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Using Event-Based Revenue Management (RM) to automate Revenue Recongition on Invoices

Michele Casey
Principal Technical Support Engineer

The Revenue Management Engine automates the timing of Revenue Recognition for manually entered invoices, or invoices imported via AutoInvoice.  If you use event-based Revenue Management, then Receivables evaluates these invoices and decides whether to immediately recognize revenue, or temporarily defer revenue to an unearned revenue account. Revenue is subsequently recognized depending on certain events, such as customer acceptance or receipt of payment.

This diagram shows how the Revenue Management engine evaluates contingencies.

 

How does this automatic process occur?  This diagram shows how Contingency removal events are handled by the revenue management engine.

Even if you enable this automated revenue recognition process, you can always use the Revenue Accounting Management (RAM) wizard to manually adjust revenue. However, once you manually adjust revenue, Receivables discontinues the automatic monitoring of contingencies. Each contingency has its own related contingency removal event. Those are events that will remove the contingency from the invoice.

Some example of contingencies removal events are:

  • Contingency Expiration or Expiration dates
  • Payment or Receipt Application
  • Customer acceptance
  • Proof of delivery (POD)
  • Invoicing

Please note that you can define multiple contingencies that have the same removal event.

Oracle Receivables predefined a set of revenue contingencies that you can use with event-based revenue management. You cannot update or delete these predefined revenue contingencies, but you can create your own. Receivables also predefined contingency removal events, which you cannot delete or modify.

Responsibility: Revenue Management Super User
Navigation: Revenue Contingencies > Contingencies Definition

Bookmark this note for future reference:  DocID 1130963.1 Understanding and Troubleshooting Event-Based Revenue Management
Watch our webcast on Event-Based Revenue Management & Revenue Contingencies (Video) DocID 1048556.1


 

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