Contracts and Revenue Generation
The methods most appropriate for revenue generation depend on contract type.
Related Topics:
- Time and Materials Contracts Without Upset Limits
For a project with a time and materials contract that does not have upset limits, use one of these procedures to calculate accrued revenue: - Time and Materials Contracts with Upset Limits
If a project is based on a time and materials contract that has upset limits, it uses either a multiplier or a rate table with a maximum. - Percentage Completed Contracts
A project whose compensation is a fee has a contract for payment based on "percentage completed." - Lump Sum or Fixed Fee Contracts
When a project has a lump sum contract, its revenue is accrued according to progress made. Progress is usually based on a percent complete that has been calculated and updated for each accrual (revenue method P). - Cost Plus Fixed Fee Contracts
When a project contract, such as a government contract, specifies that the compensation is a "cost plus fixed fee," its revenue accrues based on either a lump sum payment or a percent of total costs.
Parent Topic: Revenue Generation Overview