Postings of Third Party Expenses

[former_member605142]

Hi there,

When 3rd party expenses are posted it triggers the following:

Dr WIP Accrued 

Cr Revenue Adjustment 

Why are expenses posted to the Revenue Adjustment account? as it is not a form of revenue , can this GL account be changed/configured in the system?

[Feras_Al-Basha · Accepted solution]

Hi Tamlyn,

Thank you for contributing to the community.

Assuming that the 3rd party you referring to is a subcontractor and you are running the combination of best practice processes J11 & J45 then you may be creating supplier invoices of type ER to post expenses against projects with revenue recognition postings. If this is the case and the intent is to bill the end customer then please revise

1. The expense G/L account

2. Review the expense G/L account to the assigned expense type via SSCUI (102641)

3. Review the cost element group YBPS_E000

Further, on a more general level to maintain settings for Event-Based Revenue Recognition postings please see the SSCUI (102530).

Hope this helps,

Thank you,

Feras

[former_member605142 · Accepted solution]

Hi Feras,

Thank you for the feedback so I am just testing for a normal purchase order booked against a project.

The output we expect is

DR WIP Accrued GL Account

CR Vendor Account ( Employee/ Supplier)

So when we bill the expense to the customer on the project, we would bill out of the WIP account.

As expenses are not a form of revenue, also when looking at the engagement overall the revenue adjustment account will include the expense amount as part of the revenue UNTIL it is billed.

As per the above mentioned configuration, is this the only way it can be done?

Thanks.

[Feras_Al-Basha · Accepted solution]

Hello Tamlyn,

From my understanding seems like there may be different ways to address your request. One important point to clarify is that we are assuming that the expense is being billed to the end customer hence why the revenue adjustment account will include the expense amount. That said here are some ideas.

[1 - Design Approach ]

You may create a WBS element devoted to accumulating such expenses and mark the WBS as non-billable, that way posting accounted against this WBS will be automatically written off.

[2 - Reporting Approach ]

*Assuming that you are posting the expense to a WBS element that is assigned to a 'Time & Expense' contract then if you run you revenue recognition in a timely manner you may use the Project WIP Details app to obtain a more holistic view on your engagement. Further, you could extend project profitability reports to deduce the logic of what is technically 'not revenue' until it is billed and configure financial semantic tags to include/exclude specific G/L accounts.

Hope this helps,

Thank you,

Feras

[Cappe77 · Accepted solution]

Thanks for this explaination

[former_member605142 · Accepted solution]

Thanks Feras, with regards to the design approach on a customer project, expenses can be planned on the project but how would you indicate that it would be non-billable?

[Cappe77 · Accepted solution]

You can find the Billing category in the line items of the workpackage. If it's not visible, change your configuration layout by the button indicated by green arrow in the image

[ana_goncalves]

Hi Tamlyn,

We haven't received any feedback from you for a few weeks, therefore I have closed this question.

Kind regards,

Ana

[Feras_Al-Basha]

Hi Tamlyn, if I understand correctly, you would like to plan for the expense and account for it as a project cost. However you do not want to bill the expense to the end customer.

If so, you may assign the expense to a 'non-billable' work-package which you may create using the 'plan customer projects' Fiori app. Accordingly, all expenses booked to the WBS element will be automatically 'written-off' and not billed to the end customer.

In addition, I invite you to revise your YBPS_E*** cost element group settings to ensure your project related expenses & mappings to G/L accounts reflect the requirements of your business.

Hope this helps,

Thank you,

Feras