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Home > Accounting > Accounting Setup > Setting Up the Accounting Subsystem > Defining Accounts for Products > Defining Revenue Accounts for Products

Defining Revenue Accounts for Products

The revenue account can be used as the write-off, cancellation and all discount accounts. If you defer revenue, it is recommended that you use the deferred revenue account as the deferred discount account and the agency deferred account. Otherwise, discounts entered for orders will be recognized immediately. Revenue is typically recognized in Personify as it is earned.

 

Personify allows you to set up multiple deferred and real revenue accounts for each product. For multiple revenue distributions, a priority can be assigned to each. Distribution can be indicated by percentage or by a fixed amount.

 

The accounts are chosen from the list of valid revenue account pairs set up for each module on the organizational unit setup.  It is possible to choose a revenue account pair from another organizational unit, if desired.

 

If you choose not to utilize the deferred revenue feature, keep the following in mind:

·            Set up the recognition method as on invoice.

·            Revenue and deferred revenue should be defined as the same account.

 

The revenue accounts are defined as of a begin date. Therefore, the revenue accounts can be changed for new orders by setting them up with a new begin date. Transactions created using the old accounts continue to use those accounts until revenue is fully recognized. For most products, the order date is compared to the begin date to obtain the appropriate rate. For membership and subscriptions, the start date of the order is compared to the begin date on the product setup.

To set the Revenue accounts for a product:

1.    From the toolbar, select Products > Product Central and search for a product or create a new product.

2.    Define the general product information.

3.    From the Define the Product task category, click Define Revenue Accounts.
The Revenue Accounts screen displays.

4.    Click Define Accounts.

5.    Select the Begin Date from the drop-down.
If necessary, select the End Date from the drop-down.

6.    Select the Distribution Method Code from the drop-down.

7.    Click Add to add rows to the grid.
The Account Chooser screen displays.

8.    Select the appropriate Revenue account.

9.    Enter the following in the appropriate table cell:

·            Percent of the revenue that should go into this account

·            Priority number of the revenue account

·            Amount within the Priority

10.  Click Save.

Screen Element Description

Define Revenue Account
Define Accounts Button. When clicked, an Effective Date row is added to the table and another Revenue account is added to the product.
Add Button. When clicked, a row is added to the Deferred Revenue Account table. The Account Chooser opens to search for a deferred Revenue account.
Delete Button. When clicked, the highlighted row from the table and the information entered in the row are deleted.
Deferred Account Table column. This field is the account that is used for sales transactions. If no deferred revenue is to be recorded, this should be a standard revenue account. It is validated against the FGL_Account_Master table and must be valid for your organization. A warning message displays if an account is selected that is not for the organization unit of the product. It may be a liability or revenue account. If you defer revenue, TMA recommends you use this account as the deferred discount account and the agency deferred account. Otherwise, discounts entered for orders will be recognized immediately.
Revenue Account Table column. This field is the offsetting income account. This is the account that will be used by a revenue recognition process. It is validated against the FGL_Account_Master table. However, a warning message will display if an account is selected that is not for the organization unit of the product. It must be a revenue account.
Percent Table column. This field is the percentage of the revenue that should go to this account. The total percentages of all line items must equal 100 for the record to be saved (format 000.0000).
Priority Table column. This field is only enabled when the Distribution Method is “Priority.” When discounts or other pricing situations result in a line item not receiving its full amount, the first priority item will receive its full amount and then the next priority item in sequence.
Amt within Priority Table column. This field is only enabled when the Distribution Method is “Priority.” When populated and when the amount to be distributed (because of discounts or other pricing) falls lower than the amount specified with this line item, the amounts will be filled based on this priority.
Linked Table column. Select when the product's Revenue Distribution Product code is not null. Indicates that the line is associated with a specific component product.

Effective Date
Begin Date Drop-down. This field indicates the date on which this distribution will begin to be used as compared to the order date. Each time a change is made to the distribution accounts, a new start date must be defined for this distribution so that a history and an audit trail can be maintained.
End Date Drop-down. The end date for the Revenue account.
Distribution Method Code Drop-down. The value selected in this field automatically updates all detail records for this effective date. Valid values include:
  • Percentage – Will distribute by percentage of the price only. The Priority and Amount within Priority columns are disabled.
  • Priority – Enables the Priority and Amount within Priority columns. When discounts or other pricing situations result in a line item not receiving its full amount, the first priority item will receive its full amount and then the next priority item in sequence. If no amount is specified, the system will distribute the remaining amount by percentage.
Auto-Populate Accounts from Components Button. When clicked, the revenue account pairs set for the component products are automatically added to the product’s revenue accounts. Since components are free and do not have specific accounts associated with them, the account associated with the component product displays. For this button to work, components must be defined for the product.