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5 Main Causes of Revenue Recognition Failure

Karen Donda
Principal Technical Analyst

Business or legal requirements sometimes dictate how to account for the revenue associated with an invoice. Perhaps you recognize the revenue in full once the invoice is paid, or for invoices associated with a service spread out over multiple months. How revenue is recognized is handled by Invoicing and Accounting Rules. Scheduling when Revenue is accounted for, is all handled by the Revenue Recognition feature. Revenue Recognition is an engine that will create GL distributions for your invoices reflecting the revenue schedule you defined.


1. Create Accounting was run, not Submit Accounting
Submit Accounting kicks off child process Revenue Recognition and then Create Accounting.

Responsibility: Receivables Manager
Navigation: Concurrent Manager > Query: Submit Accounting'

2. Inconsistent period types
Revenue Recognition is picky.... period types by period must flow in order from Closed, to Open, to Future

3. Rule_duration not correct

For example, if rule_duration of 24 periods is used and rule_start_date is 01-DEC-2017, but AR and GL calendar is on set up to MAR-2019, revenue recognition will fail, because periods are not defined through DEC-2019 period.

4. Changing of the calendar after transactions were created but not posted

5. Code bug.  Ensure the latest version of ARPLARLB.pls is applied

-- Run as sqlplus user apps:
select text from user_source
where name='ARP_AUTO_RULE'
and text like '%Header%';

or, using any of the Receivable Analyzers,

Navigate: Setup and Environment Information > File Version Information > AR PL/SQL Package Versions and query 'ARPLARLB.pls'

 

Review Understanding and Troubleshooting Revenue Recognition in Oracle Receivables(Doc ID 1121944.1) for further details.

 

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