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This article provides an overview on how revenue recognition is configured in LogiSense Billing.
Prerequisites
What else do we have to do / do we have to do in discussion with our customer prior to configuration
Outline/detail the data we need from them during this stage of the process
Configuration Process
Back-end Configuration
may need to rename this to something like “Initial configuration steps” or something else that describes the customer specific work we are doing based on cx discussions/data gathering
Need to determine how much we describe this portion of the configuration (E.g. to enable rev rec reporting we set up stored procedures and then describe what each stored procedure does. This should not be written as numbered steps for the user to follow, this is a description (overview) of the back-end config work that we do and why we do it.
For this guide we will specifically cover the step required to get rev rec working and these three reports generated:
Billed Revenue
Deferred Revenue
Unbilled Revenue
LogiSense Billing Configuration
Once the initial back-end configuration aspects are completed the rest of the configuration is handled inside the LogiSense Billing application.
<<determine if the report config or the custom field config comes first here>>In order to determine the proper revenue recognition implementation we will work with you to evaluate your current systems and how to integrate them with LogiSense Billing. Some key aspects of this are:
If a CPQ/CRM system in use and if it's applicable to the revenue recognition configuration
What ERP is in use and what automation capabilities are available
What are the reporting levels and field mapping requirements within the ERP
Determining if there are any custom rev rec rules that are required outside the standard rules provided in LogiSense Billing
Configuration Process
In this document we will focus on the three standard report types provided when revenue recognition is configured in LogiSense Billing:
Recognized Revenue
Deferred Revenue
Accrued Revenue
Additional customizations are available to these reports and additional custom reports can be setup if required. The standard frequency for these outputs is scheduled monthly or at the end of your fiscal month.
Reports can be accessed in the AdminPortal (LogiSense Billing UI), delivered to a transfer location that you specify (S3 bucket/SFTP), or directly accessed by API integration with your ERP.
LogiSense Billing Configuration
Within the LogiSense Billing application you can define how revenue is recognized for every service configured in the system using rev rec rules (detailed below). How revenue is recognized for one service can differ from another service based on the rule you define per service.
Rev Rec Rules
Rev Rev Rules are configured on custom fields in the system and allow you to define how revenue should be recognized according to your needs. The custom field is defined configured on the product sold (service). <<how is the rev rec rule applied to sales orders and contracts if it is setup at the service level?>>
The standard rules plus any custom defined rules from prerequisite discussions will be configured ahead of time before the report configurations are finalized.
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Available Rules:
Evenly Distributed: this option will take the total price for the service and divide it evenly across the length of the term/contract period. For example, an annual product with a price of $120 would be recognized at 1/12th ($10) per each fiscal month
At Invoice Creation: service revenue is recognized/calculated when the invoice is created?is deferred until the first invoice is generated. Once the invoice is generated the revenue is recognized. Typically this would be used when finalizing a shippable product or switching from a trial service
At Charge Period Start: recognizes revenue when the service’s effective date is reached. When the effective date is reached even if the service has not yet been billed it will be recognized. Until the service’s effective date is reached it will remain as deferred
At Charge Period End: recognizes revenue when the service’s period end has been reached. The period end is determined by the billed invoice item or the end of the contract associated with the charge/term of the service fee
At Charge Date: revenue is recognized when the service is charged (billing is run)
Milestone Event: This option leverages additional custom fields or status changes (service status change, some other entities status changes, etc.). to know when these milestone events have occurred. The implementation team will work with your specific milestones to determine the best configuration
Standalone Selling Prices
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