Could someone explain to me how accrued revenue and revenue write-offs are accounted, when considering pure time & material assignments as well as assignments where there is a mixture of fixed-fee billing and (extra) time billed?
Accrued Revenue
Answers
Just a little bit of general advice....
I would think that the 1st steps would be to gather any historical data from at least the last 2 years (where available) to provide the basis for a financial analysis of your business. Secondly, you would of course have interviewed your business partners to understand the significant business drivers of revenue (and expense), available operational reports, other paper trails or indicators (sales reports, signed contracts, etc) that would help you forecast what transactions have occurred within your cut-off
From that basis, you should begin to build (in the absence of any financial reporting tool) a model of your sales and expense accruals that fit your specific industry and GAAP guidelines. Where information is inexact, it is helpful to have that financial historical data (preferably from the General Ledger & the supporting source documents) to begin to create reasonable estimates for your accruals where you have a time constraint to complete the month-end close process. Since you have not provided the industry & I do not have expertise with Fixed Fee billing, you should reach out to colleagues within your industry who might have relevant experience. However, my understanding is that you should rely in part on the contractual terms for part of your answer to the Fixed Fee revenue accruals. I also recommend you invest in a recent Wiley's GAAP Guide to help you understand the keener points specific to your transactions (Amazon.Com is a good place to start).
Hope this helps in a small way to get you started in the right direction!
Good answer, given the question as it is worded. Also, you may want to brush up on finer points of revenue recognition and when you can and cannot book the sale. This will be important as you move forward in assembling your data and build your financials and make your cut-offs.