Revenue Recognition Plans

Revenue recognition plans are generated for revenue elements when the event set in the item record occurs. The events that may trigger the creation of revenue plans are revenue arrangement creation, billing, and fulfillment. If the Project Management feature is enabled, project progress is also available as a trigger for revenue plan creation. When SuiteBilling is enabled, a subscription event trigger is available. For information about project progress and subscription events, see Advanced Revenue Management (Essentials) for Projects and Revenue Recognition for SuiteBilling.

The Revenue Plan Update Frequency accounting preference determines whether plans are created automatically when the trigger event occurs or if plans must be manually created. When you select Automatic, the system creates and updates revenue plans every 3 hours. You can create and update revenue plans manually even when the automatic option is selected. For more information about updating plans manually, see Updating Revenue Recognition Plans.

Revenue recognition plans indicate the posting periods in which revenue should be recognized and the amount to be recognized in each period. Revenue is not recognized until you generate revenue recognition journal entries from the revenue plans. For more information, see Month-End Revenue Processing.

The revenue plan is constructed based on a revenue recognition rule. Periods that are designated as adjustment periods are skipped. To avoid errors in revenue plan creation, be sure you have set up accounting periods for all of the periods your revenue recognition rules need. Revenue plans based on percent-complete revenue recognition rules are different. For more information about percent-complete revenue rules, see Advanced Revenue Management (Essentials) for Projects.

Revenue recognition plans and the journal entries generated from them are subsidiary-specific in NetSuite OneWorld. You can view and edit only revenue recognition plans and journal entries for subsidiaries to which you have access.

Forecast and Actual Revenue Recognition Plans

To support revenue forecasting, by default each revenue element has at least two revenue recognition plans, a forecast plan and one or more actual plans. The forecast revenue plan is used only for forecasting and in forecast reports. The actual plan controls the posting of revenue. Item records require separate actual and forecast revenue recognition rules, which may be the same or different. Depending on the revenue recognition rule you select, actual revenue plans may not be created until a later event occurs, such as fulfillment. For more information, see Item Configuration for Advanced Revenue Management (Essentials) and (Revenue Allocation).

You can choose to skip the creation of revenue recognition forecast plans if you do not intend to use the forecasting function. The accounting preference Disable Creation of Forecast Plans controls whether the system creates forecast plans. For information, see Setting Advanced Revenue Management (Essentials) Preferences.

Revenue Recognition Forecast Plans

Revenue recognition forecast plans are created for revenue elements in addition to the actual plan or plans unless you disable their creation. Forecast plans cannot be placed on hold, so they do not include fields for Hold Revenue Recognition and Catch Up Period. You can edit forecast revenue plans, but the changes are not carried over to actual revenue plans.

When revenue recognition plans are created on billing or fulfillment, actual plans may not be created immediately because the event has not occurred. You can create forecasts in advance of actual revenue plans using revenue recognition forecast rules with start date sources other than the event date. For example, you can create revenue recognition rules with Revenue Element Start Date and Revenue Element End Date as the start and end date sources. Then select the type of rule as the rev rec forecast rule and set the forecast start and forecast end dates on the revenue arrangement.

Changes in sources that affect the revenue amount in actual revenue plans, such as quantity and price changes, are also reflected in the forecast plans. As revenue is recognized according to actual revenue plans, you can recalculate your forecast plans to align the forecast plans with actual revenue recognition. For more information, see Recalculating Revenue Forecast Plans.

Actual Revenue Plans

Actual revenue plans are updated when changes occur in sources and when revenue is posted as recognized. A revenue element may have multiple actual plans. For example, if the item record has the following settings, a new actual revenue plan is created for each billing event:

Create Revenue Plan On set to Billing
Revenue Recognition Rule set to any rule with the Amount Source set to Event-Percent base on amount

See the following for information about working with revenue recognition plans:

Forecast and Actual Revenue Recognition Plans

Revenue Recognition Forecast Plans

Actual Revenue Plans

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