What is the best practice for setting up the ARM setup of items? Do we just use ARM (instead of Direct Revenue Posting) for almost everything just to make sure that we can combine any item in one SO or invoice in the future?

Most commonly, unless the direct revenue posting item will truly never be put on the same transaction as other item that do go through Rev Rec - but there are always exceptions and this causes an error down the road for someone entering the transaction to resolve. It is easier to create a revenue rule that will allow for point in time recognition (One of the out of the box rules does this when paired with Create Revenue Plans on Revenue Arrangement set on the item record).

@Luis - you cannot use direct and non-direct (ARM) items in the same reporting. that’s why you have those default rev rec rules for the immediate recognition. still, it allowes you homogenious rev recognition and reporting. Keep in mind that for every non-direct item for sale the journal is Dr AR CR Deferred (an then of course you need to do the reclass journal to balance your Deferred)

Thank you. That is actually the reason why we just want to use ARM for all items so that we can always combine any item in one SO (as opposed to having a Direct Revenue Posting and ARM). We can just use the Default Standard RRR in lieu of Direct Revenue Posting.