Full Sail Partners Blog | Accounting (11)

Many firms are not familiar with what the multi-company feature in Vision does or that it even exists.  Therefore they are not certain if multi-company needs to be enabled in their database. As a consultant that specializes in multi-company implementations for more than four years, I wanted to pass on some tips for firms considering this feature.    

What is multi-company?
Multi-company is part of the Vision Core Financial Application.  Vision multi-company allows a firm to manage more than one company in a single database and streamlines the process of managing accounting functions between companies when resources are shared.  There is no limit to the number of companies that can be maintained in Vision.  By utilizing multi-company, each company operates as a separate entity but data sources such as clients and contacts can be shared across the enterprise.   However, other data sources such as employees are company specific.  Projects can be set up so that phases are owned by certain companies.  Multi-company also makes it easier to switch from one company to another without having to log in and out of the Vision database. 

Should my company enable multi-company?
There are several factors to consider before enabling the multi-company feature.  One primary factor to consider is how will your companies interact with one another?  When resources are shared, how will the company loaning their staff or paying expense on other company’s behalf be compensated?  There are several approaches to intercompany billing and should be part of the planning discussion during the implementation process.  Do any of these companies conduct business in a currency other than US dollars?  These and other questions should be addressed during the planning process and will help you determine if multi-company is a good fit your firm. 

This topic is discussed during the initial planning meeting. Some firms determine that multi-company is not an option and instead opt to explore alternatives.  Organization reporting within Vision is a great alternative.  In Organization reporting, the companies would be included in the organization structure.   The “maintain separate balance sheets” feature in Vision would also be used as well as the labor cross charge feature to move revenue, labor and cost between companies. 

What are the implications of turning on multi-company?
Once you turn on multi-company, it cannot be turned off. So before enabling multi-company, a well thought out, carefully planned implementation of this feature should be discussed. Additionally, the creation of a test multi-company environment will go a long way in preparing your finance staff and all of your employees for all of the new features a multi-company database has to offer. Even if companies don’t interact with each other, the database still has to be configured as if they do. 

What new multi-company features are available in Vision 7.0?
In earlier versions of Vision, there were two rate methods to choose from in intercompany billing, cost plus a multiplier or the billing rate established in the project’s billing terms.  A new feature in version 7, allows you to establish rate tables between companies.  This new feature gives you more flexibility when charging the other companies in your enterprise for borrowing resources. 

Has your firm implemented multi-company? Leave a comment and let us know your experience and be sure to check out our other "Tips & Tricks" articles.

As we come into the holiday season many of us in accounting face the coming season, not only with the joy of family and friends coming together, but with a sense of impending dread – YEAR END and TAX SEASON are looming – ugh - have another drink.

W-2s- 1099s- journal entries- checking and double checking each number!  Auditors- shareholder meetings- endless explanations’ of what the results mean (even though you have been saying for the past 6 months)  - Oh the joy of the season.

As we go through the year end process there are mistakes we (and others) make that are easy to recover from like entering the 15 page depreciation journal entry “backwards” at midnight sitting in your semi dark office chugging your 15th pot of coffee.  Some are more difficult – like removing all the lower levels of your work break-down structure (did that once – glad our backups worked). So outside of deleting the database, what are some of the items in Vision year end processing that are hard to recover from:

1099 Initialization

When to run
After the final check run for the current year, but before the first check run of the next year.  Also, this utility SHOULD BE RUN before you process your 1099s.

What the process does
This utility in Deltek Vision “resets” your 1099 tracking for the next year.  This utility is run from the Utilities menu item in Navigation.   As you process payments for current year, Vision stores the sum of these payments in a field called “Paid This Year”.  This process takes the amount in this field and stores it in a separate field called “Paid Last Year” (both fields can be found in the Vendor Info Center).   When you run 1099s for the year (for example 2012 1099s must be mailed before January 31, 2013), Vision pulls the 1099 amount from the “Paid-Last-Year” field.

Implications
If you fail to run this process correctly, the amount paid recorded on your 1099s for the prior year and the current year will need to be updated – manually

Open New W-2 Quarter

When to run
After the final payroll run for the current year, but before the first payroll run of the next year.  Also, this utility SHOULD BE RUN before you process your W-2.

