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This documentation not only backs up your percentage of completion calculations but also proves invaluable during audits. Project management software can help centralize and organize your project\u2019s financial data. If \u201csufficiently dependable\u201d estimates can be made, companies must use the latter, more-complicated method, under U.S.<\/p>\n<\/p>\n
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These human capital heavy businesses can often be complex while maintaining unsophisticated accounting, which can further complicate diligence. The basis of the accounting, contract terms, scheduled salary escalations, funding status, and so forth are focus areas in diligence. Revenues also need to be systematically recognized each period based on the updated % complete figures. The method you choose to calculate the percentage of completion should be based on the nature of the contract and the terms of the delivery obligation. While using the percentage of completion method, companies can calculate the percentage of completion using either the input or output measures. For long-term projects, the percentage-of-completion method is generally more suitable as it provides ongoing financial insights.<\/p>\n<\/p>\n