{"id":153457,"date":"2025-07-16T14:35:23","date_gmt":"2025-07-16T12:35:23","guid":{"rendered":"https:\/\/veryswing.com\/keep-track-of-your-project-work-in-progress-through-optimized-management-of-deferred-revenue-and-accrued-revenue.html"},"modified":"2026-10-09T12:58:03","modified_gmt":"2026-10-09T10:58:03","slug":"keep-track-of-your-project-work-in-progress-through-optimized-management-of-deferred-revenue-and-accrued-revenue","status":"publish","type":"post","link":"https:\/\/veryswing.com\/en\/keep-track-of-your-project-work-in-progress-through-optimized-management-of-deferred-revenue-and-accrued-revenue.html","title":{"rendered":"Gain control over your project backlogs at IT services companies and consulting firms through optimized management of project managers and account managers for deferred revenue and Accrued revenue"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Reading time: 4 minutes<\/strong><\/p>\n\n<h2 class=\"wp-block-heading\">Why Deferred Revenue and Accrued Revenue Are Essential in IT Services Companies and Consulting Firms<\/h2>\n\n<p class=\"wp-block-paragraph\">In IT services companies and consulting firms, \u201cAccrued revenue\u201d and \u201cDeferred Revenue\u201d are often seen as somewhat obscure accounting maneuvers that are handled in a rush\u2026 right before the balance sheet is prepared.<\/p>\n\n<p class=\"wp-block-paragraph\">And yet, when managed effectively, they can become <strong>powerful tools for operational, financial, and strategic management.<\/strong><\/p>\n\n<p class=\"wp-block-paragraph\">That\u2019s the whole point of this first <strong>Verytalk<\/strong>, our webinar hosted by Marjory Mahler (Customer Success Manager at Veryswing), Ga\u00eblle Alcaraz Jimenez (sales expert), and Iulia Suvagau (Veryswing Account Manager and former management controller), who shared methods, insights, and best practices with more than 70 participants.<\/p>\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Verytalk du 12\/06\/2025 - Ma\u00eetrisez vos encours projets gr\u00e2ce \u00e0 une gestion optimis\u00e9e des PCA FAE !\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/MgY7bqbEM0E?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n<h2 class=\"wp-block-heading\">What is the difference between a Deferred Revenue and an Accrued revenue?<\/h2>\n\n<ul class=\"wp-block-list\">\n<li><strong>Accrued revenue<\/strong>: &#8220;Invoice to Be Issued&#8221; refers to a sale that has been completed but not yet invoiced. <strong>Example: <\/strong> Project completed on 12\/29; invoice issued on 01\/05.<\/li>\n\n\n\n<li><strong>Deferred Revenue<\/strong>: it refers to an invoice issued for a service that has not yet been fully rendered. <strong>Example<\/strong>: An annual contract billed in July, with services provided through the following June; as of December 31, a portion must be recognized as deferred revenue.<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">In service companies, these situations are common: time-and-materials assignments, fixed-price projects, complex contracts\u2026 The discrepancy between <strong>what was delivered<\/strong> and <strong>what was billed<\/strong> is inherent to the business model. And that\u2019s exactly where it all comes down to! <\/p>\n\n<h2 class=\"wp-block-heading\">Two Methods for Calculating Outstanding Balances<\/h2>\n\n<p class=\"wp-block-paragraph\">You can rely on two main valuation methods:<\/p>\n\n<h3 class=\"wp-block-heading\">1. Based on actual production<\/h3>\n\n<p class=\"wp-block-paragraph\">Ideal for cost accounting, it is based on the hours entered and approved, multiplied by the Average Daily Rate.<\/p>\n\n<h3 class=\"wp-block-heading\">2. Project Progress<\/h3>\n\n<p class=\"wp-block-paragraph\">Often used for fixed-price contracts, this calculation method is based on a progress rate defined by the project manager and provides a more qualitative view of actual progress.<\/p>\n\n<p class=\"wp-block-paragraph\">\ud83d\udca1 In any case, monitoring should be monthly (ideally), structured, and integrated into a team-wide process. Sales, operations, management, and projects: everyone is involved. <\/p>\n\n<h2 class=\"wp-block-heading\">Why Keep a Close Eye on Deferred Revenue and Accrued Revenue?