30 Work with G/L Entries for Revenue

To record the unbilled revenue for the current period, you must create General Ledger (G/L) journal entries. The amounts related to these entries appear on your income statements and balance sheets when you complete the revenue recognition process. You can use the recognized revenue amounts for projections and to review the profitability or liability of specific departments in your company.

Working with G/L entries consists of the following tasks:

• Section 30.1, "Creating Preliminary G/L Entries for Revenue,"

• Section 30.2, "Reviewing Preliminary G/L Entries,"

• Section 30.3, "Reviewing the Revenue Journal Report for Contracts,"

• Section 30.4, "Revising Preliminary G/L Entries,"

• Section 30.5, "Creating Final G/L Entries for Revenue,"

• Section 30.6, "Reviewing and Posting G/L Entries for Revenue."

JD Edwards World strongly recommends that you create and carefully review preliminary G/L entries before you create the final entries that post to the general ledger. If you post out-of-balance records to the general ledger, you must manually correct these balances.

The following graphic illustrates the revenue recognition process.

Figure 30-1 Revenue Recognition Process

Description of ''Figure 30-1 Revenue Recognition Process''

30.1 Creating Preliminary G/L Entries for Revenue

Navigation

From Contract Billing Processing (G52), choose Revenue Recognition

From Revenue Recognition (G4823), choose Journal Generation (P48132)

When you use the revenue recognition and billing process, you recognize revenue before you create invoices. You recognize revenue by creating journal entries for the General Ledger (G/L). You first create preliminary G/L entries.

When you create the entries, the system calculates revenue amounts for fee line pricing types and prints the Revenue Journal Generation report. You can also set processing options to print the Billing Journal Register and to segregate error journals in an error batch.

You must run the Journal Generation program to calculate revenue for fees and create preliminary G/L entries for T&M, component, unit, lump and fee line pricing types.

You should carefully review the Revenue Journal Generation and Billing Journal Register reports to ensure that the preliminary entries are correct so that you do not create final journal entries that create out-of-balance records in the general ledger.

When you run Journal Generation, the system:

• Uses data selection and processing options to select Billing Workfile (F4812) transactions to process

• Calculates revenue amounts for fee line pricing types and creates transactions in the Billing Workfile for the fees.

• Creates journal reclassification entries if the Journal Reclassification Control option is activated in the Billing Constants

• Processes the workfile transactions against the Account Derivation Table rules to determine the accounts for the journal entries

• Temporarily stores the details for the preliminary G/L entries in the Detail Journal Workfile (F48910).

• Prints the Revenue Journal Generation report (R48132) with journal entry detail.

• Compresses the detail journal workfile information and temporarily stores it in the Compressed Journal Workfile (F48911).

• Prints the Billing Journal Register (R48300) with the compressed information as a summary of the journal entry detail.

30.1.1 Revenue Journal Generation - Job

Figure 30-2 Revenue Journal Generation - Job

Description of ''Figure 30-2 Revenue Journal Generation - Job''

30.1.2 Journal Register Listing

Figure 30-3 Journal Register Listing

Description of ''Figure 30-3 Journal Register Listing''

30.1.3 What You Should Know About

Topic	Description
G/L document types	The system can create seven different types of G/L entries. You can use the following document type codes to determine the origination of your journal entries: EU (Revenue) - Journal entry created during revenue recognition AJ (Adjustment) - Correction to a journal entry for revenue recognition BA (Billing Adjustment) - Reclassification of a billable source journal entry that originated from accounts payable or general accounting T2 (Payroll Labor Distribution) - Reclassification journal entry that originated from payroll labor T4 (Labor Billing Distribution) - Reclassification journal entry that originated from labor billing T5 (Equipment Distribution) - Reclassification journal entry that originated from equipment billing
Error batch segregation	If you have an error in a batch of journal entries, you do not have to stop processing the journal entries until it is corrected. If you set the processing option for error batch segregation, the system places any journal entries with errors in a separate batch. Then, you can continue processing the batch of journal entries without errors and correct the batch with errors at a later time. The error batch segregation processing option works as follows: If two transactions are related, such as a base and its component, or a payroll transaction with burden, and one transaction is in error, the system places both transactions in an error batch with a separate batch number. The system prints a separate journal register for the error batch. Note: If you select error batch segregation, the Revenue Journal Generation program requires additional processing time.

See Also:

• Chapter 33, "Set Up System Constants" for more information about using journal reclassification,

• Section 35.2, "Defining Account Derivation Rules,"

• Appendix D, "Retrieval Reference Codes" for more information about how the Contract Billing system uses account derivation rules,

• JD Edwards World Technical Foundation Guide for information about running, copying, and changing a DREAM Writer version.

