Introducing SAP Revenue Accounting and Reporting

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To support the process flow in operational applications, an Integration Component (IC) creates Revenue Accounting Items (RAIs) and sends them to Revenue Accounting and Reporting. An RAI contains all of the data from the operational items and events that are relevant for revenue accounting. Rules for transformation can be defined in the Business Rules Framework plus (BRFplus).

SAP provides integration to Revenue Accounting for several operational applications (sender components) such as:

• SAP Sales and Distribution
• SAP Customer Relationship Management Service
• SAP Billing and Revenue Innovation Management (Convergent Invoicing and Financials Contract Accounting)

However, customers can feed Revenue Accounting and Reporting from external, non-SAP components. Inbound processing within Revenue accounting processes RAIs, and transforms them into revenue accounting contracts (RA) and Performance Obligations (POB)s.

The following items are components of the Revenue Accounting and Reporting engine:

• Contract Management to calculate the price allocation including manual contract processing
• Invoice Management to calculate the effects from invoices
• Fulfillment Management that determines recognized revenue from fulfillment events
• Posting Management that creates postings of recognized revenue and invoice corrections
• Reporting and disclosures

Revenue Accounting and Reporting automates the revenue recognition and accounting process, and simplifies the tasks of revenue accountants in following the accounting guidelines. These tasks are described in the following steps:

• Identify the revenue contract (combine contracts)
• Identify the performance obligations in the contract
• Determine the transaction price
• Allocate the transaction price to the performance obligations of the contract
• Recognize the revenue as the performance obligations are satisfied

The following slide shows the different components using Revenue Accounting starting with the sender components, such as BRIM, inbound processing including rules management, contract management, posting management, and disclosures and analytics.

Starting with SAP S/4HANA 2020, contract management and inbound processing have been refactored in the context of SAP S/4HANA. These capabilities have been made available as optimized contract management and optimized inbound processing, which can be used instead of the classic capabilities. Optimized Contract Management (OCM) in SAP S/4HANA is the future of Revenue Accounting. It has been significantly reworked to focus on contract performance optimizations, process simplifications, and additional features.

For new implementations, SAP recommends the optimized SAP S/4HANA capabilities of contract management and inbound processing, as future investments will mainly focus on these new capabilities. OCM comes with a set of features that are not supported in CCM (Classic Contract Management), such as the following:

• Day-based contract modifications
• Freeze periods on time-based POBs
• Early termination of contracts
• Improved usability with FIORI apps
• Improved analytical capabilities using and CDS views

For further details, please refer to the Release Information Notes for Revenue Accounting.