<\/h2>\n\n<p class=\"wp-block-paragraph\">Accrued Revenue\/Deferred Revenue have a <strong>direct impact<\/strong> on:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>The financial statement (and thus for tax purposes)<\/li>\n\n\n\n<li><a href=\"https:\/\/veryswing.com\/en\/good-cash-management-it-services-company.html\" target=\"_blank\" rel=\"noreferrer noopener\">Cash flow<\/a> (time lag between collection and production)<\/li>\n\n\n\n<li>Financial indicators (profit, margin, working capital, etc.)<\/li>\n\n\n\n<li>Relations with the CAC or the tax authorities<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">But beyond the accounting issues, they reveal above all:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Operational bottlenecks<\/strong><\/li>\n\n\n\n<li><strong>Tensions between departments<\/strong> (Sales, Project Manager, Business Development)<\/li>\n\n\n\n<li><strong>Problems with organization<\/strong>, validation, and management<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">A dashboard for managing\u2026 and planning ahead<\/h2>\n\n<p class=\"wp-block-paragraph\">At Veryswing, we believe that Accrued revenue\/Deferred Revenue figures aren&#8217;t just numbers to be recorded. They are <strong>tools for structuring<\/strong>, <strong>decision-making<\/strong>, and <strong>ensuring the reliability of forecasts<\/strong>. <\/p>\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1720\" height=\"886\" src=\"https:\/\/veryswing.com\/wp-content\/uploads\/2025\/07\/rapports-pca-et-fae.png\" alt=\"Deferred Revenue and Accrued revenue Reports\" class=\"wp-image-22406\" srcset=\"https:\/\/veryswing.com\/wp-content\/uploads\/2025\/07\/rapports-pca-et-fae.png 1720w, https:\/\/veryswing.com\/wp-content\/uploads\/2025\/07\/rapports-pca-et-fae-1536x791.png 1536w\" sizes=\"auto, (max-width: 1720px) 100vw, 1720px\" \/><\/figure>\n\n<p class=\"wp-block-paragraph\">We recommend the following key steps:<\/p>\n\n<h3 class=\"wp-block-heading\">1. Structuring Internal Processes<\/h3>\n\n<p class=\"wp-block-paragraph\"><strong>Objective: <\/strong> To ensure that Accrued Revenue\/Deferred Revenue are anticipated rather than simply endured.<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Standardize the validation steps (activity report, PV, deliverables).<\/li>\n\n\n\n<li>Establish a schedule for reporting information (weekly or at the end of the month).<\/li>\n\n\n\n<li>Assign responsibility to the various stakeholders: consultant \u2192 project manager \u2192 sales administrator.<\/li>\n\n\n\n<li>Integrate automatic alerts or reminders into VSA and VSP.<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\">2. Anticipate cash flow discrepancies<\/h3>\n\n<p class=\"wp-block-paragraph\"><strong>Goal: <\/strong> To avoid finding out at the end of the month that we\u2019ve produced goods without receiving payment.<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Use Accrued Revenue-Deferred Revenue to adjust cash flow forecasts.<\/li>\n\n\n\n<li>Identify \u201chigh-risk\u201d projects (delays, specific commercial terms).<\/li>\n\n\n\n<li>Adjust billing schedules to smooth out cash flows (interim billing, advance payments, etc.).<\/li>\n\n\n\n<li>Monitoring accrued revenue on a monthly basis makes it possible to anticipate cash flow peaks and troughs.<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\">3. Adjust project management<\/h3>\n\n<p class=\"wp-block-paragraph\"><strong>Objective: <\/strong> To make Accrued Revenue-Deferred Revenue an operational indicator rather than a purely accounting one.<\/p>\n\n<ul class=\"wp-block-list\">\n<li>If there are recurring accrued revenues on a project \u2192 there is an issue with validation, contract management, or organization.<\/li>\n\n\n\n<li>If Deferred Revenue is never finalized \u2192 service not launched? Delivery issue? No customer follow-up?  <\/li>\n\n\n\n<li>Link production metrics to billing metrics.<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\">4. Record transactions and avoid unpleasant surprises at year-end<\/h3>\n\n<p class=\"wp-block-paragraph\"><strong>Objective: <\/strong> To ensure the reliability of the figures and reassure management.<\/p>\n\n<ul class=\"wp-block-list\">\n<li>By keeping track of things on a monthly basis, closing out the month becomes a formality, not a race against the clock.<\/li>\n\n\n\n<li>The sales representative arrives prepared with all the supporting documents.<\/li>\n\n\n\n<li>The CFO and the auditors have an accurate picture of the business.<\/li>\n\n\n\n<li>That is the difference between reactive management and proactive management.