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Processing Month-End Revenue

Since the timing and sequencing of these steps have a direct impact on the validity of the revenue calculation, ensure that the steps are completed in the right order.

Step Instructions
1 On the Manage Revenue Information screen, validate the project's data. The calculation of revenue is dependent upon a variety of factors including:
  • Revenue formula
  • Ceilings
  • Prior fiscal year cost\revenue history
  • Labor categories and billing rates
  • Fixed amounts or revenue adjustments
2 Freeze the ledger. Costpoint contains locking procedures to ensure that postings can be made to the General Ledger without causing a loss of data during collisions with other processes. However, as a practical matter, you should freeze the ledger for the duration of the burden and revenue computation processes. This means that no postings are made to the General Ledger from any subsystem (Labor, Accounts Payable, and so on) during the time that those processes are running. Freezing the ledger also gives you a better result because reports that are printed after the burden cost process is complete all tie together. Because some of the detail reports (labor detail, Other Direct Charges detail) are printed directly from the General Ledger, but all of the summary reports (Project Status Report, Revenue Summary and Cost Summary) are printed from a table that is updated only through the burdening process, it is possible for them to become out of sync. This happens when a posting to the General Ledger is made AFTER the burdening process is started. Those additional costs are not picked up for burdening and for revenue calculation and do not appear on the summary reports. However, they appear on the detail reports because those reports are printed directly from the ledger.
3 Execute the Compute/Print Pool Rates screen. This step is required, even if you plan to print all of your project reports using target rates. Target rates are entered on the Pool Rates subtask of the Manage Cost Pools screen. Target rates are not updated by the Compute/Print Pool Rates program; only actual rates are updated. However, this program also allocates service center costs, which  become direct cost and therefore must be burdened by actual or target rates.
4 On the Post Pool Journals screen, post the pool journal. This step is necessary to get the service center costs into the project tables. Before posting, you can print the Allocation Journal Edit Report and\or the Service Center Cost Allocation Report and retain them for auditing purposes.
5 Execute the Compute/Print Purchasing Commitments screen.
6 Execute the Compute Burden Costs screen. This step is required before you can print any Project Summary Reports or compute revenue. The Compute Burden Cost program applies the actual and target rates from the Pool Rates subtask of the Manage Cost Pools screen to the current subperiod, period-to-date, and year-to-date direct costs from the general ledger. Cost of money rates are also applied.

The direct costs from the General Ledger, as well as the burden cost (actual and target), are stored in the PROJ_SUM and PROJ_BURD_SUM tables for use in the revenue computation, as well as for reporting on the Project Summary Report and Project Cost Summary Report.

The revenue computation does NOT look at the costs in the General Ledger: it only uses the costs that were found and burdened in the Compute Burden Cost program.

7 On the Update Project Status Report Tables screen (optional), update the Project Status Report tables with the burdened costs for each project. If you are planning to print Project Status Reports which do not include revenue or fee (profit) information, you can execute the Update Project Status Report Tables screen immediately after completing step 6. However, if you plan to reprint the Project Status Reports with revenue information, you must perform this update a second time (step 13) to get the revenue information on the report.
8 For any projects that include Loaded Labor (Time & Materials (T&M)) revenue formulas, execute the Load Labor Rates screen for revenue and billing. This program updates the Labor History table with the appropriate Time & Materials billing rates, based on the order of precedence that you set up on the Manage Rate Sequence Orders screen. You can run this program whenever you freeze the labor that is burdened and used for reporting on Time & Materials projects. In other words, you can perform this step any time after Step 2, but you must complete it before you compute revenue for projects with Loaded Labor revenue formulas.
9 For any projects that include the Equal to Billings revenue formula, compute and post billings before attempting to compute revenue for those projects.
10 Execute the Compute Revenue screen. This screen computes revenue using the formula that you specified on the Manage Revenue Information screen. It takes into account any cost ceilings that are specified and any fee rates, fee overrides, or fee ceilings. The PROJ_SUM and PROJ_BURD_SUM tables that were updated with direct and burden cost by the Compute Burden Costs program are now updated with fee and revenue information. Additionally, a Revenue Journal is created.
11 Execute the Post Revenue screen (optional). You can either post the Revenue Journal to the General Ledger now, or you can do so after the Redistribute Revenue process.
12 Execute the Redistribute Revenue screen to redistribute a project's revenue based on allowed cost. This program is particularly useful if you have manually entered revenue at a summary level of the project, or if the formula used to compute revenue is not based on incurred cost (the Fixed Amount, Equal to Project Ledger Sales, Revenue=Backlog (Is this Contract Value Less Backlog?), Cost Incurred Using Estimate to Complete (Contract Value), and Cost Incurred Using Estimate at Completion (Contract Value) formulas, and possibly Equal to Billings formulas). This redistribution allows you to post revenue based on the performing organization, since incurred cost reflects the organizations that performed on the project. The redistribution process updates both the PROJ_SUM and PROJ_BURD_SUM tables, and the Revenue Journal.
13 Execute the Update Project Status Report Tables screen to update the tables from which the Project Status Report, the Project Cost Summary, and Project Revenue Summary are printed. If you previously updated the Project Status Report Table with cost (step 7), you must update it again for fee and revenue information. If you did not previously update the table, all information (cost, fee, and revenue) is updated.
14 Execute the Create Project Report Tables screen to create the report tables necessary for specific project reports. By using this utility to create multiple report tables, you reduce the processing time necessary when the reports are run. You must run this utility to print accurate Project Revenue Summary, Time & Materials Analysis, Revenue Worksheet, and Project Labor Summary reports.
15 Print Project Status Reports and Detail Reports. Before unfreezing the ledger, print all of your Project Status Reports and the detail Labor and Other Direct Charges reports.
16 If you did not previously post revenue (Step 11), or if you posted and then redistributed revenue (Step 12), you must now post the Revenue Journal to the General Ledger.