ArticlesPSA: How to Configure and Calculate Revenue Recognition in PS Cloud

• Professional Services Automation
• Revenue Management - PS Cloud

• For users requiring similar functionality in FM Cloud (Accounting), a comparable overview of configuration options is available upon request

• Ensure that any custom fields used for bill rates or recognition dates are correctly mapped in the Revenue Forecast Setup

To understand and configure revenue recognition calculations, follow these steps:

1. Identify Revenue Forecasting Methods:

   • Determine if forecasts should be generated for projects, opportunities, or accounts

   • These runs can be performed on-demand or scheduled

      

2. Select the Recognition Method: Choose the appropriate method for the business record: 

   • Deliverable: Used for time and materials or fixed-price with milestones. It is based on delivered records such as Timecards, Expenses, Milestones, and adjustments

   • Percent Complete: Used for fixed-fee or milestone-based recognition using EVA records, with automatic capping at 100%

   • Equal Split/Ratable: Used for fixed-fee, milestones, or service credits split across periods (months, days, or part-periods)

    

3. Determine Integration Behaviour:

    

   • If integrated with Revenue Management, the user must pull Recognized Revenue via templates (e.g., Deliverable or Percent Complete) using the Income Statement Amount

   • If not integrated, the system relies on the Recognition Method picklist on the business records

      

    

4. Configure Revenue Forecast Setup: Navigate to the active Revenue Forecast Setup to modify the following options:

    

   • Total Revenue Fields: Change fields used for calculations (e.g., alternatives to Bookings or Milestone Amount).

   • Bill Rates: Customize bill rates for Deliverable by specifying custom fields on assignments and resource requests.

   • Mid-month Calculations: Enable calculations with an actuals cutoff day.

   • Weighting: Apply weighting to Percent Complete (e.g., by resource cost rate).

   • Exclusions: Exclude specific records via custom checkboxes or exclude scheduled hours in closed periods.

   • Recognition Dates: Customize dates via custom date fields on Expenses, Milestones, and Misc Adjustments

   • Actuals Bypass: Optionally select Exclude Revenue Recognition Actuals to bypass Revenue Management actuals.

The objective of this article is to provide an overview of how revenue recognition is calculated within PS Cloud, and detail the configurable elements available to tailor these calculations to specific business needs.