R12 Revenue Management and Subledger Accounting Ed Marwitz Ed@eMarwitz.com

1. R12 Revenue Management and Subledger AccountingEd MarwitzEd@eMarwitz.com A Software Company’s Case Study

2. R12 Revenue Management and Subledger Accounting • Revenue Recognition requirements to be met. • Key setup steps required to manage revenue. • Conversion requirement for the existing revenue schedules from the legacy system. • Key setup steps in Subledger Accounting (SLA) to map multiple unearned revenue accounts. • Revenue Contingencies • Revenue Management • Questions?

3. Revenue Recognition requirements • Background: A software company that has sales in the following areas of recognition concern: • Software Maintenance and Support bundled with the software sale • Term Software License • Implementation Services • Consulting Services • Training Class and “Passport”

4. Key Setup Steps • Accounting Rules • Key Item Setups • Accounting Rule Assignment • Revenue Account Assignment • Invoicing Rule Assignment • SLA Setups • “Starting from the Beginning” or “Copy All” • Mapping Sets: Allows for multiple unearned accounts

5. Accounting Rule Setup: SMS

6. Item Master Setups

7. Conversion Requirements Leveraged Service Contract conversion Leveraged Auto Invoice Open Interface for the rest Utilized “Accounting Only” Transaction Types All periods in the schedule must be opened! Memo Line setups for simplification Standard GL Journal reversal

8. Conversion Requirements

9. Conversion Requirements

10. SLA Setups: “Copy All” Copy “Standard Accrual” Subledger Accounting Method Copy “Receivables” Application Accounting Definition Assignment Copy “Receivables Default Accrual” Accounting Definition Copy “Default Accrual” Journal Line Definition Create New Account Derivation Rule for Journal Line Type Invoice Deferred Revenue

11. SLA Setups: “Copy All” • Create New Mapping Set: Rule to Defer • This allows us to book a corresponding Deferred Revenue Account for each Revenue Account • SLA looks at the Accounting Rule assigned at the line level and derives the proper Unearned Account in SLA which then ultimately books to the GL • Assign Mapping Set to Account Derivation Rule

12. SLA Setup Screen Shots

13. SLA Setup Screen Shots

14. SLA Setup Screen Shots

15. SLA Setup Screen Shots

16. SLA setups

17. SLA setup “Gotchas” • Always copy from the top and do all levels. Don’t try to just assign a mapping set to the existing setup. • Bad practice to touch existing setups • Doesn’t work! • Assign an Accounting Chart of Accounts to all levels even though it isn’t required. • Might not be a “yellow” field but if you don’t populate – it doesn’t work!

18. SLA setup “Gotchas” • Every time you touch this setup or add a value to the mapping set it requires re-validation. • Concurrent Program • “Validate Application Accounting Definitions” • If you don’t the Submit Accounting process in AR will complete with error. The error message is in the log – but it’s not obvious! • Start Dates are important… I always back date to the “infamous” ’01-JAN-1951’

19. Revenue Contingencies • This was explored to handle the requirement: • Training Class purchased. • Revenue Recognition occurs when class attended • Revenue Recognition can also occur after 18 months of class purchase regardless of attendance • Revenue Contingency can be setup with an Expiration Date

20. Revenue Management

21. Revenue Management

22. Questions? Ed MarwitzEd@eMarwitz.com970.485.2819