The Revenue Recognition functionality can be enabled on Cloud, and it applies to all currently active projects.
You need the "Manage accounting" permission in the "Account" permissions group, or you should be a member of a group that has it, to enable Revenue Recognition.
Enable Revenue Recognition
You can enable the Revenue Recognition functionality on the "Settings > Finance > Accounting" page. To enable it, click "Enable Revenue Recognition," and on the pop-up, click "Enable."
After you enable Revenue Recognition
After you enable Revenue Recognition, you will see the following changes across different pages in the Cloud UI.
Accounting Settings page
On the "Finance > Accounting" page, options to customize how Revenue Recognition is used appear. The following are the options.
Equipment Recognition trigger status
You can select one of the Item Install statuses as the trigger for the relevant product to be considered "ready to be recognized" for invoicing.
All products that are set to or beyond the status you select are available to add to an invoice.
For example, if you select "Staged" as the install status to trigger recognition, all products that are in Staged, Picked, Delivered to Site, or Installed are available to add to an invoice.
Deferred Revenue title
By default, the total amount collected as part of Request for Payment (RFP) invoices (not delivery invoices) shows as "Deferred Revenue" in the Cloud UI.
You can enter text such as "Unearned revenue" or "Customer liability" and change the terminology displayed in the UI.
Deferred Revenue label on Delivery invoices
By default, the line-item label for the deferred revenue amount applied to a delivery invoice is "Deposit."
You can change this label to "Deferred Revenue" or "Advance Payment" if you find "Deposit" ambiguous and overlapping with the project's initial deposit.
Automatically apply Deferred Revenue to existing Delivery invoices
By default, deferred revenue is not automatically applied to delivery invoices carrying a balance.
If set to ON, deferred revenue is automatically applied to delivery invoices with a balance, starting with the oldest invoice.
Default Labor Billing on Delivery invoices
You can choose how to bill labor: as a summary by labor types in the project or with the products they are associated with.
The following screenshot shows all 5 customization options for Revenue Recognition.
Delivery invoice status and Project recognition status
You can customize the default names and colors of the delivery invoice statuses and project recognition statuses shown in the Payment Status widgets in projects.
Payments page in Projects Details view
On the Payments page in the Project Details view, you can see 2 new and 2 revised Payment Status widgets:
Pending RFP invoices: The amount expected from draft and unpaid RFP invoices.
Total collected: The total amount collected for the project.
Deferred revenue: The total amount of deferred revenue collected through RFP invoices.
Recognized revenue: The total amount on delivery invoices created for the project in the "Posted" status.
Check out this article for more details.
Item Status page in Project Details view
On the Item Status page in the Project Details view, you can see a "Create invoice" button in the top-right corner to create delivery invoices if the project has items that are ready to be recognized for payment.
Accounts page
On the Accounts page, in the Account Details view, under the Billing tab, you can view and create both RFP and delivery invoices for that account.
Check out this article for more details.
Revenue Recognition dashboard
With Revenue Recognition enabled, all currently active projects are eligible to use Revenue Recognition. You can see a Revenue tab under Projects in the left navigation menu.
Click the "Revenue" tab to see the Revenue Recognition dashboard. You can do the following on the dashboard:
View the total accumulated deferred revenue across all active projects and the amount ready to be recognized as deferred revenue.
View the list of active projects in a table, filter them by various criteria, and create both RFP and delivery invoices for eligible projects.
Create delivery invoices in bulk for items that are marked as ready to be recognized.
Check out this article for more details.
Excluded projects
Completed projects and projects that had at least one invoice pushed to a Cloud-supported Accounting integration before enabling Revenue Recognition do not have the Revenue Recognition functionality available.
To enable Revenue Recognition for a complete project, click "Include in revenue recognition" in the top-right corner on the Payment page in the Project Details view.
To enable Revenue Recognition for an active project with invoices pushed to an Accounting integration, unlink the invoices and delete them in the integration.