The Cost Plus Fee on Cost or Cost Plus Fee on Hours formulas are transaction-based formulas that store their revenue primarily on the rows in the PROJ_SUM table that have a direct cost account in the ACCT_ID column. The system calculates the revenue for these formulas by adding the direct and indirect costs and a percentage fee or hourly fee. The Estimate to Complete (ETC) or Estimate at Completion (EAC) formulas multiply the project's contract value by a percent-complete percentage. Revenue for these formulas is stored on the cost lines to the extent of costs incurred and the difference is stored on the revenue lines of the PROJ_SUM table (revenue plug). Use the following steps to change your revenue formula from a "Cost Plus" type formula to a "ETC/EAC" type formula:
Manually calculate your inception-to-date revenue using the ETC or EAC formula. After changing the revenue formula, you will need this amount to determine whether you have the correct revenue.
Change the revenue formula. As soon as you enter a new revenue formula, the system will display a message stating that, if you change the revenue formula, all of the allowable columns for the current fiscal year will be deleted. You should answer Yes if you are changing the revenue for the entire fiscal year. If you wish to change only the revenue amounts for the current period, you should first change the revenue formula to Do Not Compute and then to the ETC/EC formula.
Make any necessary changes to the ETC amounts in Costpoint Budgeting and ETC. Please refer to the Special Topic PJ-13, "Estimate to Complete," for more help in this area.
Enter the "ETC" or "EAC" amount in the field provided in the Basic Revenue Info screen (Projects » Project Setup » Revenue Setup).
Recompute the revenue for your project.
Compare the revenue that the system computed to the revenue that you calculated manually in Step 1.
Loaded labor and cost-plus-type revenue formulas are transaction-based and, unless a ceiling has been exceeded or a revenue adjustment has been made, the revenue account does not appear in the PROJ_SUM table. The revenue is generally on the lines that have a direct costs account number in the ACCT_ID column. Change the revenue formula. When you enter the new revenue formula, the system displays a message stating that, if you change the revenue formula, all of the allowable columns for the current fiscal year will be deleted. Click Yes if you are changing the revenue for the entire fiscal year. If you do not click Yes, the revenue formula will not be changed.
The fixed-revenue formulas calculate revenue as follows:
When using this formula, Costpoint compares the amount entered as the YTD Revenue in the Basic Revenue Info screen (Projects » Project Setup » Revenue Setup) to the sum of all revenue recognized for the fiscal year up to and including the current subperiod in PROJ_SUM. It then subtracts the sum of the YTD Revenue in the PROJ_SUM table from the amount entered in the Basic Revenue Info screen (Projects » Project Setup » Revenue Setup) to arrive at the amount of revenue year to date not yet recognized. This additional amount appears in the PROJ_SUM table as a separate row with the revenue account in the ACCT_ID column and the additional amount in the OTH_FEE_ACT_AMT and OTH_FEE_TGT_AMT columns.
When using this formula, the system compares the amount entered as the MTD Revenue in the Basic Revenue Info screen (Projects » Project Setup » Revenue Setup) to the sum of all revenue recognized for the period up to and including the current subperiod in PROJ_SUM. It then subtracts the sum of the MTD revenue from the amount entered in the Basic Revenue Info screen to arrive at the amount of revenue period to date not yet recognized. This additional amount appears in the PROJ_SUM table as a separate row with the revenue account in the ACCT_ID field and the additional amount in the OTH_FEE_ACT_AMT and OTH_FEE_TGT_AMT columns. If you do not clear the revenue for the prior periods, there will be no affect on that revenue in the current period, since this formula does not calculate YTD. A revenue adjustment may be necessary to bring the inception-to-date revenue to the correct amount.
When you use this formula, the system compares the amount entered as the CTD Revenue in the Basic Revenue Info screen (Projects » Project Setup » Revenue Setup) to the sum of all revenue recognized for the contract to date up to and including the current subperiod in PROJ_SUM and PSR_PY_SUM. It then subtracts the sum of the CTD revenue from the amount entered in the Basic Revenue Info screen to arrive at the amount of revenue contract to date not yet recognized. This additional amount appears in the PROJ_SUM table as a separate row with the revenue account in the ACCT_ID field and the additional amount in the OTH_FEE_ACT_AMT and OTH_FEE_TGT_AMT columns.
