We continue to test Project Management and Project Billing for our Time and Materials and Fixed Bid (Milestone) projects.
I am having a hard time understanding the revenue recognition piece…likely due to not being a finance person.
For my T&M project, when I generate the invoice and then approve it, I then pull it into AR Invoice Entry. When I post the AR Invoice, it is hitting our Deferred Revenue account as opposed to our Revenue account.
My question is, what is the activity that moves the Deferred Revenue to Revenue?
I’ve create two Projects, one where the Revenue Recognition Method is Manual and the other is “On Invoice”. In both cases, it seems to work the same. The AR Invoice hits Deferred Revenue and I can’t figure out the process to move it to Revenue.
Anyone familiar with this process that can point me in the right direction?
JOE ROJAS
Epicor Applications Manager
VENTION MEDICAL + DESIGN & DEVELOPMENT
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It is doing what it should….when you “ship” the project it will move it from deferred revenue to your revenue account.
All of your milestone billings are considered advanced payments…advanced payment will ALWAYS hit your Deferred revenue account. Once the project is done and “shipped” then all of that revenue is recognized.
The original order that is tied to the project is what should get shipped. Test that out to see it move.
When you say “ship” do you mean in Customer Shipment Entry? I tried that and the part number on the sales order is an on-fly-part number and not a part number in the item master. When I try to ship this order, it’s looking for a job. If I used the project job, it tells me that you cannot ship against a job of type Project.
Does this mean that I need to be using a part number on the sales order that is in the item master and then to that point set it to non-quantity bearing so that it has not impact to inventory?
JOE ROJAS
Epicor Applications Manager
VENTION MEDICAL + DESIGN & DEVELOPMENT
DIRECT: 508.597.1392 x1625 | MOBILE: 774.826.9245
Huh, I could have sworn you would be able to do this to an on-the-fly part number…if the issue is also that you cannot have a project job ship then try the non-quantity bearing part number so that it does not impact inventory…of course even if it does for the two minutes you put it into stock and then immediately ship it out of inventory…does it really matter? But that is a different discussion….try the non-quantity bearing part.
One thing to know for those using Milestone Billings, Revenue Recognition,
and Shipments. 10.1 no longer treats Milestone Billings as advance payments
and in fact you will no longer see them on the sales order bookings or
sales order tracker. Its a shame because it was something that worked well.
Epicor’s logic for change is that they were deferred revenue and not
advance payments so they didn’t have anything to do with each other
You won’t be able to ship from the Project Job. You will have to ship from
the make to order production job in customer shipment entry
If you wanted a pack slip and weren’t ready to ship from a “billing”
perspective you can always tie it to the misc shipment entry and reference
the sales order. It will show in the sales order tracker as a misc shipment
against the order
When the project is ready to final bill (minus advance payments) use the
Customer Shipment entry and ship from the job
So I created a sales order using non-quantity bearing parts, created a new project that tied to this sales order.
I generated a T&M invoice and it hits deferred revenue.
I then shipped against the sales order in Customer Shipment Entry but I cannot invoice this shipment. When I go to AR Invoice Entry and Get Shipments, it’s not listed. I confirmed that the shipment is marked as shipped. I check to make sure that the customer’s billing day is set to All Days. Still can’t pull the shipment in.
What I also noticed is that the Inventory/WIP Reconciliation report does not show this shipment.
I also noticed, along the way, that when I posted the T&M invoice, MFG-CUS transactions were created to move the costs of the T&M items on the invoice from WIP to COS, which I was not expecting.
This “back end” process for project billing is only getting more confusing as I go.
JOE ROJAS
Epicor Applications Manager
VENTION MEDICAL + DESIGN & DEVELOPMENT
DIRECT: 508.597.1392 x1625 | MOBILE: 774.826.9245
Joe just curious how did you try to ship the non quantity bearing part?
From inventory or from a job? I have never tried either way, wouldn’t think
it would create a transaction for that part type
I shipped from inventory.
I can see the shipment transaction in Part Transaction History tracker but they don’t show on the Inventory/WIP Recon report and I can’t invoice the shipment.
I decided to delete the shipment and then tested out the “Capture Revenue Recognition” process, which I have no idea what this is supposed to do and the help file wasn’t…well…helpful.
After I ran it, I could see the invoiced amount come out of deferred revenue and then hit the appropriate sales account contexts as defined in the project billing control code.
This was a good find, but I’m still left a little confused but up to this point, I hadn’t heard about using this process.
In addition to the help in this group, I’ve also been working with a consultant, who also didn’t mention it.
I’ve decided to also reach out to our Epicor CAM to see if he can connect me to any in-house expertise.
JOE ROJAS
Epicor Applications Manager
VENTION MEDICAL + DESIGN & DEVELOPMENT
DIRECT: 508.597.1392 x1625 | MOBILE: 774.826.9245
Did you run the capture revenue recognition program for that project? I believe that is the process that will move the $$$ from deferred revenue to your sales accounts.