What the process does
For companies using Vision to process payroll ‘in-house’, opening a new W-2 quarter changes where Vision stores payroll information for payrolls processed after opening the quarter.  This one is easier to remember as you are already in the process of opening a new quarter
during the year.  Opening the quarter at year end is JUST like what you do every quarter, except the warning message appears scarier.     

Implications
If you fail to run this process correctly, the amount paid for the quarter/year will be incorrect for the last year and the current one.  You will have to manually adjust employees’ payroll history to correct the error for each item paid and withheld.  This meets my definition of a “bad time”.

Deltek Vision Payroll Update (Software update)

When to INSTALL
After the final payroll run for the current year, but before the first payroll run of the next year.  Also, this utility SHOULD BE RUN before you process your W-2s.

What the process does
For companies using Vision to process payroll ‘in-house’,  the Year-End payroll update updates the tax tables for the new year.   This is a system update.  You will need to work with your IT staff to ensure this update is run at the appropriate time

Implications
If you fail to install this prior to running the first the payroll in the new year, it isn’t a huge deal (believe it or not). Deltek Vision calculates the tax due on the year to date earnings and subtracts what has been withheld in prior payrolls to come up with the current withholding amount.  HOWEVER, while you do not have to manually adjust each person’s withholding, it is NOT fun to explain to your staff why their withholdings varied from payroll to payroll.

Open New Benefit Year

When to run
After the last Timesheet has been posted and Benefit Accrual has been run for the prior year, but BEFORE the first Timesheet posting and benefit Accrual has been run for the current period.

What the process does
Running this changes where the accrual information is stored for PTO, Vacation, sick, etc. – any “time” related benefit provided to your employees.  Every month/timesheet/payroll (depending on your policy) you run an accrual for your “time” related benefits.  You see this accrual as “current year accrued” on reports.  As you post timesheets, time taken against the accruals show as “Current Year Taken”.  Running this utility resets the system to -0- for the current year. If you do NOT track your PTO/Sick/Vacation etc. in Vision – this utility does NOT need to be run. This utility is run from the Utilities menu item in Navigation.  

Implications
If you fail to run this process correctly, the current year Taken and Accrued will not show correctly.  You will need to manually modify the current year taken/accrued for each employee. 

Open New Period

When to run
Before you process the first transaction for the new year.

What the process does
This opens a new period for processing. You typically do this every month. The only difference between your period opening during the year and the opening at year-end is the scary message. After opening the period,  you will still be able to process transactions in the prior year (assuming you have the appropriate security) or the new year - you just have to be careful to select the correct period.   This utility is also run from the Utilities menu item in Navigation.  

Implications
Failing to open a new period causes you to not be able to process transactions
in the new year.  If you process transactions in the prior period you can either un-post them (depending on the transaction) and repost them in the correct period or manually reverse the
entries and reenter them in the new period.  Not great fun, but it could be worse.
If you fail to run any or all of the above utilities, you can recover by manually updating the system. However, with all the other things going on in January with tax filings, audits, year-end financial presentations, who has the time to spare?  Here are some tips that will help to remove some of the worry:

• Ensure each employee in the accounting/payroll department understands these processes and what they do and the implications – They will help you remember as they often are the ones that have to do the tedious time consuming recovery process
• Set a calendar with the date of the last processing of the prior year, the date the above utilities should be run and the date of the process of the new year.  Review this calendar with the accounting/payroll staff
• Assign a person to run the utility and a person to help them remember. 
• Share the calendar with your IT staff and let them know when you must have the payroll update installed and running

So, plan ahead, set your calendar, train the staff now, sit back and have another cup of eggnog and smile – you have set yourself up for a less stressful January.

For more information regarding a stress free year end, please check out our recorded webinar sessionon this topic.

 

 

Everyone is talking about “Going Green” these days but like the weather, who really does anything about it?  One way to Go Green using Vision is to take advantage of Vision’s ability to email invoices to clients.  This process can save your company time and money while saving the planet!

Here’s how it works: 

• Once you get your drafts back from the Project Managers, go into Interactive Billing and make your adjustments for held time, changes in percent complete for billing fees, writing-off expenses, etc.  Preview your invoices to make sure that each is ready to send to the client, but do not “Accept” the invoice at this point.

