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

Revenue Recognition Method: Recognize revenue on time & expense-based invoice simulation

In the following, two use cases are outlined with its system behavior before and after S/4HANA Cloud 2502.01

 

Use Case 1:

In this use case you have posted time confirmations in the current month- period 004. You write-off these time confirmations in the time frame of the current month. As you are still in month end activities for the previous month, Period 003, you re-run the period end close for the previous month.

 

Before S/4HANA Cloud 2502.01:

In April:

Posting Period 004.2025

Time Confirmation 10h (Price 100 EUR per hour):

DR: Accrued Revenue                               1000 EUR

               CR: Recognized Revenue          -1000 EUR

 

Write off 2 h

DR: Recognized Revenue                         200 EUR

               CR: Accrued Revenue                -200 EUR

 

Posting Period 003.2025

Re-run month end close EBRR for 003.2025

DR: Recognized Revenue                         200 EUR

               CR: Accrued Revenue                -200 EUR

We have reduced the WIP for write offs, which are based on time confirmations of subsequent periods. This was not correct

Posting Period 004.2025

Run month end close EBRR for 004.2025

CR: Recognized Revenue          -200 EUR

               DR: Accrued Revenue            200 EUR

 

Starting S/4HANA Cloud 2502.01:

In April:

Posting Period 004.2025

Time Confirmation 10h (Price 100 EUR per hour):

DR: Accrued Revenue                               1000 EUR

               CR: Recognized Revenue          -1000 EUR

 

Write off 2 h

DR: Recognized Revenue                         200 EUR

               CR: Accrued Revenue                -200 EUR

 

Posting Period 003.2025

Re-run month end close EBRR for 003.2025

No additional postings. The write off of time is not taken in account, what is correct

 

Posting Period 004.2025

Run month end close EBRR for 004.2025

No additional postings

 

 

Use Case 2:

In this use case you have posted time confirmations in a previous month, Period 003. You write-off these time confirmations in the time frame of the current month, Period 004.

Before S/4HANA Cloud 2502.01:

In March:

Posting Period 003.2025

Time Confirmation 10h (Price 100 EUR per hour):

DR: Accrued Revenue                               1000 EUR

               CR: Recognized Revenue          -1000 EUR

Run month end close EBRR with no additional postings

 

In April:

Posting Period 004.2025

Write off 2 h

DR: Recognized Revenue                         200 EUR

               CR: Accrued Revenue                -200 EUR

 

Posting Period 003.2025

Re-run month end close EBRR for 003.2025

DR: Recognized Revenue                         200 EUR

               CR: Accrued Revenue                -200 EUR

We have reduced the WIP for write offs – posted in period 004, which are based on time confirmations of the current period – period 003. subsequent periods. If this is wanted depends on the business scenario of the customer.

 

Posting Period 004.2025

Run month end close EBRR for 004.2025

DR: Accrued Revenue                                200 EUR

               CR: Recognized Revenue          -200 EUR

 

Starting S/4HANA Cloud 2502.01:

In March:

Posting Period 003.2025

Time Confirmation 10h (Price 100 EUR per hour):

DR: Accrued Revenue                               1000 EUR

               CR: Recognized Revenue          -1000 EUR

Run month end close EBRR with no additional postings

 

In April:

Posting Period 004.2025

Write off 2 h

DR: Recognized Revenue                         200 EUR

               CR: Accrued Revenue                -200 EUR

 

Posting Period 003.2025

Re-run month end close EBRR for 003.2025

No additional postings

We do not take the write off of period 004 in account for rev rec run in period 003. The write off is only taken in account in the period, in which it is posted.  If this is wanted depends on the business scenario of the customer.

 

Posting Period 004.2025

Run month end close EBRR for 004.2025

No additional postings

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

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