Item Configuration for Advanced Revenue Management (Essentials) and (Revenue Allocation)
When you use Advanced Revenue Management (Essentials) and Advanced Revenue Management (Revenue Allocation), by default, revenue arrangements are created based on the configuration you specify on the item record. If you use the Rule-Based Recognition Treatment feature, other values may supersede some of your item configuration values under specified conditions. For details, see Rule-Based Recognition Treatment.
You can configure Advanced Revenue Management for the following item types:
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Assembly including serialized and lot numbered
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Download item
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Kit/package
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Inventory including serialized and lot numbered
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Non-Inventory for sale or resale
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Other charge for sale or resale
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Service for sale or resale
Any item configuration changes you make do not affect revenue elements that were created before the change.
Two subtabs on the item record include fields used to configure Advanced Revenue Management (Essentials) and Advance Revenue Management (Revenue Allocation). Some fields appear only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. The revenue management related fields on each subtab are described in these subsections:
Accounting Subtab
The Accounting subtab of the item record includes the following fields that are specific to Advanced Revenue Management (Essentials).
Field |
Description |
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Deferred Revenue Account |
Select the deferred revenue account to associate with this item. The default value for this field is determined by the accounting preference Default Deferred Revenue Account. This accounting preference is on the Items/Transactions subtab of the Account Preferences page at Setup > Accounting > Accounting Preferences. The Deferred Revenue Account must be of the account type Deferred Revenue. When no account is set, the system-generated deferred revenue account is used. Changing the account on the item record does not affect existing revenue arrangements. However, changing the account on the item record does affect GL impacting transactions if you resubmit the transaction. If you resubmit a GL impacting transaction that contains the updated item, the account in the GL impact will be updated. For example, suppose that you change the deferred revenue account in item 1, then edit and save an invoice containing item 1. In that case, the invoice's GL impact will be updated with the new deferred revenue account. |
Intercompany Deferred Revenue Account |
Select the account to use for intercompany deferred revenue for this item. This account is used to record transactions between subsidiaries in NetSuite OneWorld accounts. To be available for selection, an account must have the Eliminate Intercompany Transactions box checked. If the Eliminate Intercompany Transactions box is later cleared on the account, intercompany transactions cannot be eliminated. For more information, see Intercompany Accounts. This field is available only when the Automated Intercompany Management feature is enabled. The field is included on inventory type items and the following resale item types:
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Income Account |
This field is not specific to Advanced Revenue Management, but a value is required so revenue can be recognized for the item. The default value is determined by the accounting preference Default Income Account. Check the Eliminate Intercompany Transactions box for income accounts with items used in intercompany transactions. For more information, see Equity, Income Statement, and Inventory Accounts and Creating Intercompany Accounts. |
Revenue Recognition/Amortization Subtab
The fields in the Advanced Revenue Recognition section of the Revenue Recognition/Amortization subtab are used for revenue management. The required fields are listed first in the following table, followed by Create Revenue Plans On. The remaining fields are in alphabetical order.
Some fields appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. For information, see Enabling the Advanced Revenue Management (Revenue Allocation) Feature.
Field |
Description |
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Revenue Recognition Rule |
Select the revenue rule to use by default for this item for actual revenue recognition plans. For information, see Revenue Recognition Rules. The accounting preference Default Standard Revenue Recognition Rule determines the default value for this field in the item record. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. If you use Rule-Based Recognition Treatments, a recognition treatment may supersede the value you select here. For information, see Rule-Based Recognition Treatment. |
Rev Rec Forecast Rule |
Select a revenue rule to use for forecast revenue recognition plans. This enables you to create revenue recognition plans for forecasting purposes when actual revenue recognition plans have not yet been created. The accounting preference Default Standard Revenue Recognition Rule also determines the default value for this field in the item record. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. If you use Rule-Based Recognition Treatments, a recognition treatment may supersede the value you select here. For information, see Rule-Based Recognition Treatment. You may select the same or different rules for actual and forecast rules. Percent complete rules are not available as forecast rules. For more information about percent complete rules, see Advanced Revenue Management (Essentials) for Projects. |
Create Revenue Plans On |
This field determines the event that triggers creation of revenue recognition plans. Match the event with the amount source of the item’s revenue recognition rule. The revenue plans may be created automatically or manually according to the Revenue Plan Update Frequency setting in your accounting preferences. For instructions to create revenue plans manually, see Updating Revenue Recognition Plans. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. This field is not required on the item record, but a value must be selected to create revenue recognition plans. If you leave the field blank, you can select the value in the revenue element when the item is used in a contract. For more information, see Viewing Revenue Arrangements and Revenue Element Field Reference. This field has the following options:
You may see additional options if custom recognition events have been added to your account. If you use Rule-Based Recognition Treatments, a recognition treatment may supersede the value you select here. For information, see Rule-Based Recognition Treatment.
