How to Perform Revenue Recognition in SAP CRM-IPM
- by Sujoy Kumar Dey, Senior Consultant, Fujitsu America., Inc.
- March 16, 2012
Learn how to recognize revenue on license sales contracts in SAP CRM-Intellectual Property Management as well as key technical details and the configuration of the process.
In standard SAP CRM and in Sales and Distribution the revenue of a sales order is recognized from billing (i.e., when a billing document is transferred to accounting, revenue is recognized for customer). As a result, the customer is debited and the revenue G/L account is credited. However, for SAP CRM Intellectual Property Management, the revenue recognition process is independent of billing. That is because license sales of an intellectual property (IP) can be accrued and revenue can be recognized in advance even if that IP is not billed.
Intellectual property management (IPM) refers to the oversight of a variety of intangible assets known as intellectual properties (IPs), such as musical, literary, and artistic works, discoveries and inventions, designs and symbols, and publications, movies, and television shows. Some of the industries that deal with IPs include high-tech, media and entertainment, and publishing, all of which manage the maintenance of IPs and their associated rights, and the selling and buying of IP rights.
While SAP CRM Intellectual Property Management (SAP CRM-IPM) functions come standard with SAP CRM, they require the user to follow processes that are different from standard SAP CRM transactions. Some of the key concepts about IPM master data and the sales and billing processes of license sales contracts are detailed in other articles in the CRM Expert knowledgebase. I now explain the revenue recognition process that occurs after rights and royalties of a license sales contract are sold.
The revenue recognition process in IPM includes a set of manual steps that are not necessary when processing billing-based revenue recognition for an SAP CRM or SAP ERP Central Component (SAP ECC) sales order. I introduce the key parts of SAP CRM-IPM revenue recognition and show how to configure the revenue process. My step-by-step guide to revenue recognition uses a flat-fee license sales contract as an example.
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