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Enabling Revenue Bookings With Monthly Revenue Recognition

DE passive Rechnungsabgrenzung
FR produits constatés d'avance

← Bookkeeping Data Creation Use Cases

This article describes how to configure the bookkeeping data generation for invoices if your accounting requires revenue recognition on a monthly basis.

Summary

JustOn Billing & Invoice Management controls the booking data creation using dedicated configurations on invoice line items, G/L account settings, collective account settings and global settings. The key setting to cover the current use case is the Booking Month revenue recognition rule on the invoice line item, which makes the software create multiple revenue booking details that are evenly distributed to calendar months (tat is, your booking periods) over the service period of the invoice line item.

Assuming that there is only one applicable tax rate (19%), the following settings are required (under DATEV SKR 04):

Object Field Value
Global Settings Create Bookkeeping Data true
Assignment Rules - G/L Account G/L Account 4400
Tax Code DE_19
Business Entity business entity name
Collective Account Booking Account 3806
Tax Code DE_19
Type Tax
Collective Account Booking Account 3900
Type Deferred
Account |
Invoice		 ON_DebtorNo|
DebtorNo		 debtor account number
Invoice Line Item Revenue Recognition Rule Booking Month

Use Case Outline

An invoice where the service period spans multiple months may look like this:

Title Service Period Start Service Period End Tax Rate Net Total
Service 2024-04-01 2025-03-31 19% 1200,00
Total (net) 1200,00
VAT 228,00
Grand Total 1428,00

Conditions

Assume the service is paid for a year in advance, but the revenue is booked proportionally per month during the service period. To illustrate this approach, let us therefore assume the following conditions:

  • Service period: one year
  • Full payment at the beginning of the service period
  • Separate bookings for the net revenue and the VAT
  • Deferred revenue on a monthly basis
  • Tax origin and due at the service period start

Booking Accounts

The bookings are expected to be made to the following accounts:

Account name Account no.
SKR 04		 Configuration Type Booking Detail Target Field
Revenue 19% VAT 4400 G/L Account Booking Account
VAT 19% 3806 Collective Account Booking Account
Deferred revenue 3900 Collective Account Booking Account
Debtor 10000 Debtor number Contra Booking Account

Expected Postings

In the first month of the service period (04/2024), the complete amount (1428,00) is initially distributed from the debtor account to:

  • Revenue 19% VAT – 100,00
  • VAT 19% – 228,00
  • Deferred revenue ("Passive Rechnungsabgrenzung") – 1100,00
Posting Debit Credit Posting Record Amount
1 10000 4400 Debtor → Revenue 19% VAT 100,00
2 10000 3806 Debtor → VAT 19% 228,00
3 10000 3900 Debtor → Deferred revenue 1100,00

In the following months (05/2024 – 03/2025), the deferrals are reversed and recorded as revenue in the period to which they relate:

Posting Debit Credit Posting Record Amount
4..14 3900 4400 Deferred revenue → Revenue 19% VAT 100,00

Required Configuration

JustOn Billing & Invoice Management controls the booking data creation using dedicated configurations on invoice line items, G/L account settings, collective account settings and global settings. Enabling the bookkeeping data generation for the outlined use case involves the following configuration steps:

In addition, your accounting may optionally require to configure booking texts, allocate cost centers or profit centers, or specify cost objects.

Activating Booking Data Creation

In order to globally enable the creation of bookkeeping data, the feature must be activated in the global settings.

  1. Click to enter Setup, then open Custom Settings.

    In Salesforce Lightning, navigate to Custom Code > Custom Settings.

    In Salesforce Classic, navigate to Develop > Custom Settings.

  2. Click Manage in the row of Global Settings.

  3. Click Edit in the Default row.
  4. Select the checkbox Create Bookkeeping Data.

  5. Click Save.

    Once enabled, the bookkeeping data is generated automatically upon invoice finalization.

Info

Once created, the booking details can no longer be modified or deleted. In case of errors, however, you can regenerate booking details for invoices.

Enabling Booking Accounts

To provide for the correct booking account allocation, you create dedicated G/L Account Assignment Rules and Collective Account settings.

Booking revenue and taxes including deferred revenue according to the outlined use case requires the following booking accounts:

Account name Account no.
SKR 04		 Configuration Type Booking Detail Target Field
Revenue 19% VAT 4400 G/L Account Booking Account
VAT 19% 3806 Collective Account Booking Account
Deferred revenue 3900 Collective Account Booking Account
Debtor 10000 Debtor number Contra Booking Account

Remember that depending on your accounting system, the booking account numbers may differ.

  1. Create an Assignment Rules - G/L Account setting to book the revenue.

    To cover the use case for revenues with 19% VAT, you need the following setting:

    Name G/L Account Tax Code Business Entity
    Revenue 19% VAT 4400 DE_19 business entity name

    For details, see Configuring G/L Account.

  2. Create a Collective Account setting for the tax bookings.

    To cover the outlined use case, you need the following setting:

    Name Booking Account Tax Code Type
    VAT 19% 3806 DE_19 Tax

    Depending on your requirements, your Collective Account setting may, in addition, need to define the Business Entity.