<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">All while adhering to accounting principles (prudence, separation of fiscal years, justification of provisions).<\/p>\n\n<p class=\"wp-block-paragraph\">And to do all that without spending hours on it, <strong>a good ERP system becomes an indispensable ally<\/strong>.<\/p>\n\n<h2 class=\"wp-block-heading\">What VSActivity Actually Lets You Do<\/h2>\n\n<p class=\"wp-block-paragraph\">The ERP software <strong><a href=\"https:\/\/veryswing.com\/en\/our-solutions\/vsactivity\" target=\"_blank\" rel=\"noreferrer noopener\">VSActivity<\/a><\/strong>, designed for IT services companies and <a href=\"https:\/\/veryswing.com\/en\/industry\/consulting-firm\" target=\"_blank\" rel=\"noreferrer noopener\">consulting firms<\/a>, allows you to:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Centralize time tracking, assignments, invoices, contracts, and supporting documents<\/li>\n\n\n\n<li>Automate Accrued Revenue\/Deferred Revenue Calculations<\/li>\n\n\n\n<li>View project balances in real time via monitoring dashboards<\/li>\n\n\n\n<li>Prepare for the end of the fiscal year with greater peace of mind<\/li>\n\n\n\n<li>Collaborate More Effectively Through a Cross-Functional View of Progress<\/li>\n\n\n\n<li>Easily provide justification to the CAC or the tax authorities<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">And above all: <strong>improve collaboration<\/strong> among teams.<\/p>\n\n<h2 class=\"wp-block-heading\">Key Features of VSActivity for Accrued Revenue\/Deferred Revenue Management<\/h2>\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">Key Feature<\/mark><\/strong><\/td><td><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">Impact on the Management of Outstanding Balances<\/mark><\/strong><\/td><\/tr><tr><td>Time Tracking and Progress Monitoring<\/td><td>Accurate Valuation of Accrued Revenue\/Deferred Revenue on a Monthly Basis<\/td><\/tr><tr><td>Automated Calculation of Provisions<\/td><td>No more manual errors or the stress of month-end closing.<\/td><\/tr><tr><td>Real-time reporting on financial metrics<\/td><td>Anticipate and correct deviations as soon as they occur.<\/td><\/tr><tr><td>Document Centralization<\/td><td>Easily prepare your supporting documentation for the CAC and the tax authorities.<\/td><\/tr><tr><td>Collaborative Management of Validations<\/td><td>Streamline the process by involving all stakeholders.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n<h2 class=\"wp-block-heading\">FAE \/ Deferred Revenue: A Collective Responsibility<\/h2>\n\n<p class=\"wp-block-paragraph\">Sales, management, CFO, project managers, sales representatives, consultants\u2026 everyone has a role to play:<\/p>\n\n<h3 class=\"wp-block-heading\">The sales team establishes the billing terms during the pre-sales phase<\/h3>\n\n<p class=\"wp-block-paragraph\">It negotiates billing terms that result in a time lag between production and accrued revenue (<br\/>). Sales representatives are responsible for providing complete contract information<br\/>before the project begins. They affect project work in progress by:  <\/p>\n\n<ul class=\"wp-block-list\">\n<li>Offering management services, flat-rate pricing, or hybrid projects to prospects and clients<\/li>\n\n\n\n<li>Organizing project phases and establishing an invoicing schedule for fixed-price contracts<\/li>\n\n\n\n<li>By including (or not including) a provision for risks (PPR)<\/li>\n\n\n\n<li>Management analyzes and makes decisions.<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\">The project manager updates the progress report every month<\/h3>\n\n<p class=\"wp-block-paragraph\">It fulfills the promises made during the pre-sale and by the sales team regarding margins and service quality<br\/>.  <\/p>\n\n<p class=\"wp-block-paragraph\">The project manager influences the project backlog by:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Selecting internal and external resources throughout the project;<\/li>\n\n\n\n<li>As the project progresses and by sharing this information with the Finance Department;<\/li>\n\n\n\n<li>Keeping track of what remains to be done;<\/li>\n\n\n\n<li>Gathering the information needed for billing (work orders, customer agreements, etc.).