You notice that the revenue recognition run accrues revenue for project expenses that are marked as written off. You expect the costs of these expenses to be realized but no revenue is to be recognized.
SAP Business ByDesign
Reproducing the Issue
- In the Cost and Revenue work center go to the Revenue Recognition view.
- Find the respective run, access the application log and navigate to the Postings tab.
- You notice debit postings on the G/L account defined to be used for Revenue Accruals.
- But the amounts that you identify relate to expenses that are marked as Written off in Project Management. These amounts should never produce any revenue.
To verify the written off expenses use the Revenue by Team Member report in Project Management:
- Go to the Reports view of the Project Management work center.
- Find and open the Revenue by Team Member report.
- In the Project field, enter the Project ID and press Apply.
- Go to View and to the Collumns Fields section.
- At the Key Figure attribute choose More (three little dots) and select Key Figure Settings.
- Select Amount Written-Off (Source Document) as well as Quantity Written Off (Source Document) and move them to the right.
- Press OK.
- You can now identify the written off amounts and quantities per team member per month.
- Add further attributes, such as Project Task, Sales Order, Sales Order item, Source Document Type, Source Document ID to identify the exact details of the written off expenses.
- Compare the Net Value Written off with the accrued amounts in the Revenue Recognition run.
- You notice that written off quantities/amounts are considered to recognize revenue and therefore produced Revenue Accruals.
- Whenever a project expense is being written off an internal write-off- or not-to-be-invoiced date is derived for this expense. An expense is considered as to be invoiced until the not-to-be-invoiced date is reached.
- If the expense was generated automatically as unbilled expense its write-off-date equals its incurrence date.
- If any change is made to an automatically written off expense, such as a sales order item re-assignment for example, the write-off date/not-to-be-invoiced date of the expense changes to the date when the change happened.
- If a billable expense gets written off after its incurrence date, for example during the project invoice request creation, then its write-off-date will be the date when this change happened.
- If the incurrence date and the write-off date are not the same then the expense is considered as to be invoiced until the not-to-be-invoiced date is reached.
- If the write-off date is in a later accounting period than the expense incurrence date then the expense will be considered as revenue to be recognized in the earlier accounting period (the respective net value is realised and offset on the accruals account). The accrual will be cleared in the period of the write-off / not-to-be-invoiced date.
Currently, this is the designed system behaviour.
If you need to clear the accrued, written-off amount in the periods, in which itgot incurred initially you can create a manual journal entry voucher of type 00088 -Manual Journal Entry Voucher for Sales Document where you credit the accruals account and debit the Revenue account. The posting needs to be reversed in the period of the write-off date, as then the amount gets cleared automatically by the revenue recognition run.
written off expense, accrued revenue, revenue recognition, non-billable project expense, overstated revenue , KBA , SRD-FIN-COR , Cost & Revenue , Problem