A revenue recognition template defines how you want Revenue Management to calculate revenue or costs for a particular source object. You must create templates for any source objects for which you want to forecast or recognize revenue, or amortize costs. Once you have created a template you associate it with the appropriate settings record for the source object.
There are three revenue calculation attributes:
- a template type
- a revenue or cost basis
- and, if the template type is Equal Split, an optional calculation type.
Revenue Calculation Attributes
You must first select the template type:
| Template Type | Description |
|---|---|
| Equal Split | Calculates the revenue or cost based on the start date and end date of the project or milestone. This calculation can be adapted to suit your needs by defining a calculation type. Equal Split is sometimes called ratable or straight line revenue recognition. |
| % Complete | Calculates the revenue or cost based on the percentage of the project or milestone that is complete. |
| Deliverable | Calculates the revenue or cost based on the project or milestone being flagged as complete. |
Then, choose the basis on which your revenue is calculated. You can base your calculation on a single total revenue figure, or base it on a calculated value. The total units value could be the number of hours or days worked on a project for example.
| Revenue Basis | Description |
|---|---|
| Total Revenue | The revenue amount is based on a single value in your project management app. This figure is mapped using the Total Revenue field in Settings. This is the default. |
| Total Revenue * VSOE % | The calculated revenue amount is based on the total revenue value described above, but this time it is multiplied by the current VSOE percentage. |
| Total Units * Rate | The calculated revenue amount is based on total units and rate values in your project management app. These values are mapped using the Total Units and Rate fields in Settings. |
| Total Units * Rate * VSOE % | The calculated revenue amount is based on the total units * rate value described above, but this time it is also multiplied by the current VSOE percentage. |
| Total Units * VSOE Rate | The calculated revenue amount is based on the total units * VSOE rate. |
| Cost Basis | Description |
|---|---|
| Total Cost | The cost amount is based on a single value in your project management app. This figure is mapped using the Total Cost field in Settings. This is the default. |
| Total Cost Units * Cost Rate | The calculated cost amount is based on total cost units and rate values in your project management app. These values are mapped using the Total Cost Units and Cost Rate fields in Settings. |
If the template type is Equal Split, you can configure the underlying calculation further to match your specific requirements:
| Calculation Type | Description |
|---|---|
| Months | This is the simplest option. The revenue or cost is split over the number of calendar months the project or milestone is live. The start/end month is simply the month (01 to 12) in which the project or milestone starts or ends. In this case, a project starting on March 1 would have a start month of March (03) as would a project that started on March 31 or any date between. No account is made for part periods or actual dates. In this case, the application calculates revenue or cost based on the month in the recognized date, not the actual date. For an example, see Using Equal Split Months Calculation Types. |
| Months/Actual Days in Part Periods | This calculation takes account of part periods by calculating revenue or cost amounts for the first and last periods based on their actual start and end dates. Middle months are a simple equal split. To recognize revenue on source records with templates using this calculation type you must have a recognition calendar of at least one year with a Month or Month End period calculation basis. For an example, see Using Equal Split Months Calculation Types. |
| Months/Part Periods | This calculation takes account of part periods by considering the first and last periods to be one whole period and calculating a revenue or cost amount for the first period based on its actual start date, then giving the remainder to the last period. Middle months are a simple equal split. To recognize revenue on source records with templates using this calculation type you must have a recognition calendar of at least one year with a Month or Month End period calculation basis. For an example, see Using Equal Split Months Calculation Types. |
| 445 | This calculation specifies that period ends in a quarter occur every 4, 4, and 5 weeks. The cycle repeats for the next quarter. To recognize revenue on source records with templates using this calculation type you must have a recognition calendar of at least one year with a 445/454/544 period calculation basis. See About Recognition Years and Periods for more information. If you generate revenue schedules using a template with this calculation type, Revenue Management switches it to the "Days" calculation type at run time. The resulting revenue schedules show the recognition method as Equal Split Days in Period. |
| Days | This calculation takes account of part periods by looking at actual dates rather than just months and the actual number of days in each month. The calculation is based on a 7-day week and takes account of leap years. In this case, the application calculates revenue (or cost) based on the actual recognized (or amortized) date, not just its month. |
Editing and Deleting Templates
Once a template is in use on a revenue recognition transaction line, you can only edit the Template Name and Forecast Schedule Definition fields. You cannot delete a template that is in use.
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