Set up revenue recognition for projectsLast updated on 03/22/2022
In your project settings page you can select the default revenue recognition method for your projects. There are four methods that you can select:Sales Basis Method, Completed Contract Method, Percentage of Completion Method and Cash Basis Method. After you select the revenue recognition method, you can decide whether you want to apply that to all current and future projects or only future projects. You can set a different revenue recognition method for individual projects.
Things to know
When you select the Sales Basis Method, the revenue is recognized if the item is invoiced or billed. Note: The total of the bill is the amount of the revenue recorded in accounting records.
When you select the Completed Contract Method, the revenue and expenses are recorded at the end of the contract. Note: Even if cash payments are issued or received during the contract period, the revenue and expenses are recognized at the end of the contract.
When you select the Percentage of Completion Method, revenue from long-term contracts is recognized as a percentage of the work completed during the period.
When you select the Cash Basis Method, the revenue is recognized when payment is received from the customers.
Set your revenue recognition method
Go to the navigation bar and click Settings .
In the side panel, go to Operations > Project Settings. Create Project Labels opens.
Click the Project Setup tab.
The Project Setup screen opens, where you can select default preferences and settings.
Select the default revenue recognition method you want to use for projects. Note: By default the selected option is applied to all current and future projects. If you want to apply only to future projects, select the Only future projects option.
When you’re done, click Save. Note: When you change pages and return to Project Settings > Project Setup, the selection of current or future projects doesn’t display the previous state whether it is applied to Only future projects or All current and future projects. Instead, it shows the default selection for future changes only.
Go to the Project page, click the Edit
icon.
icon.
Edit Project opens.
In the Revenue Recognition Method field, you can see the method which you selected in Project Settings.
Note: You can change the Revenue Recognition Method for an individual project.
Important note: Some features may not be currently included in your account and additional configuration may be required. Please contact technical support for details.
Disclaimer: Information provided in this article is for informational purposes only and it should not be construed to be legal advice. Information provided in this article may also not constitute the most up-to-date legal or other information. You should not act or refrain from acting on the basis of any information in this article to meet any compliance requirements without seeking independent legal or other professional advice.