cp-38: reconciling unbilled - do you struggle to reconcile

CP-38:Reconciling Unbilled - Do You Struggle to Reconcile Unbilled Receivables?

Brandye Thompson, DeltekJane Kranyak, Deltek

Agenda

2

» Definitions

» Revenue Setup & Sources

» Billing Setup & Sources

» Unbilled Analysis Process

» Summary

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Definitions

Definitions» Revenue – The value or dollar amount of work

performed, services rendered and products provided to a customer.

» Billing –The process of collecting information, constructing an invoice for submission to a customer.

» Unbilled - The difference between the dollar value of revenue recognized and the dollar value of what has actually been billed to a customer.

» Project Account Group (PAG) – Defines your revenue, billing, and unbilled accounts for each project.


Why is reconciling unbilled important?


» Check to ensure your revenue is accurate.

» Visibility into why items are unbilled.

» Easy to see if something that should have been billed has been missed.

» Issues can be caught early when they arise.

» Issues can fixed before things get out of hand, and while they can still be

billed.


Revenue Setup & Sources

Revenue Setup & Sources» Revenue Formula in Project Setup

» Compute Revenue Process

» Revenue Adjustments

» Post Revenue Process

» Other Revenue Scenarios That May Affect Unbilled

» Redistribution of Revenue

» Changing function codes in an existing PAG

» Revenue adjustments as AJEs

» Billing @ Target/Provisional, Revenue @ actual

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Project Revenue Formula


Project Account Group


» One account per function code for labor billed, and unbilled.

» You can have multiple PAGs across different projects.

Revenue Adjustments


» Always do revenue adjustments in ‘Manage Revenue Adjustments’ and not as a journal entry (AJE).

» Positive amounts increase revenue

» Negative amounts reduce revenue

Revenue Adjustments – Common Examples


» Accrue costs and revenue for work performed by vendors or

subcontractors that has not yet been invoiced.

» True-up for a % complete project.

» Correction to prior amount recognized.

» Audit adjustments.

Compute Revenue Process


Post Revenue Process


» Posts revenue amounts from the PROJ_SUM table to the general ledger.

» Revenue posting is a YTD "adjust-to" process.

» Costpoint sums account balances for all periods up to and including the subperiod being calculated.

» The revenue account contains an Account Function Code = Revenue, and is set up at the level of the

project where the revenue formula is entered.

» Costpoint subtracts the YTD revenue in the GL_POST_SUM table from the YTD revenue in the

PROJ_SUM table and posts the difference to the revenue account in the GL_POST_SUM table for the

current subperiod.

» It is possible that revenue per GL_Post_Sum does not equal revenue per the PROJ_SUM table on a

period-by-period basis. However, the two are equal to YTD.

» Last minute revenue updates

» Revenue can be posted at actual or target rates.

» If you select a target revenue posting, you can post cost variances to the balance sheet.


Billing Setup & Sources

Billing Setup & Sources» Billing Formula in Project Setup

» Compute Standard Bills Process

» Open Billing Detail

» Post Standard Bills

» Other Billing Methods/Scenarios

» Milestone Bills

» Progress Payments Bills


Project Billing Formula


Retainage


Project Account Group


» One account per function code for labor billed, and unbilled.

» You can have multiple PAGs across different projects.

Compute Standard Bills


Post Bills


» The Standard Billing

Journal contains project

billings computed and

updated on the Manage

Standard Bills screen.

» The journal debits the

billed receivable that has

been assigned in the

project's project account

group.

» Unbilled amounts are

posted to the unbilled

receivable account as a

credit that has been

identified in the project's

project account group.


Unbilled Analysis Process

Unbilled» Unbilled Accounts

» Unbilled Receivables Setup

» Unbilled Cleanup Tips

» Scenarios That May Affect Unbilled


Unbilled Accounts


» Revenue posts as a

debit

» Billing posts as a

credit

» Processes can be

done at different time

resulting in balances in

this account.

» Revenue and Billing

formulas can be

different.

Unbilled Reason Codes


» When you can create the unbilled report, it can group unbilled balances by project

and by reason code.

» Allows you to analyze unbilled balances by project.

