Project management Accounting -2

okay hi everyone welcome back

today in last episode we have discussed till fee journal from in the project

management accounting so now I'll start with item item Journal

posting so for that go to project management

accounting sorry

Let me refresh issue

project management accounting all projects

so in last episode we created one project for time and material

so I'll book for the same project

so basically there are five types of journals our Journal

uh then we did expense Journal free Journal yesterday

currently we are doing item Journal next we are going to do beginning balance

Journal our Journal normally Journal name will

be created from project management accounting expense Journal it will be from GL Journal names and

later on fee Journal it will be project management these three are from project

management and item Journal it will be from

Inventory management later on beginning balance it will be project management

Journal names so three are from project management what

are those however Journal and uh

fee Journal then beginning balance expenses expense Journal name will be

created from GL ittem Journal

Journal name will be created from Inventory management

so first to create the item Journal Journal name

supposed to be there for that purpose Inventory management

um let me expand all

Journal names

say here project item type supposed to be project type then only it will appear

in the project management module name the given project item project item

journal and journal type Mustang should it will be project otherwise it won't

show in the project management accounting Journal voucher series these things you already

know and so once the journal name created

as I told you yesterday we have created one time and material project

for that project We are booking all the journals

so let's go and pause the item Journal as well for the same

thank you

so this one double five is the project that we have created yesterday

for the human material project

so let's go to Project tab for creating the item Journal click on

item Journal

new so here project item Jr it is coming

this is coming from item sorry Inventory management

Inventory management Journal names go to lines

select the item that you need to book

taking time okay so cash price it picks from the

cost price of that okay let's

save it

then post

so post it view posting

Financial

move to Ledger Financial watcher

so one item sold and

see here it is inventory issue it is uh credited and project cost

debited that means we are using the material for the project right so we are

consuming the inventory consuming the inventory means inventory coming out of

the stock so out of the warehouse or out of the Gordo so we are consuming it so

item inventory is going out so when the inventory are going out then it will be

credited because it is current asset right so when the asset is decreasing

then it will be obviously it will be credit so that's why it's crediting for

what purpose we used it is used for the project so we are booking to the project cost this is the entry at the time of

oh item item Journal

okay so this is item Journal

next will proceed with another one more Journal card beginning balance journal

for this uh you need to create the journal names Journal name

so from the project management accounting

here beginning balance journal and type should be beginning balance

and The Watcher from here you need to create the journal name

so as I told you free Journal however journal land beginning balance Journal it will be

Journal name will be created from the project management accounting for item Journal it will be from Inventory

management for expense Journal it will be from GL

so then let's go and post the beginning balance Journal

all right

we'll post for the same project not for different projects

so same project we have here under setup beginning balance

so under beginning balance uh Journal we have uh let me show you click new this

journal is name is coming from the project management journals Journal names

then we have two three parts actually for beginning balance expense hour and item

we can post from here create from here fee Journal we can do it and on account

transactions also we can post it let me add the expense version

for example

so this is expense design is our I am booking to the hover

so this is the resource quantity

or hovers so many quantity maybe seven hours I'll give so when you are booking hours

Journal it will allow the hovers cost price and cost amount it will be taken

from the uh that particular resource this resource what is the cost provided

for our that will be picked automatically and

okay transaction type must be filled in we have

okay see here sorry transaction type original

and then

I think it's went out

cost price is 180 per hour then

I'll create expense type

expense maybe I'll use car rental

quantity and 600 price

let me add one more this is item Journal

category if you have project terms category and quantity one

I'm giving you the 700 fee Journal if you want to add you can

add the fee Journal as well select the category

and provide the sales price

on account transaction

if you want to book an account transaction you can book it out

okay once this is done post it

so same way to check the transactions go to manage tab poster transactions and

you can verify the transactions from there manage tab

posted transactions

there are many transactions here yesterday we posted few journals and now

we posted a few journals so view Watcher will check it out one by

one so on account transactions there will be no voucher

invoices charge not charged fully invest it is and

free Journal I think

item item it will be

wait for few minutes maybe this is something refresh issue

okay so maybe later on you can check it out yesterday we already checked the

vouchers how it looks like for the original however Journal it will be project cost