30.1.4 Processing Options

See Section 43.15, "Revenue Journal Generation - Contract (P48132)."

30.2 Reviewing Preliminary G/L Entries

After you create preliminary G/L entries, you can review the resulting journals to verify that the account information is correct.

Reviewing journals for G/L entries consists of the following:

• Reviewing the batch header and status

• Reviewing revenue journal details

JD Edwards World strongly recommends that you create and carefully review preliminary G/L entries before you create the final entries that post to the general ledger. If you post out-of-balance records to the general ledger, you must manually correct these balances.

To review the batch header and status

Navigation

From Contract Billing Processing (G52), choose Revenue Recognition

From Revenue Recognition (G4823), choose Batch Review (P48221)

On Batch Review

1. Complete the following field:

   • User ID

   Figure 30-4 Batch Review (User ID) screen

   
   Description of ''Figure 30-4 Batch Review (User ID) screen''
   
   

   If you place an asterisk is the User ID field, the system displays all batches created by all users regardless of the batch activity status.

2. To limit the list of batches, complete the following optional fields:

   • Batch Number

   • Batch Date From

   • Batch Date Thru

   • Batch Status

   • Current Activity

3. Review the following fields for a batch:

   • Batch Number

   • Total Amount

   • Current Activity

   • Batch Status Description

To review revenue journal details

Navigation

From Contract Billing Processing (G52), choose Workfile Generation

From Workfile Generation (G4822), choose Revisions (P4812)

If you want to review the workfile transaction details for a batch of revenue journals, you must use the Revisions form. You use a processing option to control whether the system displays the Revenue Batch Number field in the upper portion of the form.

When you enter the revenue batch number on the Revisions form, the system displays all transaction information. The system marks transactions in an active revenue batch with an R and displays the revenue batch number in the lower portion of the form. You cannot revise workfile transactions in a revenue batch.

On Revisions

1. Complete the following field to locate transactions in a revenue batch:

   • Revenue Batch Number

2. To limit the display of transactions, complete a combination of the following fields:

   • Customer Number

   • BCI Number

   • Account Number

   • Employee/Supplier

   • Contract Number

   • Equipment Worked

   • Subledger

   • Subledger Type

   • Job Type

   • Job Step

   • G/L Date From

   • G/L Date Thru

3. Choose Total Amounts For All Records.

You can also re-print the Journal Edit Register (R48300) from the Revenue Recognition menu (G4823) to view the preliminary summarized journal entries. You can use this report to verify the accounting entries.

30.3 Reviewing the Revenue Journal Report for Contracts

Navigation

From Revenue Recognition (G4823), choose Revenue Journal Report (P48139)

In addition to running summarized G/L reports, you can use the Revenue Journal Report (P48139) to review revenue recognition batches in the Contract Billing system, Service Billing system, or both systems. You use the data selection to select Service Billing or Contract Billing batches.

The Revenue Journal Report displays information for active and recognized revenue recognition batches. A recognized batch, is one that has been processed to the general ledger. The report displays recognized batches only if the batch details are in the G/L Linkage File - Service Billing file (F48912).

When you run this report, the system:

• Uses records from the Billing Workfile (F4812) and the Billing Workfile History (F4812H) files that are in active and recognized revenue recognition batches.

• Accesses the corresponding revenue account details for these records from the Detail Journal Work File - Service Billing (F48910) or the F48912 files.

• Accumulates revenue amounts for every combination of revenue account, Subledger/Subledger Type, and G/L date.

For Contract Billing, the program:

• Accumulates amounts at the billing line level.

• Creates subtotals at the change order and contract levels.

• Prints all records, followed by the Contract Billing total.

For Service Billing, the program:

• Subtotals at the job and customer levels.

• Prints all records, followed by the Service Billing total.

The structure of the report is similar for both Contract Billing and Service Billing. When you run this report for both systems, Service Billing details print first, followed by Contract Billing details.

The report includes the following header fields for Contract Billing:

• Contract Number

• Change Order Number

• Customer Number

• Job Number

For Service Billing, only Job Number and Customer Number display.

The report includes the following detail fields for Contract Billing:

• Pay Item

• Pay Item Description

• Resulting Account

• Resulting Account Description

• Subledger and Subledger Type

• G/L Date

• Cumulative Amount

For Service Billing, Pay Item and Pay Item Description do not display.

At the end of the report, a grand total displays.

