1. Using Revenue Management
  2. Overview of Revenue Management

Overview of Revenue Management

Oracle Revenue Management is a centralized, automated revenue management product that enables you to address the ASC 606 and IFRS 15 accounting standard Revenue from Contracts with Customers.

The accounting standard provides a core principle for recognizing revenue: Recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue Management automates revenue processing tasks, thus minimizing manual interventions, allowing organizations to comply efficiently and consistently with the ASC 606 and IFRS 15 core principles:

  • Identify the contracts with the customer
  • Identify the separate performance obligations
  • Determine the transaction price
  • Allocate the transaction price
  • Recognize revenue when a performance obligation is satisfied.

Manage Contracts

You can easily ensure compliance with the ASC 606 and IFRS 15 accounting standards using the Revenue Management centralized repository that stores imported and processed sales data. Revenue Management analyzes the data and uses user-defined rules to automatically group the data into performance obligations and customer contracts.

After the contracts and performance obligations are identified, Revenue Management performs the following ASC 606 and IFRS 15 explicit steps:

  • Determines the transaction price for each accounting contract.

  • Allocates the relative percentage of the total transaction price to the total for the standalone selling prices in the contract. Applies the allocation percentage across the performance obligations in an accounting contract.

  • Recognizes revenue when each performance obligation is satisfied either at a point in time or over time, based on satisfaction events or revenue satisfaction plans.

Manage Standalone Selling Prices

Revenue Management automatically calculates observed standalone selling prices based on:

  • Imported standalone sales pool.

  • Pricing dimensions you defined

You verify the suggested values and decide whether to establish them as standalone selling prices for any specific period. You can also manually upload standalone selling prices or estimated selling prices using an integrated workbook.

You can pass standalone selling prices on the individual transactions or for new product offerings by assigning the standalone selling price using the residual method.

Accounting

Revenue Management is fully integrated with the Oracle Subledger Accounting rules engine. In Subledger Accounting, Revenue Management uses business events to trigger when to create the corresponding accounting events.

The following types of business events trigger the creation of accounting events:

  • Initial performance events: Initial performance events are events when either party acts and can be either a billing event or a satisfaction event.

  • Billing events: Billing events reduce the contract asset balance and track the discount allocation at performance obligation level.

  • Satisfaction events: Revenue Management uses satisfaction events to determine whether the accrual is reduced and revenue is recognized.

  • Revisions and return events: Sales order or subscription service changes due to price, quantity, or returns of goods and services that impact the existing value of the performance obligation where retrospective or prospective accounting treatment is invoked.

Import Data into Revenue Management

Revenue Management works with any source application and is integrated with these products:

  • Oracle Fusion Cloud Financials
  • Oracle Fusion Cloud Project Management
  • Oracle Fusion Cloud Order Management
  • Oracle Fusion Cloud Subscription Management
  • Oracle E-Business Suite Release 12.1.3 or higher

Revenue Management also provides robust integration with third party applications through a file-based data import integrated workbook.

There are three types of integrated data in Revenue Management:

  • Contract-related information such as sales order lines.

  • Billing-related information, such as sales invoices.

  • Satisfaction-related information such as product shipment and fulfillment, or project milestone completion.

Data from the various source systems is processed and managed centrally in Revenue Management.

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