About Accounting Methods

The accounting method determines when to recognize revenues for a project.

Note: The program limits the range of accounting methods you can select to those that are consistent with the project type.

You can choose the following default accounting methods for new projects:

• Completed Project
• Total Cost Percentage Complete
• Labor Hours Percentage Complete
• Billings And Costs
• Project Percentage Complete
• Category Percentage Complete
• Accrual-Basis

Calculation of Percentage Complete

For projects using a percentage complete method, the first step in billing calculation or revenue recognition is to determine the percentage complete. This percentage is then used to calculate the revenue or billing amounts.

The program calculates the percentage complete as of the specified cutoff date or fiscal year and period using a cost-to-cost basis that is consistent with the particular accounting method, as follows:

• Total Cost Percentage Complete (see the total costs on the project Totals tab)

  % Complete = Total actual project costs / Total estimated project costs

• Labor Hours Percentage Complete (see the quantities on the project Employee tab)

  % Complete = Total actual project labor hours / Total estimated project labor hours

• Category Percentage Complete (see the costs on the Estimates tab for each category)

  % Complete = Actual costs for the category / Estimated costs for the category

• Project Percentage Complete (see the total costs on the project Totals tab)

  % Complete = Total actual project costs / Total estimated project costs