Enable Prospective Accounting for Price Changes, Renewals, Amendments and Terminations

You can now determine how subscription bill line adjustments, manual credit memos, close, pricing term, renewals and amendments are accounted in Revenue Management. You can choose to account them on prospective or retrospective basis. A new section Revenue Management in the Subscription Profile page captures the attributes that determine the accounting option and revenue contract creation rule. You may also choose the revenue accounting option and contract rule at the time of closing, amending and renewing a subscription. You can also mention the effective revenue periods when a bill line adjustment or a manual credit memo is created. When you perform accounting on a prospective basis the revenue already recognized till the period prior to the modification date of the subscription will remain intact. Prospective accounting is supported only for a recurring charge which has a period satisfaction measurement model and satisfaction plan of daily rate partial periods.

  1. When a subscription is closed the revenue recognized in past periods in not recalculated and the application applies the change due to close only to revenue in the current and future periods.
  2. Any price adjustment done through a change in bill line amount will maintain the revenue recognized in past periods and the change is applied only to revenue in the current and future periods.
  3. Any amendment of a subscription that causes a termination of a subscription and creation of a new subscription line will maintain the revenue recognized in past periods and the application applies the change only to revenue in the current and future periods.

Steps to Enable

To enable this feature you need to log a Service Request (SR).

1. Raise a service ticket to request for enabling this feature in your environment.

Tips And Considerations

  1. Prospective accounting is only supported for satisfaction measurement model (SMM) = Period and satisfaction plan = Daily Rate Partial Periods.

  2. Contract revision date and accounting option are at customer contract level and hence they are applicable to all the performance obligations of the revenue contract.

  3. If contract revision date for a subscription action is earlier than the contract modification date in the revenue contract, then Revenue Management automatically performs retrospective accounting which will void the earlier prospective accounting.

  4. When prospective and retrospective changes are processed together by the Identify Customer Contracts ESS, it will trigger retrospective accounting.

  5. Any new revenue line added with Satisfaction Measurement Model of Quantity or Percent to existing contract will trigger retrospective accounting.

  6. A contract that has undergone prospective accounting cannot be discarded.

  7. When a retrospective change is sent after a prospective change, this will trigger retrospective accounting.

  8. If the Unit Standalone Selling Price (SSP) does not change, then the impact on the revenue allocation is uniform across the remaining periods irrespective of the revenue effectivity attribute.

  9. If Performance Obligation Templates are used, then prospective accounting is not supported.

  10. When the revenue contract consists of a performance obligation which used the Residual Method to assign the Unit SSP, all modifications trigger retrospective accounting.

  11. This out of the box prospective accounting is supported between Subscription Management Cloud and Revenue Management Cloud only when Fusion Receivables is the billing application. This not supported out of the box if E-business Suite Receivables is the billing application.