Deltek Insight 2011: GCS Premier Revenue Reconciliation
 

Deltek Insight 2011: GCS Premier Revenue Reconciliation

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Deltek Insight 2011: GCS Premier Revenue Reconciliation Deltek Insight 2011: GCS Premier Revenue Reconciliation Presentation Transcript

  • GCS-103GCS PremierRevenueReconciliationTips & TricksBy : Robin Prausa
  • Enabling Success Project Human Financial Project Manufacturing Resources Management Management Do More Market Teaming CRM and Capture Win More Intelligence Solutions Management Know More Business Performance Management Winning More Increasing Project Improving Cash Reducing the Cost Business Visibility Flow of Compliance2 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Know More Project Human Financial Project Manufacturing Resources Management Management Do More Market Teaming CRM and Capture Win More Intelligence Solutions Management Know More Business Performance Management Project & Org Resource Enterprise Analytical Budgeting Visibility Reporting Workspace3 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Agenda Quick Refresher of GCS Revenue Methods Identify Revenue Errors Key Reports to Assist in Revenue Reconciliation Troubleshooting Revenue Errors • Run Key Reports to look at contract from all angles • Contract Master File (CMF) Settings • Budgets/Non Labor Budgets/Summary Budgets & Ceilings (“Summary Budgets”) Correcting and Validating Corrections by Contract4 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Revenue Methods Refresher Normal Method- Most automated, system does the work Based on Billing- Common, but overrides system abilities Based on G/L- Infrequent, overrides all system abilities Based on Delivery- FP contracts using Form 1443 Progress Billings5 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • What “Normal Method” meansfor different contract types: • Fixed Price (FP) • burdened costs + fees as set up • Estimate At Completion** (EAC) • Estimate To Complete** (ETC) • Contract Backlog** • Cost Plus (CPFF) • burdened costs + fees as set up • Time & Materials (T&M) • rates per hour + ODCs + burdens + fees, if any** for CPFF contracts too6 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • We will assume AutomaticCalculation is “on” (box checked): Revenue calculations by contract type:  FP: Fiscal Year to Date  CPFF: Fiscal Year to Date  T&M: Month to Date Critical to understand these calculation methods!7 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Identifying Revenue Errors How do we know if Revenue is wrong?  Odd fees/profits (too high, too low) on Contract Revenue Summary or JSR  Odd backlog results on Contract Revenue Summary (particularly “negative” backlog)  The existence of an unexplained unbilled AR8 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Look for unusual fees, both dollars and percents Look for odd backlog amounts, particularly negative backlog amounts `9 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Key Reports to Assist in RevenueReconciliation Job Status Report (JSR) Contract Revenue Summary (CRS) General Ledger Detail Time & Materials Sales Worksheet for “allowed ODCs” (part of JSR reports)10 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Key Reports to Assist in RevenueReconciliation “As if” Reports - Reflect latest “Compute Costs & Revenue” process May or may not be posted—be careful!  Job Status Report  Contract Revenue Summary  Time & Materials Sales Worksheets Posted (i.e. “real”) Records  General Ledger Detail Understand what stage your reports are in before you begin your troubleshooting and corrections!11 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Troubleshooting Revenue Errors • GL Detail, CRS & JSR Reports • Contract Master File Settings • Budgets / Non Labor Budgets Summary Budgets & Ceilings12 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • GL Detail and CRS Reports They match so it means revenue has been fully posted $13,256.2513 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • JSR JSR also shows the YTD revenue that matches the GL, thus it is fully posted14 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Time & Materials Sales Worksheet“Allowed ODCs” “Allowed” (for revenue & billing) vs. “Incurred” (spent) ODCs15 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • T&M Sales Worksheet “Allowed” ODC $’s and Burden Rates Limit on G&A rate (8% vs. 11% target)16 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • T&M Sales Worksheet “Incurred” (i.e. spent) ODCs and burdens, excess is adjustment “out” a b (a+ b)17 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Troubleshooting Reports Recap• JSR• CRS• GL Detail• T&M Sales Worksheet Examine these reports carefully before beginning any correction process18 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Contract Master File (CMF) Settings  Contract Value (CV) amounts  Task Revenue/Task AR settings  Revenue method  “Automatic” vs. manually computed revenue  Revenue adjustments  Fee percentages on FP & CPFF  Maximum revenues and fees on CPFF  T&M Contracts: buttons for ODCs, burdens and fees19 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Contract Value (CV) Amounts  Fixed Price Contracts  CV caps revenue  Cost Plus Contracts  “Maximum Revenue” caps revenue  If “maximum revenue” = 0.00, then NO cap on revenue!  Time & Material Contracts  CV caps revenue unless  “exceed revenue by $___ amount” has a value20 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Fixed Price Contract Value Caps Revenue21 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CPFFIf 0.00 , thenrevenue will accruewith no limit!22 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Time & Materials Revenue can exceed CV by this $20,00023 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Task Revenue/Task AR buttons  Rolled Revenue/Billing  CV must be on task 000  Task Revenue/ Rolled Billing  CV must be at task level  Task Revenue/Task AR  CV must be at task level24 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Revenue Method Normal: system settings determine revenue Billing: billing must be posted to get revenue GL: a manual journal entry creates revenue Delivery: used for FP/Progress billing only Recommend Normal Method in most cases!25 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: “Automatic” vs. ManualRevenue  If automatic:  