Excluding a Job from POC or RPO Calculation

If you are using the Percentage-of Completion (POC) or Revenue Performance Obligation (RPO) method to recognize revenue, you can exclude jobs from the POC/RPO calculation. This is useful if you do not want jobs that do not generate revenue, for example, template, fixed asset, and warranty jobs, to appear on the POC/RPO Edit List and POC/RPO Entry List when building a POC entry at the end of a period.

In addition, you may choose to exclude a job from POC if you are:

• Building an asset for your own use, without billing an external customer for the job.
• Tracking costs that stay inside the company, for example, time spent on internal training, without billing an external customer for the job.
• Billing a customer for a job that is not substantial enough to estimate or include in the POC calculation.

You may, however, want to continue posting costs to excluded jobs when applicable; costs and billing information can still be updated for these jobs, and a closing jobs journal entry will still be created for a job that is excluded from POC, but we recommend setting up a separate division if you are posting costs for these jobs.

Setting up a non-POC division

Jobs that are excluded from POC do not appear on the POC edit list; if you do not post costs for these jobs to a separate division with separate accounts, the totals on the edit list will not match the WIP balances in the General Ledger. In addition, non-POC jobs are not included in the POC entry; when the posting journal clears WIP amounts to the income statement, a balance from the non-POC jobs will remain in the WIP accounts.

To avoid reconciliation confusion at month's end, if you are posting costs to jobs that are excluded from POC, we recommend setting up separate divisions that do not use the same and COGS accounts as regular POC jobs.

You may have template jobs that are used only to create other jobs and are excluded from POC so that they do not appear on the POC Entry List and POC Edit List. If you are not posting costs to these template jobs, you do not need to use a different division for them.

Example: A fixed asset job tracks costs for an asset but does not bring in revenue. Setting up a division that uses the same accounts for posting costs, recognizing revenue, and closing jobs shows that the costs posted to this and other non-POC jobs in the division will remain in the same accounts, as there is no revenue being recognized.

Setting up the job to exclude from POC/RPO

Once costs or billings have been posted to a job, you cannot change the option to exclude the job from POC or RPO.

1. Choose Cards > Job Cost > Job to open the Job Maintenance window, and complete the necessary fields to create a new job.
2. Choose the appropriate Division for the type of excluded job you are creating. You do not need to use a non-POC /RPO division if you are creating a template job that will not have posted costs.
3. Mark the Exclude from POC/RPO  checkbox. The checkbox displays if you are using the POC or RPO revenue recognition method.
4. Choose Save.

You can use the printer button to print the Job Report, which indicates if the job has been excluded from POC or RPO. 

When creating a POC/RPO entry at the end of a fiscal period, jobs that are excluded from the POC/RPO calculation do not appear on the Edit List or Entry List, and they are ignored by the posting journal.