2605446 - Deferred Cost of Goods Sold not Cleared After Revenue Recognition Run / Quantity Conversion

You are creating a Project Invoice Request for incurred hours and expenses. After executing the Revenue Recognition run for the relevant period you notice that not all expenses are recognized. You check the G/L Accounts - Line Items report by sorting all values according to the Deferred Cost of Goods Sold (CoGS) - Account and Project Tasks. You notice that some items have not been cleared from the Deferred CoGS - Account.

SAP Business ByDesign

Revenue Recognition Run:

1. Go the Cost and Revenue - Periodic Tasks Revenue Recognition view.
2. Press New / Revenue Recognition Run.
3. Execute the Revenue Recognition for a defined period.

Analyse all postings with the G/L Accounts - Line Items report:

1. Go to work center: General Ledger and here to the G/L Accounts view.
2. Specify the necessary selection parameters via the Advanced search.
3. Press Select.

Expenses associated with a project have not been selected for automatic invoicing. You can see those positions under:

1. Work Center: Project Management.
2. View: Invoice Preparation, Sub-view: Not Invoiced Time and Expenses.
3. Among the Customer Projects with Unassigned Expenses choose the Customer Project with the relevant project ID e.g.: SO_XYZ (associated with a sales order, e.g.: XYZ).
4. Press Edit Time and Expenses.

Here you see that the relevant incurred hours and expenses are not written off as expected and are still listed as Expenses to Be Invoiced.

The reason is that no matching associated Sales Order Item could be assigned despite a matching Project Task ID.
Consequently, a Revenue Recognition Run for sales order XYZ (XYZ represents the Sales Order ID)  will not automatically clear those items from the Deferred CoGS - Account and recognize them as Cost of Goods Sold (CoGS).

As an immediate workaround you can always manually assign the unassigned hours and expenses to a sales order item using the value help.
Causal, however, in this case is a mismatch of quantity type definitions of the involved products/services and, hence there is no proposed sales order item.
This behavior follows a restriction relating to the matching of Sales Order Items and incurred project expenses/costs.
In order for incurred costs and expenses to be allocated automatically to a project, the quantity in the sales order and Items to be Invoiced have to match.

Example:

Sales Order item XYZ-10 (XYZ-10 represents the Sales Order Item ID) is associated with Project Task ABC-XX (ABC represents the Project ID, XX represents the Project Task ID) on document level. Sales Order item XYX-10 is of type service- time and material (project) with quantity unit of measure h (hours).
In the Not Invoiced Time and Expenses screeen for Project ABC, however, the unassigned item is of type Material and the quantity unit shows as ea (each).
In order to facilitate an automatic matching of incurred expenses and sales order items the quantity units either have to match or an adequate quantity conversion is to be maintained in the Product Master Data. In order to perform the quantity conversion proceed as follows.

1. Access the Product/ Service - Item Master Data of the Sales Order Item XYZ-10, e.g.: the Service Overview and choose View All.
2. Under General / Quantity Conversions tab, you find the possibility to assign corresponding quantities and Units of Measurement (UoM) for the affected  sales order item.
3. E.g.: Define an adequate quantity of ea (Each) for a corresponding quantity h (Hours).

deferred costs of goods sold, unassigned project costs , KBA , SRD-FIN-COR , Cost & Revenue , Problem