The row with the adjusting amount appears at the level of the project to which revenue is being posted.
Use the following steps to change to one of the preceding revenue formulas:
Manually calculate the inception-to-date revenue. You will need to compare this to the revenue on your PSR when you have completed the process.
Change the revenue formula to month, year-to-date, or inception-to-date fixed amount as needed.
Answer Yes to the question about allowable columns if you want all revenue to show in the current period on the PSR. If you want only the difference to be shown on the current period PSR, you should change the revenue formula to Do Not Compute. After you have made this change, enter the new fixed-revenue formula. This will prevent the system from deleting the allowable columns. As a result, no data in prior periods will be changed.
Enter the fixed amount for a month-to-date, year-to-date, or inception-to-date formula.
Calculate the revenue with the new formula and follow standard revenue procedures to print the PSR and evaluate the effect of the change.
Cost Plus Fee on Cost and Cost Plus Fee on Hours formulas are year-to-date formulas. The program calculates revenue only on costs incurred during the current fiscal year. If you need to adjust the revenue from a prior fiscal year, you should use an inception-to-date revenue adjustment. Whenever you enter the ITD revenue adjustment, the next computation of revenue following the revenue adjustment entry reflects the ITD adjustment. Because fixed formulas usually contain a revenue line, you should delete it before you change revenue formulas.
If you want to restate the G/L and restate the PSR to reflect the CPFF formula for all of the periods in the fiscal year, you will need to recompute revenue for each of the periods and post for each period. If you want to restate the PSR for all periods but not the GL, you will need to recompute revenue in each period but post only in the current period. If you want the entire fee to be recognized in the current period, compute only in the current period and the YTD fee will be reflected in the current period.
Use the following process to change to a Cost Plus type formula:
Manually calculate the inception-to-date revenue. You need to compare this to the revenue on your PSR when you have completed the process.
Change the revenue formula to a cost-type formula (Cost Plus Fee on Cost or Cost Plus Fee on Hours).
Answer Yes to the question about allowable columns if you want all fee to show in the current period on the PSR. If you want only the difference to be shown on the current period PSR, change the revenue formula to Do Not Compute. After you have made this change, enter the new cost type formula. This will prevent the system from deleting the allowable columns. As a result, no data in prior periods will be changed.
Enter the fixed fee or hour amount in the Basic Revenue Info screen (Projects » Project Setup » Revenue Setup).
Calculate the revenue with the new formula and follow standard revenue procedures to print the PSR and evaluate the effect of the change.
All loaded labor formulas are calculated in the PROJ_SUM table using current period information. Therefore, if you want to restate the revenue using a loaded-labor formula for all periods of the current fiscal year, you must recompute revenue for each period. You will need to use an inception-to-date revenue adjustment if you need to change revenue for a prior year.
Loaded Labor formulas require Project Labor Category (PLC) codes to compute accurately. All loaded-labor formulas use PLCs and their related billing rates to compute revenue. To change to a loaded labor formula, you must make sure that PLCs are in the Labor Summary table for all periods that you wish to change. Changing to a loaded-labor formula in the middle of a project makes it impossible to impose hours ceilings unless you have the data to initialize the Prior Year T&M Revenue screen.
Use the following steps when changing from any formula to a Loaded-Labor formula:
Calculate or obtain the correct inception-to-date revenue for the project.
Determine whether you are going to adjust revenue for all periods or for just the current period.
Change the revenue formula. When you enter the new revenue formula, the system displays a message stating that, if you change the revenue formula, all of the allowable columns for the current fiscal year will be deleted. Click Yes if you are changing the revenue for the entire fiscal year. If you do not click Yes, the revenue formula will not be changed.
Check for PLCs in the Labor Summary file.
