DEFERRAL FOR INVOICING AND REVENUE RECOGNITION

Most of the Business have the requirement to DEFER Invocing & Revenue Recognition until original shipment has been received at customer or receipt of a sales order shipment has been formally acknowledged / accepted by a customer

 • Benefits
     - Reduce Administrative Costs
    - Revenue Accounting Management
    - Audit Improvement
    - Compliance to Corporate Governance Regulations and requirements
   - Improves over all customer service and risk

You can handle/setup in oracle by defining acceptances,
 Acceptance are of two types Explicit and Implicit


Pre-billing Acceptance – Always reflect to Invoicing
• Defers Invoicing AND Revenue Recognition  – Sales Order Line status will be Invoice Interface
 Eligible – Pending Customer Acceptance

• Sales order line status will be Pending prebilling acceptance after ship confirm is complete

Post-billing Acceptance – Always reflect to Customer Acceptance Removal
• Defers ONLY Revenue Recognition –  Sales Order Line status will be at Close Line Eligible – Pending Customer Acceptance

 • Sales order line  status will be as Pending post billing acceptance after ship confirm
• Invoice will be generated however Revenue will be Deferred and accounted into  Unearned Revenue Account until customer Acceptance is completed

Accounting entries for Deferred Revenue

Accounting Date	Account Type	Debit	Credit
20-Aug-2012	Receivable	$190.00
20-Aug-2012	Deferred Revenue		$190.00
30-Sep-2012	Deferred Revenue	$190.00
30-Sep-2012	Revenue		$190.00