Revenue Recognition

Revenue recognition enables recognizing sales and scheduled invoices to multiple months and users.

Content

Description

With the revenue recognition tool you can recognize sales to multiple months and users, according to the expected expense and invoicing schedule. Invoicing material can be automatically generated based on this recognition.

Versions: Enterprise, Enterprise+

Permissions: Projects, Revenue recognition

View revenue recognition

In the revenue recognition view you'll see the:

• Revenue recognition & cumulative revenue recognition
• Scheduled invoicing & cumulative scheduled invoicing
• Estimated costs & cumulative estimated costs,
• Actual costs & cumulative actual costs

1. Go toProject > [Selected project] > Sales > Revenue recognition.
2. View the monthly figures. According to your needs, you can hide certain figures from the chart by clicking on their corresponding labels. By re-clicking the label, you can set the figures visible again.

Define the project timespan

You can define the project timespan in both the project details and in revenue recognition view. When the timespan is edited, the months on the revenue recognition chart and the below tables will change accordingly.

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Select a start and an end date for the project.

The revenue recognition view will update to match the selected timespan and the project duration is updated in project details.

The revenue recognition view always shows a timespan minimum of 12 months. If the project lasts less than a month, there will be months visible that revenue cannot be recognized to.

Define a monthly revenue recognition

You can recognize the deal value (the value of the sales quote, excluding the VAT) to multiple months by dividing it across the selected timespan. You can add values in manually or spread the deal value evenly between months, automatically. When a value is added to a certain month, you can also divide it between users either using percentages or concrete currency values.

The project's sales agent will be automatically added in this user list. Adding new users happens in edit mode, from the dropdown under the table. After the users are added, you can freely divide the recognized value between them. However, the month's total recognized value acts as a limit the sum of user values cannot exceed. You can leave some of the recognized value unshared – this is important if you don't know who will do the work in the future or whether you want to divide your sales based on it.

You can define settings regarding the recognized value or locking the previous months' values in the revenue recognition settings view.

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Click Edit in the Sales section.
3. Fill in monthly sales values.
4. Add user shares for recognition values to each month.
   • You can do this either by using percentages or currency values – change the method easily from the View dropdown in the top right corner of the section.
   • If needed, you can add new users from the Add user(s)dropdown and recognize values for them immediately.
5. Change the month's sales date (for reporting purposes) by clicking on the date in the table header and picking a suitable one. You can do the same date selection to all months at once by setting the Add same creation date to all months toggle on.
   
6. Click Save.
   

The new recognized values are now visible in the chart and in the revenue recognition report.

Add a note to show on revenue recognition report

You can add a note that will be visible on the revenue recognition report.

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Click Add note in the Sales section.
3. Type your note in the input field that shows up.
4. Close the slider by clicking outside it.
5. The message will be saved automatically.

Create and divide scheduled invoices

In revenue recognition view, it's possible to create scheduled invoices manually or automatically according to the recognition. In the feature settings you can define whether you want to target your scheduled invoices to the revenue recognition.

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Click Edit in the Scheduled Invoicing section
3. Type in the amount you want to create scheduled invoices from.
4. From the Options menu, define how you want to divide the amount between months.
5. Click the table header and select a date for the scheduled invoice.
6. Click Save.

View actual costs

Costs targeted to the project will show up in the actual costs section in the following way:

• Bills:

  • Status: All statuses except declined

  • Date: According to the defined setting either by the bill date or its due date

• Expenses:

  • Status: Approved

  • Date: According to the defined setting either by the creation date or the expense date

• Travel expenses:

  • Status: Approved

  • Date: According to the defined setting either by the creation date or the travel expense date

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Click the Total costs row in the Actual costs section to see a detailed breakdown of your costs.

View working hour costs

You can see how your hours' internal costs match your sales in the Working hour costs section. Here you'll see the monthly tracked hours and view the following related values:

• Internal hourly cost
• Hours selling price
• Actual selling price

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Click Tracked hours in the Working hour costs section to see a detailed breakdown of your hours.

View and add estimated costs

In revenue recognition view, you can target monthly estimated costs across the project's timespan.

Purchase orders will show up according to the defined setting either by the order date or the estimated due date. When a purchase order is linked to a bill, it won't be visible in estimated costs and only the bill's data will be shown in the actual costs section.

1. Go to Project > [Selected project] > Sales > Revenue recognition.
2. Click Edit in the Estimated costs section.
3. Define your estimated costs for each month.
4. You can add new cost rows according to your needs. Click the Add cost button and define the costs for each month.
5. Click Save.

You can also create a new purchase order directly from this section by clicking the Add purchase order button. You'll be taken to the purchase order view to finish the creation. After creating the purchase order, you can return to the revenue recognition view to do the monthly estimates for the new costs.