SAP's revenue recognition functionality enables you to post the billing documents and recognize revenue at different points

in time. In the regular process, SAP recognizes revenue as soon as the billing document is posted to accounting. The receivables account (customer account) and the revenue account are posted with this transaction. However, certain business scenarios require revenue to be recognized either before or after the invoice has been created. The revenue recognition function provides a separate transaction (VF44) to trigger the recognition of revenue. Here, two additional G/L accounts come into play: the deferred revenue and unbilled receivables accounts. If you bill the customer first and recognize revenue at a later point, the amount is classified as deferred revenue in the interim. On the other hand, if the business requires you to recognize revenue periodically but bill the customer later, then the amount is kept in the unbilled receivablesaccount.