This document will continue to evolve as existing sections change and new information is added. All updates are logged below, with the most recent updates at the top.
05 APR 2017
New feature delivered in Update 4 (April), which will also be included in the May Quarterly update.
17 JAN 2017
Initial Document Creation
This guide outlines the information you need to know about the new cloud service Oracle Revenue Management Cloud, which is an automated revenue management solution that enables you to address the accounting standard for Revenue from Contracts with Customers. Revenue Management provides a configurable framework to automate the identification and creation of customer contracts and performance obligations, their valuations, and the resulting accounting entries, with the ability to recognize revenue over time or at a point in time. Revenue Management also provides an option to calculate or load and manage standalone selling prices. Each section includes a brief description of the feature, the steps you need to take to enable or begin using the feature, any tips or considerations that you should keep in mind, and the resources available to help you.
The table below offers a quick view of the actions required to enable each of the Release 12 features.
Action Required to Enable Feature
End User Action Required
Administrator Action Required
Oracle Service Request Required
Oracle Revenue Management Cloud
Revenue Management enables automation of end-to-end revenue compliance and revenue recognition processes for your enterprise. Oracle E-Business Suite (EBS) products use the coexistence solution for integration with Revenue Management to bring in source document revenue lines from upstream sales cycle systems. Reference data, such as customers and inventory items, are synchronized between EBS and Revenue Management.
The coexistence feature enables you to deploy a uniform, centralized and comprehensive view of contracts with customers, unifying the details tracked in a variety of order management, retail point of sales, and billing systems.
- Integrate with your existing sales cycle applications
- Revenue Management imports, processes, and stores data related to the sales cycle. For example, orders, contracts, receivable data, point of sale data, projects, shipping, traffic, and other fulfillment data (satisfaction events).
- The product integrates with:
- Oracle Financials Cloud
- Oracle E-Business Suite
- Third party applications
- Revenue Management centrally processes and manages data from various source systems.
- Extract Data from EBS
- Extract Revenue Basis Data - This program extracts the transaction data from the source application that was not extracted in the prior runs and integrates the data into Revenue Management canonical tables on EBS.
- Create Revenue Management Data Export File - This program gathers the above extracted information and prepares the data file.
- Create Billing Data File - This program generates the data file with billing data for reconciliation in EBS.
- Import Revenue Basis Data and Billing Data from third party applications
- Import revenue and billing data from third parties into Revenue Management using predefined File-Based Data Import (FBDI) templates for Revenue Basis and Billing data. You should prepare the table data and fill in each worksheet of the xlsm template with the appropriate data. After the data is prepared you should generate a DAT file. Import this file using the File Import and Export tool. Run the Import Revenue Basis Data program to import the revenue basis data. Run the Import Billing Data program to import the billing data.
- Validate and Correct Customer Contract Source Data
- The Validate Customer Contract Source Data program validates the imported revenue lines, transforms master data, and assigns the transaction period to the imported lines.
- Correct any errors in the source data and upload the changes through the Correct Contract Document Errors in Spreadsheet task in Revenue Management.
Correct Contract Document Errors in Spreadsheet
Summary sheet of the spreadsheet
Correct Source Document Errors worksheet
Calculate the observed standalone selling prices automatically by importing pools of historic standalone sales, categorized by the way your organization stratifies the data for the purpose of pricing. Review the system calculated values, make necessary changes, and recalculate and establish or approve the observed standalone selling prices.
Upload standalone or selling prices in bulk using spreadsheets.
At contract inception Revenue Management allocates the total expected consideration to the performance obligations in an accounting contract using the relationship of the total transaction prices to the total standalone or estimated selling prices.
- Manage Observed Standalone Selling Prices
- Standalone sales are categorized into sets (observed price sets) based on item, currency, unit of measure, and pricing dimension value
- The Calculate Observed Standalone Selling Prices program calculates observed standalone selling prices.
- Establish Observed Standalone Selling Prices
- The Revenue Management work area displays any calculated observed standalone selling prices which have not yet been established. They can be established (approved), investigated, marked as valid, marked as invalid, or discarded by the revenue manager or revenue analyst.
- Observed standalone selling prices can be marked ‘Do Not Establish’ to exclude them from use when allocating the transaction price across performance obligations in an accounting contract.
- Create Standalone Selling Prices
- Standalone Selling Prices (SSP) or Estimated Selling Prices (ESP) can be uploaded through the Create Standalone Selling Prices spreadsheet.
- This process assumes that the SSPs or ESPs are approved offline and hence the prices uploaded are considered to be established.
- This spreadsheet is launched from the Standalone Selling Price Profile setup.
