Percent-Complete Revenue Recognition Plans
This topic is about recognizing revenue for projects that are attached to line items in sales transactions. For information about recognizing revenue directly from charge-based projects, see Project Revenue Recognition.
For project-driven revenue recognition, use a service item that has a percent-complete revenue recognition rule and Create Revenue Plans On set to Project Progress. When you add this service item with a project to the sales order, the actual revenue plan is created based on actual time logged for the project.
No actual revenue plan is created initially. As actual progress is recorded in the project plan, an actual revenue plan is created and lines are added to the revenue plan. When you create revenue recognition journal entries, the plan is updated with a link to the journal entry. For more information, see Journal Entries for Percent-Complete Revenue.
The Financial subtab of the project record includes a Percent Complete Override subtab. When the Percent Complete Override subtab is empty, forecast revenue plans are created in three ways. In order of precedence, these ways are as follows:
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If the project has planned time defined, the planned time is used for the forecast revenue plan. Actual revenue plans do not use planned time entries.
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If the project does not have planned time, you can select a rule for forecast revenue plans from the Rev Rec Forecast Rule list. This list is on the Financial subtab of the project record. The start and end date for the project must also be set. For instructions, see Linking a Forecast Revenue Recognition Rule to a Project.
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If the project has neither planned time nor a project Rev Rec Forecast Rule, NetSuite uses the Rev Rec Forecast Rule on the revenue element. The Forecast Start Date and Forecast End Date on the revenue element determine the plan start and end dates.
No forecast revenue plans are created when the accounting preference Disable Creation of Forecast plans box is checked.
To understand what happens when the Percent Complete Override subtab is not empty, see Using the Percent Complete Override Subtab.