We've just upgraded the revenue phasing tool in CMAP. If you're not yet familiar with this tool, there are plenty of reasons why now is as good a time as any to start getting acquainted.
What is Revenue Phasing in CMAP?
Revenue Phasing is simply a tool in CMAP to help you determine how your revenue will be recognized and forecasted for each of your projects.
Revenue recognition is an accounting principle whereby you calculate revenue per month based on how much of the project value has been earned, or how much work has been completed. This can be accounted for separately to your monthly invoiced amounts.
As with all functionality in CMAP, our revenue recognition tools have been developed to acknowledge the fact that our users have different ways of working.
Because of this, there are a few ways you can both forecast & recognize your revenue in CMAP:
Historic Options (for existing revenue)
- Percent Complete uses the project's % complete (captured when a month is closed in CMAP) to determine the amount of revenue that can be recognized.
- Invoiced uses the value of invoicing for previous months to determine the value that can be recognized
- Manual Entry uses the values entered into the revenue phasing tool to determine the amount of revenue that can be recognized, these values will be locked once the month is closed in CMAP
- Resourcing Forecast (Weighted) pulls resourcing information from the project's Resource Schedule & spreads the remaining revenue using this resourcing information to weight the values month-to-month
- Resourcing Forecast (Actual) pulls resourcing information from the project's Resource Schedule & forecasts the future months using the value of resourcing entered
- Even spread applies a flat spread of remaining revenue to the end date of the project
- Weighted Forecast using the stages start/end dates and their values to spread the revenue based on which months the stages fall into.
Why is it important?
The good news is that recognizing revenue in CMAP fully supports & complies with the new revenue recognition standard under IFRS 15 and ASC 606 in the U.S.
For our U.S clients, this means that you can easily recognize your revenue as the performance obligations are fulfilled on your projects.
Secondly, managing your revenue through CMAP also gives you access to some pretty insightful reporting; including the combined revenue position for all of your projects:
1. Recognized Revenue Breakdown shows the total revenue of your projects split by Project Type via a visual pie chart view.
2. Recognized Revenue Calendar provides a month by month view of each project, with a breakdown of the revenue values for each month. Showing the will show the recognized values for closed months and the forecast figures for open months - both of which are fed by data inputted in to the Revenue Phasing tool
CMAP provides a range of project accounting features specifically tailored to support the core professional services industries we work with; explore them here: