Income accounting in management accounting

Here you will learn how to set up accounting for company income broken down by income items and lines of business:

• • Revenue from sales of goods and services.
• • Other non-operating income, such as revenue from sales of fixed assets and raw materials, AP write-off, and other.
• • Financial income.

You can set this up after you configured Basic management accounting capabilities.

Company income is accounted for only by income items. Income accounting by items is not applied in the system.

You can account for income by the Line of business dimension. There are the following methods to define this dimension:

• • If you use the direct method, the dimension is defined at the level of a system document that registers the income. In this case, you do not need to set up allocation by lines of business. This method is available in almost all income registration documents, including the following documents: Customer invoice, Customer invoice — Services and Assets, Credit and deposit interest charge, and other.
• • Use the indirect method when you cannot specify a line of business in the income registration document and when you need to allocate the amounts by the statistical database. Set up the sales allocation by lines of business. Within the Period-end closing procedure, the system automatically creates the Inventory cost calculation document. The document shows how revenue and cost are allocated by lines of business according to the settings.