• Make sure your invoice template includes images from your letterhead so that the emailed invoice will look like the one that you would mail.  Adding images to invoices is really not very difficult and is definitely worth the effort.  You can have multiple invoice templates – one for printing on letterhead, one for emailing and one for draft invoices, for example.

• Once the invoices are ready for production, go into Batch Billing, select to print for Active Projects, select “Final Run” as the run type and set to use Billing Terms for AR, Backup, etc.  This will produce the invoices according to each project’s billing terms.  In the Invoice Template field, select your Email Invoice Template, which includes images discussed above.  Then, select to email the invoices to the Billing Contact.

Try this with a small group of invoices to start until you get the hang of it.  Then expand to include all your invoices.  This method not only saves you time and money (printing and mailing costs) in producing final invoices, but it also gets your invoice to your client sooner which can reduce your cash cycle days.

Taking Green Invoicing to the next level:

• To personalize your invoicing, think about setting up user ID’s tied to your project managers.  This will allow you to send the invoices and have it appear to the client that the project manager is the one that sent the invoice.

• Follow-up with the clients to ensure that delivery was successful.  Now that you have reduced the time it takes to deliver invoices, use some of that saved time to give a call to your clients to make sure that they received the invoice.  This gives you the opportunity to get some “personal time” with your client and to solidify the process

• Add additional email addresses where clients need to have the invoice delivered to multiple recipients. 

• Create email templates to personalize the email, give the client additional information and to save time when producing the emails.

Give “Green Invoicing” a try.  Save time, money and the planet!  

 

 

Year-end is always a stressful time of year, but it doesn’t have to be.  As with everything else in the world of Accounting, planning and preparation is the key to a successful and stress-free year end.

Here are just a few tips to make your year-end close just a little easier:

• Communication – It is vital to communicate to the rest of the firm that year end is approaching and the important dates that they should be aware of: final timesheet due date, final expense report due date, etc.
• Create a calendar – Your calendar should contain all of your year-end deadlines: final AP check run, final timesheet due, final bank rec are all dates you may want to add to your year-end calendar.
• Create a year-end manual – Given that year-end procedures change very little from year to year, create a manual.  With a manual to refer to, you no longer have to rely on your memory or cryptic notes you may have taken in years past.
• Reconcile on a monthly basis - Stay on top of your monthly reconciliations.  Nothing adds to the stress of year end more than performing several months of reconciliations that could be done monthly.
• Recurring transaction files – If there are yearly JE’s or other transactions that you only post once a year, consider creating a recurring transaction file.  Each year those files will already be in place so you don’t have to re-create them from year to year.
• Order year end forms well in advance - Why wait until the last minute to order your 1099 and W-2 forms?  By ordering your forms in advance you know they are on hand when you are ready to process.

In addition to the tips above, Deltek publishes the Year End Bulletin each year.  This is an excellent resource for year end preparation of your Deltek Vision System.

Just remember to stay focused and keep organized and along with the tips outlined above, you will be surprised at how easy and stress free year end will be!

The timing of when you recognize revenue for your business can be influenced by a number of factors.  In normal day-to-day business, most firms use a revenue generation model that recognizes revenue on an accrual basis – revenue hits the books and project reporting when clients are billed for services rendered.  For tax purposes, revenue is not generally recognized until the client pays for the services rendered (cash-basis accounting).                                         

In addition to standard accrual and cash basis recognition of revenue, many firms are interested in recognizing revenue at the time services are performed.  That revenue is then tracked on the project and financial statement as either unbilled or billed revenue.  This article will focus on those revenue methods that recognize the value of your qualified Work In Progress (WIP), as unbilled revenue. Additionally, the methods described, will allow unbilled revenue to be reported on project reports and on your financial statements. 

A word of caution!  Before changing your method of revenue recognition, you should meet with your tax professional to discuss the requirements for your firm and discuss industry standard revenue recognition methods to determine right method for your firm.  Also, you will want to meet with the owners of the firm, as well as, the project and divisional managers to discuss their requirements for financial and project reporting in regards to recognizing unbilled revenue.  

