Accrual Method - For expense time and material (project)

[Andie]

Dear Community,

I would like to know what accrual method I should use for the following scenario.

I have a customer project on which I only have expenses or pass-through. It is bill back to the customer at actual cost.

Example :

Meal and Entertainment: 10$

On my sales order, I used a service set up as “Expense”, Item Type: Expenses - Time and Materials (Project)

No bill has been issued yet to the customer. And we do not want to trigger an invoice at this point.

I need to close the month.

I would like to recognize 10$ of cost and 10$ of revenue.

Which accrual method would enable me to achieve this result automatically?

Thank you.,

Andréanne

[caroline_lost · Accepted solution]

Hi Andréanne,

here you could use the Accrual Method 'Recognize at point of delivery'.

With the Revenue recognition run the costs will be realized on the Expense Account in the accounting period when the expense was incurred.

The revenue is going to be credited on the revenue account and debited on the Accrued revenue (Unbilled Receivables) account. Once you post the customer invoice the accrued revenue will be cleared again.

I hope this helps.

Kind regards,

Caroline

[Andie · Accepted solution]

Hi Caroline,

Thank you very much for your prompt answer !

Yes it does work. We got a strange behaviour related to a surcharge that was removed out of the Sales Order. Even thought the surcharge was removed the rev rec was still considering the surcharge in the revenue calculation. That's how we got misled. We are now wondering if there is a delay before the surcharge update applies.

Thanks,

Andie