Set up PLCs and Billing Rates in the project labor area. See Special Topic PJ-4, "Labor Categories/Billing Rates," for assistance with this.
Load Labor Rates for all the periods that will be changed to the new revenue formula.
Change the revenue formula.
Enter the inception-to-date revenue adjustment.
Compute revenue and follow month-end procedures
Review inception-to-date revenue.
Both loaded-labor formulas and cost-types formulas are transaction-based. This makes the transition easier than most other revenue changes. You do not need to recompute burden cost when changing from a loaded-labor formula to a cost-type formula. Cost Plus type formulas are year-to-date formulas. Therefore, if you make the change in the current period and forward only, the system will make a year-to-date adjustment in the current period. The allowable burden and fee columns will be populated with amounts for the entire year. The labor lines will have amounts in the markup columns that represent the difference between labor revenue computed using the former loaded-labor method and labor revenue computed under the cost-plus method.
If you restate all the periods of the fiscal year with the new revenue formula, there will be no evidence in the PROJ_SUM table that the project was ever a loaded labor type.
Follow these steps to make the change:
Manually calculate the inception-to-date revenue under the new method.
Change the revenue formula. When you enter the new revenue formula, the system displays a message stating that, if you change the revenue formula, all of the allowable columns for the current fiscal year will be deleted. Click Yes if you are changing the revenue for the entire fiscal year. If you do not click Yes, the revenue formula will not be changed.
Calculate revenue for the current period only or all the periods of the fiscal year.
Follow closing procedures to update tables.
Analyze the revenue using the new formula.
Although both the cost-type and loaded-labor type revenue formulas are transaction-based, it is slightly more complicated to change from a cost-type to a loaded-labor type. The loaded-labor type of revenue formula uses PLCs and their related billing rates as the major component of revenue. A PLC must be associated with every labor entry in the LAB_HS table for the system to accurately compute revenue. If you plan to recompute revenue for each period of the current fiscal year, first make sure that PLCs are in the LAB_HS table for all the labor lines. Use the following steps to change the revenue formula from a cost-type to a loaded-labor:
Ensure that all hours have been recorded with a PLC and the labor account has a function code of LABOR in the Project Account Groups screen (Projects » Project Setup » Controls).
Set up the Assign PLC to Projects screen (Projects » Project Setup » Project Labor) (if rates are project-specific).
Set up Project PLC Rates screen (Projects » Project Setup » Project Labor) (if rates are project-specific) or Project PLC Rates by Employee/Vendor screen (Projects » Project Setup » Project Labor) (if using workforce billing rates).
Set up Define Rate Sequence screen (Projects » Project Setup » Revenue Setup) at the transaction level of the project and reference the source project (the project used in the Project PLC Rates screen (Projects » Project Setup » Project Labor) or the Project PLC Rates by Employee/Vendor screen (Projects » Project Setup » Project Labor)).
Change the revenue formula. When you enter the new revenue formula, the system displays a message stating that, if you change the revenue formula, all of the allowable columns for the current fiscal year will be deleted. Click Yes if you are changing the revenue for the entire fiscal year. If you do not click Yes, the revenue formula will not be changed.
Load the labor rates.
Compute Revenue (Projects » Cost and Revenue Processing » Revenue Processing).
If you are making this change prospectively, you can change the formula first to Do Not Compute and then to the loaded-labor formula. This will eliminate the warning about changing revenue formulas. After you have saved the Do Not Compute formula, change it again to a loaded-labor type. This method will prevent you from having to clear the allowable columns. You will probably need an inception-to-date revenue adjustment when using this method. The loaded-labor revenue formulas are period-to-date formulas, so no year to date adjustments will be shown in the table.
If you are making the change retroactively, you will need to make sure that PLCs are listed on each line of the Labor Summary table for this project. You should clear the allowable columns if you want to change the revenue for all periods of the fiscal year. You will need to recalculate revenue for each period of the fiscal year, but you have to post only the revenue in the current period. When you use this method, there is no evidence that the previous formula was used.