Job Costing - Revenue Generation Methods

The system supports two methods of revenue generation, as costs incurred with General Ledger and as costs incurred without General Ledger. Whenever a cost is posted to Job Costing, the system will always look up the billing rate and calculate the potential revenue. The difference between these two methods depends on if the potential revenue amount is booked to the General Ledger when the cost is incurred.

As Costs Incurred (Without General Ledger)

Using this method, the General Ledger revenue accounts will not be affected – only the Job Costing will reflect the accumulation of potential revenue. When the Job Billing is generated and posted, the revenue amount will only be posted to the General Ledger. The unbilled amounts if any will still be available within Job Billing and Job Costing, but the General Ledger will not store the unbilled amount.

As Costs Incurred (With General Ledger)

Using this method, revenue is to be recognized when costs are incurred. Unlike the As Costs Incurred (without General Ledger), the General Ledger revenue accounts are affected by both the accumulation of costs and the accumulation of billing transactions. When a cost is posted, the unbilled revenue account is debited and the revenue account is credited (the unbilled revenue account is a contra revenue to the billings account).  When a billing transaction is created, the system will debit Accounts Receivable and credit unbilled revenue account.

NOTE: There are limitations using the As Costs Incurred (with General Ledger) method due to the fact that the General Ledger is affected. If this method is used, the user may not re-calculate billing rates, nor can they override the calculated billing amount when creating Job Billing invoices. All adjustments to billing amounts must be done via transactions.