Advanced Revenue Management (Essentials) for Projects

Note:

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.

If you have a projects-based business, you can recognize revenue based on the percentage of completed project work by using percent-complete revenue recognition plans. A percent-complete plan is one that is derived from a percent-complete revenue recognition rule. Percent-complete rules have Event-Percent Complete as their Amount Source. For more information, see Percent-Complete Revenue Recognition Plans.

Set up a service item to associate a percent-complete revenue recognition rule with projects you track. Then sales that contain the service item generate revenue recognition plans based on the rule and the linked project completion.

As you log time worked and mark portions of the project complete, revenue is recognized through the revenue recognition journal entries. Hours must be assigned to a project task to ensure that project completion calculations are accurate.

To recognize revenue based on project completion:

Enable the Advanced Revenue Management (Essentials) feature. See Setup for Advanced Revenue Management (Essentials). The Projects feature must also be enabled.
Use the Default Percent Complete revenue recognition rule, or create a revenue recognition rule that uses percent-complete as the Amount Source. See Revenue Recognition Rules.
Associate a percent-complete revenue recognition rule with a service item on the item record, and set Create Revenue Plans On to Project Progress. See Item Configuration for Advanced Revenue Management (Essentials) and (Revenue Allocation) and Setting a Service Item to Create a Project.
Create a sales order that includes a service item that meets the requirements in step 3 and attach a project. If the project does not have planned time entries, see the options in Generating Forecast Revenue Plans for Projects Without Planned Time Entries.
Create revenue recognition journal entries as needed. The revenue recognition plan is updated based on changes in actual time for the project. See Journal Entries for Percent-Complete Revenue.

To recognize revenue based on project completion:

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