Revenue Generation

Because Vision 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 allows you to increase the accuracy of project reports and financial statements.

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

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

Timing

  • Because Revenue Generation calculates revenue on a job-to-date basis, you can run it whenever you want (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 Revenue Generation, Vision calculates your firm's revenue on a project-by-project basis (or phase-by-phase, task-by-task) according to the revenue methods that you assign to each project, phase, and task.
  • Standard Revenue Methods
    If you set up Revenue Generation to track only one uninvoiced revenue account and one unbilled services account, Vision provides six standard revenue methods.
  • Contract Types and Revenue Methods
    A key factor to help you decide the best revenue method for a project is the project's contract type.
  • Example: Prove Out a Revenue Method
    For certain projects, you may find that none of the standard revenue methods is appropriate. If so, you can create your own formula for calculating revenue. Deltek recommends that you prove out each method on a few projects before assigning the method to all of your 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 firm 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), Vision tracks the difference between revenue amounts and billing amounts.
  • Unbilled File Reconciliation
    A file reconciliation (file rec) issue 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 issue 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: Accounting Concepts Overview