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Fixed Price Revenue Recognition Models
Fixed Price Revenue Recognition Models

Select the appropriate way revenue is reported for fixed price services

Stjepan Šandor avatar
Written by Stjepan Šandor
Updated over a week ago

Productive allows you to choose when the revenue from fixed-price services will be recognized - as opposed to hourly services, where revenue is always recognized at the moment when the work is done (in other words, when you track time against a service).

To select your desired fixed price revenue recognition method, go to Settings > Revenue Recognition:

Here you can choose between two options:

1. Revenue from fixed-price services is recognized on a single date:

  • If the Budget is still open, the revenue will be recognized on the Budget date

  • If the Budget has been delivered, the revenue will be recognized on the Budget delivery date

2. Revenue from fixed-price services is spread across time:

  • The revenue is spread across the whole length of the Budget, based on tracked time and planned hours from Resourcing

Examples

What will this look like in real life?

Let's take a look at a Budget that has a fixed price service, 9 hours worked, 36 more hours scheduled in the future, and a budget start date that is set to November 11:

If the preferred method of calculating recognized revenue is set to single date, the revenue will be recognized for November - because the budget date is set to November 11:

If you're creating a report for a later date, the revenue will not be shown, even though the budget is still open:

But if you deliver the budget:

... the revenue will be reported in the month when it is delivered:

Now, let's take a look at what will happen if the revenue is recognized over time. Again, the budget has 9 hours worked in November and 36 more scheduled in May:

Notice that the date range is in November - so it doesn't take into account the scheduled hours from December. But when the range is expanded, it takes into account both worked and scheduled hours:

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