currently ARM is set up so that when sales order is created, nothing gets posted to GL. then when sales order is billed, GL impact is debit AR credit deferred revenue. what i want to happen is on sales order creation, debit unbilled AR credit deferred revenue, and when billed debit AR credit unbilled AR. how do i achieve that? what setting do i need to change?

I don't believe that is possible - unbilled receivable occurs only when recognition is ahead of invoicing. Maybe you can start messing with the accounts to get closer to your scenario, but it wouldn't be advised. Also if you want the gl impact right away on the order you will have to use a cash sale, there isn't a way that I know of to turn the SO into a posting transaction

the only way to post into unbilled receivables is to a) have your rev rec rule to be on rev rec element, 2) not invoice until next period 3) run reclassification at the end of the period when SO was created.