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While it may be tempting to change the Project Account Group (PAG) in Deltek Costpoint, revenue and billing formulas, revenue and billing formula levels, or a combination of both, you must consider the risks and consequences accompanying this decision.
Risks and Consequences to Consider When Making Changes:
- This can lead to incorrect accounting entries.
- Revenue recognition and project accounting are complex processes in Costpoint. Changes to PAGs and revenue and billing formulas can disrupt how data is captured.
- The GL and project ledger in Costpoint rely on accurate data and formulas to reconcile accounts. Changing this information can disrupt the record of that data making it extremely difficult to reconcile!
- Changes of these kinds can lead to incorrect billing rates, which can lead to under or over-billing a project.
- Compliance and Audit issues related to the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS)
- Impact on your financial statements as these changes can affect how revenue and expenses are recorded on your GL.
- When this information is changed, it can result in the loss of your historical data. Costpoint maintains a detailed history of all transactions, including revenue and billing calculations. Changes done incorrectly can delete or overwrite this history.
- Changes can cause incorrect project reporting. Alterations to PAGs and revenue and billing formulas affect how data is captured on your GL and can also GREATLY affect how data is reported on your project ledger. This can cause your project ledger and GL to get out of balance with one another.
BEFORE moving forward with any changes, you must ask yourself a few questions to plan the proper path forward:
- Have I posted revenue and/or billing for this project?
- Am I still in the first fiscal year of this project? If not, revenue changes after crossing fiscal years can get messy, fast!
- What is the end goal I am trying to achieve versus where revenue and billing are currently sitting?
- Is it fiscal year end?
Proper project structure planning and setup at the beginning of a project is vital. We understand the pressure is on when you receive a new contract or project code, and the employees need it on their timesheets NOW! However, taking the extra time to plan properly can help avoid the need for PAG, revenue, and billing updates required after the fact.
If you are already in the middle of a project and think a change is necessary, consider the questions above, make sure you know the ramifications, and plan your strategy. NOW is the time for these alteration/modification efforts. YEAR END IS NOT the time to make the moves and/or review project reports and realize there is a serious issue at hand! These types of changes affect multiple areas, one of which is deeply intertwined with your unbilled analysis (read our blog on “Understanding Deltek Costpoint Unbilled Receivables”), which can require additional correction efforts. So don’t wait.
If you have concerns about current PAGs, revenue and billing formulas, or revenue and billing levels, please contact one of our Deltek Costpoint consultants at Redstone Government Consulting, Inc. We can help assess the need for any changes and plan the proper path forward to keep your GL and project ledger clean and all sub-ledgers in balance with your GL. We will take a strategic approach to help ensure that your revenue and billing processes are accurate and compliant.
Heather joined Redstone Government Consulting, Inc. in December of 2017 as a Consultant. Her areas of expertise include supporting government contractors in the implementation and operation of Costpoint, assisting with employee training and providing outsourced accounting services, including general ledger, unbilled analysis, reconciliation, accounts payable, accounts receivable, payroll, and payroll taxes. Heather specializes in best accounting practices, from setup and training to monthly processing. Heather has over 17 years’ experience in government contracting, supporting a wide range of contract types and customers. Her areas of expertise include program control, financial analysis and forecasting, government cost accounting, and procurement. Heather’s hands-on technical experience in all aspects of the business department provides a unique set of expertise for our clients. Heather has led numerous Costpoint implementations and re-implementations for the Accounting and Projects modules. She has worked directly with our clients to design accounting systems that are meaningful and useful for each individual client. Heather also assists contractors with the implementation of the new Subcontractor module and Budget & Planning module within Costpoint. She provides training in these modules and has developed desktop procedures that allow for a quick and seamless transition and implementation of both modules. Heather is Costpoint certified in Billing & Accounts Receivable, Accounts Payable, Projects, General Ledger, and the Master Costpoint Certification. Heather graduated with a Bachelor of Science Degree in Financial Management and a minor in Economics from the University of Alabama in 2006.