Project Accounting Fee Types

Issue

What are the Retainers, Retentions, Service Fee and Project Fee types in Project Accounting?

Resolution

All of these are fee types within Project Accounting.

Retainers are prepayments received from a customer for a project. They can be applied to any project type. Retainers are scheduled, and computed as a fee amount. They must be billed. Once the cash receipt is entered and applied, the retainer will be available to apply to future billings. To apply a retainer to a future billing, go to the 'More Info' button in the Billing Entry Window and click on the 'Applied Retainer' expansion button. Accounts Receivables and Project Deferred Revenue accounts must be set up.

Retentions are a billing amount that is held back from billing until the project is substantially complete. Retentions can be used with cost plus and fixed price projects. In the Fee Maintenance Window, you can select the transaction types that will have retentions applied to them. Retentions are computed as a percentage of billings. Retentions are accumulated on each billing invoice that is generated for the project. Retentions will be released when the project status is changed to 'Completed.' The released retentions will then show up in the Billing Entry Window as a fee amount to be billed. You can bill the retention as a one lump sum, or it can be split up. Accounts Receivable and Retention Accounts Receivable account must be set up.

Service Fees are used for various types of service contracts. They can only be applied to time and materials projects. They are scheduled and can be renewed. Even though Service Fees are attached to time and materials projects, revenue recognition can be performed. Revenue recognition amounts are calculated using the ratable method. This means that the fees that are scheduled can be recognized regardless of the billing status for the fee amounts. Required accounts include Project Sales, Accounts Receivables, and Project Deferred Revenue.

Project Fees can be used in all project types. They are computed as a fee amount, percent of baseline cost, or percent of baseline revenue. Project fees are scheduled. Distribution accounts will depend on the project type that is selected.

All fees can have taxes from customer, fee, or they can be nontaxable.

This article was TechKnowledge Document ID: 18496