I am working on a Real Estate implementation in ERPNext. I have a question regarding Revenue Recognition based on the Percentage of Completion (POC).
In our business case, we need to recognize revenue based on actual physical progress reported by engineers (e.g., foundation finished, 1st floor finished), not based on a fixed time period.
I checked the Deferred Revenue feature, but it seems to be strictly time-bound (based on start and end dates), which doesn’t fit the unpredictable nature of construction milestones.
My Questions:
1. Is there a way to trigger Deferred Revenue recognition manually based on a custom percentage instead of dates?
2. If not, what is the best practice to handle this? Should I use Progressive Billing (Sales Invoices with partial amounts) without updating stock? Or just record Advance Payments and perform manual Journal Entries for revenue?
3. How can I ensure the Unit (Item) remains Reserved in the warehouse until the final handover (Sales Note/Delivery Note), even if I issue partial invoices?
I am a Functional Implementer and I prefer a No-Code or Standard approach if possible.
Thank you!
Hi @norhan_elhewehy
Based on payment term template, I have achieved progressive billing custom function which can create percentage based sales invoicing on a single click.
Thanks for sharing this custom solution! It’s a great technical feature, but for our Real Estate Development model, I believe a Single Final Invoice is better than Progressive Invoicing for a few reasons:
1. Legal & Tax Compliance: We are selling a single finished unit (Asset), not a construction service. Issuing multiple tax invoices for one unit might complicate the final ‘Title Deed’ transfer and ZATCA reporting.
2. Accurate COGS: Since the project is still under construction, the final cost (COGS) isn’t fully settled yet. Issuing a Delivery Note or Invoice now wouldn’t reflect the true cost of the unit until handover.
3. Internal Discipline: We can still achieve the ‘Progressive Reporting’ management wants by using Manual JVs for Revenue Recognition (POC) without affecting the customer ledger or issuing multiple legal documents.
I think keeping it to one final Sales Invoice at handover is safer for our stock integrity and audit trails. What do you think?
