Maintain Project Master screen or Basic Info Screen

You can bill progress payments at one and only one level of the project, which can be at any level. Progress payments do not have supporting, or "backup-only," invoices. For cost accumulation and reporting purposes, you can set up multiple project levels on the Manage Project User Flow screen.

Typically, companies use progress payment billings on projects in which something is being built. Because the costs are retained on the balance sheet until the revenue is recognized, the Project Classification on the Manage Project User Flow screen in Costpoint Project Setup is usually WORK IN PROCESS or COMMON INV. This is not mandatory, however, unless you plan to use the Cost of Goods Sold (COGS) feature.

Project Account Groups Screen

You should establish a project account group specifically for progress payments. Aside from the usual accounts with Function Codes of BILLED A/R and UNBILLED-GENERL (on the Manage Project Account Groups screen) that you normally place in your account group for billing, be sure to include accounts for the BILLD AR-PRGRSS, PRGRSS-LIQUID, and PRGRSS-UNLIQUID Function Codes. You can assign the PRGRSS-LIQUID and the PRGRSS-UNLIQUID Function Codes to the same account, or you can use a separate account for each Function Code. In addition, the BILLED A/R and BILLD AR-PRGRSS Function Codes can be assigned to the same account. The UNBILLED-GENERL Function Code must have a separate account.

Cost of Goods Sold, Basic Revenue Info

If the Project Classification on the Basic Info tab of the Manage Project User Flow is WORK IN PROCESS or COMMON INV, you must set up the Manage Cost of Goods Sold screen to transfer the costs from the balance sheet to the income statement. Many companies use the Delivery Amount, Estimate to Complete or the Delivery Amount, Estimate at Completion formula for calculating COGS. Using one of these methods, along with the Equal To Deliveries revenue formula selected on the Manage Revenue Information screen, allows them to recognize revenue when the deliveries are made and then match the approximate cost to that revenue. This scenario is not mandatory; you can use any COGS or revenue formula you want.