Understanding Revenue Management

PeopleSoft Contracts enables you to capture revenue information for a contract and allocate that information to specific contract lines within the PeopleSoft Contracts system. You can associate revenue information with a revenue recognition method, manage when the conditions for recognizing revenue have been met, and generate journal entries to record revenue in your PeopleSoft General Ledger system.

You can actively manage accounting activity that is generated by PeopleSoft Contracts. You define accounting information (amounts and accounting distributions) within PeopleSoft Contracts at the individual contract line level. You then assign these contract lines to revenue plans. A revenue plan has one of four possible revenue recognition methods: apportionment, milestone, percent complete, and as-incurred. How you manage a revenue plan depends upon its revenue recognition method.

Managing revenue consists of managing the revenue plan and revenue plan events, and managing the contract line. Managing the revenue plan and revenue plan events is part of your normal contract management cycle and is not governed by amendment processing. Changes to your contract line are generally governed by amendment processing, with the exception of changes to the accounting distributions for a contract line.

When creating a contract you identify whether billing and revenue are managed separately or as one amount. If revenue and billing are managed separately on the contract, then the contract line level revenue amounts and revenue limits are entered separately from billing. If revenue and billing are not separated on the contract then contract line amounts and limits for revenue are read only and match billing. Under both selections (separating billing and revenue and not separating billing and revenue) revenue plans are assigned allowing for different timings for billing and revenue recognition. The difference being whether the contract line amounts and limits for revenue are separately identified from billing or match billing.

For more information see Defining General Contract Information

See Updating Billing and Revenue Separation Identifiers

When describing actions to manage revenue in PeopleSoft Contracts documentation, the reference is to actions after adding a contract, allocating prices to contract lines, and contract activation. Managing revenue includes setting up and readying your revenue plans and revenue plan events, and then managing these revenue plans and events to record revenue using the PeopleSoft Contracts revenue Application Engine processes.

This section discusses:

  • Managing accounting for revenue plans.

  • Managing the revenue process in PeopleSoft Contracts.

  • Placing a revenue plan on hold.

  • Managing revenue plan event statuses.

  • Changing accounting distributions for amount-based contract lines.

  • Changing accounting distributions for rate-based contract lines.

  • Allocating amounts and cancelling contract lines.

  • Changing revenue plan information.

Note:

For contracts with a classification of Government, you can find additional revenue information in the Contracts for Government Contracting documentation.

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