1. Using Revenue Management
  2. Overview of Revenue Management Accounting

Overview of Revenue Management Accounting

Oracle Revenue Management integrates with Oracle Subledger Accounting, which is a rule-based accounting engine that centralizes accounting across applications.

Subledger Accounting acts as an intermediate step between Revenue Management and Oracle General Ledger. Subledger Accounting enables you to create accounting in draft and final modes.

You can create multiple accounting representations for a single business event, which enables your enterprise to meet both corporate and local fiscal accounting requirements using primary and secondary ledgers.

Revenue Management:

  • Derives balance sheet accounts from Revenue Management System Options setup.

  • Derives revenue accounts in the following hierarchy:

    • Item or memo line

    • Bill-to site customer reference at the source document line

    • Bill-to site customer reference at the source document header

  • Derives appropriate accounts based on predefined events.

  • Performs accounting at the performance obligation level.

  • Tracks the difference between the billed amount and the allocated amount at the performance obligation level in a Discount Allocation Liability account.

Accounting for Customer Contracts and Performance Obligations

When you run the Recognize Revenue of Customer Contracts process, the process determines whether there are any eligible business events and creates any corresponding accounting events.

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

  • Initial performance events

  • Satisfaction events

  • Billing events

  • Revisions and return events

For material contract revisions and returns, the application performs retrospective accounting. In the current open period the application reverses the accounting related to the satisfaction events on the original accounting date and creates new accounting entries based on the new satisfaction events. The application creates new accounting entries based on the new satisfaction events.

For immaterial contract revisions, the application performs prospective accounting. The application doesn't reverse the accounting related to the satisfaction events up to the contract revision date. The application creates new accounting from the contract revision date forward for the new satisfaction events.