Run the Revenue Recognition program to generate the revenue distribution records for your invoices and credit memos that use invoicing and accounting rules. Accounting rules determine the number of periods and percentage of total revenue to record in each accounting period. Invoicing rules determine when to recognize the receivable for invoices that span more than one accounting period. See: Invoices with Rules.
When you submit the program, Revenue Recognition selects all transactions that have invoicing and accounting rules and that have not yet been processed since you last submitted the program. The program creates the revenue distribution records for all accounting periods specified by the accounting rule on each transaction line:
The Revenue Recognition program creates distribution records for the invoices and credit memos that you create in Receivables and import using AutoInvoice. The Revenue Recognition program uses the accounting distribution sets that you specify in the Transactions window or import into Receivables using AutoInvoice to determine the accounts of your newly created revenue distribution records.
Receivables considers this revenue scheduled.
If a deferred accounting rule exists, then Revenue Recognition will create the distribution records for an unearned revenue account. Receivables considers this revenue unscheduled.
Revenue Recognition also creates the receivable, tax, freight, and AutoInvoice clearing account assignments which correspond to the GL date of each invoice included in your submission.
Note: Revenue Recognition creates accounting distributions for all periods of status Open, Future, or Not Open. If any period has a status of Closed or Close Pending, then Revenue Recognition creates the distributions in the next Open, Future, or Not Open period.
If you later decide that the GL distributions need to be reclassified, you can change the individual distribution on the transaction. Receivables will automatically create the reverse accounting entries.
If the Revenue Recognition program cannot create accounting distributions for a transaction, then the program generates the accounting for all other transactions in the submission, but completes with a status of Warning. Receivables includes the transaction at the bottom of the Revenue Recognition Execution report so that you know which transaction to correct, incomplete, or delete. See: Revenue Recognition Program Execution Report.
Note: Whenever you run the Submit Accounting program, Receivables first runs the standard Revenue Recognition program. See: Creating Accounting in Receivables.
Matching COGS with Revenue
Oracle Costing integrates with Receivables to ensure that, during revenue recognition and deferral activities in Receivables, COGS (Cost of Goods Sold) is recognized or deferred in the same percentage as revenue. COGS is the expense of manufacturing that is associated with the sale of goods. See: Overview of Revenue and COGS Matching.
Prerequisites
Define accounting calendars and accounting periods. See: Define accounts.
Note: You must define accounting calendars for at least as many periods as you plan to recognize revenue.
There are two Revenue Recognition programs: Revenue Recognition and Revenue Recognition Master. The Revenue Recognition Master program is for parallel processing only and takes advantage of the Oracle scalability feature to reduce processing time by running on multiple processors, or workers. The Revenue Recognition Master program determines the maximum number of parallel processors needed for your transaction volume and uniformly distributes the processing over these workers. You can set a maximum number of processors for the Revenue Recognition Master program to use at runtime. This scheduling capability allows you to take advantage of off-peak processing time. You choose the Revenue Recognition program that you want to use at runtime.
Attention: You cannot use the Revenue Recognition Master program on a system with less than two processors.
Suggestion: If you have a high transaction volume, we recommend that you run Revenue Recognition at regular intervals. This minimizes the number of transactions to process and improves performance.
Navigate to either the Run Revenue Recognition or the Requests window.
Choose the Revenue Recognition program you want to run:
Enter 'Revenue Recognition' in the Name field for the single processor program.
Enter 'Revenue Recognition Master Program' in the Name field for the parallel processor program.
Choose a print format of either Summary or Detail.
Select a parameter for the program you chose:
For the Revenue Recognition program, specify whether you want to commit your work. Enter Yes if you want to create the distribution records generated by this submission. Enter No if you want to review the distributions first in the Revenue Recognition Execution report without actually creating the distribution records.
For the Revenue Recognition Master Program, enter the Maximum Number of Workers (parallel processors) you want to utilize for this run. The default is 4.
Choose OK.
Change the language if desired by choosing Languages.
Schedule the run as needed. The default is As Soon as Possible. You can run Revenue Recognition more than once, as well, Periodically and/or on Specific Days.
Choose to save the output of the Revenue Recognition program to a file by checking the Save all Output Files box.
Choose Print Options to select print options, including the number of Copies to print, the Style, and the Printer to use.
Choose Submit Request. Receivables displays the Request ID of your concurrent request and creates the Revenue Recognition Program Execution report.
You can use the Request ID to view your submission in the Concurrent Requests Summary window. To see all of the revenue distribution lines that the program creates for this submission, use the: Revenue Recognition Program Execution Report.