Currently the system automatically calculates a suggested revenue amount to be recognized each month, based on what it sees as the estimated percentage complete* of the project.
With the the introduction of manual revenue recognition open beta, users can now input their own revenue recognition amounts per month - and in turn re-calculate the estimated percentage complete of the project. This gives you the best chance of ensuring the monthly revenue forecast is as accurate as possible. This beta is only available on Pro and Plus plans.
When should I be recognizing revenue manually?
Although the general preference is to go with the “suggested revenue recognition” figures which are based on quantitative system data (e.g. timesheets and forecast data from the scope), there are various reasons why you would want to recognize a different revenue amount to what the system is showing:
- You don't agree with the revenue (or percentage complete) suggested by the system and want to recognize a different amount.
- The scope (project plan) - which is a key informant of the suggested revenue - is in constant flux or there’s a lack of confidence in its quality. However you still want to forecast revenue for the project - and hence can use the manual recognition feature either temporarily or permanently. Please note that the suggested revenue recognition will always be preserved, so users can compare the system generated vs. manual numbers at any time.
- The scope (project plan) is only partly planned. For example, the project is due to run for 12 months, however only Phase 1 (3 months) has been planned. Users can either:
- Add blocks of time and resource to their scope for future phases to show forecast billable time which will allow the system to properly suggest revenue for all 12 months
- Use manual recognition, and base the first 3 months on “monthly billable time” figures, and distribute the rest as anticipated spent throughout the remainder 9 months.
- The project is in an “opportunity” state and only the budget is known (and not the plan) - however the user still wants to forecast revenue so it shows in higher level company reports.
How do I enable manual revenue recognition?
Manual recognition is a permission based feature and is available for Admins by default, however it must be enabled for other profile types first, before other team members can access this functionality.
To enable access to manual recognition
- Click on your profile icon on the top right.
- Select Admin from the dropdown.
- Click on Permissions tab at the top.
- Next to the permission profile to change, click the Edit button.
- Check 'Manual revenue Recognition'.
- Click on Save to update your permission profile.
How do I recognize revenue manually?
Once enabled, users can navigate to their Project Budget to review the Revenue Recognition. Note that to be able to manually recognize revenue, your project need to be configured to use revenue recognition. See Understanding and using Revenue Recognition for more information.
Additionally, it is also possible to have a combination of manually recognized and system generated revenue figures. In deciding whether amounts should be manually recognized or not - you may want to consider monthly billable time (which is the sum of actual time spent to date (time registrations) + forecast time (scope / project plan) for the month).
After manually recognizing the revenue, it is also possible to lock the revenue for any month at any time (does not have to be sequential). This will grey it out in project reports as well as company reports denoting the revenue is locked in. Even if underlying data changes (i.e. users enter more timesheets), this figure will be locked.
To recognize revenue manually
- Click on the Projects tab.
- Open the Project of choice.
- Click on the Budget tab within the project header.
- Select the Revenue Recognition tab.
- Enter your own revenue amount in the fields next to Manual revenue recognition, under 'Time manual revenue recognition' section. Clicking the “X” will reset the amounts to the suggested revenue recognition amount.
- If you try to manually recognize all months, you will be able to do this with the exception of one (1) month, which will be system generated and carry the balance between the fixed price and the amount manually recognized to date.
- If you modify the fixed price to a higher amount, then the additional revenue will be distributed between the system generated month(s).
- If you modify the fixed price to a lower amount, then the system may show negative revenue (if the amount is lower than the total amount recognized).