Invoicing ongoing software, licensing, or support fees

If your organization bills your clients for ongoing fees, whether it be software, licensing, intellectual property, or support, then this article will help you understand how you can model this in Projector.

We are making the assumption that you are billing things without a disbursed amount. This is often true for software or licensing agreements. With no quantifiable outlay of expenses the Soft Cost has a zero disbursed amount and a positive client amount. Or in other words, it is all revenue.

The general steps look like:

Create an expense type that is enabled for soft costs
Create a new soft cost document
Add cost cards to it using the expense type
Approve the cost cards for invoicing

We recommend that your cost contract terms be set to Time & Materials or Not to Exceed for these types of fees.

Milestones

Why use a soft cost instead of a milestone?

A milestone generates deferred revenue. Essentially it is treated as a prepayment. It is then consumed by time or cost approved for the engagement. These licensing fees are supposed to generate revenue for you, not deferred revenue.

Permissions and Settings

To reconfigure Projector for these changes you will need the global permission System Settings set to Update.

Soft Costs

Additional Resources

Watch Recurring Revenue Management Webinar (go to 37:10) for a quick demonstration of entering and invoicing of soft costs.

Soft costs are an expense type we often recommend in this use case. A soft cost typically encompasses an expense with no incurred amount like a software licensing fee. You will create an expense document that contains all the months of maintenance. You can then invoice monthly and collect your licensing fees. You may need to make changes in each of these areas of Projector.

Expense Types

If you don't already have an Expense Type to cover your fees, you will need to add one. Go to Administration tab | Job Accounting subsection | Expense Types | Click New. In this example I have created a Software Licensing expense type and enabled it only for Soft Costs.

Create Soft Cost Document

Next you should go to your Expense Document manager - https://app.projectorpsa.com/management/expense/expensedocuments

Click +Soft Cost Batch and create a new document

Edit Soft Cost Document

Click the documents name to edit.

Add Cost Cards

Use the + button to add new cost cards.

Since the soft cost does not have a disbursed or incurred amount, you'll need to Overrride and manually enter in the service fee under Client Amount.

If you need to create multiple cost cards, use the "Create and New" button to create the next card. This method populates all of the fields of the new card with values from the previous card.

You then, simply need to change the date.

Approve Cost Cards

Approve to invoice the new cost cards.

Create Invoices

Head over to Management Portal. Now that you have an expense document with the soft costs created you can start pulling individual cost cards onto your invoices. Go to your Invoices tab and create an invoice for the month you are licensing. Make sure you specify an end date so that you only sweep a single soft cost in, rather than all future ones too.

Accounting

By approving soft costs you will generate a negative Cost WIP balance. As your invoices are issued, this Cost WIP is consumed.

You will need to ensure that future accounting periods are open for cost, but closed for GL. This allows you to enter the soft costs without letting them hit the books too early. Most organizations will have this setup anyway.