Revenue Plans

PeopleSoft Contracts revenue plans enable you to define, administer, and maintain accounting schedules and rules for the products and services that you sell under a contract. Revenue plans are contract-specific; you cannot use the same revenue plan across multiple contracts.

After you have defined the revenue plans for a contract, data from PeopleSoft Contracts drives the creation of accounting entries for amount-based contract lines. Data from PeopleSoft Contracts and PeopleSoft Project Costing drives the creation of accounting entries for rate-based contract lines. In both cases, PeopleSoft Contracts creates accounting entries to send to PeopleSoft General Ledger and creates bill lines to send to PeopleSoft Billing. PeopleSoft Contracts generates the revenue entries and sends these to PeopleSoft General Ledger. PeopleSoft Billing generates the offsetting entries. PeopleSoft Billing also handles recurring revenue.

A contract can consist of multiple contract lines with complex and diverse revenue recognition requirements. In PeopleSoft Contracts you assign each product to its own contract line and then associate each contract line with its own set of accounting distribution codes. You then associate each contract line for which PeopleSoft Contracts manages revenue with a revenue plan. Revenue plans store the timing of revenue recognition, as well as any notes relating to individual revenue plan events. You can assign contract lines with similar revenue recognition requirements to the same revenue plan. When PeopleSoft Contracts manages revenue, each contract has at least one revenue plan, and it may have more.

Revenue plans are often made up of a series of dated revenue recognition events that are associated with percentages or revenue amounts. The percentage or amount reflects how much of the contract line's revenue amount will be recognized upon a certain date, milestone, or user-initiated action. Should a revenue plan be tied to several contract lines, then the revenue amount that is recognized for each event is based on the sum of revenue amounts of all contract lines associated with that revenue plan. The revenue amount will be same as the billing amount if billing and revenue are not separated on the contract.

You can optionally select revenue plan templates to automate the creation of revenue plans on your contract. You can also associate events with your revenue plan template depending on your plan method. Create revenue plan templates on the Billing/Revenue Plan Templates page and apply the templates to a contract line in one of these ways:

• Associate the product with a revenue plan template when setting up the product definition.

  The system creates the revenue plan automatically when you select the product onto a contract line.

• Associate the product with a revenue plan template upon adding a product to a contract line.

• Select a value in the Revenue Plan Template field on the Assign Revenue Plan page.

  The system creates the revenue plan automatically when you assign the contract line to your plan.