Revenue Recognition Approval Workflow States
The Revenue Recognition Approval Workflow is initiated upon the update and submission of a revenue arrangement. The arrangement is validated and processed, depending on the conditions that are set for each state.
The workflow uses the total revenue amount as the default for all amount validations. You have the option of using the total carve-out amount by customizing the workflow. For more information, see Setting the Amount Validation Field.
Entry
In the Entry state, the workflow verifies that the Approval Routing feature is enabled in the account where the arrangement is created. If the feature is enabled, the arrangement moves to the General Limit Check state. For more information about the required features and preferences, see Prerequisites.
General Limit Check
In the General Limit Check state, the total revenue amount on the arrangement is compared with the predefined General Limit of 10,000. An arrangement with a total revenue amount that exceeds the General Limit moves to the Pending Approval state. Otherwise, the arrangement transfers to either of the following states:
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Approved – The arrangement is automatically approved if the total revenue amount is equal to or does not exceed the General Limit. For more information about this state, see Approved.
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Rejected – Arrangements with a blank total revenue amount cannot be validated. They are automatically rejected by the workflow to ensure that only valid transactions are processed. This applies to merging where revenue elements of the merged arrangements are transferred to the new arrangement.
Pending Approval
Arrangements that require initial or further approval transfers or returns to the Pending Approval state. The approval status of the transaction is set to Pending Approval. The Submit for Approval button is enabled only for the reviewer or Revenue Accountant who created the transaction. When the reviewer submits the transaction, it transfers to the Check Reviewer Limit state. If the transaction requires approval, it goes through a series of approval states. Based on the approval routing setup, the workflow determines the initial and next approver of the transaction. For more information about the approval setup, see Setting Up Employee Records for Approval Routing.
If an arrangement in Pending Approval status is deleted, the workflow notifies the approver about the deletion through email.
After an approver has been assigned, the transaction returns to the Pending Approval state. The transaction transfers to one of the following states based on specific conditions:
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Rejected – When a transaction for approval returns to the Pending Approval state, the workflow sends the notification email to the approver. It enables the Approve and Reject buttons on the transaction, which can be accessed only by the current approver. If the approver rejects the transaction, it transfers to the Rejected State. For more information about this state, see Rejected.
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Check Approver Limit – If a transaction requires initial or further approval, the workflow validates the approval limit of the designated approver. For more information about this state, see Check Approver Limit.
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Resubmit – Transactions that have not been approved remain on Pending Approval status. The transaction can be resubmitted by the same or another reviewer. If a transaction is resubmitted, the workflow verifies that the total revenue amount has been changed. The current approver is sent a notification email. This informs the approver of the cancelled request for approval because it has been resubmitted. For more information about this state, see Resubmit.
Check Reviewer Limit
In the Check Reviewer Limit state, the total revenue amount is compared with reviewer’s limit. If the total revenue amount is equal to or has not exceeded the limit, the transaction is automatically approved. If the total revenue amount exceeds the limit, the transaction transfers to the Get Highest Approver Limit state.
If the reviewer’s limit has not been set or is left blank, the zero value is assigned when the transaction enters the Check Reviewer Limit state. For information about the revenue recognition limits, see Setting Up Employee Records for Approval Routing.
Get Highest Approver Limit
An arrangement can transfer to this state either from the Check Reviewer Limit or Check Approver Limit state. In the Get Highest Approver Limit state, the workflow identifies the highest approval limit in the approval hierarchy. The highest limit is compared with the total revenue amount on the transaction. This validation determines if any of the approvers has the capacity to approve the transaction. The transaction is processed based on the following conditions:
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If the total revenue amount exceeds the highest limit, the transaction transfers to the Rejected state. For more information about this state, see Rejected.
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If the total revenue amount is equal to or does not exceed the limit, the transaction moves to the Set Next Approver state.
Set Next Approver
In the Set Next Approver state, the workflow identifies and assigns the approver of the transaction. For initial approval, the designated revenue recognition approver of the reviewer is assigned as the approver. For further approval, the designated revenue recognition approver of the previous approver is assigned as the approver. For information about the revenue recognition approver, see Setting Up Employee Records for Approval Routing.
Check Approver Limit
In the Check Approver Limit state, the workflow determines if the arrangement requires initial or further approval. The approval limit of the current approver is compared with the total revenue amount. The transaction is processed based on the following conditions:
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If the total revenue amount is equal to or is lower than the approval limit, the transaction transfers to the Approved state.
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If the total revenue amount exceeds the approval limit, the transaction returns to the Get Highest Approver Limit state. The transaction requires further approval by another approver with a higher limit than the previous one. This cycle continues until the transaction is approved by the approver who has sufficient limit to cover the total revenue amount. For more information, see Get Highest Approver Limit.
Approved
Approved arrangements are transferred from any of the following states:
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General Limit Check State – Arrangements transferred from this state have a total revenue amount that does not exceed the General Limit.
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Check Reviewer Limit – Arrangements transferred from this state have a total revenue amount that does not exceed the reviewer’s limit.
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Check Approver Limit – Arrangements transferred from this state have been manually approved by one or more approvers, and does not require further approval.
Approved arrangements that are resubmitted transfer to the Resubmit state. The workflow verifies that the total revenue amount has changed before transferring the transaction.
In the Approved state, the workflow sends an email to the reviewer who submitted the arrangement to confirm the approval. For cases where a resubmitted transaction is already attached to a pending request for approval, the pending request is cancelled. The approver of the pending request is informed of the cancellation through email. For more information about resubmissions, see Resubmitting Revenue Arrangements for Approval.
Rejected
Rejected arrangements are transferred from any of the following states:
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General Limit Check – Arrangements transferred from this state do not have a total revenue amount.
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Get Highest Approver Limit – Arrangements transferred from this state do not have an approver with a limit that can cover the total revenue amount. The workflow displays a message to inform the reviewer that no approver in the hierarchy can cover the total revenue amount.
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Pending Approval – Arrangements transferred from this state have been manually rejected by the initial or next approver. The workflow sends the reviewer an email regarding the rejection of the transaction.
Rejected arrangements that are resubmitted transfer to the Resubmit state. The workflow verifies that the total revenue amount has changed before transferring the transaction.
In the Rejected state, the workflow sends an email to the reviewer to confirm the rejected transaction. For cases where a resubmitted transaction is already attached to a pending request for approval, the pending request is cancelled. The approver of the pending request is informed of the cancellation through email. For more information about resubmissions, see Resubmitting Revenue Arrangements for Approval.
Resubmit
Arrangements that transfer to the Resubmit state can be any of the following: approved, rejected, or pending approval. In this state, the transaction is prepared before it transfers to the Entry state where it re-enters the workflow. For more information about resubmissions, see Resubmitting Revenue Arrangements for Approval.