You can modify invoices or invoice lines that are still under collectibility analysis. Modifications to invoices include:

• Manually adjusting revenue using the Revenue Accounting Management (RAM) wizard

• Adjusting invoices

• Modifying distributions or sales credits in the Transactions workbench

• Crediting invoices

• Incompleting invoices

• Reversing receipts

When modifying invoices under collectibility analysis, however, you should be aware of the following:

Using the Revenue Accounting Management (RAM) Wizard

You can use the RAM wizard to manually adjust revenue on an invoice or invoice line that is under collectibility analysis.

When you move revenue on an invoice or invoice line from an unearned to earned revenue account, or vice versa, Receivables removes the invoice or invoice line from further collectibility analysis. The invoice is no longer subject to automatic revenue recognition.

Adjusting Invoices

You can manually adjust an invoice that is under collectibility analysis. However, if the GL Account Source for the specified adjustment activity is Revenue on Invoice, then Receivables removes the invoice from further collectibility analysis after making the adjustment.

This is because Receivables calls the Revenue Adjustment API if revenue on the specified invoice is unearned. The Revenue Adjustment API uses AutoAccounting to derive the anticipated revenue accounting distribution accounts and amounts, thereby overriding the event-based revenue management process.

If you want Receivables to continue monitoring an invoice for automatic revenue recognition, then always use a credit memo to adjust an invoice under collectibility analysis.

Using the Transactions Workbench to Modify Accounting Distributions or Sales Credits

You can manually change the accounting distributions and sales credits for an invoice that is under collectibility analysis. When making a change in either the Distributions window or Sales Credits window, Receivables removes the invoice from further collectibility analysis if:

• You change an existing accounting distribution to a revenue account or unknown account in the Distributions window

• You rerun AutoAccounting when you modify sales credits in the Sales Credits window

Crediting Invoices

If you issue a credit memo against an invoice whose revenue was automatically deferred upon import, then the impact of the credit memo differs depending on the original reason for the revenue deferral. This is applicable only if you set the Use Invoice Accounting for Credit Memos profile option to Yes.

For example, perhaps you apply a credit memo against an invoice whose revenue was initially deferred due to one or more contingencies, but was later partially recognized. A portion of this invoice's revenue, therefore, is still in an unearned revenue account.

• If revenue on this invoice was deferred due to unmet payment-based contingencies, then Receivables always debits the unearned revenue account for the full amount of the credit memo, according to the initially assigned accounting rules.

  Note: This is a departure from standard functionality. When you credit a typical invoice that is not under evaluation for event-based revenue management, Receivables prorates the amount of the credit memo between the earned and unearned revenue invoice amounts.

  If the amount of the credit memo exceeds the amount of the unearned revenue on the invoice, and you selected the Allow Overapplication check box on the credit memo's transaction type, then Receivables records the excess amount as a debit to the unearned revenue account. You can optionally use the RAM wizard to clear the negative unearned revenue on this invoice.

• If revenue on this invoice was deferred due to unexpired time-based contingencies, then Receivables always prorates the credit memo amount between the earned and unearned revenue amounts on the invoice. If a multi-period accounting rule exists on a line, then Receivables further prorates the credit memo amount across future periods.

See: Credit Memos Against Invoices Under Collectibility Analysis.

Crediting Manually Adjusted Invoices

If you apply a credit memo against an invoice whose revenue was already manually adjusted via the RAM wizard, then Receivables follows standard credit memo functionality. Even if the invoice was initially analyzed for collectibility and acceptance, Receivables prorates the credit memo amount between the earned and unearned revenue amounts on the invoice.

In that case, you must confirm that the earned and unearned revenue on the invoice is stated appropriately for each period. If necessary, use the RAM wizard to make any further adjustments.

Incompleting Invoices

In the Transactions workbench, you cannot incomplete invoices that initially failed collectibility and acceptance analysis, and which are still under analysis for future event-based revenue management.

Reversing Receipts

If you apply a receipt against an invoice whose revenue was automatically deferred upon import, and you later reverse that receipt, then the impact of the receipt reversal differs depending on the original reason for the revenue deferral:

• If revenue on an invoice was deferred due to payment-based contingencies, then Receivables initiates revenue recognition whenever you apply a receipt to the invoice. If you reverse a previously applied receipt, then Receivables automatically unearns the previously earned revenue.

  In some cases, you might apply a receipt against an invoice line, but Receivables cannot recognize revenue for that line due to unexpired time-based contingencies. Therefore, Receivables leaves the receipt amount as unearned revenue, but flags the amount as pending revenue recognition at a later date.

  If you later reverse the receipt, then Receivables reflects the receipt reversal by simply removing that pending flag from the receipt amount.

• If revenue on an invoice was deferred due to unexpired time-based contingencies only, then the reversal of a receipt does not impact the amount and timing of revenue recognition.

Scenario 1

You import a customer invoice with 3 lines. All lines are associated with a nonstandard refund policy (90 days). In this case, Receivables recognizes revenue only upon the expiration of the 90-day period. Applying and later reversing a receipt against this invoice has no impact on the timing and amount of revenue recognition.

Scenario 2

You import a customer invoice with 2 lines. Line 1 is $226 and Line 2 is $350. Line 2 is associated with a cancellation provision (120 days). Additionally, the Revenue Management Engine finds that the customer is not creditworthy.

• You apply a receipt for $126 against this invoice. For simplicity, assume that Receivables applies $63 to each line.

  • Receivables recognizes revenue for Line 1 in the amount of $63.

  • Receivables cannot recognize revenue for Line 2 due to the cancellation provision. Therefore, Receivables flags $63 for Line 2 as an amount that is pending revenue recognition.

• Several days later, you reverse the receipt.

  • Receivables automatically unearns the previously earned $63 in revenue for Line 1.

  • Receivables removes the pending flag that was assigned to $63 for Line 2.

• After this receipt reversal, the entire amount of the invoice is in the unearned revenue account.