If manual, then you will have to enter revenue into “Revenue Is”:  Remember, manual “Revenue Is” must be Fiscal Year to Date Current Period FP and CPFF T&M26 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Special Considerations forT&M Contracts  Manual “Revenue Is” number must be removed after monthly close in one of two ways: 1. Manually zeroed out after close by entering 0.00 2. Removed as part of month end close process by choosing proper option in GL Close Period  Failure to remove or adjust manual revenue calculations will cause them to post each month until they are removed!27 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Special Considerations for T&Ms Checking this box during both month end and year end processing will “automatically” zero out manual “revenue is” calculations on T&M contracts.28 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Revenue Adjustments  Increase or decrease system automated revenue calculations  Increase Revenue: positive number  Decrease Revenue: negative number  Revenue Adjustments must be: Fiscal Year to Date Current Period FP & CPFF T&M29 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Special Considerations for T&M Contracts  Revenue Adjustments on T&Ms (only!) must be manually zeroed out after each month end close or they will duplicate in the next month.  Impromptu/Dataport report can help remind you to do this  Best practice would be to clear these out immediately after closing the period.30 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Fee Percentages forFP and CPFFs  FP contracts: estimate of profit expected to be earned on contract  CPFF contracts: fixed fee represented as a percentage  On both FP & CPFF—a new fee will be projected across current fiscal year only  Use a revenue adjustment to adjust a prior year fee31 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Maximum Revenueand Fee Ceilings on CPFFs32 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: Maximum Revenueand Fee Ceilings on CPFFs  Remember a CPFF will accrue revenue and fee even if there is NO contract value entered!  To limit revenue and/or fee:  Enter a value in “Maximum Revenue”  Check the “Fee Ceiling” box (this limits fee to that entered in Fee Amount Column)  To further limit fee, enter a fee in “fee amount ceiling”  Very common error: forgetting to update these after a contract modification33 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: T&M Buttons forODCs, burdens and fees • Bill some or all ODCs? Check box. • Burden ODCs? Check box. • Add fee to ODCs? Check box and enter fee.34 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • CMF: T&M Buttons forODCs, burdens and feesNow we need to: • Turn ODC’s “on” or “off” for billing and revenue purposes • Set limits on ODC’s • Set limits on burden ratesWhere do we do this? • Budgeting / Non-Labor Budgets / Summary Budgets & Ceiling35 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Summary Budgets & Ceiling:36 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Summary Budgets & Ceiling:37 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Summary Budgets & Ceiling:• Two Tabs: 1. Suffix  Set limits (turn “on” “off”) by suffix  Allows fee by suffix  Helpful to exclude subk costs from revenue when revenue is already taken based on subk hours worked on T&M 2. Pools  Set limits on indirect burdens used or override rates• Works for all contract types• Works with both revenue and billing38 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Summary Budgets & Ceiling:Suffix Tab Amount: Sets suffix limit or budget on ODCs  “Ceil” looks to “Amount” column for limit Code: 1. Fee, Ceil 2. Fee, No Ceil (Default)  Allows fee, no limits on amounts billed 3. No Fee, Ceil 4. No Fee, No Ceil39 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Summary Budgets & Ceiling:Pools Tab Optional rate available on T&M contracts for G&A burden on ODCs where billing and revenue is different than target rate.  Code is called “Special Handling” and will be used instead of target rates on JSRs and in billing  Must be enabled in Contract Control File40 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Recap: Troubleshooting Revenue “Automated” revenue settings • Most revenue errors are due to contract settings on:  Contract Value  Summary Budgets “buttons”  Failure to clear out T&M Revenue Adjustments “Manual” revenue settings • Revenue errors result from forgetting to manually update revenue • Failure to clear out manual T&M “revenue is” amounts • Lack of understanding of what stage revenue is in (posted or not)41 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Correcting and ValidatingCorrections by Contract Do Revenue Adjustments in CMF, not general ledger journal entries, to correct revenue if fixing the settings does not correct problem  JE’s for revenue only work if your method is “Based on G/L” Re-compute revenue and review Contract Revenue Summary and JSR  Remember these are “as if” reports  Must actually post revenue to keep correction—once posted, will be in GL42 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Correcting and ValidatingCorrections by Contract Can recalculate and post revenue as many times as desired in a month  Recheck JSR, CRS and GL to ensure corrections worked Corrections for prior year errors must usually be done via “revenue adjustment” in CMF Pay attention to revenue calculation method for each contract type43 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Summary of Key Contract Differences FP CPFF T&M Contract Value, "Maximum unless "exceeds Revenue Limit Contract Value Revenue" revenue by ____" is used Revenue FYTD FYTD Current Period Calculation Manual "Revenue Current Period, FYTD FYTD Is" clear out each month FYTD, FYTD, clear out manually clear out manually Current Period, Revenue at beginning of at beginning of clear out manually Adjustments each new fiscal each new fiscal each month year year44 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • ReferencesGCS Premier Special Topics  CT-5 How Contract Revenues Are Computed  CT-6 Computing Contract Revenues  CT-14 Method to Change Task Revenue Setup45 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
  • Questions? www.twitter.com/deltek www.facebook.com/deltekinc www.linkedin.com/company/163414 www.youtube.com/user/deltekinc46 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved