Implementation Settings for Revenue Recognition

You must ensure that you enable certain settings in order to recognize revenue properly on your transactions.

These settings influence revenue recognition on your transactions:

• Enable Salesperson System Options

• Define Lookups for Revenue Recognition

• AutoAccounting based on Standard Line

Enable Salesperson System Options

You must enable the Require salesperson Receivables system option for revenue accounting. Revenue accounting requires that you assign sales credits to all transactions that can be adjusted for either revenue or sales credits. If you don't normally track sales credits, and you want to use revenue accounting for revenue adjustments only, use the default salesperson value of No Sales Credit.

Optionally enter a value in the Sales Credit Percent Limit field on Receivables system options to limit the percentage of revenue plus non-revenue sales credit that a salesperson can have on any transaction line. If you don't enter a value for this system option, then no sales credit limit validation is performed during revenue accounting.

Define Lookups for Revenue Recognition

Define these lookups for revenue recognition, according to your requirements:

• Use the Revenue Adjustment Reason lookup type to define reasons specific to your enterprise for making revenue adjustments.

• You can assign payment-based revenue contingencies to the transaction lines of transactions that use the In Arrears invoicing rule. This lets you recognize revenue after you receive payment, instead of recognizing revenue according to the revenue recognition schedule. Use the AR_FEATURES lookup type to define the AR_CONT_INV_INARREARS_RULE lookup to enable this feature.

AutoAccounting based on Standard Line

If AutoAccounting is set to derive accounting segments based on standard line, the transaction line must be either an inventory item or a standard memo line. Otherwise, AutoAccounting can't derive a valid account code combination for revenue recognition.