Revenue Management

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    Beth Bleijie
    Is there such a thing as Deferred Billing?
    Topic posted June 28, 2019 by Beth BleijieBronze Trophy: 5,000+ Points, tagged Financials, General Ledger, Receivables 
    146 Views, 3 Comments
    Title:
    Is there such a thing as Deferred Billing?
    Summary:
    Is there a process to recognize revenue now, but issue the invoice months later?
    Content:

    We bill a fee which we want to recognize in the current month, but our contract with the client says that we won't bill them for 12 months.  Other than a journal, is there a process to get this onto the Balance Sheet without creating an AR Invoice with 365 day terms?

    Regards,

    Beth

     

    Comment

     

    • Praveen T

      Hello Beth,

      This transaction can be recorded either in GL or AR with following options.

      In AR, if you do not want to create an invoice at the time of  recording revenue, you can create a Misc. receipt in AR ( Debiting Un billed Receivables and crediting Revenue)

      Later on when you raise the invoice after 12 months, you can debit receivables and credit Un billed receivables account.

       

      Regards

      Praveen

       

       

    • Helle Hennings

      Hello Beth

      A new worldwide accounting standard ASC 606 (and IFRS 15) for Contracts from Revenue with Customers became effective for public companies with fiscal years starting from Jan 1, 2018 and for private enterprises from Jan 1, 2019.

      The new accounting standard is a revenue reform and is all about reviewing the accounting contract at inception e.g. looking at all sales  cycle data at inception which could be sales orders, service contracts, project contracts and the like.

      The new accounting standard completely separates billing from revenue recognition.

      Revenue Management Cloud is a product you can subscribe to and implement to help you address ASC 606.

      For more information refer to Revenue Management information refer to:

      Past recording on Cloud Customer Connect such as:

      ERP – Cloud Cafe February 2018: The New Revenue Recognition Standard here: https://cloudcustomerconnect.oracle.com/posts/6a4b5ee63c
      You can scroll down the page to listen to the recording and download the presentation via:
      Event File:

      There are a number of Oracle University recordings made by my colleague Seamus Moran, senior director Financials development, available free of charge about the Revenue Recognition Standard and how Revenue Management Cloud enables you to address the new accounting standard:

      https://learn.oracle.com/pls/web_prod-plq-dad/db_pages.getpage?page_id=912&get_params=cloudId:243,p_searchWords:seamus%20moran

      Review the Quick Tour guide here: https://go.oracle.com/LP=43623?qt=saas_erp_revmgmt_ManageASC606IFRS15RevenueRecognition&src1=ow:occ:feb

      Also a bit of feature write up here: https://cloud.oracle.com/en_US/financials-cloud/features

      As well as the Revenue Management user guide here: https://docs.oracle.com/en/cloud/saas/financials/19b/fafrm/using-revenue-management.pdf

      Best regards,

      Helle

       

      • Beth Bleijie

        Thank you Helle,

        We are currently working with our Auditors to develop an SOP for ASC 606.  This is partly where the question arose. 

        I doubt that we will be able to adopt Revenue Management Cloud any time soon, but I have passed on the information from your post to the manager in our office who is coordinating the work on ASC 606.

        And I'll have at look at the resources you have noted.

        I really appreciate the detailed information.

        Regards,

        Beth