About spent amount

What is spent amount?

Spent amount, also called spent value, can be viewed as the value of effort expended on a project if you are able to achieve your assigned billing rates.

Ajera uses the billing rate table to determine the amount spent. In this way, the rate used to calculate amount spent can be unique to a project, phase, activity, employee, and employee type.

Example 1: Labor

Patricia Hill is set up with an employee type of Administration. Project 1, Phase 1 uses the standard rate table, which specifies billing rates by employee type. The billing rate for Patricia's employee type of Administration is $50. When Patricia enters one hour of time to Project 1, Phase 1, this billable time generates an amount spent of $50.

Example 2: Expense

A vendor invoice is entered for Global Blueprinting. A line item is charged to Project 1, Phase 1 for activity (photos). Project 1, Phase 1 uses the standard rate table, which specifies that expenses are billed at cost plus 15%. The line item on the vendor invoice specifies that there is 1 unit and that your company was charged $20 per unit for a total amount of $20. Using the rate table calculation of cost plus 15%, the resulting amount spent is $23.

The amount spent can change when you do the following:

• Move time from one project to another project.
• Change the employee type or activity, if the billing rate table uses those criteria.
• Change the rate table and recalculate rates.
• Change the status of the time or expense work-in-progress (WIP) to nonbillable.

How does the amount spent affect the general ledger?

Ajera assigns the spent amount when cost is incurred. For example, Ajera assigns labor an amount spent when hours are entered on a timesheet. Ajera assigns an amount spent for expenses and consultants entered in vendor invoices or in-house expenses. The amounts are reflected in your WIP and Unbilled Revenue accounts on the ledger.

How is the spent amount reflected on accrual basis financial reports?

When billable cost is entered in Ajera using Manage Time, In-house Expenses, or Vendor Invoices, the amount spent is posted to your income accounts of Unbilled Labor, Unbilled Expense, or Unbilled Consultant Revenue. It is reflected on your Profit and Loss Statement as revenue and on your Balance Sheet as an asset.

When the cost is included on a final invoice, the amount spent is reversed from these accounts. This is true whether the cost is invoiced as time and expense or as part of a fee. And the billed amount is posted to Accounts Receivable and to your income accounts of Billed Labor, Expense, or Consultant Revenue.

What about the spent amount and the cash accounting basis?

With the cash accounting basis, revenue is not reported until you receive payment from the client for the work performed. When you enter the cash receipt, entries are made to the Cash and Revenue accounts. No accounting entries are made to the WIP, Unbilled Revenue (Spent), or Accounts Receivable account.

How is the spent amount reflected on project management reports?

The spent amount, as it appears on project management reports, represents the total effort of time and expense at your billing rates. It accumulates to show you the potential revenue for the project. The amount spent on project management reports does not tie out to the WIP and Unbilled Revenue accounts on your financial reports because the project value does not get relieved when invoiced.