Revenue Recognition in Microsoft D365 F&O and Conspro

Revenue recognition is an important aspect of financial management for every business today. It involves the recognition of revenue received after the goods or their sale. This is important both for compliance with accounting standards and for accurately reflecting the financial position of the company.

In general, Microsoft Dynamics 365 Finance and Operation has powerful tools for managing finances, including both accounts receivable and revenue recognition. It is of great importance as an ERP solution.

Dynamics 365 F&O Consporo and Revenue Recognition Basics

IFRS 15 requires that for long term contracts, revenue is to be recognized provided that all conditions are met for the completed portion of the contract. Revenue is to be billed for the completed portion of the

When Conspro is used;

• The contract with the employer and its updates; and
• Construction budget and its updates are stored and used for the actual to budget comparisons, and for revenue recognition.
• Contract Revenue billed today and
• Cost incurred today are the necessary information for the accrual of the revenue

Total costs incurred to date can be obtained online real time from Conspro;

• Actual uses of Materials are recorded and the Material costs are taken from the procurement and inventory module.
• Labor costs are taken from the payroll module.
• Subcontractor costs are taken from subcontractor progress payments.
• Machine-equipment costs are taken from subcontractor progress payments, accounting service invoices or machine maintenance management module.
• Overhead expenses are taken from the project expense journals.

Thus Progress payments amounts are calculated via:

• Progress creation for the requested periods
• Unit prices, previous period progress and amounts, deduction rates obtained automatically from the contract and previous progress payments.
• Period amount/tax/deduction auto calculation with cumulative amount entry
• Implementing equipment/material/other deductions are used to calculate the employer invoice automatically to recognize the actual worked performed in the period.