Common Deltek Costpoint Questions and Complaints (Part 2)

Heather Stroud is a Senior Consultant in Redstone Government Consulting's Deltek Costpoint group. She primarily works in the Accounting, Projects, and Planning modules for Deltek Costpoint. The Costpoint Group works with our clients to implement Deltek Costpoint, create customized training, and assist with day-to-day processing. This two-part video and article discuss some common Deltek Costpoint questions and complaints we hear from our clients.

Did you miss Part 1? You can view it here

General entries are not displayed when reconciling the bank accounts through Costpoint. Why is that?

You are not supposed to do journal entries for bank transactions. For any Costpoint module, we recommend using the appropriate module to make any entries or corrections.

For example, labor adjustments need to be made through timesheets, AP through the AP module, revenue and billing adjustments through the Projects module, and cash or AR adjustments through the AR module. When you use the journal entry screen to create or move cost housed in a specific module, that transaction and associated cost will not flow through to those modules. This is in place to ensure that your general ledger and sub-ledgers remain in balance. This also provides a cleaner audit trail for transactions in your system.

Costpoint just doesn’t meet my billing needs and is too rigid in what my invoices look like.

Costpoint can be rigid when you get to the billing, AR, and reporting side of the house if the project structure is not set up to handle your billing and reporting needs. We often find with our clients that spending extra time upfront to understand all requirements and building those requirements into the project structure allows for seamless invoicing and reporting on the back end. With that said, there are exceptions to every rule, and sometimes, we need to utilize business intelligence to help meet our clients’ invoicing needs by creating a custom reporting solution.

My company has to implement the new revenue recognition requirements for ASC 606. Can Costpoint help with that? Specifically referencing 606, T&M, cost-plus billing, revenue formulas, and Costpoint follow the cost. We have to consider with 606 when we’re looking at different types of fees and when and how that fee is booked with revenue.

The fee must be at the charging level tied to the actual cost as opposed to the project as a whole. It is important to think through these requirements during project setup so that you can properly capture and estimate this cost. For example, we have a contract with an incentive fee, but only six of the twelve projects or charging levels on that contract have an incentive fee.

We need to set up the project so you can get the cost and estimate that cost on just the six applicable projects. Thinking through the billing formula setup is a major part of the project setup creation in Costpoint. It is crucial this is done on the front end as opposed to once it is time to produce your first invoice. Here, we can define the billing parameters as outlined in the contract or subcontract. As a general rule, your revenue formula will follow your billing formula. Time and material billing would equal time and material revenue, and cost-plus billing would equal cost-plus revenue. This ensures that cost captured through timesheets, expense reports, purchase orders, and AP vouchers are calculated and burdened correctly.

What is the purpose of a revenue adjustment?

The revenue adjustment function should be used sparingly. This is not the place to throw in amounts to sync your billing and revenue. A good example of a revenue adjustment is a cost-plus or T&M billing formula with a firm fixed price component. We use the revenue adjustment to capture the fixed price amount of the billed firm in revenue. Another example is if you must write off a bill as bad debt.

You would then need to use the revenue adjustment screen to reduce revenue by that billed amount that was written off. As we discussed earlier, any billing and revenue adjustments must be made through the appropriate modules. If you need to adjust revenue, it is best to reconcile your unbilled and, find out the true driver behind any revenue discrepancies and fix the transactional source.

Why can I only run a project labor summary or any other project reports on a month or period rather than over a customized time period?

The project reports are not designed to give you costs between certain time periods. The project labor summary, project status report, revenue worksheet, revenue summary, and other project reports are designed to give you information at a certain period in time. This is because of the programming behind those reports.

On the project status report, you can see the costs for the prior years, year-to-date, current period, and inception-to-date. If you need reports that can give you project costs for a time period range and you need to get this information on a regular basis, you would now need to look at a business intelligence custom reporting solution.