Warning:
If changing the Create Revenue Plans On value changes the source transaction of the revenue arrangement, then a duplicate revenue arrangement will be created upon updating the revenue arrangement. This only applies if you have already created a revenue arrangement and then change the Create Revenue Plans On value afterward. |
Allocation Type |
Select an allocation type to associate with this item on sales transactions. The default value is Normal.
Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. If you use Rule-Based Recognition Treatments, a recognition treatment may supersede the value you select here. For information, see Rule-Based Recognition Treatment. This field appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. For information, see Enabling the Advanced Revenue Management (Revenue Allocation) Feature. |
Auto-Expansion for Revenue Management |
This box appears only on kit items. When this box is checked, the parent kit item and its child product items become revenue elements. The child items include the fair value and accounting rules for Advanced Revenue Management (Revenue Allocation). By default, it is checked. This box appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. For a full description of this item-level preference, see Auto-Expansion of Kit Items. |
Default as Delivered |
Check this box to set this item to a delivered status automatically when it is added to a transaction. Clear this box to leave the delivery status clear by default. The fulfillment status of an item is separate from its delivery status. An item may be marked Delivered although fulfillment has not yet occurred. The delivery status is one of the factors that determines whether the residual method can be used. For more information, see Residual Method and Two-Step Allocation. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. This field appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. |
Direct Revenue Posting |
Check this box to disable Advanced Revenue Management for this item. When checked, posting transactions that include this item post directly to the item revenue account. No revenue element or revenue arrangement is created. When you check this box, the Deferred Revenue Account on the Accounting subtab is disabled. When you create sales transactions that include items that have this box checked, all the items in the transaction must have the box checked. You cannot mix items that post directly to revenue with items that post to deferred revenue in the same transaction. This restriction also applies to kit items. All items in a kit must post either to revenue or to deferred revenue. By default, this box is not checked. You cannot check or clear the box after the item has been used in a transaction with Advanced Revenue Management. |
Eligible for Contingent Revenue Handling |
Check this box to indicate that this item is subject to contingent revenue handling. When checked, revenue allocation is affected. For details, see Contingent Revenue Handling. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. This box appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled and the accounting preference Enable Contingent Revenue Handling is checked. For information, see Enabling the Advanced Revenue Management (Revenue Allocation) Feature and Setting Advanced Revenue Management (Revenue Allocation) Preferences. |
Foreign Currency Adjustment Account |
This field is displayed only when the Multiple Currencies feature is enabled. Select the account to use for the foreign currency adjustment during reclassification. The default is the Income Account set on the Accounting subtab. You can select any other account with an account type of income, other income, expense, or other expense. These account options include the gain and loss accounts generated by the system after qualifying revaluation transactions. You can change the Foreign Currency Adjustment Account on the revenue element before revenue recognition plans are created. Check the Eliminate Intercompany Transactions box for all foreign currency adjustment accounts with items used in intercompany transactions. For more information, see Equity, Income Statement, and Inventory Accounts and Creating Intercompany Accounts. Use item chart of account mapping in Multi-Book Accounting if you want to use a different account for foreign currency adjustments in secondary books. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. |
Hold Revenue Recognition |
Check this box to delay posting from a revenue recognition plan by putting it on hold. When a revenue plan is on hold, the total balance of the delayed item remains in the Deferred Revenue account until you cancel the hold. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. |
Item Revenue Category |
Item revenue category is a classification for items that have similar characteristics and revenue allocation requirements. The options in this list are configured during setup to meet the specific needs of your company. For instructions, see Adding Item Revenue Categories. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. This field appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. |
Permit Discount |
Choose from the following to determine how discounts are handled for this item.
Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. This field appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. |
Revenue Allocation Group |
The revenue allocation group value is used in GroupSum functions in fair value formulas. The option you select here is the default, but you can change it on the revenue element. The available options are configured during setup to meet the specific needs of your company. For instructions, see Adding Revenue Allocation Groups. If you use Rule-Based Recognition Treatments, a recognition treatment may supersede the value you select here. For information, see Rule-Based Recognition Treatment. Changes made to this field between the creation of the source transaction and the creation of its revenue arrangement are reflected in the revenue arrangement. This field appears only when the Advanced Revenue Management (Revenue Allocation) feature is enabled. |
When the Multi-Book Accounting and Revenue and Expense Management features are enabled, an Accounting Book subtab is added to the Revenue Recognition/Amortization subtab. For more information, see Book Specific Revenue Arrangements, Elements, and Plans.
Related Topics
- Advanced Revenue Management (Essentials) and (Revenue Allocation)
- Setup for Advanced Revenue Management (Essentials)
- Setup for Advanced Revenue Management (Revenue Allocation)
- Revenue Recognition and Advanced Revenue Management (Essentials)
- Revenue Management Roles and Permissions
- Revenue Recognition Rules
- Revenue Arrangement Management
- Revenue Recognition Plans
- Advanced Revenue Management (Revenue Allocation)
- Advanced Revenue Management (Essentials) for Projects
- Advanced Revenue Management and Multi-Book Accounting
- Month-End Revenue Processing
- Reports for Advanced Revenue Management