Revenue Recognition is simplified in Cobalt 3.4+ with fields designed to make it easy to schedule recognition for dues, membership applications, meetings, classes, and subscriptions. This article will provide an overview of the process and the records related to it.
All RR Products Need Both a WIP and a Revenue Product GL Account
If you start from the product record then the only field to complete is the GL Account. You can create unique WIP and Revenue GL accounts for this purpose, or just use the defaults. The Product and the Type will populate by default.
For membership it is possible to have multiple products on an order, and those products can have different WIP and Revenue Product GL accounts for Revenue Recognition.
Revenue Recognition Records
These records are generated when an invoice is paid. To find them start from the invoice and click for related records and select Revenue Recognition. The number of records will depend on how many different product GL accounts there are, and the recognition schedule. For the example below, you can see payment was made on 7/30/2018 since that's when the Revenue Recognition records were created. However, the first recognition is not scheduled until 9/1/2018.
RECOGNITION FOR MEETINGS AND CLASSES
On the Class and Meeting record there is now a field where the date for Revenue Recognition can be set. If a date is set on this field and the product GL accounts are set up correctly, then a Revenue Recognition Record will be created. If no date is set on this field, then there will be no revenue recognition record even if the product GL accounts are set up with a WIP and Revenue record.
RECOGNITION FOR DUES AND MEMBERSHIP APPLICATIONS
Dues can be set to recognize revenue Monthly or Quarterly or not at all. You can also specify if someone is paying later as part of a Membership Application, if the Revenue will be recognized upfront, or if the amount will be split across the remaining months. If the fields are not set, then no revenue recognition records will be created. For specific details on this part of dues set up click here.
COMPLETING REVENUE RECOGNITION RECORDS
A cron job runs daily to look for revenue recognition with the current date set and will complete those records it finds. Completing the records means that the GL entries will be created to
- Debit from the WIP Account
- Credit the Revenue Account
The revenue recognition record will then be deactivated. If there is only one record then the process is complete. If you have multiple records, then the process will continue on the dates set on other records. If you need to recognize revenue ahead of the established date, this can be done by changing the date on the Revenue Recognition record to a day prior to the current date. That will prompt the record to deactivate and generate the correct GL entries.
The record below has not yet been recognized.
The record below has been recognized.
