Milestone (Advanced) Billing

Yahoo Archive
1
Although I am still working in Test Vista and we are currently using the classic system, I am doing milestone billing.

When I send out milestone billing it becomes advance money and a liablity. My projected sales still include this amount because the sale has not been realized. If you took it off the sales report you would have to use it for tax purposes.

I think this is correct the way I understand it.
Pam

--- In vantage@yahoogroups.com, "jplehr" <jlehr@...> wrote:
>
> Vantage 8.03.406
>
> Looking for anyone using Milestone (Advanced) Billing.
>
> I am beginning to work with the idea of using Project Entry and setting up milestones for billing purposes. This is all very new to me, so here is the firt of what will probably be many questions. I am relaying this second hand so I hope it makes sense.
>
> I was able to work through the process that triggered the milestone to be invoiced. This worked nice so that I was able to invoice without affecting a shipment. I expected that my Sales Backlog Report would not be affected and the dollars would still show since I had not shipped.
>
> However, the issue comes when management runs the Sales Backlog Report to see what dollars are available for shipment within the given month and the dollars, that were previously invoiced (not shipped), are still listed on the report. We understand that the Milestone Billing defaults as 'Deferred Revenue', which was unchecked because we wanted the sale at the time of invoice. The Sales Order Backlog Report leads management to believe we still have those dollars coming.
>
> Management wants to see what dollars are available less this item that was invoiced in advance. Is this possible? Is this a good business practice?
>
> Jeff
>
2
Vantage 8.03.406

Looking for anyone using Milestone (Advanced) Billing.

I am beginning to work with the idea of using Project Entry and setting up milestones for billing purposes. This is all very new to me, so here is the firt of what will probably be many questions. I am relaying this second hand so I hope it makes sense.

I was able to work through the process that triggered the milestone to be invoiced. This worked nice so that I was able to invoice without affecting a shipment. I expected that my Sales Backlog Report would not be affected and the dollars would still show since I had not shipped.

However, the issue comes when management runs the Sales Backlog Report to see what dollars are available for shipment within the given month and the dollars, that were previously invoiced (not shipped), are still listed on the report. We understand that the Milestone Billing defaults as 'Deferred Revenue', which was unchecked because we wanted the sale at the time of invoice. The Sales Order Backlog Report leads management to believe we still have those dollars coming.

Management wants to see what dollars are available less this item that was invoiced in advance. Is this possible? Is this a good business practice?

Jeff
3
As far as good business practice, the general rule is that you should record the sale when an item ships, not necessarily when you issue the invoice. Among the exceptions are when you have an item constructed under contract and a percentage of completion revenue recognition method is appropriate. Also, you may have an exception where your customer has asked you maintain inventory at your site that the customer has title to. There are other exceptions, but the situation you describe, where there is an advance invoice before shipment, does not appear to be an exception - though additional facts might make me change my mind.

Except for cases where percentage of completion accounting applies, the following tests should be met before you recognize a sale:

- Manufacturing of the items being sold should be complete.

- If you are required to perform installation or provide other services to the customer as part of the sale, those activities should be complete.

- Title to the items being sold should have passed to the customer.

- You should have a reasonable expectation that you will collect the money due from the customer for the goods.
The exact rules are a little more complicated, but using those tests should cover most situations.

I think you could come up with a BAQ report that subtracts the Advance Billing amounts from the amounts to be shipped in the future. That could satisfy your management information needs without violating any accounting rules.

Thom Rose
Controller
Electric Mirror LLC
HOTEL LUXURY

"The World Leader in Back-lit Mirrors & Mirror TV Technology"

T 425 776-4946
A 11831 Beverly Park Rd, Bldg D, Everett, WA 98204 USA
www.electricmirror.com<http://www.electricmirror.com>

From: vantage@yahoogroups.com [mailto:vantage@yahoogroups.com] On Behalf Of jplehr
Sent: Thursday, July 02, 2009 8:37 AM
To: vantage@yahoogroups.com
Subject: [Vantage] Milestone (Advanced) Billing





Vantage 8.03.406

Looking for anyone using Milestone (Advanced) Billing.

I am beginning to work with the idea of using Project Entry and setting up milestones for billing purposes. This is all very new to me, so here is the firt of what will probably be many questions. I am relaying this second hand so I hope it makes sense.

I was able to work through the process that triggered the milestone to be invoiced. This worked nice so that I was able to invoice without affecting a shipment. I expected that my Sales Backlog Report would not be affected and the dollars would still show since I had not shipped.

However, the issue comes when management runs the Sales Backlog Report to see what dollars are available for shipment within the given month and the dollars, that were previously invoiced (not shipped), are still listed on the report. We understand that the Milestone Billing defaults as 'Deferred Revenue', which was unchecked because we wanted the sale at the time of invoice. The Sales Order Backlog Report leads management to believe we still have those dollars coming.

Management wants to see what dollars are available less this item that was invoiced in advance. Is this possible? Is this a good business practice?

Jeff



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