Revenue recognition built for how services firms actually bill
Percentage-of-completion recognition for fixed-fee work, milestone billing tied to SSP, and project margin computed from real delivery cost - in one AI accounting system.
Why services revenue recognition is not just invoicing
A time-and-materials engagement can recognize revenue as billed, but a fixed-fee project cannot - GAAP requires recognizing revenue as the work is delivered, which means tracking cost incurred against the total estimated cost of the engagement, not just sending invoices on a schedule.
- Fixed-fee recognition: revenue should track percent complete, so billing ahead of delivery creates a liability and billing behind creates an unbilled receivable.
- Milestone billing: bundled services with multiple deliverables need SSP allocation across performance obligations.
- Unbilled WIP: delivered work not yet invoiced is a contract asset that needs to be tracked, not forgotten.
- Project margin: fees earned against delivery cost must be visible while the engagement is still running.
How Fintra maps to services revenue recognition
- ASC 606 / IFRS 15 revenue recognition supports percentage-of-completion for fixed-fee engagements, alongside point-in-time and milestone-based recognition for deliverable-driven contracts.
- SSP allocation splits multi-deliverable engagements across performance obligations, so a bundled strategy-plus-implementation contract recognizes each piece correctly.
- Month-end close values unbilled WIP as a contract asset and reconciles it to subsequent invoicing.
- AI accounting keeps a project-dimensional GL, so fees earned and delivery cost roll up to live project margin.
- Sales commissions handle origination and delivery credit splits for partner and business-development compensation.
A worked percentage-of-completion example
Recognized revenue (percentage-of-completion)
Contract value × percent complete = $300,000 × 60% = $180,000
Illustrative example: percent complete is cost incurred ÷ total estimated cost ($135,000 ÷ $225,000 = 60%), recognized in the close independent of the invoicing schedule.
Invoice-as-revenue vs Fintra
| Workflow | Spreadsheets + generic tools | Fintra |
|---|---|---|
| Fixed-fee revenue | Recognized as invoiced, not as delivered | Percentage-of-completion from cost-to-date |
| Bundled deliverables | Billed amount treated as revenue | SSP allocation across performance obligations |
| Unbilled WIP | Reconstructed at close from memory and email | Valued as a contract asset every close |
| Project margin | Known after the engagement ends | Live budget-vs-actual as the project runs |
Getting started
From invoice-as-revenue to real recognition
- 1
Import engagements
Load fixed-fee, T&M, and milestone-based contracts with estimated costs.
- 2
Connect delivery cost
Hours and project expenses feed percent-complete calculations.
- 3
Close with recognition posted
Your first close recognizes revenue by percent complete and values unbilled WIP.
Frequently asked questions
How should a fixed-fee consulting engagement recognize revenue?
Under ASC 606, revenue on a fixed-fee engagement is generally recognized as work is delivered - percentage-of-completion based on cost incurred versus total estimated cost - rather than as invoices are sent. Fintra computes this automatically each close: a $300,000 engagement at 60% cost-complete recognizes $180,000, regardless of the billing schedule.
Does Fintra track unbilled WIP as a contract asset?
Yes. When recognized revenue exceeds amounts invoiced - for example $180,000 recognized against $150,000 billed - Fintra records the $30,000 difference as an unbilled receivable, tied to subsequent invoicing so it doesn’t get lost between the close and the next bill run.
Can Fintra allocate revenue for a bundled engagement with multiple deliverables?
Yes. Multi-deliverable engagements - for example a strategy phase bundled with implementation - are allocated across performance obligations by standalone selling price, with each obligation then recognized on its own appropriate pattern (percentage-of-completion, point-in-time, or milestone).
What is the best accounting software for a consulting or professional services firm?
The best fit recognizes fixed-fee revenue by percent complete rather than by invoice, values unbilled WIP as a contract asset, and reports live project margin. Fintra keeps all of this on a project-dimensional GL rather than requiring a separate revenue recognition spreadsheet.
Stay in the loop
One practical finance briefing a week - new guides, checklists, and benchmarks.
Recognize fixed-fee revenue the way ASC 606 requires
Fintra is free to start, no card required. Import your engagements and see percentage-of-completion recognition in your first close.
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