Revenue Generation

Because DPS is an accrual-based system, you can recognize revenue when it is earned, rather than when payment is received, and recognize expenses when they are incurred, rather than when they are paid.

This system of revenue recognition increases the accuracy of project reports and financial statements.

DPS accrues revenue when you run the Revenue Generation process. Revenue Generation calculates revenue on a project-by-project basis (or phase-by-phase, task-by-task) according to the revenue method that you assign to each project, phase, and task.

If you do not use Revenue Generation, DPS recognizes revenue as it is billed. Job-to-date billings may not be the best way to recognize revenue because:
  • A project may not be billed on a monthly basis, but only when it reaches certain milestones.
  • Your enterprise may post invoices in a different period than it posts expense accruals.
  • On projects with "lump sum" billing terms, the amount billed may not match the labor expense incurred.
  • Your financial statements are dependent on your billing cycle.

Timing

  • Because Revenue Generation calculates revenue on a job-to-date basis, you can run it whenever you want to(multiple times during the same accounting period, if necessary). To keep your project reports accurate and up-to-date, run Revenue Generation at least once a month or at the end of each accounting period.
  • To see current period revenue, run Revenue Generation and then subtract the prior job-to-date revenue from the new job-to-date revenue.

Project Reports

Revenue displays in the job-to-date, year-to-date, and current sections of the Office Earnings report and in the Financial Analysis section of the Project Progress report.

Related Topics:

  • Revenue Calculations
    When you run the Revenue Generation process, DPS calculates your enterprise's revenue on a project-by-project basis (or phase-by-phase, task-by-task) according to the revenue method that you assign to each project, phase, and task.
  • Revenue Methods
    If you set up Revenue Generation to track only one uninvoiced revenue account and one unbilled services account, DPS provides six standard revenue methods. You can also create your own revenue methods.
  • Contract Types and Revenue Methods
    A key factor to help you decide on the best revenue method for a project is the project's contract type.
  • Testing a Revenue Method
    You should consider testing a revenue method (either standard or user-defined) on a few projects before assigning the method to many projects.
  • Running Revenue Generation by Project
    You can run Revenue Generation for all of your projects at once, or you can select specific projects and run Revenue Generation for only those projects.
  • Unbilled Services
    Your unbilled services amount is the revenue that your enterprise has earned job-to-date, less the amount that has been billed job-to-date. When you run Revenue Generation for projects whose revenue method is any method other than Method B (job-to-date billings), DPS tracks the difference between revenue amounts and billing amounts.
  • Unbilled Services File Reconciliation Errors
    A file reconciliation error is a discrepancy between the sum of the detail for an account and the same account's balance on the general ledger. To determine if an unbilled services file reconciliation error exists, you can run the File Reconciliation report.
  • History Loading for Revenue Generation
    The amount of history required for Revenue Generation to calculate revenue amounts correctly depends on the components used in the revenue method calculation.
Parent Topic: Labor and Accounting