Assigning a revenue contract to a project

Revenue recognition is an accounting procedure that officially accounts for revenue earned.

Revenue for a project can only be recognized if that project has a revenue contract assigned to it. This contract, with its sub-clauses, defines when revenue earned from the project becomes recognizable by the company.

Refer to Understanding revenue contracts and clauses for information about how the default contracts work. Note, however, that your company may be using a custom contract.

The project manager’s role in revenue recognition

The project manager is responsible for:

  • Ensuring all billable projects are assigned an appropriate revenue contract when they’re created. You can only assign contracts upon project creation – they can’t be added later.
Project managers have the capacity to modify the system-level contracts, so they meet the requirements of each project.
  • Assigning the value of the contract, which will likely be used by the contract’s rules to calculate recognizable revenue.
  • Ensuring any necessary project requirements referenced in the contract are in place so revenue can be recognized.
For example, if you’re using the Percentage of Completion method, resources must be assigned to the project to ensure cost estimates are available.

Assigning revenue contracts and contract values to projects

You need to assign revenue contracts when you create a new project -- you can’t add the contract later.

You can, however, update the total contract value at any time, to reflect negotiated changes in the contract value.

To assign a revenue contract and the total contract value:

  1. Create a new project.
  2. In the Add New Project dialog, enter a value in the Total Contract Value field, and select a revenue contract from the Revenue Type field.
  3. Complete all other needed fields, and click Add Project.

If you’re not sure what contracts or value to assign, talk to your company’s revenue manager or your Replicon administrator.

Viewing and updating the contract

Typically, you’ll just apply revenue contracts as they were configured at the system level. However, you can update configurable parameters of the rule, and you can even add additional clauses to the contract, if needed.

To view or edit the contract assigned to a project, click the Revenue tab for that project.

You can’t update or delete parameters of a clause if they’ve been used in a revenue recognition calculation.