PM519 – 🚀 Revenue Recognition in D365 Finance – What You Need to Know! 💰

How does D365 Finance recognize revenue for projects? It depends on whether your project is Time & Material (T&M) or Fixed Price!

✅ T&M Projects → Revenue is recognized immediately when invoicing for actual labour, materials, or expenses.
💡 Example: A consultant works 40 hours at £100/hr → £4,000 revenue is instantly recognized!

✅ Fixed Price Projects → Revenue is recognized gradually based on project completion or contract terms.
💡 Example: A £500,000 project at 40% completion → £200,000 revenue is recognized!

📊 Methods Used for Fixed-Price Revenue Recognition:
🔹 Percentage of Completion – Revenue aligns with project progress.
🔹 Completed Contract – Recognized only when the project is fully done.
🔹 Straight Line – Recognized evenly over time, great for service contracts.

📢 Why It Matters?
✔ Ensures compliance with IFRS & GAAP
✔ Keeps cash flow & profitability predictable
✔ Helps finance teams track real-time performance

💡 Budget vs. Forecast in Revenue Recognition – What’s the impact?
📌 Budget = Forecast → Revenue follows the plan 📈
📌 Budget < Forecast (Higher Costs) → Lower profit margins ⚠
📌 Budget > Forecast (Cost Savings) → Increased profitability 💵

👉 Want to master project accounting in D365 Finance?

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