Hello all,
We are a general contractor about to go live with Acumatica soon and I was wondering how people are handling revenue and cost recognition and accrual at the end of the period.
- Our current process for cost is issue POs/Commitments and “receive” them (even though there is no stock). These receipts are three-way matched to AP bill. We then accrue open receipts and the end of period and reverse the accrual automatically. The incurred cost is AP bill + Open Receipt. Our current ERP lets us receive stuff without managing inventory.
- Then the process for revenue is to calculate Earned Revenue as (actual incurred expense/budgeted expense * budgeted revenue). We accrue (Earned Revenue - Billed Revenue) and reverse automatically, either as Revenue or Billings in Excess of Revenue. This process is in-line with GAAP and is approved by our auditors.
The above is mostly done via manual entries except accruing open receipts.
We are trying to figure how to implement this in Acumatica. It doesn’t have to be the exact same process but should arrive at same results.
- For Revenue, it looks like we can use Allocations based on completion % and revenue budget. We don’t have to do reversals since project billing moves it from Accrual to AR when billed. We are not sure if Billings in Excess can be handled automatically.
- We understand that we can’t really use “receipts” in Acumatica for non-stock items, which is what we will use to issue commitments to subcontractors. So, we are not sure what to do on cost side. We can’t wait for AP bill to recognize costs. How is everyone handling this? We see that we can use Cost Projections and WIP Detail to see cost to completion, but it doesn’t look like it books anything to GL. Do we have to do this manually?
Any thoughts/comments/insight on how others are handling this are much appreciated.
Thanks
Sarat