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Administrator Guide
Last Updated: 2023-06-23
Reference: Revenue Recognition Methods

Reference: Revenue Recognition Methods

Workday provides these revenue recognition methods for your revenue recognition schedules and templates:
Revenue Recognition Method
Description
Custom
You can customize the:
  • Installment date to recognize revenue.
  • Customer contract lines that you’re recognizing revenue for.
  • Period of time that you're recognizing revenue for.
  • Amount of revenue that you want to recognize for that period.
  • Worktags that don't populate from the customer contract line.
When you select a revenue recognition method of
Custom
, you must manually verify that the revenue schedule total matches the total line amount. Workday doesn't display a critical validation error when the amounts differ.
Defined Installment
Workday uses the:
  • Amount of revenue equal to the number of days that are in the beginning and end periods of the schedule.
  • Spread Even
     revenue recognition method for the remaining periods.
Number of Days
Workday recognizes revenue proportionate to the number of days in the period.
Example: You receive more revenue for the March period than the April period because the month of March has 1 more day than the month of April.
Percent Complete
Workday recognizes revenue equal to the percent completion of your project for that period.
You can recognize revenue by the:
  • Total cost of the project completed for that period.
  • Number of hours completed for the project in that period.
Spread Even
Workday recognizes the same amount of revenue for each installment that it creates.
You can create revenue installments by:
  • Selecting a date range.
  • Entering the number of installments to create.
Transaction
You can create a revenue recognition schedule for these transaction sources:
  • Expense
  • Miscellaneous Expenses
  • Supplier Invoices
  • Time
When you select the
Create Reversal
 check box, Workday:
  • Accrues revenue installments, posting the accrual in each period.
  • Creates a reversal journal when you generate accounting for revenue installments. The journal reverses the debits and credits using the first day of the next period.
When you select the
Independent Revenue Processing
 check box, you can recognize revenue before creating a customer invoice.