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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Project Accounting Rev...
Microsoft Dynamics GP (Archived)

Project Accounting Revenue Recognition - Partial

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Posted on by babubaskaran@outloo...

Dear All,

I have some challenge for the week :-) .  I have set up contract(Fixed Price as Def. Acctg Method) under project accounting with one project with following details.

1) 1600001 - Project with few inventory item under Budget - IV Items

2) Fees - one Fee ID under project and service fees with scheduled on 4 different dates with a percentage of 10%, 40%, 40% & 10%.

The challenge is once I reach 90% progress billing and shipment made I will issue all inventory transfer then do Revenue Recognition at this stage my final fee schedule for remaining 10% is few month away.  So I wanted to recognize only 90% of based on my fee schedule and recognize all cost of sales.  But whats happening is even though the date of the 10% schedule is after few month its include that as well and sales number is 100%.   I am not sure how to use Retainer Fees or Retentios since when I try this its not included on the billing total.  Can any of you shed some light on this.

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  • Kerry Evans Profile Picture
    Kerry Evans 165 on at
    RE: Project Accounting Revenue Recognition - Partial

    Based on your description, it sounds like you are trying to recognize revenue for a project before all of the fees have been earned according to their respective schedules. In this case, you may want to consider using the percentage-of-completion method for revenue recognition, which allows you to recognize revenue based on the percentage of the project that has been completed.

    Under the percentage-of-completion method, you would recognize revenue and cost of sales based on the percentage of the project that has been completed. For example, if you have completed 90% of the project and shipped all inventory, you would recognize 90% of the revenue based on the fee schedule up to that point, and recognize all cost of sales.

    To implement this method, you would need to calculate the percentage of completion for each fee based on the progress of the project. This can be done by dividing the actual costs incurred to date by the estimated total costs for each fee. Once you have determined the percentage of completion for each fee, you can recognize revenue and cost of sales accordingly.

    If you are still having trouble with Retainer Fees or Retentions, you may want to consult with a financial advisor or accountant to ensure that you are setting up and using these correctly. Additionally, your accounting software or ERP system may have specific functionality to handle these types of fees, so it may be helpful to reach out to the vendor for assistance or guidance.

    Rest you can go through https://www.projectpro365.com/ for more reference.

  • Verified answer
    babubaskaran@outlook.com Profile Picture
    babubaskaran@outloo... on at
    RE: Project Accounting Revenue Recognition - Partial

    Dear All,

    A quick update on this.  I have created contract with 2 project line and added 90% fee on one project and 10% on another project and all problem resolved can do revenue Recognition separately.  It was so easy to handle this way and achieve what I want.

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