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Implementing Project Portfolio Management: From Organization Structure to Recognized Revenue · Module 14 · Project Billing: Contracts, Invoice and Revenue Methods

Bill plans and revenue plans

Lesson 144 of 198 · 2 min · Free preview

A bill plan is the rules for producing an invoice. When, for how much, in what format. A revenue plan is the rules for recognizing revenue. When, and how much. THEY ARE SEPARATE AND THEY SHOULD BE. You can invoice in advance and recognize revenue as work is done. You can do work and recognize revenue before you are entitled to invoice. The two events answer different questions: WHAT CAN WE ASK THE CLIENT TO PAY, and WHAT HAVE WE EARNED? And the two balances that separation creates. Unbilled — revenue recognized, not yet invoiced. An asset. Unearned — invoiced, revenue not yet recognized. A liability. THEY ARE ON THE BALANCE SHEET, THEY ARE AUDITED, AND EXPLAINING THEIR MOVEMENT IS A MONTHLY TASK. That is why the project accountant lives with these two numbers. They are not a reporting curiosity; they are a balance sheet position somebody signs. The design…

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In this module: Module 14 · Project Billing: Contracts, Invoice and Revenue Methods

  1. 1The contract dependency
  2. 2Contracts, lines and projects
  3. 3Bill plans and revenue plansFree preview
  4. 4Invoice methods
  5. 5Revenue methods
  6. 6Creating a contract
  7. 7Associating projects and tasks
  8. 8Contract types and approval
  9. 9Proving the association works
  10. 10What breaks
  11. 11Lab: a master agreement, a fixed price, and one task that must not bill