¶ Contract / Revenue Projections
Contract Projections alternatively called Revenue Projections (these will be used interchangeably) are separate from Current Contract values, i.e. Original Contract + Change Orders. It is important to keep Contract Projections up to date since they drive Revenue Recognition and (Over)/Under calculations.
It is useful to separate the two processes because there are many industries where contract values may represent the agreement between themselves and the owner but not what the 'best guess' of the contract value might be at completion.
For example, it is common when working for the Department of Transportation to have a Contract with many lines on the SOV that are all unit price, that is, they are paid for quantities/units completed against that line. The Contract quantity might be a DOT estimate where the actual completed/billed quantities might be completely different. In these cases it is important to be able to create a projections for quantities the contractor will install which will ultimately drive billing without processing a change order representing the current agreement with the owner.
¶ Approving Initial Contract Projections
When a Sales Order is initially created as a Contract the Initial Projection Status is set to 'Pending Approval' and there is a button that appears at the top of the Sales Order form that says 'Approve Initial Projections':
From the Contract tab of the Project you would notice that it says that some lines are read-only because the contract has not been approved and you would also notice that the Projected Contract value is zero. This is because users are given the opportunity to change what might need to be changed before initiating those Contract Projections. This is important because for example, if a projection is created and then the Sales Order line for that projection is subsequently deleted, the projection will then be orphaned for time. These orphaned projections are automatically deleted each night but could result in reporting incongruancies until those records are deleted.
¶ Approving Initial Contract Projections from the Contracts Center
Projections can be handled either at the time of Sales Order creation by clicking the 'Approve Initial Projections' button from the Sales Order or users can navigate to BlueCollar -> Contracts -> Contracts Center to approved Initial Contract Projections in mass:
