We've written the guides in this series to help you learn more about the Revenue Scheduling functionality that CMAP has to offer. Hopefully by using this information and reviewing the tool, you should have all you need to know about our Revenue Scheduling functionality and how you can use it to produce powerful management reporting for your company.
Initially, we need to talk about what Revenue Scheduling actually is. To explain that I need to start by explaining the idea of Revenue Recognition or Recognized Revenue.
You may already be familiar with the term 'Revenue Recognition', but if not, I will explain it briefly here:
Revenue Recognition is an accounting principle whereby you calculate Revenue per month based on how much of the project value has been earned, or how much work has been completed. This can be accounted for separately to your monthly invoiced amounts.
Let's look at an example:
|Month 1||Month 2||Month 3||Month 4||Month 5||Month 6||Month 7||Month 8||Total|
So for the project above, lets imagine you have a Fixed Fee project where you have agreed a 50% upfront and 50% on completion deal with your client. If you take into account just the Invoiced Income, you would see two large amounts for the project: one at at the beginning and one at at the end, which can cause spikes in Income figures.
However, by doing revenue recognition in CMAP, you can spread the value of the work along the project lifetime depending on how much of the project value has actually been worked or earned.
One way to do this is by using the % complete sliders which are set on the Budget Vs Actuals page of the project. The % complete can be calculated against the Fee to give you the value of the project that you can recognize in any one month.
|A $10,000 project, may have a % complete of 15% at the end of the first month. At the end of this month you can recognize $1,500.|
CMAP's Revenue Scheduling tool is the base of these calculations. We use the tool to capture these recognized revenue values and, what's more, you can also use the tool to Forecast the values which may be recognized in the future too.
The Revenue Scheduling tool gives you the ability to decide two things;
1. How you would like to recognize revenue for the project using one of CMAP's Historic Options.
2. How you would like forecast the remaining project value using CMAP's Auto-Forecast options.
Follow on to the next guide in the series by clicking HERE