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Cost Recognition for Fixed Price Project

We have a client who uses an unusual method of cost recognition and am looking for some ideas on how we could use Project Accounting on GP2013 to achieve what they need.

The projects have a fixed amount to bill and recognize revenue and have costs from all transaction types. They recognize revenue using the 'Effort Expended - Labor Only' option. Setting up the project as Fixed Price with the revenue amounts as Fees and the Cost Categories with a profit type of None works great for them with one exception - cost recognition.

Although the majority of their costs are expensed in line with GP's normal revenue recognition process, they expense inventory costs over the life of the project based on the % complete.

For instance, they may pay a large amount at the beginning of the project for software, and that cost should stay in WIP and be recognized as COGS in line with the Revenue Recognized each month - if we are recognizing 10% of the revenue we also need to move 10% of the software cost out of WIP and to COGS.

GP always recognizes 100% of the cost on a FP project so I am hoping there may be some other ways to set up the project or process transactions to facilitate this cost recognition. Some ideas have been to recognize revenue but use the COGS GL account, use a different project or a different project type, however nothing has worked so far. As a note - they use Standard Pricing with % of list price as the method which cannot be changed.

I thank you in advance and welcome any ideas you may have to help with getting this working for our client!

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