» There are 9 out of the box codes but you can add more.

Unbilled Reason Codes


Create Unbilled Analysis Report Tables


» Creates report tables in order to print the Unbilled Analysis Report and

Unbilled Reason Code Report.

» This process creates the RPT_PROJ_UNBILLED table for use in running

the Unbilled Analysis Report, and the RPT_UNBILLED_RSN table for

use in printing the Unbilled Reason Code Report.

» Run this process after posting revenue and billings for the month, and

before printing the Unbilled Analysis or Unbilled Reason Code Report.

Create Unbilled Analysis Report Tables


Edit Unbilled Reason Codes


» Refine the unbilled amounts by project.

» The Create Unbilled Analysis Report Tables process populates this screen by project with

system-defined reason codes.

» The rows display the difference between ITD billings and ITD revenue by the Costpoint-

defined code.

» Unbilled amounts that are not associated with Costpoint-defined codes display as NONE.

» You can reassign the rows with the NONE code to the user-defined unbilled reason

codes that you setup in the previous step.

» Use this screen after running the Create Unbilled Analysis Report Tables screen and

before printing the Unbilled Analysis Report.

Edit Unbilled Reason Codes


Print Unbilled Analysis Report


» The Summary Report provides an overview of the unbilled balances and

how they were derived.

» The Detail Report is used to understand the timeframe in which some of

the unbilled components will be billed.

» The Unbilled Reason Code Report prints data from the

RPT_UNBILLED_RSN table. You can also view and edit this data on the

Edit Unbilled Reason Codes screen.

Print Unbilled Analysis Report


Unbilled Receivables Analysis Summary


Unbilled Reason Code Report


Unbilled Cleanup Tips: Reporting vs. GL

» The “Print Project Ledger Detail Report” is an easy way to see each

transaction in the GL for a particular project.

» Use “Manage Project Bill Summary” to see when bills were posted and

in what amount.

» Rev worksheet is built, whereas PSR uses data from “Manage Prior

Year Cost and Revenue” screens and proj_sum tables.

» The PSR is the report that matches up to the revenue on the UB report.

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©2014 Deltek, Inc. All Rights Reserved 35

Unbilled Cleanup Tips: Reporting vs. GL (cont.)» Each month, make sure both the PSR and Rev Worksheet tie back to

your unbilled revenue on the unbilled report.

» Changes to the “Manage Prior Year Cost and Revenue” screen will only

affect reports, not the GL.

» Don’t forget to update tables anytime a change is made.

» True Revenue adjustments affect both reporting and GL revenue.

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Unbilled Cleanup Tips: Reporting vs. GL (cont.)» Think about fixing reports in the year that the issue occurred (if no

longer matches GL, do a revenue adjustment in year of issue and wash it out in the current year to offset).

» If period is closed, reports will change in the current period once tables are updated.

» May have to “Update Prior Year History” to roll forward project balances.

» Sometimes “refreshing” the revenue formula can work wonders.

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Unbilled Cleanup Tips: Reporting vs. GL (cont.)» When cleaning up a project that includes history. . . can calculate a dummy invoice to

see cumulatives and details rather than flipping through old files trying to piece together information.

» Pay attention and be consistent to what levels information is put in.

» If information is plugged in at the top level, it more than likely won’t show up on a report wanting level 0 information since it was never put in at the charging level.

» It also could prevent info from showing up on the unbilled report. If you can’t find the issue try running the report at levels 1,2, etc. to look for anything added in.

» Remember. . . revenue is YEAR TO DATE

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Scenarios That May Affect Unbilled


» Bills are posted in the month following revenue recognition

» Billing periods may not match accounting periods

» Redistribution of Revenue

» Changing function codes in an existing PAG

» Revenue adjustments as AJEs

» Billing @ Target/Provisional, Revenue @ actual

» Revenue and Billing at different project levels

» Retainage (Fees withheld)

» Items on hold

» Fixed Price Bills (accumulate costs, bill at milestones, etc.)

Summary

40

» Sources of Revenue and Billing

» How to manage unbilled receivable amounts

» Maintaining unbilled receivable reports

cp-38: reconciling unbilled - do you struggle to reconcile

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