Has anyone ever found that revenue recognition is giving incorrect information?
In a project that we finished working on, we realized that Epicor’s “Recognized To Date” amount is much higher than the actual “Invoiced To Date” amount. (We think this is because of having milestone invoices in the project as the difference comes up to the exact amount we have milestone billed for this project) In the end, we did a negative manual entry “To be recognized” to make the “Recognized To Date” to match the “Invoiced To Date”. This action caused our revenue recognition GL account to go down in to a negative. So we believe that we might have understated our revenue in our income statement.
In the same project we see the actual cost values (labor, burden, subcontractor material, ODC etc.). However, the "Recognized to date section of the cost of sales recognition shows an even hire number. Doesn’t this mean that our cost has been overstated (also shows up in our income statement as a large positive)?
Even when the cost of sales recognition “Recognized To Date” is higher than the “Actual” cost value, Epicor still suggests that we recognize more cost in “To be recognized” section in the cost of sales recognition box.
Does this happen to anyone? Is it something we are doing that causes this?
We recently built a solution for another customer to do exactly what you are mentioning, detecting revenue on invoiced items on projects. I cant recall the exact situation that lead us to that point, but long story short, the reporting from the projects didnt fit their expectations either.
I think we ended up doing 6 BAQs breaking down ODC, MTL, Revenue, Rev Dist, Labor, Burden
@Chris_Conn Is there any way we can talk to the other Epicor user you are mentioning?
We want to hear more about the issue to see if we have the same one.
When you say that you ended up doing 6 BAQs, were these for testing purposes? or was it to replace the revenue recognition page?
In ASC 605, we had to limit our revenue to invoicing but today we are operating under ASC 606 and that restriction is gone. We do have to keep track of the asset/liability position of the project to track when invoicing is greater or less than revenue recognition.
We found that when Epicor takes costs out of a project, it spreads it equally across ALL open phases, which makes profitability by phase impossible. So we never take costs during recognition (we use Manual). We close the phase jobs to flush the costs and then re-open if we need to add the costs later.
10.2.400 has “Recognition by Phase”, which we’ll be testing next week. I’m hoping that the cost are pulled from the phase being recognized. We shall see…
