When ARM is enabled, how do you recognize outright the revenue from billable expenses? Since there are no items associated (GL accounts are used), where do we set up the direct revenue posting? Currently, the invoice defaults to Deferred Revenue when billable expenses are invoiced. Charge-based billing is not used.

@Luis - you have two options: 1) recognize revenue using default rev rec rule (via def revenue account) and 2) set it to direct recognition (Dr AR CT Income). Option 1 gives you much better revenue reporting, that’s why you have those default rev rec rules set

Where would I set the rules if we we are using GL accounts instead of Items?

you would first set up rules in List > Accounting > Rev Rec rules. but you already have one you need to use (Default Standard). And then you would set your journal entry with this rule for this line (among others)

Thank you for your inputs. We are actually using Vendor Bills, Checks and Expense Reports for billable expenses. I don't see any field for rev rec rule.

??? in your first message you say your “invoice defaults to Deferred Revenue when billable expenses are invoiced”

Yes, the source transaction of the Billable Expenses are Vendor Bills, Checks and Expense Reports (all using GL accounts and not Items). When we invoice this billable expenses (Invoice transaction), the GL impact is credit to Deferred Revenue.

I think what you need is a) create an item for resale with all attributes and then use it in both purchases and sales

No, we don't. We use GL accounts under Expenses sublist of the Bills/Checks/Credit Cards/Expense Reports (for some but not all).

if you need to bill it you must have an item set up. if you do not invoice it - it makes it easier, just record a journal with customer name on it and move on

Thanks, Karina. It appears that setting up the ARM for billable expenses using GL accounts is a system limitation then.

I might be out of date - can you not set the revenue account for billable expenses directly on the expense account, which then dictates the GL impact on the invoice? Or are you saying you’re doing that already and it’s FLIPPING to deferred because of other lines going through ARM?

@PaulJ - the advantage of having all transactions going through deferred is consistent reporting. This of course an be ignored if there isn’t a need but the assumption is (the default standard rev rec rules) is that customer would want that.

Oh 100% @Karina. I was just surprised that the existing feature of specifying an income account ON an account of type ‘Expense’ in the ‘Track Billable Expenses’ fields doesn’t allow anything other than the default Rev Rec rule to be applied. But…. @Luis does this not mean that as long as you set rev rec start and end date on the invoice when you bill, NS would post to deferred initially, then generate the arrangement/element/plan and then recognize the billed amount in full the next time you generate ARM JEs? I haven’t tested but it seems to me this would allow you to continue your current process with the same MONTH END impact to revenue…