Hi everyone, One of our subsidiaries is a service-oriented business, so we don't really process customer RMAs, we just create a Credit Memo. I'm just wondering if that has implications with regard to ARM. I understand that revenue arrangements can be generated from standalone Credit Memos, just like we do in standalone Customer Invoices but I just wanted to make sure it's okay or its the best practice in our case that don't really need RMAs.

should be ok. Just be aware that your credit notes will sit in unbilled income rather than deferred revenue, via the revenue adjustments process - depending on the recognition period on the credit notes. To our accountants, this is annoying (they'd rather this adjustment was done manually at year end)

Why would it affect the unbilled receivable account? I thought it will debit the deferred revenue account and credit the income account associated with the item record selected in the Credit Memo?

@Luis - it does not affect unbilled in my settings.. your invoice is Dr AR Cr Def Rev so your CM is Dr Dev Rev Cr AR, no?

Yeah, you were correct about the GL impact. Totally agree. I was replying too fast when K read that the unbilled receivable could be affected. Thank you.

Initial entry is DR deferred revenue, CR AR Upon recognition, will be DR income, CR deferred revenue If it sits on the balance sheet unrecognised, the "schedule reclassification journal entries" process will move it from deferred revenue to unbilled income (DR unbilled receivable, CR deferred revenue, reversing on the 1st of the following month)