Revenue recognition

In the revenue recognition view, you can recognize the project’s sales based on the cost and invoicing accruals across different months of the project and for different users, and also add scheduled invoicing automatically based on this. In this view, you can also define monthly cost estimates.

The basic settings for revenue recognition are first defined in project settings. Revenue recognition can be monitored in a consolidated way in the new reports. 

Permissions: Projects > Revenue recognition
PSA plans: Enterprise, Enterprise+

 

Revenue recognition chart and project timespan

In the chart in the project card view Sales > Revenue recognition, you can see the figures by month over the project period. You can see more detailed monthly information by hovering over a month. If you wish, you can hide certain figures by clicking the section names below the graph, e.g. estimated costs, in which case the section name will appear struck through. 

You can define the project timespan (duration) both in the project’s basic information and from this view. The change is updated immediately in both places. The revenue recognition view always shows at least 12 months, so if the project timespan is shorter, the months for which revenue recognition cannot be done are shown as locked. 

Sales: monthly and user-specific revenue recognition

The project total value is the quote’s total sales price excluding VAT. You can recognize (i.e., allocate) this amount over the project period, either evenly across the project months or only to specific months.

Once a value has been entered for a month, you can further allocate it by user either as a percentage or as an amount in currency. The project’s sales agent appears in the list automatically, and you can add other team members from the drop-down menu. The month’s recognized value is the maximum that can be allocated to users. Sales can also be left unallocated by person.

The selections made in the Revenue recognition settings, e.g. regarding the value to be recognized or locking previous months, may affect the process described below. 

1. Go to the project card: Sales > Revenue recognition > Sales > Edit.
2. Add monthly sales prices to the revenue recognition row either individually or by clicking Split evenly above. 
3. If you wish, add user-specific sales prices or shares on their own rows. 
   • Using the View button, you can recognize revenue based on percentage or currency amount.
   • From the Add users menu, you can add new users to the list. 
4. If necessary, change the month’s sales date for reporting by clicking the date. In the calendar that opens, if needed click Add same creation date for all months. 
5. Edit note if needed for the revenue recognition report. Write the message in the window that opens and then click elsewhere, after which the message will be saved. 
6. Click Save. The figures will be transferred to the chart at the top and to the revenue recognition reports. 

Scheduled invoicing

In connection with revenue recognition, it is possible to create Scheduled invoicing directly according to the recognition, or with a separately defined monthly amount.

1. Go to the project card: Sales > Revenue recognition > Scheduled invoicing > Edit.
2. Add monthly scheduled invoicing amounts to the row either individually, or by entering the total amount in the upper left and selecting from the Options button how you want to distribute the amount across different months.
3. If necessary, change the date of the month’s scheduled invoicing by clicking the date. In the calendar that opens, if needed click Add same creation date for all months. 
4. Click Save. The information is updated in the chart at the top, and the scheduled invoicing items can be found in the project view Finances > Scheduled invoicing with the description “revenue recognition scheduled invoice”. 
   
   If the scheduled invoicing items need to be removed later, this must be done via the finances section. 
   When a scheduled invoicing item is raised to an invoice, it moves in the revenue recognition view from Scheduled invoicing to Invoiced.

Invoiced

When sales invoices are created for the project, their information is updated here monthly based on the invoice date. 

Actual costs

When Bills, Expenses, and Travel expenses are allocated to the project, or manually added costs, their information is updated here. From Bills, all except rejected ones are shown, but from Expenses and Travel expenses only approved ones are shown. The settings determine whether invoices are shown in the month according to the invoice date or the due date.

Working hour costs

When hours are tracked for the project, their quantity and price information are updated here by month.

Estimated costs

You can allocate monthly cost estimates to the project either as a purchase order or as other estimated costs. 

Creating a purchase order:

1. Go to the project card: Sales > Revenue recognition > Estimated costs > Edit.
2. Click Add purchase order. 
3. Complete and save the purchase order in the view that opens.
4. Return to the project’s revenue recognition section (either via the arrow or the project name) to check the purchase order’s monthly amount and click Save.

The settings determine whether purchase orders are shown in revenue recognition in the month according to the order date or the estimated payment date. When the purchase order is later linked to a bill, the figure moves from Estimated costs to Actual costs.

Creating other estimated costs:

1. Go to the project card: Sales > Revenue recognition > Estimated costs > Edit.
2. Click Add cost.
3. Enter the name of the estimated cost and the amounts for different months.
4. Add the required number of cost rows and click Save.