Enabling Revenue Generation

As revenue generation posts revenue to your financial statements, you will need to create at least two general ledger accounts: 

• Unbilled Services (asset – balance sheet)

• Unbilled Revenue (revenue – income statement) 

The unbilled services account will carry the job-to-date unbilled revenue amount for your projects.  The balance in this account will be carried over from one fiscal year to the next.  The unbilled revenue account will carry the year-to-date unbilled revenue amount for your projects and the balance will be cleared to retained earnings at the end of each fiscal year.  At all times you should be able to balance the detail on your projects to the balances in your GL accounts.  This is called file reconciliation and it is very important that you reconcile these balances on an on-going basis.  When performed properly, revenue generation will never cause a file reconciliation issue. 

In addition to the general ledger accounts, you will need to establish and setup revenue methods to be used in the revenue generation process.  These revenue methods will be specified at the lowest level of your project setup so that the work performed on those project levels can be recognized as revenue.  We will be using two revenue methods in this discussion:

• Method “W”, which calculates Total Revenue as Job-to-Date (JTD) Billed plus WIP at billing rates

• Method “B”, which calculates total revenue as JTD Billed 

Note: the Revenue Generation Method is used to calculate Total Revenue.  Billed Revenue is then subtracted from Total Revenue to calculate Unbilled Revenue. 

To determine which revenue method to use, this decision should be made on a project by project and phase by phase basis.  You will only want to recognize revenue on those projects and phases where you expect to be able to bill and collect on your work effort.  Also, you may need to set limits on your revenue generation methods so that revenue is not calculated above and beyond your contractual limits with the client.  In some cases, Method W might be used on one or more phases in a project and Method B is used on other phases within the same project.  Additionally, the method used may need to be changed as a project reaches a fully billed status. 

Running Revenue Generation

The following should be completed, before running and managing revenue generation:

• Determine your revenue methods

• Create your GL accounts

• Create your revenue methods

• Setup these revenue methods in your projects 

We recommend starting with a small sample of projects, testing your revenue generation methods, and procedures on these projects before expanding to all billable projects.  Keep in mind that you can use Method “B” on some projects, which will keep them on an “Accrual” basis where revenue = billed. 

Part of the management of Revenue Generation is the creation of good reports to check your “baseline” prior to generating revenue.  Then check the reports again after generation of revenue and after billing.  A report should be created showing the Contract Amount, Billed Revenue, Unbilled Revenue and Total Revenue at a minimum.  This report can be run at the project level to verify overall amounts and/or at the phase level to verify individual phase level amounts.  

Revenue Generation should be run at the following times and for the following reasons:

• Each week after posting time and expense | Ensures revenue is generated and can be viewed on reports

• Month end, prior to billing | Verifies the total of unbilled revenue for the month can be viewed

• Immediately after billing | Confirm billed and written-off amounts are properly recorded and unbilled revenue is verified as total revenue less billed revenue 

Verifying and Managing Revenue Generation

As mentioned above, Revenue Generation should be run following billing and the unbilled revenue.  The remaining unbilled on reports should be compared to the general ledger balance (in the Unbilled Services asset account) and to unbilled detail and summary reports.  If there are any projects where the unbilled amount does not seem right, run a project detail report to see all individual transactions and billing statuses to determine where the discrepancy might be.  

One action that might cause unbilled to be different than expected would be where you process a fee based invoice for less than the unbilled amount of labor and do not put any of the labor on hold prior to billing.  In this type of situation, you might bill $5,000 on $6,000 worth of labor and expect there to be $1,000 of WIP remaining.  However, if you processed the invoice without putting any of the labor on hold first, then all $6,000 of labor would be cleared as having been billed against the $5,000 fee and you would not have any WIP remaining. 

Another item to keep in mind is that the billing process does not have any effect on total revenue.  The process of billing simply moves revenue from Unbilled to Billed.  When using Revenue Generation, revenue is only generated when Revenue Generation is run, not at time of billing.  

General Ledger effect when generating revenue:

• Debit to Unbilled Services

• Credit to Unbilled Revenue

   

General Ledger effect when running billing:

• Debit to Accounts Receivable

• Credit to Unbilled Services

• Credit to Billed Revenue

• Debit to Unbilled Revenue

To learn more about revenue recognition, join our webinar as we discuss the 9 key points to keep in mind regarding Revenue Generation. 

