Deltek Insight 2011: Complete the Contract Closeout in Costpoint Part II: Revenue

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  • The Call to Action slide is a smart additional to all presentations. This slide is not required, but speakers should be encouraged to include one.For Deltek presentations, a note to visit the product kiosks should always be included. Any related sessions could be included and attendees encouraged to attend.
  • Deltek Insight 2011: Complete the Contract Closeout in Costpoint Part II: Revenue

    1. 1. CP305 - Complete theContract Closeout inCostpointPart II: RevenuePresented by:Greg D Luczyk, Deltek 1
    2. 2. 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
    3. 3. 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
    4. 4. Agenda Definition of the Contract Closeout. Review of the Process Flow for Revenue An Example of the Closeout Process4 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    5. 5. Key TakeawaysBy the conclusion of this session, you will be able to… Identify the type of data that must be in Costpoint in order to complete the closeout in a semi-automated manner for revenue. Identify the processing steps. Identify the changes in setup. Identify potential pitfalls to this process.5 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    6. 6. Part 1: Introduction
    7. 7. DefinitionContract Closeout… The Contract is physically complete and moved to “Section 2” status in MOCAS. All performance activity is complete. The customer has accepted all goods and services. Provisions of FAR 4.804-5 can commence. MOCAS: Mechanization Of Contract Administration Services7 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    8. 8. Contract Closeout in Costpoint Deactivation of the Project. Definition of Final Rate by Fiscal Year [Pd 13]. Generate Final Bill. Clear Open Billing Detail. Recognize Write-Offs of Non-Billable Items. Recognize Adjustment to Revenue. Reconcile Unbilled Receivable Account. Take “Hit” for Unreconciliable Items.8 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    9. 9. Costpoint Contract Close OutPart I: Billing Part II: Revenue Bill for retainage.  Re-calc Revenue for PROJ_SUM. Clean out OBD.  Regenerate PSR’s. Use retroactive billing.  Address Revenue adjustments for G/L. Submit final bill.  Unbilled Account analysis and Analyze Unbilled Account for billing adjustment. items.9 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    10. 10. Accounting Final Indirect Rate System Proposal Fiscal Year End Submitted Audit Cycle Adjustment of Indirect Proposal Costs from Transmitted forProvisional Rates Audit to Actual Final Indirect Audit Performed & Rates Negotiated Report Issued10 5/22/2012
    11. 11. Prerequisites These prerequisites relate to using Costpoint in the Contract Close out process, as opposed to a completely manual process in a spreadsheet. Historical Billing & Necessary for doing billing and revenue Revenue calculations retroactively. In Costpoint Cost Pool Cost pools must exist for these prior years. Established for Close Out Years [Optional] Period “13” is helpful in isolating cumulative Period 13 variance. Helps to maintain visibility. For Final Rate11 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    12. 12. Cautionary Statements! Every company has policies that govern the reporting and maintenance within the General Ledger and Project Ledger. Whether you consider these techniques “controversial” is your decision to make. Some organizations might never want to take “the hit” on their P&L’s.12 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    13. 13. Part 2: ContractCloseout -Revenue
    14. 14. The Closeout: Examining thePieces General Ledger Project Ledger [GL_POST_SUM] [PROJ_SUM] Prior Year Revenue History Unbilled Receivable [PSR_PY_SUM] [GL_POST_SUM] Unbilled Receivable [RPT_PROJ_UNBILL Maintain Project Bill ED] Summary [PROJ_BILL_HS]14 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    15. 15. The Questions  What is done about prior fiscal year revenue in General the General Ledger? Ledger [GL_POST_SUM]  What type of entry is made?  How does this reconcile with the Project Ledger?  What kind of adjustment should be made to the Project Project Ledger? Ledger  What does this do to Unbilled Receivables? [PROJ_SUM] Unbilled Receivable [GL_POST_SUM] [RPT_PROJ_UNBIL LED]15 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    16. 16. The Reality? Do it all off line. Calculate manually. Adjust history. Support the computation in a spreadsheet. This is not the solution that we are proposing here. If the adjust is 5+ years or older, is the effort of correcting it through the system worthwhile?16 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    17. 17. The Process:Diagrammed
    18. 18. ContinuedActivate Project Generate & For Final Compute Retain all pre- Processing adjustment Revenue Revenue [Period 13] Reports Review Final Bill Set Approved Compute Proposed Generated Yes Indirect Rates Revenue Revenue ? for Year X…n [Period 13] Journal No (S/B $0) Process by Project 1 Year At a Time Prior Year: Revenue Update PSR Revenue Table Return to Bill Close Adjustment Out Review Create Project Proposed Consider use of override screen versus pool rates. Report Tables Revenue18 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved Journal
    19. 19. Is The Repeat Continued Update Prior Subsequent Year the No Processes on Year History Current Year ? Prior Page Yes Current Year: Reverse Revenue Adjustment Continued Revenue Compute Revenue Update & Review Post Create Report Reports Revenue Tables19 5/22/2012
    20. 20. Onward, to Unbilled… Continued Create Unbilled Analysis Report Print & Review Unbilled Journalize Analysis Write-off Analyze Is Unbilled Project Master Cleared? No Variances END Inactivate Yes20 5/22/2012
    21. 21. Part 3:Considerations
    22. 22. The Pitfalls The number of years involved and the iterations in the processing. Isolating and documenting the changes to only the specific project. Following through on the reconciliation of all pieces associated with this activity. Unintentionally altering results for other projects. Or consider using test database first.22 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    23. 23. Unbilled Receivable Account After all activities in billing and revenue are completed, does the Account clear out? Is the amount material? Is additional analysis required? Clear out the balance and offset revenue? When all is said and done, will such a writeoff be “palatable” to management?23 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    24. 24. In Summary… This process can only work if the historical data exists within Costpoint. The revenue closeout involves taking care of both the General Ledger and Project Ledger. Let the system calculate the correct revenue by year, but adjust to prevent a General Ledger impact. In current year, take the “hit” or “gain”. Alternately, restate all prior years’ PSRs.24 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    25. 25. Questions… www.twitter.com/deltek www.facebook.com/deltekinc www.linkedin.com/company/163414 www.youtube.com/user/deltekinc25 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved
    26. 26. Call to Action  E-mail me at gregluczyk@deltek.com  Schedule an appointment… “Meet the Experts”.  Let’s chat… between sessions or at lunch.  Thanks for your participation!26 5/22/2012 ©2011 Deltek, Inc. All Rights Reserved

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