Accounting Distributions When PeopleSoft Billing Manages Revenue

When PeopleSoft Billing manages revenue recognition for fixed-amount or recurring contract lines, PeopleSoft Contracts does not make any accounting entries. Revenue recognition for a contract line occurs upon booking the entries to PeopleSoft General Ledger after the bill finalization. Billing and revenue recognition occur at the same time.

Accounting Distributions for Fixed-Amount and Recurring Contract Lines with No Contract Liability Entries

Once an active contract line on an active contract is assigned to a billing plan and the plan contains a ready event (in the case of milestone and percent complete plans), the CA_BI_INTFC process sends the revenue accounting distribution associated with the contract line to PeopleSoft Billing. PeopleSoft Billing creates the following accounting entry, booking revenue, and billed AR simultaneously:

Account	Debit	Credit
AR Account	100
Revenue Account		100

The final step in the process is to collect cash for outstanding invoices. Once cash is received, the following entry is made in PeopleSoft Receivables, moving the $100 from AR Account to Cash:

Account	Debit	Credit
Cash Account	100
AR Account		100

Accounting Distributions for Recurring Contract Lines with Contract Liability Entries

In the following example for contract liability, the bill for service during the month of September is sent out in August. However, the revenue is recognized in September.

The bill for service is sent out during the month of August:

Account	Debit	Credit
AR Account	100
Contract Liability Account		100

Revenue is recognized in September:

Account	Debit	Credit
Contract Liability Account	100
Revenue Account		100