The most important aspect in modifying revenue formulas is the analysis of the PROJ_SUM table for the method used in recording revenue for the current and desired revenue formulas. 

When this is understood, you can effectively analyze the affect on the balance in the general ledger for the revenue and unbilled accounts and evaluate the need for more data. 

Costpoint calculates revenue in accordance with the revenue formula on the Manage Revenue Information and using information stored in the PROJ_SUM table. The results of the revenue calculation are also stored in the PROJ_SUM table. Costpoint obtains revenue posting and reporting data from this table. It is this table that creates the problem when you need to modify a revenue formula. The Compute Revenue program does not correct columns that were populated when a previous revenue formula was in place. For this reason, you must evaluate the previous formula and how it stored data in the PROJ_SUM table before you change to a new formula.

You need to decide whether you want the modification in the revenue calculation to be prospective or retroactive. You can make the modification from the current period forward or go back and modify all the periods in this fiscal year up to and including the current one. If you make the modification for all the periods of the current fiscal year, you can still post the modification in revenue to the current period only. Some formulas are calculated on a year-to-date basis and automatically calculate year-to-date revenue. If you need to make modifications to prior year revenue, you should use an inception-to-date revenue adjustment.

Beginning in version 3.0c of Costpoint, the allowable columns in the PROJ_SUM, PROJ_BURD_SUM, and LAB_HS tables are automatically cleared when the revenue formula is modified on the Revenue Information screen. The allowable columns in the table store the amounts that can be included in the revenue amount for the project. This applies to transaction-based formulas only.

This process clears out all revenue from all prior periods for your current fiscal year. When you run the revenue reports, all the year-to-date revenue display in the current period column. When you post revenue, the Post Revenue application compares the year-to-date revenue that has already been posted to the general ledger this fiscal year with the revenue in the PROJ_SUM table up to and including the current period and posts the difference. This process ensures that revenue is accurately posted.  

Costpoint uses the MARK_UP_FEE_AMT column to adjust the total revenue by period to the correct amount. You must manually delete any other revenue amounts on the separate revenue account line. When you select the new formula on the Revenue Information screen, Costpoint displays the following warning message:

"If you modify the revenue formula the revenue information (allowable columns) in the PROJ_SUM, PROJ_BURD_SUM and LAB_HS columns will be cleared. Do you want to continue?" 

If you click Continue, the application clears all allowable columns in the tables referenced previously. The program then asks you for your current fiscal year. If you click Cancel, the program returns the revenue formula to the original. If you want all prior periods of the current fiscal year to be restated with the new revenue formula, you can recompute the revenue for all prior periods. Because most companies cannot post revenue to closed periods, this method results in a period-by-period difference between the general ledger and the project ledger. The year-to-date amount is correct. If you do not want to clear the allowable columns, you can change the formula first to Do not Compute, save the modification, and then change the formula from Do not Compute to the desired revenue formula. The revenue calculated before the modification is not deleted from the project ledger; however, this method does not address the revenue columns that were used by the previous revenue formulas. This method requires some manual intervention to produce the correct year-to-date revenue. 

Costpoint uses the markup fee column as a retroactive column for all revenue formulas where there are costs in a prior period on which revenue has not been computed. Costpoint computes revenue on the new cost line in the prior period(s) and uses the markup fee column to back down the revenue on the cost line to drive that line to zero. It then puts the same amount in the markup fee column in the current period to reflect that revenue in the current period. Year to date, the markup fee column is zero.

If you have not posted transactions to the project and no revenue has been posted, no analysis is required to modify the revenue formula. If you wish to freeze the revenue as it is in the general ledger, change the formula to Do Not Compute. The amount of revenue remains as it was as of the last revenue posting.

It is always easier to make modifications to the revenue formula at the beginning of the fiscal year. Depending on the type of formula involved, Costpoint may try to recalculate revenue on a year-to-date basis when the revenue formula is modified in the middle of a fiscal year. The only exception to this is for the formulas Fixed Amount Month to Date and Do Not Compute.