Use Multiple Income Account for Items

Business Use Case

User need to post Income for an Item to different Accounts.

Users with the Revenue Recognition feature enabled may take advantage of the feature to post to multiple accounts but with additional steps.

Settings/Requirements

a.     Under Setup>Company>Enable Features>Accounting > Revenue Recognition=T

b.    Custom Revenue Recognition Template

c.     Items are configured to have default Deferred Revenue Accounts on the record

Solution:

1.    To create a template, navigate to Lists>Accounting>Revenue Recognition Templates>New.

2.    Set the following fields:

Name = Multiple Accounts Template

Type=Standard

Method=Custom

Term Source = Rev Rec Dates Specified on Transaction

Start Offset = 0

Accounts (Example):

>>>> 4000-01  Sales Account 01..........Period Offset = 0............100.00%

3.    Click Save.

4.    Configure the Item Record. Open an Item either from the Item List or Global Search.

5.    Click Edit next to the Item record.

6.    Under the Accounting tab, note that the Income Account is set to different account (Example: 4000 Sales)

Choose the template created on steps 1 and 2 on the Revenue Recognition Template field.

7.    Choose a Deferred Revenue account.

Note: Users can use a dedicated Deferred Revenue Account that is used as a temporary holding Account for the Income Amounts. They just need to create a separate GL Account

8.  Create an Invoice. Navigate to Transactions>Sales>Create Invoices.

9. Choose a valid Customer and select the Item set up on steps 4 to 7.

Example:

Item A..........................1,000.00

Rev. Rec. Schedule=Multiple Accounts Template

(Leave the Rev Rec Start Date and Rev Rec End Dates blank)

10.  Select a Location if mandatory. Click Save.

11.  Once saved, navigate to More Actions>GL Impact. The affected accounts that users need to note will be the Deferred Revenue Account.

Debit: Accounts Receivable                         1,000.00

Credit: Deferred Revenue                                                 1,000.00

12.  Navigate to Transactions>Financial>Create Revenue Recognition Journal Entries.

13.  Select the Posting Period to which the Transaction got posted to.

Example: Feb 2013

Select Individual Schedules=T

Select=T          Inv1234

14.  Change the Journal Entry Date to the same Invoice Transaction Date.

15.  Click Create Journal Entries.

16.  The Processed Schedules page shows the Journal processed. Click the link for the Journal.

Result:

Debit: Deferred Revenue                          1,000.00

Credit: 4000-01  Sales Account 01                                                1,000.00