and credit will be payroll allocation and expense Journal it will be the

offset account will be from default offset account for expense and project

cost so if for all the journals project cost is same so it is book everything it

is booking to the project course if even experience Servo and uh

item Journal as well for item Journal it will be accredit the

inventory and debit project course for a expense Journal project cost debit and

credit offset account default of site account for expense for hours Journal it

will be project cost to the payroll account

okay these are the transactions we have then

we'll do few basic things just we already created the basic

time and material project and we created we posted the

transactions as well so that's why I'm skipping this time and material project

creation whatever we performed

that only I note it down to explain

so this is already covered so I'm skipping this one

or maybe we'll go with one one more

so let me create one time and material project and we'll post

the horizonal and we'll invoice that our Journal

okay new project

foreign so time and material project we have

basic TM project

I'm taking node WAP group

and project contract selecting one

from the drop down this project contract and we'll discuss

in coming sessions

so once the project is created we'll it will be in create a status

in the create status system won't allow or to post any transaction any type of

transaction so let's change the project stage to in process or in progress

then we can post the hover Journal I'll show you again what is what going to be

debited and what going to be credited

project tab change the project

to in progress

then let's suppose the hover Journal first new

lines

new when you click new automatically PM is

coming because of default category selected is PM in the parameters level

okay so that's why it's picking that

let me take

maybe 10 hours

10 I'll use

50 hours so so that I can recognize which one is maybe we have date right

anyway five hours I am giving

let's post it

so when you are consuming hovers for the project what will be the entry project

cost anyway debit we are debating to the project course what will be the credit

payroll allocation the credit will be the payroll allocation because of these many hours

spent by this particular resource and for one hour this is the cost for that

particular resource that is crediting and debiting the project cost for this

project this resource worked that's why this much cost happened that is We are

booking to the project so that's the reason if you go if you

want to check the transactions I told as I told you many step

project transactions sorry posted transactions

and I need this one

so project cost is debited and payroll allocation is credited

then coming to invoicing

let me do the invoice

proposal

so this is the journal I want to invoice

foreign

let's just post it

so when you are invoicing the uh posted

project transaction when you are invoicing it then uh you will build to

the bill you to build to the your customer right so from Custom to a your

customers supposed to pay that amount to you because you are providing the

services to that particular customer so normally I'll show you

it will be like this for example IBM is there IBM taken one

project called some X Project they take in

to provide the services so X is the project

so for that project working purpose they had

one employee one employee that particular employee

will work to that particular project how many hours he worked that way he

will submit the timesheet so that this many hours he worked for this project so

IBM supposed to pay to this particular resource how much uh how many hours he

spent and what is the cost per hour based on that IBM has to pay to the

particular resource whoever worked for that X Project so at

that time for company perspective he worked for Project X Project X will be

Project X cost will be debited and credit is the payroll

so when when IBM is invoicing it they

will invoice to the customer customer for The X Project they taken from uh the customer X

Project they will invoice to them and it's posted

I think it's posted then they will get that money back right

so this is revenue generation this is cost for the IBM what what is

the cost they are paying to the employees that is the cost and revenue

will be uh getting from the customer so customer

will be debited and revenue account uh will be credited

what I did whether I posted or not uh

so this is invoice View sorry here watcher

so it's credited as for nominal account remain

use all expenses and losses debit all incomes and gains credit right so your

Revenue it's crediting here and customer debiting

so IBM is IBM is sending the invoice that these

many hours this particular person spent for providing service to your ex project

so I need I need to get from you this much amount this many hours spent by my

employee okay so this way it will work

first cost recognition then Revenue billing the particular

course so I'll show you one more thing

I'll create one more hover Journal

okay come on

I'll give you seven hours

non-billable I am giving this is the only change I am

giving here while posting the hover Journal so let's see how it will go

so non-billable what are the setups we mentioned uh here invoice chargeable

and now we given here right so let's go and check this

poster transactions

many step

where is this not judgeable this one second one seven hours one

see project cost and payroll here it is okay then let's

what is the next step invoicing the

transactions there is no

there is nothing to select because it is non-chargeable right so it is not allowed for invoicing

purpose maybe like uh how I can explain this

some internal billing on bench when the new employee had they will be on bench

or they will be under some mandatory trainings right at that time for

mandatory trainings and bench we cannot build to the customer why customer will

pay for that uh for that bench and mandatory trainings this is internal

right so for that purpose maybe a non-chargeable values

that is one example okay then let's

go with another

project creation I am going to do

basic fixed price project let's take the fixer price

this one I am selecting group let's check this

setup

otherwise right click

so this is the project group we are selecting fixer price category priority

category billable by default balance sheet balance sheet balance sheet they

all are going to the balance sheet all the this is fixed price project right so

it is going to uh working progress maybe account working

progress account this is HTML tab this fee these two fields are enabled and

this field is uh this field something is selected uh

estimate sales estimate this this part is grayed out for the time and material

if the project type is Diamond material this part will won't allowed to fill

anything so now it is fixed price project that's why it is showing here

I'm taking one contract

project manager

okay once the project is created to post any Transaction what is the first step

change the project stage to

in process

let's post one hover Journal and maybe we'll post one expense as well

lines

so I'll post the expense Journal as well later on we'll go and check the transactions for both

