Problem: When an Invoice is generated directly from a Phased Revenue Recognition document or from Project Estimates, the Statement of Account may show both the recognized revenue and the invoiced revenue
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,
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creating an apparent duplication.
Solution: Revenue recognized before invoicing is recorded as a Contract Asset
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. The amount should
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be transferred from Contract Assets to Accounts Receivable when an Invoice is issued. This approach ensures that revenue is recognized progressively, based on the stage of contract completion, and is not recognized again at the time of invoicing.
When Phased Revenue Recognition is performed, the following entry is created:
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As a result, revenue may be recognized twice: first through Phased Revenue Recognition and then again through the Invoice.
Recommended Process to Avoid Duplication
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This ensures that the amount is transferred from Contract Assets to Accounts Receivable instead of being recognized as revenue again.
Reporting
The Settlement of Accounts report will display the invoiced amount correctly, while the revenue recognized through Phased Revenue Recognition will not be recognized a second time through the Invoice.
This ensures the proper transfer of amounts from Contract Assets to Accounts Receivable and prevents double recognition of revenue.
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