3601037 - Write-offs in project billing for professional services with event-based revenue recognition, SAP S/4HANA Cloud Public Edition

In CE2502.01, we have resolved a critical issue impacting the treatment of write-offs from project billing. Previously, the issue caused temporary duplicate postings and could lead to an unintended WIP Reduction during the period prior to confirmation and write-off. After a thorough investigation, our team implemented a more reliable solution to ensure that write-offs in project billing are considered exclusively within event-based revenue recognition for the fiscal period in which they are initiated. This KBA provides a detailed overview of the behavior before the correction and the improvements introduced thereafter.

SAP S/4HANA Cloud Public Edition

For billing elements with revenue recognition keys SPTM and SPTMWP, Event-Based Revenue Recognition now offers two options for considering write-offs during re-evaluation. Re-evaluation in Event-Based Revenue Recognition is triggered from the apps Event-Based Revenue Recognition – Projects and Run Revenue Recognition – Projects.

Default Logic of Re-Evaluation in Event-Based Revenue Recognition

Re-evaluation considers only write-offs posted within or prior to the financial period in which re-evaluation takes place.

This option is active by default, and it is the standard behavior of Event-Based Revenue Recognition re-evaluation.

Example:

1. Time allocation or other billing-relevant cost posting is performed in financial period N.
2. At the end of period N, the billing document is issued and sent to customers.
3. At the beginning of period N+1, feedback from customers is received and leads to write-offs of revenue recognized in period N.
4. By triggering re-valuation for period N, you still recognize full revenue. Write-offs are not considered for period N as they were posted in period N+1.
5. Finally, close the financial period N.

Note: This option was delivered as part of CE2502.01.

Re-Evaluation in Event-Based Revenue Recognition with Fewer Restrictions

Here, re-evaluation considers all write-offs (even those created in the future from the financial period of the re-evaluation's point of view) released to billing element items (time confirmations or expenses) created within or prior to the financial period in which re-evaluation takes place. 

This option can be activated upon request by expert configuration. This activation has a global effect, and it cannot be activated only for a subset of billing elements (for example, all billing elements within a selected company code).

Example:

1. Time allocation or other billing-relevant cost posting is performed in financial period N.
2. At the end of period N, the billing document is issued and sent to customers.
3. At the beginning of period N+1, feedback from customers is received and leads to write-offs of revenue recognized in period N.
4. You now recognize the write-offs posted at the beginning of period N+1 for period N by running re-evaluation for period N.
5. Finally, close the financial period N.

Note: This option had been active before CE2502.01. 

Revenue recognition, write off, write-off, project, billing, period, WIP, reduction, professional services, customer project. , KBA , CO-PC-OBJ-EBR-2CL , Event-Based Revenue Recognition (Public Cloud) , Problem