Considerations for Independent Revenue and Invoice Amounts

When the invoice and revenue amounts are marked up independently, then the journal generation control options for revenue recognition, with or without reconciliation, affect the variance balance that the system maintains in the Accrued Accounts Receivable and Accrued Revenue accounts. (The journal generation control options appear on the Journaling Controls tab of the Billing Constants form.)

The Independent Revenue/Invoice Amounts option on the Service Billing Constants form specifies whether the markup amounts that the system calculates for the workfile transactions must use the same rules for the invoice and revenue amounts. If this option is set to allow different markup rules for the invoice and revenue amounts, processing invoices and revenue recognition without reconciliation creates a permanent variance between accrued accounts receivable and actual accounts receivable amounts. Invoice and revenue amounts are always different.

If the Independent Revenue/Invoice Amounts option is set to allow different markup rules for the invoice and revenue amounts, processing invoices and revenue recognition with reconciliation forces the accrued accounts to reconcile, but allows the invoice and revenue amounts to be different.

This table presents results that are based on the relationships between the system constants and the revenue recognition process. The first two columns contain system constants, and the last three columns contain revenue recognition results:

Journal Generation Control	Independent Revenue/Invoice Amounts	Revenue Amount	Invoice Amount	Accrued Accounts Receivable
Inv/Rev w/o Reconciliation	Off	Same	Same	No Variance
Inv/Rev w/o Reconciliation	On	Different	Different	Variance
Inv/Rev with Reconciliation	Off	Same	Same	No Variance
Inv/Rev with Reconciliation	On	Different	Different	No Variance

Note: The results displayed in the preceding table are also affected by the setting for the Company Exceptions Used for Independent Rev/Inv Amounts check box, and whether the company number on the transaction is in the Company Exceptions table.