- Manage Standalone Selling Prices
- The Manage Standalone Selling Prices spreadsheet in the Revenue Management task pane is used to review and compare SSPs and ESPs.
- You can edit manually uploaded SSPs and ESPs from this spreadsheet if these have not yet been used in the allocation process.
Ensure compliance with the new accounting standards ASC 606 and IFRS 15 through the Revenue Management centralized repository that stores imported and processed sales cycle data. Revenue Management analyzes the data, and provides user-configurable contract identification and performance identification rule engines for the system to automatically:
- Identify and create performance obligations and accounting contracts.
- Create contract identification rules to determine the transaction lines that should be included in the contract.
- Revenue Management provides performance obligation identification rules and performance obligation templates where matching attributes that provide a common link for grouping the source document lines into performance obligations can be defined.
- To make the rules work, the deploying organization needs to capture the common link value in one or more attributes on the source document lines.
- The Identify Customer Contracts program identifies and creates customer contracts and performance obligations.
- Determine the transaction price for each accounting contract.
- The transaction price is calculated by Revenue Management by adding the selling price for every promised detail in the accounting contract.
- Allocate the transaction price using a relative allocation based on standalone selling prices across performance obligations in an accounting contract.
- Recognize revenue when each performance obligation is satisfied either at a point in time or over time, based on seeded revenue satisfaction plans, business events, or satisfaction events.
- Recognize revenue independent of billing and automatically accrue contract liability and contract assets.
- The Subledger Accounting rules engine provides out-of-the-box seeded accounting events to address the need for creating contract assets and contract liabilities at initial performance, as well as reflecting the appropriate accounting once a performance obligation is billed. The satisfaction event enables you to ensure that the revenue is recognized at the appropriate point in time.
The following screen capture illustrates the feature.
Edit Customer Contract page
Tips and Considerations
- In addition to using the seeded contract identification and performance obligation identification rules, you can define your own additional contract identification and performance obligation rules to automatically create accounting contracts with performance obligations without manual intervention.
- Use named attributes in Revenue Management as common identifiers for grouping of data such as the Bill-To Customer Party Identifier or the Customer Purchase Order Number.
- Use extensible attributes to capture common identifiers from your source systems that are unique to your business for grouping of transactions into a contract. For instance you may use a quote number across your source systems as a common identifier.
- Define performance obligation rules with the Allow Partial satisfaction method setting for source systems with transactions such as subscriptions or support services, where you would recognize revenue for the performance obligation over time, such as revenue recognition on a monthly basis
- Define another performance obligation rule with the Require Complete satisfaction method setting for source systems with transactions such as products that are satisfied only when transferred to the customer.
Revenue Management can automatically generate and post accounting entries to the contract asset, contract liability, revenue, discount, and clearing accounts for customer contracts by evaluating the performance obligation satisfaction status and billing information of the customer contract.
Accounting occurs at the performance obligation level, which means that account balances are maintained and reported at the performance obligation level. The difference in the selling price and the allocated amount is tracked in a Discount account at the contract level.
Revenue for performance obligations will be recognized in the ledger currency. Any exchange rate variance will be tracked in a separate account called the Price Variance Account.
The following screen captures illustrate the feature.
Accounting of Contract from the Customer Contract page
Automatically create performance obligations in a customer contract that are implied in nature but not captured in any upstream application as a source document line. Define implied performance obligation rules to address this requirement.
The following screen captures illustrate the feature.
Customer Contract page with Implied Performance Obligation (Number 2078)
Edit Implied Performance Obligation Template – Promised Details
Handle variable consideration estimate corrections or contract modifications for existing frozen accounting contracts through improved File Based Data Import (FBDI) capabilities.
Use the File-Based Data Import (FBDI) to add a line item using one of the following methods:
- Add the line item as a new promised detail to an existing performance obligation by selecting Yes (Y) in the Add to Existing Contract column and ADD TO PO in the Add to existing contract action code column.
- Add the line item as a new promised detail to a new performance obligation by selecting Yes (Y) in the Add to Existing Contract column and CREATE NEW PO in the Add to existing contract action code column.
You now have more flexibility to perform accounting contract updates such as:
- if you estimated variable consideration at contract inception based on product selection, you can revise the estimate by adding a replacement product.
- if you negotiated with a customer to modify a contract, you can add a new line item to the contract.
The following screenshots illustrate the feature and its benefits.
You can easily upload new lines through the Revenue Basis Data Import FBDI spreadsheet by adding new performance obligations or new promised details to an existing frozen contract.