A Cautionary Example of Using KPIs

If a Project Manager Falls Down in the Forest and No One is Around to See It, Does the Project Manger Still Get the Quarterly Bonus?

I have been giving a great deal of thought to KPIs (Key Performance Indicators) lately.  One thought was about the idea of the unintended consequences of putting a “suite” of KPIs (KPIs are like potato chips, you can’t have just one. . .) in place, specifically for Project Managers.

How will their behavior change?  Will measuring chargeability for their project teams cause the employees to be more utilized or cause billable project to become less profitable?

Let me throw out an example.  This example is based upon a real client and provides KPI insight. The Names have been changed to protect the innocent.

Company A wanted to incentivize their project managers to produce more revenue.  So, after months of discussion and planning, the partners setup revenue targets for each PM based upon past performance and a generously favorable potential revenue prediction for the next year.  The Project Managers would be paid a bonus at the end of each Quarter for any Revenue they brought in over the projected target.  This was very generous, and all the partners agreed that this would drive business revenues higher.

Except it didn’t happen exactly the way they wanted it to.

Here is a graph showing how their revenue was before this particular KPI was put in place:

 

 

 

 

 

 

 

 

 

And here is the before and after picture:

 

 

 

 

 

 

Ouch!

This of course caused their accounting team to load up on antacids for most of the year.  Their KPI (and bonus program based on that KPI) had encouraged some behavior that was not necessarily good.  The Project Managers did not care about recognizing any revenue (and by extension, billing the client) until the end of the quarter, and when they did, they typically over-recognized and over-billed.

This problem caused a cascade through-out the organization.  Clients noticed and started to question why this month’s bill was so much larger that last month’s.  Average AR started to go up.  Cash flow went down.  Lines of credit had to be accessed to make payroll (and pay the quarterly bonus).

How could this have been prevented?  Looking back, it is obvious right?  But at the time, this sounded like a great idea and everyone was committed to making it successful.

1. Too much focus on one KPI is not a good thing.  They should have used several measurements that touched upon AR, Chargeability, and (Project Managers cover your ears!), Client Satisfaction.
2. Quantitative measurements are great, but we also need some Qualitative measurements in the mix.
3. Involve many different types of people in your KPI development.  Someone might have pointed out this scenario at the beginning if the partners had not developed this on their own.

Which brings me to my final point... KPIs only help if you review them frequently and action is taken based upon them.  A well designed KPI exists to measure performance and if adjustments are not made based upon them...then no one saw the Project Manager fall in the forest.

View webinar on KPI Insight for Project Managers.

Did you know you can enter your time into Deltek Vision from your iPhone or iPad?  I don’t know anyone that gets excited about filling in their timesheet, but the Deltek Vision Timesheet app allows me the ability to access my timesheet no matter where I am. For users that travel or are away from the office, it allows a convenient method to update your time on the fly.  Sorry, no more excuses for those on the road.

To set up the app, I searched “Deltek” from my iPhone app.  I clicked install and obtained my server name from my IT person to sync to my Deltek Vision database. The installation was simple.  The added security of a 4-digit pin also provides secure access to the app.  There is no syncing between my desktop and my phone. The information is automatically updated in real-time.

It’s easy to add a project to my timesheet and the favorite feature allows me to keep my frequently used projects. The project did, of course, have to be active and approved for use in processing.  With the iPhone 4s, I’m able to use the voice-to-text feature to speak my timesheet comments.  A very helpful feature when your drinking your morning coffee.  

Kudos to Deltek for this free, user-friendly app.  Now I can access my timesheet anywhere, anytime.

To check out more features and compatibility requirements, visit iTunes: http://bit.ly/Ki93E6. 

    

Update on 10/1/12:
For firms that need to access Deltek Vision for all applications via Mac, iPad, iPhone, Android any many other devices, check out Full Sail Partners' solution:Vision Unleashed.

Update on 2/25/13:
Deltek has a newer timesheet version available for iPhone and Android users. View this page for more information: Deltek Touch.