Revenue Management

Get Involved. Join the Conversation.

Comments

  • Zoë Read

    I just wanted to make everyone aware that from Release 20A, the information about features with either current or future opt-in expirations is now included in our What's New document (click the Opt In Expiration tab on the left-hand panel) https://www.oracle.com/webfolder/technetwork/tutorials/tutorial/cloud/r13/wn/fin/financials-optin.htm

    With regards, Zoë

     

  • Janelle Azimullah

    Thanks Helle, appreciate your prompt assistance.

  • Janelle Azimullah

    Thanks Perry, this is a brilliant response and exactly the information I was after. 

  • Janelle Azimullah

    Thanks Mikhail

  • Mikhail Bakharev

    Hi Janelle,

    The flows related to RMCS are L3: 040606 and L3: 040607 from your list.

    I think you should take the latest version (1.012)

    Regards,

    Mikhail

  • Perry Unrau

    Hi Janelle,

    Oracle PPM Cloud supports two accounting models:

    1. Unbilled Receivables & Deferred Revenue.  This model uses the Create Accounting Transactions process in Project Billing to reclassify billing offset balances.  This model must be used for intercompany and interproject contracts and can be used for external project contracts.

    2. Contract Assets & Contract Liabilities [for IFRS 15 and ASC 606].  This model uses the Create Accounting Transactions process in Project Billing to accrue the performance obligation.  This model can be used for external project contracts.  Please see the PERFORMANCE OBLIGATION ACCRUAL feature in the Update 18B What's New release readiness documentation.  Please also see the png file attached that depicts the intended accounting entries for the new accounting model.

    Oracle PPM Cloud also allows users to turn off revenue accounting in Project Billing in favor of RMCS performing revenue accounting for all revenue contracts, including project contracts.  Please see the PERFORM PROJECT CONTRACT REVENUE ACCOUNTING IN REVENUE MANAGEMENT feature in the Update 18C What's New release readiness documentation. 

    If you are having RMCS perform the revenue accounting, you probably also want RMCS to record the initial performance event (essentially a debit to Contract Asset and credit to Contract Liability).  If you need more details on this, Helle is the person to answer your questions.  That just leaves the question about the Create Accounting Transactions process in Project Billing. 

    Presuming you want RMCS to record the initial performance event, if you don't have intercompany or interproject contracts, you don't have to run the Create Accounting Transactions process in Project Billing at all.  If you do have intercompany and/or interproject contracts, run the process but ensure you specify the Billing Type as Intercompany or Interproject, as appropriate.  Not running it for the External Billing Type will avoid the creation of Project Billing accounting transactions with a transaction type of Performance Obligation Accrual. 

    If you actually want Project Billing to accrue the performance obligation in GL (different terminology, but again essentially a debit to Contract Asset and credit to Contract Liability), then you just need to run the Create Accounting Transactions process in Project Billing with the Billing Type set to External and then the Create Accounting process in Project Billing.  Please note, Project Billing accounting transactions are NOT currently interfaced to RMCS.

    Perry

     

  • Helle Hennings

    Janelle

    No it's fine to leave your question here. I'll ask a colleague of mine with the PPM Cloud knowledge (and RMCS integration knowledge) to review and respond.

    Best regards,

    Helle

  • Janelle Azimullah

    Yes, specifically does the Billing Offset process still need to take place when implementing RMCS?

    If RMCS is not implemented, this would be standard process in PPM run at period end. 

    Do you want to transfer this to the PPM Forum?

  • Helle Hennings

    Is your question related to Fusion Project Blling Offset?

    Regards,

    Helle

     

     

  • Janelle Azimullah

    I've seen this resource but it doesn't specifically answer my question

  • Helle Hennings

    Hello Janelle,

     

    Please refer to my response given in a prior Cloud Customer Connect Post here:

    https://cloudcustomerconnect.oracle.com/posts/b01b49b7f2

    I explained how AR processes the accounting entries and how RMCS processes the accounting entries.

    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:

    Replay:

    Streaming Recording

    Event File:

    RMCS_OCC_2018'02'20.pdf (1.5MB)

    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/19d/fafrm/using-revenue-management.pdf

    Best regards,

    Helle

  • Perry Unrau

    The current integration between Enterprise Contracts, Project Billing, and RMCS is comprised of:

    1. Views provided by Enterprise Contracts of the contract header and contract line tables.

    2. View provided by Project Billing of the revenue distribution line table.  The Generate Revenue process creates revenue distribution lines for all eligible revenue plans for all revenue methods, including percent spent and percent complete.  The revenue distribution lines are displayed on the Manage Revenue Distributions page in the Contract Revenue work area.  They are also summarized by contract, contract line, and associated project and task and displayed on the Manage Summary Revenue page in the Contract Revenue work area.

    3. Process in RMCS to use the views provided by Enterprise Contracts to pull in project contract headers as source documents and project contract lines as source document lines.

    4. Process in RMCS to use the view provided by Project Billing to pull in revenue distribution lines as satisfaction events.

    The intent of the integration is for Project Billing to generate all revenue, based on rates, amounts, or progress.  The amount of revenue generated is converted into a percent of the contract line amount, which is the Enterprise Contracts proxy for the performance obligation allocated revenue amount.  This percentage is then pulled into RMCS as a satisfaction event using the satisfaction measurement method of Percent.  RMCS then calculates revenue to be recognized in RMCS, using the percentage and the performance obligation allocated revenue amount.  When the contract line amount in Enterprise Contracts and the performance obligation allocated revenue amount in RMCS are the same, the revenue generated in Project Billing and the revenue recognized in RMCS would be identical.

    Revenue created in RMCS is not interfaced back to Project Billing.

    Perry

     

  • Janelle Azimullah

    Have looked at "How To Generate Revenue For Contracts With Percent Complete Revenue Method? (Doc ID 2204831.1)" but it only covers only the Project Billing information but not the integration with RMCS.

  • Helle Hennings

    The ASC 606 / IFRS 15 accounting standard clearly sets out that you need to estimate the expected consideration at inception (promise including estimated rebate) for the sales deal and such estimation includes expected rebates thus you should be making revisions to the original performance obligation within a contract over time when those estimates change  When the revision is processed it will be re-allocated to the other lines.

    Regards,

     

    Helle

  • Kannan Thoppae

    Hi Helle,

    Thank you for your response.

    I believe that you have given steps for contract revisions. My scenario is not a revision scenario. When the initial contract is created, can I process a negative contract line towards rebates and have the rebate reallocated to other lines?

    Thanks,

    Kannan