it's taking time for expense Journal

okay then lines

okay cost I'll give nine thousand

um

okay posted let's check the transactions first

watches for both the hover as well as expense

Journal

so the first one is server Journal

so WIP cost payroll allocation because uh there we

have given uh in the project group that balance is given right for however

Journal instead of p l account balance she is given so that way that's why it's

taking W project WAP and payroll allocation credit

this scenario even yesterday showed so expansion Journal

foreign

as this is a fixed price project say they both are non-chargeable only

okay and let me go to Project

on account transactions

so I'm on account transactions when while uh

reaching to some Milestone they will uh raise the invoice for on account charge

an account transactions if you go to invoice proposal

for invoicing you'll get that on account transaction

when suppose if it is a very big project if you reach till this point you will

get some you can invoice to the customer so once one stage is completed they can

invoice it and they can get the amount from the customer so same way uh this for this project

Milestone reach so we are claiming from the customer we are invoicing to the

customer and we are getting that amount

so I think it will be a fixed price project it will be in this

uh example for example in fixed price project

hover Journal expense Journal we just saw we are no need to raise a invoice it

is not chargeable no need to raise invoice because uh for

example IBM taken one project and from some other company and that they agreed

with fixed price for that project so once that project reached to some

Milestone then they will get the money so they will not uh

invoice or they will not issue any invoice for hovers or materials or uh

however spent to complete that project they won't build that to the customer

they will get the fixed price for that project so in that fixed price uh they

are getting Revenue right in that Revenue only there will be a project cost everything original item expense

this will be covered under that fixed price itself so only uh

only invoice invoice will be generated for the Milestone on account

transactions when they reached that particular point

so in this case let's go to invoice Journal

voucher it is customer debit always while

investing project WIP invoice on account

so this is the one it's crediting

okay so this is a fixed price project

and we create a time and material as well those two comes under external

project so let's go and create one more project fixed

cost project

basic fixed cost

project

so first I need to select the type right so cost project

so group caused its game so no need I told you right in the

starting of the session itself yesterday for if it is internal project no need

contract so internal projects we have cost project internal project

and sorry cost project Time Project

and investment project

internal project so project contract is not a mandatory not at all required for

the internal projects so let's take project course again and

group is cost when we go to the particular cost group

see the parameters and you you can come to know how the setup will be

see here cost project type all will be penal account

on account transactions none let me take new to show

see cost

type it is coming by default parameter cost type if I tell select cost type

automatically it goes into penal account and this one and grayed out we don't

have option to select it because it is a cost project right Cost

Plus cost will be always to hit to the penal account X it is like X fans

so cast project it will be like this if you want to check the in investment

I'll take new and I'll show all the types

investment this these are required

Revenue recognition template and period code like uh fixer price project we have

option to select the uh whether we need to balance or penal account

here if it is investment project then fixed price we already discussed

cost project done internal project say internal project also we have option

to select the balance or p l account

Time Project see the time project never Ledger it's automatically grayed out grayed out

grayed out so time project and cost project there is no option to select these things

which Ledger it's supposed to pose however it's never laser and penal

account Payless account for expense and item so this is these are the differences

if you go with different types of projects and cost project I am selecting the

one of the customer

so here cost project right we are not billing to anyone so there will be no billing things

and no on account transactions as well for the cost project

maybe I'll stop after this uh and later on we'll discuss uh in the

next session we'll discuss project adjustments and project validations

even those two topics will take uh maybe 40 to 1 hour

so I'll stop after this so if you go to the project

tab say there is no on account transaction

option itself because this is cost project right

let me change it to in progress

we are getting only three three options created in progress and finish because

stages defined for the cost project is these three in the project management if

you remember in the last session I discussed about it

okay see here non account transactions

No One account forecast

okay so fee Journal also grayed out

let me pause the hover Journal it depends on the

project group where to book like whether it's supposed to book to the penal

account or WIP if the project group contains for hover posting it is penal

account it will take the project cost and payroll allocation if it is balanced

it will go to WAP cost and payroll location

okay now this will be same same way how

the original will be posted in the previous uh project types

you can see the transactions as well

oh connection last talk issues there or what

if it is getting late uh anyway we posted many our journals I think

you got it what I'm going to show in this project as well I'll go and create

the our journal and I'll show the posted transactions and as well as

I'll try to do the invoice how it will looks

as it is a cost project it would provide any list under the invoicing proposal

form when you try to book the invoice

Wi-Fi is there but why it is taking too long

okay I'll stop here just keep on loading so maybe you can try this posting the

hover journal and check the transactions and try to post the and try to generate

the invoice from the invoice proposal thank you

we'll discuss uh other topics in the next session