Page 43 - Unanet GovCon Using Billing Revenue - Participant Guide ebook

Cost Plus:

Revenue is Recognized at the time of the Billing & Revenue Post.

What is included?
• CP Labor from timesheets = Direct billable hours worked * Cost Rate
• CP Expenses from expense reports = Other Direct billable expenses
• PLUS, Indirect Costs
• PLUS, Fees on Cost Plus contract

A Fee for the contract is established on the Accounting tab in the Project Profile. Billing
Manager role can view these properties by using the magnifying glass icon.

Indirect Costs are calculated based on the Indirect Cost Formula and Indirect Rates in
the Cost Structure. The System Admin Posting Option Setup defines which Indirect
Rate (Actual, Provisional, or Target) is to be used to calculate the Billing (Customer
Invoice) and Revenue Recognition amounts for a Cost Plus project.

Cost Plus type contracts are typically billed at the Provisional rates, which is the
estimated rate submitted to an external agency such as Defense Contract Management
Agency (DCMA). This may result in a difference between Billings and Revenue at the
end of the year due to the differences between the Provisional and Actual rates. This
difference is shown in the Deferred Revenue column on the Billing & Revenue
Summary Report. From an accounting reporting perspective, this is expected and
corrected through a “true-up” invoice or journal entry since Actual rates are often
unknown until after the year end close.

LESSON 4 REVENUE RECOGNITION
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