Title: Bill on Completion with auto-calculated % complete
The example below is Bill on Completion with Revenue Recognition based on autocalculated % complete. Unanet offers the option in the Fixed Price item set up to designate a billing date, or, to indicate that the item should be "Billed on Completion". If you elect to set the FP item to be "Billed on Completion", then "Completion" is determined by setting 2 fields on the Project/Task Budget tab: "Completed Date" and "Completed Percent". You also have the option to leave the "Completed Percent" field blank during the life of the contract, thereby allowing Unanet to autocalculate the Completed Percent. If you elect to have Unanet autocalculate the Completed Percent, then at the end of the contract when you are ready to bill you must key in 100% in that field as your signal that in fact the project is completed and ready to be billed. This prevents any unexpected billings appearing without your authorization.
What’s covered in this document:
Set up the project for Billing including invoice set up and FP items.
- In the FP item set up:
- check the box for “Bill on Completion” and provide an amount. In this example, the FP amount will be $500,000.
- designate a Revenue Recognition method. In this example, the method will be % complete (note that the Revenue Recognition of % Complete has nothing to do with Billing on % Complete)
- Set the project/task budget tab to:
- estimate from the appropriate value. In this example, "Hours" will be set in the "Estimate From" field.
- provide the hours or cost budget. In this example, 2000 hours will be set.
Hours are charged in timesheets
Timesheets must reach the locked/extracted. In this example, 1000 hours will be charged in March. This represents 50% of the total hours budget.
The Bill/Revenue Post process is run.
Since 50% is the autocalculation of % complete, $250k will be deferred for Billing and recognized as Revenue.
Again, hours are charged in timesheets
Timesheets are locked/extracted. In this example, 1000 more hours will be charged in April (the full 2000 hour budget has been charged at this point).
Again, the Bill/Revenue Post process is run.
- Since an additional 50% complete has been autocalculated (the additional 1000 hours), an additional $250k will be deferred for Billing and recognized as Revenue. Now we have $500k deferred for Billing and $500k recognized as revenue.
- Note: At this point, invoice creation is possible after completing the next step of entering 100% complete in the project/task Budget tab (even though Unanet had autocalculated 100% complete.)
Contract is completed and authorized person indicates completion to the Unanet system
Someone with the appropriate permissions edits two values on the Project/Task budget tab: the Completed Date and a manually entered 100% in the Completed Percent field.
At this point, it is still not possible to create an invoice even though the project is 100% complete. See the next step.
The Bill/Revenue Post process is run again
- At this point, the manually entered percent completed is registered in the Post. The $500k now moves from the Deferred Billing status to the Unbilled status. From a revenue perspective, nothing changes, the $500k was already recognized previously.
- At this point the invoice may be generated.
- Note – at this point, the project/task Completed Date and Completed percent fields are grayed out (since the manually entered 100% has now been Posted).
Note: % complete autocalculations will vary based on the data provided to Unanet for actuals and budgets; please reference the Report Calculations page of the Help documentation for all the permutations possible.