Hi I was wondering does anyone use ARM at the arrangement level? We have been using it at the Element level but it has made unbilled reclass a bit of a pain so we are taking a look at the arrangement level. So far it is looking good, but we found that we need to have a DEFAULT DEFERRED REVENUE RECLASSIFICATION ACCOUNT. We are a little confused on how this is used. It says it catches errors but we have a deferred account tied at the SKU level but this says if we want to override this it has to be at the customer level. We have currently tested the process in sandbox and so far nothing is posting to that account but we are trying to understand when it's actually used.

because it is at the arrangement level there isn’t an option to do it at the item (i.e. element) level (pretty clear). NS then uses one (default) def revenue account to reclass. There is a system generated account, use that one, that’s the account they have in mind when they talk about default def rev account

Well that's funny since what you say makes complete sense. We spoke it ACS ARM SME about this and they understood how we have our system and didn't really explain this when we walked him through examples. However I think we are a little confused since many of our arrangements have multiple deferred revenue buckets and merged arrangements but when we ran the reclass process in SB everything tied out perfectly to the manual netting adjustments we have done in the past. Nothing even posted to the default account we chose.

this is a definite change in the process for you. See if you can make sense out of total amount by still using items; if you have each item going to its own def revenue account it might actually work for you

All of the items do have a def rev account. So far the march 2024 close looks good but we haven't started adding items in April to test new items. I am just trying to figure out how to get something to hit that default account because so far I haven't been able to.

The only way that account is used is if it is assigned to items or set up as default def rev account in Accounting Settings (which you probably do not want at this moment). There is no system triggered transactions using this account other than any transactions involved with def ref (invoice, revenue journal, reclass journal)

It is setup in the accounting because it was required when we flipped the switch from Element to Arrangement. It said the only way to override the default is to do it at the customer level or sales order (however this sounded like it was tied to legacy ARM)

so you did flip already…. ah

yea we refreshed our SB before we clsoed March and then in SB we flipped the switch and ran the reclass

oh, so no transactions going into that default account which you set in the Accounting Settings? what account is it using?

So I went back and compared all of our settings For the setting "Unbilled Contract Asset Account" we do have a default Unbilled Receivable type and this appears to be the account that the unbilled process hits. Currently for the setting DEFAULT DEFERRED REVENUE RECLASSIFICATION ACCOUNT we have nothing. In Sandbox in order to change the feature from element to arrangement we were required to add an account and we added a Deferred Revenue Type account (maybe this is the incorrect type - originally ACS had it). So far even after running the reclass for March 24 we see that nothing hits that account and everything appears to tie. So it's more just about understanding what the purpose of it. I don't want to run into a situation in 2 months where things start getting posted to it when it didn't happen during our initial testing. We are also reaching out to our ACS contacts about it.

“Currently for the setting DEFAULT DEFERRED REVENUE RECLASSIFICATION ACCOUNT we have nothing”

ok so would we expect new orders and arrangement to start carrying on in the new way and the only reason these are working is because they are legacy?

I have to declare 🙂 - I never had to switch but I do understand why it may happen

haha even the ACS people said they have never had someone do this which didn't give us the most confidence

usually customers do not switch n the middle of the revenue life per se because you cannot have a clear cutoff

Yea I am going to try to get a new item in our release preview to see what happens now with something brand new. I'm confused on what you mean that's why we don't want to flip the switch. Are you saying we shouldn't attempt to make this change now that we have a lot of legacy orders?

you have numerous rev plans going right now. If you switch you cannot switch over time, plan by plan, so some plans will stay what they were and some will have new def rev account. So you will need to update all your existing items with the default rev account somehow (script probably) right after you close the period and no transactions happened yet (so that this account would not be applicable backward, only forward). Reporting will be off.

ok this is what i was concerned about. We don't want them to change the account

you won’t if you do it right after you close the period - but you have to do it for all existing items

yea and we have years of plans

but you cannot have your reclass at the arrangement level if you do not use ONE def rev account

I am going to create a new rev arrangement and try to see what happens when i recognize and have unbilled for a items with different rev accounts