Setting Up Unbilled Revenue Accrual
There are three mandatory steps for enabling the Unbilled Revenue Accrual process. A fourth optional step provides a means of setting up defaults for this feature:
Define a Journal Generator Template for accrued unbilled revenue.
Create an accrued AR (accounts receivable) distribution code.
Set up unbilled revenue accrual options for the billing business unit.
(Optional) Set up unbilled revenue accrual defaults.
In addition to establishing a regular Journal Generator template for regular revenue, set up a Journal Generator template that automatically reverses accrual entries at the beginning or at the end of the next accounting period. Use this additional template solely for posting accrued revenue accounting entries. The system keeps track of when you actually invoiced the customer and prevents double booking of revenues in the same accounting period.
Use the Journal Generator Template page to set up an autoreversing Journal Generator template. For the unbilled revenue accrual template, select as the reversal code Beginning of Period or End of Next Period.
Use the Distribution Code page (DST_CODE_TABLE) to create an unbilled accounts receivable (AR) distribution code.
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In the Distribution Type field, select Unbill AR.
Use the Billing Definition - Business Unit 3 page to enable unbilled revenue accrual processing in the system for the corresponding business unit.
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Select Enable Contract Asset in the Contract Asset Accrual group box.
When you select this option, define a default Contract Asset Distribution Code and an Accrued Journal Template. Only those journal templates that are set up to autoreverse are available for selection.
Define which bill statuses to include in the accrual.
You can define multiple statuses, inserting a row for each additional status. The following statuses are eligible for accrual: Finalized, Hold, New Bill, Pend Approv (pending approval), and Ready.
Select Accrue Bills at This Level to accrue bills by business unit.
To enable unbilled revenue accrual at the business unit level (but only for certain bill types), do not select Accrue Bills at This Level. Access the Bill Type 3 page for additional setup.
Define the Contract Asset Distribution Code (or offset account) on the Distribution Code page and Bill Type 3 page. This value is not stored on the bill, but the Contract Asset process needs this distribution code to run successfully. The Contract Asset Distribution Code field default hierarchy is:
Distribution Code page.
Bill Type 3 page.
Billing Definition - Business Unit 3 page (where the field is required).
Setting Up Unbilled Revenue Accrual Defaults on the Distribution Code Page
If you have several AR accounts and you want to use a separate contract asset account for each (in effect, pairing each AR account with its own contract asset account), use the Distribution Code page to define these relationships.
To define pairs of AR accounts and contract asset accounts:
Select AR as the distribution code search parameter, and match each of the AR distribution codes to its own contract asset distribution code.
The distribution type of AR denotes an AR type of account distribution.
In the Contract Asset Distribution Code field, enter the distribution code for the unbilled ChartField values that you establish during the initial setup for the contract asset process.
If you do not want to pair each AR account with its own contract asset account, leave this field blank, and define the Contract Asset Distribution Code on the Bill Type 3 page.
Setting Up Unbilled Revenue Accrual Defaults on the Bill Type 3 Page
To set up the Contract Asset process at the bill type level:
Select Accrue Bills of This Level to enable unbilled revenue accrual of bills at the bill type level.
Enter an contract asset distribution code to use different contract asset distribution codes for different bill types.
If you define an contract asset distribution code on the Distribution Code page, the system uses that value. If you leave that field blank, the system uses the contract asset distribution code that you establish here at the bill type level. If you do not establish an contract asset distribution code here, the system uses the one that you establish at the business unit level where it is required.
Setting Up Unbilled Revenue Accrual Defaults on the Standard Billing - Header - Info 2 Page
Use this page to accrue unbilled revenue for individual invoices. If you selected the Accrue Bills at This Level field at the bill type or the business unit levels, that information appears by default on this page, and the Accrue Unbilled option is selected. If not, select it here. For this bill to be eligible for accrual, this flag must be selected.