3590910 - Revenue Mismatch Due to Manual Completion of Contract with Partial Invoicing

There is a mismatch between the accrued revenue and the final invoiced amount, as the system posted a journal entry to reverse part of the previously recognized revenue after manually completing the contract with only a portion of the expected invoicing. 

SAP Business ByDesign

1. Go to the Cost and Revenue work center and here to the Sales Document Items view.
2. Find and select the respective sales order item
3. Apply accrual method 304 – Straight-line – prorate partial periods for revenue recognition.
4. Manually complete the contract before the full invoicing period ends, with only a portion of the invoicing being completed.
5. Observe that the system posts a journal entry to reverse the over-accrued revenue.
6. Check for a mismatch between the accrued revenue and the final invoiced amount.
7. Click on the Edit Manual Revenue Recognition Data button and select Recognized Costs and Revenues.

The mismatch arises from the difference between the planned contract duration and the actual invoiced duration. The accrual method (304 – Straight-line – prorate partial periods) initially distributes revenue across the entire contract period. When the contract is manually completed, the system adjusts the recognized revenue to match the actual invoiced value, resulting in the reversal of the over-accrued revenue.

The system behavior is standard functionality, designed to ensure that revenue recognition aligns with the actual invoicing. When the contract is completed before the expected invoicing period ends, the system automatically adjusts the recognized revenue to match the invoiced amount.

Revenue Recognition, Contract, Manual Revenue Recognition, Accrual Method, Journal Entry, Revenue Adjustment, Invoiced Duration, Order Value Period. , KBA , SRD-FIN-COR , Cost & Revenue , Problem