Time Accounting Transactions
- Thomas Sherman (Deactivated)
- Shivam (Deactivated)
This page explains the accounting transactions that occur as a time card flows from entry, to approved, to invoiced. It also explains when those transactions will be transmitted to your accounting package. The page is broken up into sections with the simplest scenarios first. Later sections describe special cases.
Additional Resources
- In the Topic of the Day: Accounting Overview Webinar, we provide a general overview of accounting within Projector and provided examples of some of the most common accounting transactions that Projector generates and can be transmitted over to an accounting system. (go to 13:22)
Time and Materials / NTE
This is a very simple introduction to a T&M/NTE time card's journey from entry to invoicing.
Key Accounts
The following are important accounts for T&M/NTE time cards.
| Account | Asset/Liability | Type | Use | Defined On | Account Name |
|---|---|---|---|---|---|
| Time WIP | Asset | Balance Sheet | Projector control account that represents the value of labor that has been expended on behalf of a client, but for which the client has not yet been billed. Only Projector should be allowed to modify the balances in this account. | Engagement Type | Time WIP G/L Account |
| Time Revenue | Revenue | P&L | Revenue associated with time worked. | Engagement Type | Revenue G/L Account |
| Accounts Receivable | Asset | Balance Sheet | Money your AR department expects to receive | Cost Center | Accounts Receivable |
Accounting Workflow
When will key accounts get hit?
| Step | Debit | Credit | Description |
|---|---|---|---|
| Submit Time Card | - | - | We do nothing because Projector doesn't consider work 'real' until somebody approves it |
| Approve Time Card | Debit Time WIP | Credit Time Revenue | You've done the work, which means you've earned some revenue. The revenue is immediately recognized. You can adjust it via write up/downs still. |
| Invoice Time Card | Debit Accounts Receivable | Credit Time WIP | You issue your invoice. |
Fixed Price
This is a very simple introduction to key accounts that get hit during a FP time card's journey from entry to invoicing.
Key Accounts
The following are important accounts for FP time cards.
| Account | Asset/Liability | Type | Use | Defined On | Account Name |
|---|---|---|---|---|---|
| Deferred Revenue | Liability | Balance Sheet | Revenue you have billed, but not yet earned. | Cost Center | Deferred Revenue |
| Time Revenue | Revenue | P&L | Revenue associated with time worked. | Engagement Type | Revenue G/L Account |
| Accounts Receivable | Asset | Balance Sheet | Money your AR department expects to receive | Cost Center | Accounts Receivable |
Accounting Workflow
When will key accounts get hit? One important thing to remember is that Revenue Recognition and Invoicing are decoupled. You can recognize revenue and invoice one different schedules and for different amounts of money. The two actions will push/pull from the deferred revenue account. When deferred revenue is positive, you have invoiced more than you have recognized. When it is negative, the opposite is true.
| Step | Debit | Credit | Description |
|---|---|---|---|
| Submit Time Card | - | - | We do nothing because Projector doesn't consider work 'real' until somebody approves it |
| Approve Time Card | - | - | Unlike T&M engagements, time is not tied to the approval process. It is tied to the revenue recognition process. |
| Invoice Milestone | Debit Accounts Receivable | Credit Deferred Revenue | Invoices for fixed price engagements are always done via milestones. Milestone billing credits deferred revenue. |
| Perform Revenue Recognition | Debit Deferred Revenue | Credit Time Revenue | Revenue recognition should be run on all Fixed Price engagements. This depletes your deferred revenue balance. |
Special Cases
These are a few typical cases you'll encounter when working with time cards and accounting transactions.
Unapprove Time Cards
For T&M/NTE engagements we create reversing transactions. So you will find that Time WIP gets credited and Time Revenue debited.
For Fixed Price engagements, you need to worry about revenue recognition. Projector tracks recognized revenue totals at the engagement level, but also recognized revenue on individual time cards. When you unapprove a time card that has been through revenue recognition, the revenue sitting on it gets zeroed out. However, Projector does not update revenue recognition numbers at the engagement level. This can lead to a mismatch in Projector's actual revenue on time cards vs. what it thinks is on time cards. By default, this action is blocked, but you can bypass if you know what you are doing.
Change Rates
When a time card is approved Projector locks in the rates that were in place at that time. If you make rate changes on the backend, these cards will not update. If you need them updated you can perform a revalue adjustment.
Void Invoice
Reversing transactions are created that undo Accounts Receivable and Time WIP (T&M/NTE) or Deferred Revenue (FP).
Write Up / Down
Only T&M/NTE time cards can be written up or down. The process modifies Time WIP and Time Revenue balances. If you write up a card, you are generating more revenue. So the transaction debits Time WIP and credits Time Revenue. If you write a card down then it credits Time WIP and debits Time Revenue.
Transfer Time Cards
A transfer of time cards between projects acts exactly like an unapprove, reapprove. See the Unapprove Time Cards section of this page for more details.