This article explains how to correctly use the Percentage of Completion (PoC) method in Next for both fixed price and cost-reimbursable projects. It covers the mandatory prerequisites, how PoC is calculated for each compensation type, and how to generate the PoC basis from the Project Overview module. Recommended column configurations are also provided to support clear financial reporting during the selected period.
PoC in Fixed Price Projects
Prerequisites — These Are Mandatory
- Make sure the correct compensation type is set on the project — this is very important, as Next calculates earned revenue differently depending on the compensation type.
- A forecast or budget must exist on the project (covering both revenue and cost).
- If there is a forecast on the project card (whether manual or created via the forecast module), it will always override the budget.
Generating the PoC Basis from Project Overview
The basis for PoC is generated from the Project Overview module. Here's what to do:
- Activate the interval filter.
- Set an end date.
- Look at the column Billable period — this is the value that should be included in your accounting.
How PoC Is Calculated on Fixed Price Projects
Earned revenue period = Posted cost in period / (1 - GP% on forecast or budget)
PoC (Billable period) = Earned revenue period - Posted revenue period
Projektöversikt tab showing one ongoing project; note interval filter and date range controls.
Recommended Column Order in Project Overview
For a clear overview, here's a suggested column order to use in Project Overview:
Status period, Compensation type, Total booked revenue, Total booked cost, Booked cost period, GP% (SLP), Budget GP%, Earned revenue period, Booked revenue period, Billable period.
With this order, you get a good overview of the total cost and revenue in the project from start to now, and you can compare it with the cost and revenue in your selected period.
PoC in Cost-Reimbursable Projects
Prerequisites — These Are Mandatory
- Make sure the correct compensation type is set on the project — this is very important, as Next calculates earned revenue differently depending on the compensation type.
- Check that hours, order lines, and supplier invoices have the correct cost and price, and that they are set to billable if they are to be invoiced onward.
- Invoice the project according to the time and materials principle — do not create manual invoices.
Generating the PoC Basis from Project Overview
The basis for PoC is generated from the Project Overview module. Here's what to do:
- Activate the interval filter.
- Set an end date.
- Look at the column Billable time and materials period — this is the value that should be included in your accounting.
How PoC Is Calculated on Cost-Reimbursable Projects
Earned revenue period = All billable supplier invoices (including markup), order lines, and hours for the period.
PoC (Billable time and materials period) = Earned revenue period - posted revenue period + manual adjustments on invoice.
The sum of unbilled billable costs, order lines, and hours corresponds to the amount shown in the Billable time and materials period column.
Projektöversikt tab showing project list with financial summary columns and date filter.
Recommended Column Order in Project Overview
For a clear overview, here's a suggested column order to use in Project Overview:
Status period, Compensation type, Total posted revenue, Total posted cost, Posted cost period, Earned revenue period, Posted revenue period, Billable time and materials period.
FAQ
What do I need to consider to do this correctly?
Check the prerequisites listed under each compensation type above — make sure all of them are met before you get started.
PoC on my cost-reimbursable projects doesn't match — what should I check?
Next always calculates PoC based on the posted costs and revenues in the project. When PoC doesn't match, it's usually due to a prerequisite not being met in the project (such as markup, budget, compensation type, or billability). Here's what to check:
- Make sure you have the interval filter active and that you're looking at the correct period column.
- Check whether any costs have changed in the project — hourly rates, order lines, or supplier invoices.
- Have any costs been moved?
- In cost-reimbursable projects, check how billability is set — it affects PoC, since it looks at all billable unbilled costs.
I accidentally created a manual invoice in my cost-reimbursable project and now the numbers don't add up.
We always recommend avoiding manual invoices in cost-reimbursable projects. But if it has happened, create an invoice basis for the costs in the project that you included in the manual invoice. This is only a method to adjust the follow-up figures — you should definitely not lock the invoice.
Is the value for Billable time and materials calculated based on my markup template?
Yes, but only via the specified markup template. This does not apply if you have specified a markup percentage on the project card and/or customer — those markups are only shown on the customer invoice.
My PoC shows negative numbers in the Billable period column in Project Overview.
Great news — you're front-loaded and have planned your project well.
My PoC shows positive numbers in Project Overview.
This means you're behind on invoicing and are effectively financing your customer.
Which amount should I include in the accounting?
Time and materials projects: Use the amount in the Billable time and materials period column in Project Overview.
Fixed price projects: Use the amount in the Billable period column in Project Overview.
We import revenue vouchers from our accounting system — is there anything we need to consider?
As long as you create the basis in Next, there are no complications. However, if you import revenues without having created an invoice basis in Next, you should look at the Billable period column for the most accurate picture of your finances.
What should I check if my numbers don't add up?
- Is the correct compensation type specified on the project?
- If it's a cost-reimbursable project: are the correct markup templates and price/unit being used?
- If it's a fixed price project: is there a forecast or budget in place so that a GP% can be calculated?
- If it's a fixed price project: are both budgeted/forecasted cost and revenue present so that the GP% is reasonable?
- Is there an interval filter active in Project Overview with the correct date?
- Are you looking at the correct fields — specifically those relating to the period?