Figure 30-5 Revenue Journal Report - Contract Billing

Description of ''Figure 30-5 Revenue Journal Report - Contract Billing''

Figure 30-6 Revenue Journal Report - Contract and Service Billing, Page 1

Description of ''Figure 30-6 Revenue Journal Report - Contract and Service Billing, Page 1''

Figure 30-7 Revenue Journal Report - Contract and Service Billing, Page 2

Description of ''Figure 30-7 Revenue Journal Report - Contract and Service Billing, Page 2''

30.3.1 Data Selection

The value you enter in the Order Number field determines if you are running the report for Service Billing, Contract Billing, or both. If the value in the Order Number field is:

• Zero, the report displays Service Billing information.

• Non-zero and matches a valid contract number, the report displays Contract Billing information.

• *ALL or blank, the report includes both Service Billing and Contract Billing information.

30.4 Revising Preliminary G/L Entries

Due to the complexity and volume of preliminary revenue or costing journal entries in a batch, you cannot revise preliminary detail journal entries. To understand how to correct batches in error, you need to understand the types of errors detected by the system. You can correct errors and reset the error status of a batch, as outlined below.

When you create a batch of preliminary revenue or costing journal entries, the system validates the entries. Any resulting errors are either General Accounting setup errors or Billing system setup errors.

30.4.1 Correcting General Accounting Setup Errors

These errors are caused by incorrect setup information in General Accounting (System 09). You can usually correct these errors without having to delete the revenue batch. You can make the necessary corrections in the General Accounting system and re-run the Journal Edit Register. The system edits the preliminary journal entries again, and if the system does not detect errors, the batch status updates and indicates no errors. You can then create final journal entries.

30.4.2 Correcting Billing System Setup Errors

These errors are caused by incorrect setup information in the Billing system (System 48S). These errors require that you delete the batch of preliminary journal entries and make the necessary corrections to setup information in the Contract Billing system. You must then re-run Revenue Journal Generation (P48132) to create the preliminary journal entries. Note that each time you run Revenue Journal Generation, the system assigns a new batch number. If the system does not detect errors, the batch status indicates no errors and you can continue processing final journal entries.

30.4.3 What You Should Know About

Topic	Description
Deleting a batch	To delete a batch, inquire on it in Batch Review on the Revenue Generation menu, then choose the Delete option (Option 9) and press Enter. On the Batch Submission Screen, choose Submit Batch (F6). To verify the batch delete, choose Submit Job (F6).

30.5 Creating Final G/L Entries for Revenue

Navigation

From Contract Billing Processing (G52), choose Revenue Recognition

From Revenue Recognition (G4823), choose Create G/L Entries (P48198)

You complete the revenue recognition process by creating and posting journal entries that relate to the transactions. The system stores the final G/L entries in the Account Ledger table. When you create final G/L entries, the system:

• Uses the Billing Batch Header (F48011) information to create a batch header in Financials (F0011)

• Uses the Compressed Journal Workfile (F48911) transactions to write the final journal entries to the Account Ledger (F0911)

• Uses the Detail Journal Workfile (F48910) transactions to update the G/L Link (F48912), if the Create Link (LINK) field is populated in the Account Derivation Table (P48126)

• Updates the Payroll History File (F0618) with any payroll reclassification entries, if applicable

• Updates the workfile transactions as processed to G/L. If the Eligibility Code (ELGC) of the workfile transactions is 2 (revenue and cost only) or 4 (cost only), the system copies the workfile transaction to Billing Workfile - History (F4812H) and deletes it from the Billing Workfile (F4812)

• Changes the journal status (JRST) for the related workfile transactions

• Deletes the records in the Detail Journal Workfile and the Compressed Journal Workfile

• Removes the batch header number for the revenue journals from the Billing Batch Header (F48011)

After you create the final G/L entries, you cannot change or delete the batch of journal information.

To create final G/L entries

On Create G/L Entries

Figure 30-8 Create G/L Entries (Batch Validation) screen

Description of ''Figure 30-8 Create G/L Entries (Batch Validation) screen''

1. Complete the following field and press Enter:

   • Batch Number

2. Choose Submit Batch (F6).

   The system displays a message prompting you to verify the batch post submission.

3. Choose Submit Job (F6).

30.6 Reviewing and Posting G/L Entries for Revenue

Navigation

From Contract Billing Processing (G52), choose Revenue Recognition

From Revenue Recognition (G4823), choose Post G/L Journal

After you create the final G/L entries, you complete the revenue recognition process by reviewing, approving, and posting the journal entries.

The journal review and post programs are the same programs you use in the Accounts Receivable and General Accounting systems.

See Also:

• Reviewing and Approving Journal Entries in the JD Edwards World Accounts Receivable Guide,

• Entering Basic Journal Entries in the JD Edwards World General Accounting I Guide.