Deltek Insight 2011: Reconciling Unbilled A/R and the Analysis Report

GCS-303Reconciling Unbilled A/R and the Analysis Report

Lesley Beardow, CPA Senior Consultant

Susan Smith, CPA, MBA GCS Practice Director

WJ Technologies Deltek Premier Partner

Project Manufacturing

Human Resources

Project Management

Financial Management

Enabling Success

04/18/20232

Winning More Business

Reducing the Cost of Compliance

Increasing Project Visibility

Improving Cash Flow

CRM and Capture Management

Teaming Solutions

Market Intelligence

Business Performance Management

Know More

Win More

Do More

© 2010 Deltek, Inc. - The specifications, functionality and schedules described reflect Deltek’s current estimates, may change without notice, and do not constitute obligations of Deltek.

Project Manufacturing

Human Resources

Financial Management

Project Management

Do More

04/18/20233

CRM and Capture Management

Teaming Solutions

Market IntelligenceWin More

Do More

Project Execution & Management

Reporting, GRC & Compliance

Project & Corp Accounting

Time, Expense, Labor, Payroll

Business Performance Management

Know More

© 2010 Deltek, Inc. - The specifications, functionality and schedules described reflect Deltek’s current estimates, may change without notice, and do not constitute obligations of Deltek.

Overview

Unbilled Receivables

What is it?

Where does it come from?

How GCS Premier tracks Unbilled Receivables

How GCS Premier reports on Unbilled Receivables

Billing Worksheets

Analysis of Unbilled Receivables Report

How to reconcile Unbilled Receivables

How to write off unbilled receivables

Agenda

Defining Unbilled Receivables

Unbilled Receivables in GCS Premier

Reconciling Unbilled Receivables

Writing Off Unbilled Receivables

Unbilled Receivables = Revenue minus Billings

Revenue is posted and:

Unbilled Receivables, sfx 12 is hit

Contract Revenue, sfx 30 is hit.

Example:

Revenue Basis in Contract Master File (for contract 1000) = Billed

Post billings for $1,000

1000-000-11 Billed Receivables 1,000 DR

1000-000-12 Unbilled Receivables 1,000 Cr

Post revenue for $1,000

1000-000-12 Unbilled Receivables 1,000 DR

1000-000-30 Revenue 1,000 Cr

Unbilled Receivables when Revenue not equal Billings

Revenue Basis = Normal on a Cost Plus contract

1. Billings have a 15% withhold on fee

Unbilled will have this withholding amount, to date

2. No withholding on fee, but indirect billing rates are different from those used for revenue

Difference will be in Unbilled receivables

Other Valid Sources of Unbilled ReceivablesTiming Differences

1. “Administrative Delay” caused by billings being processed & released, but AP records another voucher, then revenue is computed

2. Revenue computed & posted, financials released, then issue billings that include a cost not present/known when revenue was calculated

3. Intentional difference caused by customer cutoff for billing on the last Friday of the month vs. the month end date

Retainage

Revenue is taken for the full amount, but the amount billed is less the X% retained

Fixed Price Contracts

Revenue computed on Percentage of Completion method, and billing is either on Milestones or Progress Payments

How GCS Premier tracks Unbilled Receivables

General Ledger, suffix 12

Billing Worksheets, which show Unbilled amounts for that contract

Analysis of Unbilled Receivables Report

- Let’s take a look

Contract Billing Worksheet

Analysis of Unbilled Recs.

Analysis of Unbilled Receivables - Per Analysis

The last 2 columns, Per Analysis and Per G/L should be the same

Per Analysis source:

Total revenue in prior years, from the Prior Year Summary file, plus revenue posted this year, from sfx 30

The Prior Year Summary file is updated when you close your Fiscal Year, during implementation, and when you update costs from a prior year by using Update Prior Year’s Contract Costs

Less -

Total billings in prior years, from the Prior Year Billable Data file, plus total posted billings in the current year, from the Current Year Billing file.

Prior Year Billable Data file is updated when you close your fiscal year, when you post T&M billings, and during implementation.

Current Year Billing file is updated when you post Fixed Price or Cost Plus bills (not T&M)

Analysis of Unbilled Receivables - Per G/L

The last 2 columns, Per Analysis and Per G/L should be the same

Per G/L source:

The balance in sfx 12.

Suppose they are different? Which is correct?

Differences between Per Analysis and Per G/L

Possible reasons:

Revenue or billing has not been posted

Contract not implemented correctly (could affect both columns)

Either sfx 12 or the Prior years summary file is incorrect – or both

Journal entries made to sfx 12 which do not affect the Prior Year’s summary file – and so will not affect the Per Analysis column

Postings to sfx 12 from other than posting revenue or billings

such as Labor Distribution, Accounts Payable.

Contract task set up changed – originally revenue at contract level and changed to task level (or vice versa)

Adjustments made to prior years files, which will not affect sfx 12.

Reconciling the differences

Review Billings – does Aged A/R match sfx 11?

Review Contract Revenue Summary to see if the revenue posted equals the G/L sfx 30 amount.

Review prior years revenue

Add contract to date cash receipts to the outstanding billed receivables –

does this match the sum of the billings?

[Cash Receipts + O/S A/R (not paid) should = Total Billings]

If not, perhaps a billing was not paid in full (and never will be) but the billing amount was not corrected.

Correcting Unbilled Receivables

Once you have reviewed and realized that your unbilled receivables is incorrect, take the following correcting actions:

Write off through Contract Revenue

Set up a contract called “Prior Years’ Adjustments”

Enter a revenue adjustment in the contract master file for your corrections

compute and post revenue

Do a journal entry to correct sfx 12, on affected contracts .

OR

Write off on Income Statement

Set up an F/S code called “Adjustments to Prior Year Revenue” or the like

Enter a journal entry to correct sfx 12 and an “Other” account type assigned to this FS code.

Key Session Takeaways

Unbilled Receivables = Revenue minus Billings

Contract Billing Worksheets show Unbilled Receivables

The Analysis of Unbilled Receivables shows Unbilled Receivables computed by GCS Premier and what’s in the GL sfx 12

Reconcile your Unbilled Receivables so that you always know what it is made up of

Session Content Overview

Unbilled Receivables defined

Reports to help reconcile Unbilled Receivables

Reconciling Unbilled Receivables

20 ©2010 Deltek, Inc. • CONFIDENTIAL • All Rights Reserved2/16/2011

Questions

5/9/201121 ©2011 Deltek, Inc. All Rights Reserved

www.twitter.com/deltek

www.facebook.com/deltekinc

www.linkedin.com/company/163414

www.youtube.com/user/deltekinc

Call to Action

For more information feel free to call or email us

WJ Technologies, LLC

Lesley Beardow, CPA, Senior Consultant

• [email protected] 703-885-7154

Susan Smith, CPA, MBA, Practice Director


Watkins Meegan, LLC

Rich Wilkinson, Director


mailto:[email protected]



Deltek Insight 2011: Reconciling Unbilled A/R and the Analysis Report

Economy & Finance

Transcript of Deltek Insight 2011: Reconciling Unbilled A/R and the Analysis Report