According to Merriam-Webster, “milestone” means “a significant point in development.”
Professional services organizations (PSOs) are well acquainted with milestones because they often use them as scheduling tools. Milestones break projects into small, manageable pieces, and project managers plan, schedule, and execute the individual tasks or phases.
Project milestone billing uses agreed-upon events or deliverables as billing deadlines. PSOs typically invoice customers when a milestone is beginning or has been completed versus on a schedule (e.g., monthly).
This billing benefits the customer and the PSO. Rather than pay a lot of money at once, the customer pays a smaller amount when milestones are met, and the PSO enjoys a steady cash flow.
However, there are challenges. PSOs that run SAP Business One, a powerful enterprise resource planning (ERP) solution, have a project management module at their disposal—but because you must manually generate invoices, you risk sending an incorrect invoice or forgetting to send one.
Billing the client at the onset of a milestone or project stage creates another challenge: The invoiced amount can't be recognized as revenue until services have been delivered. So, in addition to managing a series of manual journal entries to properly account for liabilities and revenue, you must manage projects and their related revenue recognition calculations in spreadsheets. Once again, this time-consuming process leads to expensive mistakes.
How can you make project milestone billing and revenue recognition fast, easy, and error-free?
With automation.
Automations for SAP Business One automates labor-intensive tasks that drain productivity, and project milestone billing is just one of the many activities you can automate.
Here’s how the project milestone billing automation works.
A milestone billing workflow searches for invoice dates that have been reached and automatically raises an invoice using data added to the milestone by a project manager. You can specify within the system whether the invoice date is the beginning or end of a milestone or project stage.
A second workflow looks for invoices posted to the deferred income accounts with a percentage completed greater than zero.
The automation calculates the revenue to release to the profit and loss account monthly. The liability account is debited, and the revenue account is credited. This process continues until the project is complete, at which point the final journal is posted to recognize all invoices associated with the project as revenue.
Automations for SAP Business One is powered by The Saltbox Platform, Vision33’s exclusive integration platform as a service (iPaaS) solution for enterprise integration, workflow, and collaboration between business applications. Saltbox extends SAP Business One's functionality without compromising system performance or generating intrusive client-side pop-ups.
With project milestone billing automation, your PSO will:
SAP Business One queries and Saltbox workflows, the key automation components, are easily customized to meet your PSO’s needs—and new automations are continuously rolling out to propel your organization forward.
Download the brochure below to learn more about Automations for SAP Business One and see what’s possible with automation!