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 Revenue Recognition by Proof of Delivery


You use the method of revenue recognition by proof of delivery (POD) if you create a sales document with an item that is relevant for revenue recognition. This item is relevant for both delivery and billing.If you have a contract with your customer that is fulfilled using release orders, the contract is billing-relevant.

You cannot carry out revenue recognition until the customer has confirmed the delivery.The service is considered to have been performed at this point.


You have chosen an item category with service-related revenue recognition (revenue recognition category B).

You have set the proof of delivery ( POD-relevant ) in the shipping settings for the order, in the item category of the delivery, or in the customer master data.

You set the POD-relevance for the item category of the delivery in Customizing. To do this, choose Start of the navigation path Logistics Execution Next navigation step Shipping Next navigation step Deliveries Next navigation step Proof of Delivery Next navigation step Set POD-Relevance Depending on Delivery Item Category. End of the navigation path

Process Flow

You create an order containing an item with service-related revenue recognition and a delivery-relevant material.The delivery item is relevant for the proof of delivery and the outbound delivery is made with reference to the order.The goods issue creates a revenue line that is automatically allocated a posting block at this stage. This means that the revenue cannot be recognized and is only used as a preview.

  • The revenue recognition process is triggered as soon as the customer confirms receipt of the goods (phone call, IDoc).

    • The system updates the revenue lines that were created upon goods issue.The amount for the revenue is adjusted to the confirmed quantity.

    • If the customer has only confirmed part of the quantity, an additional revenue line is created or the relevant line is changed the next time a delivery is confirmed (proof of delivery).

  • The block indicator is removed automatically and the posting is made. The revenues are posted on the debit side of the account for unbilled receivables, and the offset posting is made to the credit side of the revenue account.

    You can reset the block indicator manually using the Post Revenues transaction (VF44).

  • Invoicing takes place for the confirmed amounts with reference to the order. When the invoice is released for accounting, the amounts are posted on the debit side of the customer account, and the offset posting is made to the credit side of the non-billed receivables account.