Over the years, we have heard from clients and non-clients about many issues related to project accounting. One of the situations we often come across is companies that are having difficulty calculating their work in process (WIP), also known as unbilled professional services revenue.
With their needs in mind, Baker Tilly Digital is proud to offer WIP and other real-time cloud accounting solutions built directly on Sage Intacct.
Let’s say you work 20 hours for a client, but you don’t charge that client until the end of the month. This is known as WIP, or unbilled revenue. Since your accounting system can’t truly be considered “real-time” if your revenue is not being reflected anywhere within your system for several weeks, the Transaction Rule was developed as a solution.
The Transaction Rule is a functionality available within Sage Intacct that automatically generates a journal entry when a timesheet is posted. The system can evaluate either the cost or billing rate associated with the employee on that project among other factors and builds a journal entry that allows the balances to move directly into revenue, while the unbilled AR is designated as the offset. Then later, when you create the invoice, the program will clear out the original journal entry, leaving behind your correct revenue.
Baker Tilly Digital not only can address an organization’s WIP challenges, but the software can maintain timesheet accounting in two different ways. It can handle it in a less detailed, simpler fashion or in a more complicated, more detailed manner. It’s ultimately up to the user to decide which of the following is more appropriate based on their specific use cases:
Another key feature of Sage Intacct is its ability to account for varying labor costs, which may come into play for projects that require hazard pay, travel time or involve certain types of safety equipment. These projects can be designated as requiring “low” or “high” fringe rates, and the program can adjust accordingly.
Additionally, with Sage Intacct you can use transaction rules to amortize your fixed assets. For instance, if you have 100 employees who drive a bulldozer, you can put an amortization on the cost of the bulldozer for every hour that your employees are on it, and the software calculates that in real-time.
Utilizing transaction rules can help keep track of your unbilled revenue so you can focus on helping the client first. Baker Tilly Digital is here to help implement the transaction rules and manage your WIP challenges. If you would like to discuss how Sage Intacct can help you with your project accounting needs, contact us today.