1. Projects
  2. Project Management
  3. Project Billing
  4. Charge-Based Project Billing
  5. Project Revenue Recognition

Project Revenue Recognition

The Project Revenue Recognition feature enables you to defer revenue for charge-based projects using advanced revenue management (essentials) without generating sales orders. You can recognize the deferred revenue independently from customer billing across future periods according to rules you configure.

Important:

Project Management, Charged-Based Billing, and Advanced Revenue Management (Essentials) are all required to use Project Revenue Recognition.

To use Project Revenue Recognition, create project revenue rules based on your existing charge rules for the project. You can create as charged, percent complete, and fixed amount project revenue rules. These revenue rules determine how much and how often you recognize the revenue created by your project. After creating your project revenue rules, NetSuite automatically creates revenue arrangements, elements, and plans for your project revenue. For more information, see Charge-Based Project Billing, Advanced Revenue Management (Essentials) and (Revenue Allocation), Updating Revenue Arrangements and Updating Revenue Recognition Plans.

If you selected a Project and Charge Type on any of the following transactions, then a corresponding revenue arrangement is not created for that transaction. Instead, the transaction's performance obligations appear on the project's revenue arrangement.

Do not select a charge type on the transaction if you do not want the transaction's performance obligations to appear on the project's revenue arrangement.

After you finish the setup, be sure to complete the additional month-end steps to recognize revenue in your month-end procedures. The basic month-end project revenue recognition processes are as follows:

  1. Create revenue recognition journal entries. You can schedule the revenue recognition journal entry creation process. For details, see Revenue Recognition Journal Entries.

  2. Reclassify deferred revenue. You can schedule the reclassification process. For details, see Reclassification of Deferred Revenue.

  3. Run and save the Deferred Revenue Waterfall Report. See Run and Save the Deferred Revenue Waterfall Report and the related topics for the individual reports.

Tip:

On project billing rules, the Revenue tab was added and it links you to the Project Revenue Recognition rules. You can display revenue elements and recognized revenue directly on project revenue rules. The project revenue rules are displayed on linked project billing rules. The Summary box shows how much revenue has been recognized. Through improved visibility, it allows a better audit of billing and revenue rules, and provides transparency of linked project revenue rules when monitoring project billing. This improvement makes the whole revenue recognition process and revenue management more intuitive, as revenue recognition and project are now closer to each other.

This topic includes the following sections:

General Notices