FBDI spreadsheet listing attribute add to an existing contract with options ADD TO PO, CREATE NEW PO
New performance obligation number 104009 was added to an existing frozen contract
New promised detail number 2 was added to an existing performance obligation with a frozen contract
Steps to Enable
No steps needed to enable this feature.
Tips and Considerations
- If you estimated variable consideration at contract inception based on product selection, you can revise the estimate by adding a replacement product. To do this select Yes (Y) in the Add to existing contract column and ADD TO PO in the Add to existing contract action code column in the Revenue Basis Data Import FBDI.
- If you negotiated with a customer to modify a contract, you can add a new line item to the contract. To do this, select Yes (Y) in the Add to existing contract column and CREATE NEW PO in the Add to existing contract action code column in the Revenue Basis Data Import FBDI.
Proactively contrast and compare sales cycle data between existing accounting standards and various proposals for compliance with the new accounting standards during the transition period until the new ASC 606 and IFRS 15 accounting standards go into effect.
Accounting trial balances form an excellent point of comparison between the latest iteration of a compliance proposal, and either previous proposals or ASC 605 and IAS 18 old rules accounting.
Oracle recommends that you compare the results of your current accounting (ASC 605 and IAS 18) to each accounting iteration generated in Revenue Management (based on ASC 606 and IFRS 15) in an enterprise performance tool, such as the Oracle Essbase standalone dimensional database, Oracle Planning and Budgeting Cloud, or Oracle Hyperion Planning.
Revenue Management is engineered to address ASC 606 and IFRS 15 so you can:
- Perform what-if iterative studies of how you might implement the new rules, such as the impact of different definitions of contracts and performance obligations, different pricing paradigms, different satisfaction criteria, and so forth.
- Perform iterative modeling by discarding the processed contracts, reconfiguring your rules, and running the processes again to create accounting contracts. The imported data remains available for the next iteration.
- Ensure that default accounting will not corrupt your old rules accounting in your general ledger but instead, the accounting will be posted to a secondary ledger from which you can extract data to populate into an Enterprise Performance tool.
- Adopt the new accounting rules proven during the modeling stage on secondary ledger into the primary ledger for on-going use.
- Run the Discard Customer Contracts program to discard already identified customer contracts for any valid reason and select an option to reprocess the source document lines again. You can choose to submit the Identify Customer Contracts program so that new contracts can be created with new or updated lines.
The Revenue Management work area enables you to focus on customer contracts of significance and contracts with exceptions to be resolved. Actionable information is displayed in the work area to prioritize the work.
The centralized work area contains three tabs:
- Contracts Requiring Attention
- The Pending Review tab lists customer contracts with a total transaction price over a certain threshold amount (significant value contracts).
- The Pending Allocation tab lists customer contracts where the standalone or estimated selling price has not been established and therefore, the transaction price cannot be allocated across performance obligations.
- The Pending Revenue Recognition tab lists customer contracts awaiting the appropriate data to recognize the revenue.
- Observed Standalone Selling Prices Requiring Attention
- Observed standalone selling prices pending establishment and pending research are detailed under the Observed Standalone Selling Prices Requiring Attention section. You can drill down to the details of the Observed Price Set for further action to establish, mark it valid, mark it invalid, mark it as do not establish, discard, and mark it as requiring investigation.
- Process Monitor
- Use the Process Monitor to track scheduled processes.
The following screen captures illustrate the feature.
Work Area – Contracts Requiring Attention
Work Area – Observed Standalone Selling Prices Requiring Attention
Use the Revenue Contract Account Activity report in Revenue Management to review account balances by accounting contract and performance obligation to support audit processes and perform detailed analysis of various accounts.
This BI Publisher report provides an easy and convenient way to pull such data in Excel or flat file format that will enable you to load the data into an analytical tool like Essbase. Drill down from the summary report to the Manage Customer Contracts page UI is also supported for further analysis.
Steps to Enable
Complete the following steps to enable Revenue Management:
- Define Common Revenue Configuration
- Manage Revenue System Options
- System Options in Oracle E-Business Suite Receivables for integration with Revenue Management
- Manage Source Document Types
- Define Revenue Contracts with Customers
- Manage Contract Identification Rules
- Manage Performance Obligation Identification Rules
- Manage Performance Obligation Templates
- Manage Implied Performance Obligation Templates
- Define Standalone Selling Prices
- Manage Revenue Pricing Dimension Value Sets
- Manage Revenue Pricing Dimension Structures
- Manage Revenue Pricing Dimension Assignments
- Manage Pricing Dimension Bands
- Manage Revenue Item Groups
- Manage Standalone Selling Price Effective Periods
- Manage Standalone Selling Price Profiles
- Manage Standalone Sales Pool Exclusion Rules
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