Managing Deferred and Accrued Revenue
You can chose one of three ways to recognize revenue:
Cash Basis: revenue is recorded in the period it is actually received.
Accrued: revenue is recorded in accrued revenue account in the period in which it is earned. Bill Arrears must be set to Yes. When you invoice at the end of service coverage, this lets you post accrued amounts during the duration of the contract.
Deferred: collected revenue is held in a deferred account and is posted periodically over the contract duration. Bill Arrears must be set to No.
Deferred and Accrued Revenue accounts are set up at the domain level, by product line, or for combinations of product line, channel, site, and customer type.
To find deferred and accrued accounts, the system searches first for alternate sales accounts set up in Sales Account Maintenance (1.2.17) using:
• The product line of the service type in effect
• The channel specified on the contract header
• The contract site
• The customer type
If these do not exist, it uses accounts set up in Product Line Maintenance (1.2.1). If these do not exist, it uses accounts defined in Domain/Account Control (36.9.24).