    For details, see Configuring Collective Accounts.

  3. Create a Collective Account setting for the deferred revenue bookings.

    To cover the outlined use case, you need at least this setting:

    Name Booking Account Business Partner Account Type
    Deferred 3900 debtor number Deferred
    Account debtor no for deferred revenue

    By default, JustOn Billing & Invoice Management fills the field Contra Booking Account in booking details for deferred revenue using the value of the Business Partner Account field of the corresponding Collective Accounts custom setting record. Your business use case, however, may require to use the value of the custom field ON_DebtorNo on the account instead. To support this scenario, activate the corresponding global setting Use Debtor No for Deferred Revenue.

    1. Click to enter Setup, then open Custom Settings.

      In Salesforce Lightning, navigate to Custom Code > Custom Settings.

      In Salesforce Classic, navigate to Develop > Custom Settings.

    2. Click Manage in the row of Global Settings.

    3. Click Edit in the Default row.
    4. Select the checkbox Use Debtor No for Deferred Revenue.
    5. Click Save.

    Depending on your requirements, your Collective Account setting may, in addition, need to define the Business Entity.

    For details, see Configuring Collective Accounts.

  4. Enable the debtor account number.

    Depending on your requirements, the way to define the debtor account number differs:

    For customer-specific debtor numbers, you use the Account field ON_DebtorNo.

    1. Navigate to the fields list of the Account object.

    2. Create the following new field.

      API Name Data Type Description Example Values
      ON_DebtorNo Text (255)
      or
      Formula      		 Specifies the contra account number for booking details. If configured as a formula, it can determine the value based on other fields. 10000
      AnotherField__c

    To support collective debtors (or debtor groups), you use the Invoice field DebtorNo.

    Using a collective debtor number via the Invoice field DebtorNo does not require a collective account setting. Instead, you just set the intended booking account number to be transferred to the booking detail.

    1. Navigate to the fields list of the Invoice object (ONB2__Invoice__c).

    2. Create the following new field.

      API Name Data Type Description Example Values
      DebtorNo Text (255)
      or
      Formula      		 Specifies the contra account number for booking details. If configured as a formula, it can determine the value based on other fields. 10000
      AnotherField__c

    If the field is configured as a text, you can use the ON field mechanism to have it set using values from invoice source objects. Be aware, however, that if the field is configured as a formula, the ON field mechanism will not overwrite the DebtorNo value.

    Info

    When creating booking details, the Invoice field DebtorNo takes precedence over the Account field ON_DebtorNo. If the Invoice field DebtorNo is empty or does not exist, JustOn Billing & Invoice Management uses the Account field ON_DebtorNo to set Contra Booking Account in the booking detail.

Setting Revenue Recognition Rule

JustOn Billing & Invoice Management writes deferred revenue bookings according to the revenue recognition rule set in the invoice line item field Recognition Rule.

The ON field mechanism is a likely option for having the revenue recognition rule specified automatically on the invoice line item when generating invoices. Alternatively, you can use Salesforce flows or other automation tools.

To make use of the ON field mechanism, you set the field ON_RecognitionRule on the invoice line item source object:

  1. Navigate to the fields list of the corresponding object.

  2. Create the following new field.

    API Name Data Type Description Use Case Value
    ON_RecognitionRule Text (255)
    Formula (Text)
    Picklist    		 Specifies the revenue recognition rule to be applied, is copied to the invoice line item during the invoice run. Booking Month

    For help about creating fields, see Managing Object Fields.

Produced Booking Details

Once configured accordingly, JustOn Billing & Invoice Management produces the following booking details, covering the outlined use case:

First service period month (04/2024)
# Booking Period Amount Debit/Credit Flag Booking Account Contra Booking Account Type
1 04/2024 100,00 H 4400 10000 Revenue
2 228,00 H 3806 10000 Tax
3 1100,00 H 3900 10000 Deferred
Following months (05/2024 – 03/2025), re-posting the deferred revenue
# Booking Period Amount Debit/Credit Flag Booking Account Contra Booking Account Type
4 05/2024 100,00 H 4400 10000 Revenue
5 -100,00 S 3900 Deferred
6 06/2024 100,00 H 4400 10000 Revenue
7 -100,00 S 3900 Deferred
8 07/2024 100,00 H 4400 10000 Revenue
9 -100,00 S 3900 Deferred
10 08/2024 100,00 H 4400 10000 Revenue
11 -100,00 S 3900 Deferred
12 09/2024 100,00 H 4400 10000 Revenue
13 -100,00 S 3900 Deferred
14 10/2024 100,00 H 4400 10000 Revenue
15 -100,00 S 3900 Deferred
16 11/2024 100,00 H 4400 10000 Revenue
17 -100,00 S 3900 Deferred
18 12/2024 100,00 H 4400 10000 Revenue
19 -100,00 S 3900 Deferred
20 01/2025 100,00 H 4400 10000 Revenue
21 -100,00 S 3900 Deferred
22 02/2025 100,00 H 4400 10000 Revenue
23 -100,00 S 3900 Deferred
24 03/2025 100,00 H 4400 10000 Revenue
25 -100,00 S 3900 Deferred