Project Revenue Recognition Overview

In this MasterClass webinar, we discover insights to typical questions you may have asked or heard:

“Why don’t we see any revenue when we invoiced the customer for this project?” or
“Why do we see a lower profit than expected… when we are so busy and our staff is fully utilized?”

This webinar was recorded on August 17th, 2022.

Target Audience

• Executives, Business Owners
• Users with roles in Finance/Accounting, Operation Managers, Project Managers
• Users interested in learning about the options to recognize project revenue as percent of completion (“POC”)
• Users of Q360 v22.01+

By the end of the session, you will be able to:

• Explain the framework for percent of completion of projects and why/how to update the cost basis for revenue recognition
• Compare and contrast between “expense ratio” and “job cost class” methods to recognize project revenue
• Identify system reports that help to highlight projects requiring attention

Agenda:

1.  Introduction | ”Why don’t we see any revenue when we invoiced the customer?”…
2. Context | Types of revenue to recognize…
   • Invoice (Box Sales) | independent orders; revenue/cogs recognized when customer is invoiced; does not have labor associated
   • Service Call (Invoice) | revenue/cogs recognized when call is invoiced
   • Service Contract (Invoice) | invoices are deferred and monthly portion is recognized each month
   • Project (Revenue Recognition) | revenue is recognized (posted) when cogs are posted; cost is the driver that determines how much revenue to recognize
3. “Recognized Cost” as the influencer
   • Equipment | all tangible equipment/goods used on the project
   • Labor Cost | internal cost: standard cost or wage+burden
   • Vendor Invoices | rental equipment, freight cost, PPV, other misc cost
   • Expense Claim | travel, parking, misc supplies, employee out-of-pocket
   • Subcontractor Cost | when vendor invoice is posted
   • Manual Entry | job cost type
4. Track and reflect on my cost basis | What should I be doing? And when?
   • Labor Cost | Adjust labor required, identify type of labor, forecast when needed
   • Equipment Cost | Adjust equipment required
   • ICO/CCO | Create change order to reflect adjusted cost
   • Frequency: Monthly, at least
5. Reports | What should I be looking at? Identify projects requiring attention
   • Project WIP – Template LD Report | Q0291
   • Project Hours Summary | Q0286
   • Project Material Schedule Summary | Q0288
   • Project Revenue/Cost Forecast | Q0058
6. “Expense Ratio” and “Job Cost Class” methods| Compare and contrast
   • Expense Ratio:
     • % Complete = Total Actual Cost ÷ Total Projected Cost
   • Job Cost Class:
     • % Material Complete = Total Actual Material Cost ÷ Total Projected Material Cost
     • % Labor Complete = Total Actual Labor Cost ÷ Total Projected Labor Cost
7. Q & A
8. Wrap Up