<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\">IT Consultants Affect the Billing Timeline<\/h3>\n\n<p class=\"wp-block-paragraph\">By reporting their monthly hours in the <a href=\"https:\/\/veryswing.com\/en\/5-good-reasons-to-go-paperless-for-activity-reports.html\" target=\"_blank\" rel=\"noreferrer noopener\">activity reports<\/a> (CRA), each resource<br\/>affects project work in progress by:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Capturing high-quality data: complete, accurate, consistent \u2026<\/li>\n\n\n\n<li>In accordance with the client&#8217;s billing processes: signed client activity report, deliverables, etc.<\/li>\n\n\n\n<li>Submitting their activity reports no later than Day 1 of the following month<\/li>\n<\/ul>\n\n<h3 class=\"wp-block-heading\">The Sales Administration department coordinates, notifies, and manages<\/h3>\n\n<p class=\"wp-block-paragraph\">As a cross-functional role by nature, her position plays a central role in accrued revenue in particular.<br\/>Working with the sales team, she reviews contractual documents and configures rules and conditions for<br\/>billing. Working with the Project Manager, she ensures consistency in project progress and collects deliverables and meeting minutes<br\/>. Working with consultants,<a href=\"https:\/\/veryswing.com\/en\/5-best-practices-to-lighten-your-sales-admin-load.html\" target=\"_blank\" rel=\"noreferrer noopener\">the Sales Administration team<\/a> monitors the entry of activity reports and the provision of production supporting documents<br\/>.    <\/p>\n\n<p class=\"wp-block-paragraph\">Sales and Operations Planning (SOP) affects project backlogs by:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Identifying risks and notifying the CFO;<\/li>\n\n\n\n<li>Creating proactive follow-up processes;<\/li>\n\n\n\n<li>Providing justification for advance payments and billing delays;<\/li>\n\n\n\n<li>Optimizing billing every day.<\/li>\n<\/ul>\n\n<figure class=\"wp-block-pullquote has-cyan-bluish-gray-background-color has-background\" style=\"border-style:none;border-width:0px;border-radius:26px;font-size:17px\"><blockquote><p><em>A well-positioned Sales Administration department<br\/>makes it possible to escalate field-level roadblocks to the right contact<br\/>and to fuel a cycle of continuous improvement.<br\/>This cross-departmental collaboration streamlines processes<br\/>and directly helps boost cash flow.<\/em><\/p><\/blockquote><\/figure>\n\n<h3 class=\"wp-block-heading\">The Finance Department ensures reliability, provides justification, and closes the books<\/h3>\n\n<p class=\"wp-block-paragraph\">The Administrative and Financial Department pays particular attention to monitoring project balances.  <\/p>\n\n<p class=\"wp-block-paragraph\">The DAF has an impact through:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Regarding the choice of methods for calculating Accrued Revenue-Deferred Revenue,<\/li>\n\n\n\n<li>Regarding the decision to release the FAE-Deferred Revenue,<\/li>\n\n\n\n<li>Regarding the decision to use the Provision for Risks (PPR),<\/li>\n\n\n\n<li>On the Regular Auditing of Accrued Revenue-PCAs.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">In conclusion: Outstanding balances are an indicator of your company&#8217;s maturity<\/h2>\n\n<p class=\"wp-block-paragraph\">Accrued revenue and deferred revenue are neither good nor bad. It all depends <strong>on how they are monitored, utilized, and integrated into overall management<\/strong>. <\/p>\n\n<p class=\"wp-block-paragraph\">At Veryswing, we help service companies better organize their project portfolio management every day through our industry-specific ERP system, <strong>VSActivity<\/strong>.<\/p>\n\n<p class=\"wp-block-paragraph\">\u27a1\ufe0f <strong>Let&#8217;s talk about it!<\/strong> Schedule a meeting with our team to see how VSActivity can be tailored to your processes:<br\/>\ud83d\udc49 <a href=\"https:\/\/veryswing.com\/en\/request-a-demonstration\" target=\"_blank\" rel=\"noreferrer noopener\">Request a demo<\/a><\/p>\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Discover best practices for managing Deferred Revenue and Accrued revenue in IT services companies and consulting firms.  <\/p>\n","protected":false},"author":5,"featured_media":22411,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"Project Portfolio Management: Project Managers and Project Coordinators in IT services companies and consulting firms","_seopress_titles_desc":"Discover best practices for managing Deferred Revenue and Accrued revenue in IT services companies and consulting firms. 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