Project management Accounting in D365 live

for

for

hello everyone welcome back again today I'm going to discuss about project management

accounting uh from the starting I I I done almost 16 to 15

episodes previously on uh individual Basics uh individual basic concept

wise now I'm going to start from the

starting of project management accounting I have prepared some uh

documents uh in reference with the Microsoft documentation so now I'll show that

document and I'll follow the steps and I'll explain

uh from the starting project management accounting

so in this uh why I'm doing this session again means uh in this session will uh

go along with the testings more testings how the entries will POS uh how the

building rules will work uh how the building rule priority everything uh

whatever I know I can explain in detail in the uh in this uh

session live session and uh let's start with the project management accounting

so first of all project management accounting what is

Project a project is a group of activities designed to provide any

service or to produce a product or and Achieve results by consuming the

resources by consuming the resources materials and generate the financial

results in the form of Revenue and asset simple way simp simple words we can say

that uh it's a group of uh activities

which consumed the resources and material to produce any any service to

provide any service or produce a product or achieve any type of result any

results uh and which will provide which will generate the financial results in

the form of Revenue or assess is a project project so that is that way we can say

that simple definition for project it is a group of activities which will provide

service uh group of activities designed to provide services or achieve any

results or produce any product by using or by consuming resources or material

and generate the financial results in the form of Revenue

and asset revenue or assets so next is that uh

project management accounting module initial there are three uh phases

initial phase executive and analyze phase normally in the analyze initials

phase will create and send and confirm the quotations create project project

contracts create project WBS build project team create uh project

forecast and budgets these are all the creation things we'll do here in the

execution stage enter the time and expenses manage whatever uh we created

here will manage here manage focus and budgeting here we created and here we

are managing and uh here we created WBS and in the execute stage we are

monitoring and adjusting the WBS and process project invoices procure

products and services recognization of revie uh Revenue these all activities will

perform in the execute project stage and the next stage is that analyze phase

analyze project uh in the analyze phase we whatever the

invo we booked uh we processed here we'll just review and we'll review the

profit and we analyze the utilization

analyze sorry and cash flow so this uh this is simple uh

wordwise I have wrote here what will be done in the initial execute and analyze

phase but this is from the Microsoft document I just copy pasted here uh it's initial

project uh we the same Pro same points but it is like sentence you can use a

project quotation to communicate the uh estimated labor expenses and materials

to the customer this is like creation of uh quotation creation of quotation you

can record the building terms limit and agreements in the project contract that means project contract is created in

this point they are saying that you can use the work breakdown structure to plan

and estimate the work this is creation of work breakdown structure point that

we discussed previously and you can set up the focus and budget to guide the

project execution same I I told in uh

two three words but this is exact sentences and next is execute the

project during the execu project execution team members and managers

record work and expenses that are incurred by using time sheets expenses

port and other business document as I told in in the previous uh

uh previous page uh here I have told that we need to enter the time and

expens es that is the point they uh mentioned here in detail how the uh

project execution Works team members are managers uh record the work uh and the

expenses that incured by using the time sheet expense report and other

documents project managers have tools that let them monitor the consumption of

budget amounts of the project so this is budgeting uh monitor monitoring and

project managers can also order pick or procure materials for project by using

purchase orders and other business documents this is procurement invoices

are prepared and approved so that customer can be

built so that customer can be built for ongoing work finally r Vue is recognized

during the process of process to affect the organization Financial so same way

analysis phase whatever we just told same points will be there but it will be in uh clearcut sentences at the at its

most basic level a project is used to group transactions that records cost and

then POS this cost to the general hu generally these transactions are results

Pro business documents such as time sheets expense reports vendor invoices and inventory transactions the life

cycle of the project usually starts with the estimates focus and budgets and help

plan and anticipate the work that the financial impact on of the

project as you analyze a project you can evaluate not only the transactions that

occur during the project but also the accuracy of your estimates and focus

that utilization rates of the project team members and the overall success of

the project so here we'll analyze all the

things so coming to next topic make it to next

page

oh okay this is the document so next

is project project type overview there are

two types of projects external and internal uh in the external we have time

and material project and fixed price project in the time and material project

uh projects customer is bued for all the cost that are incured in the incode on a

project so customer we can build all the costs so in the time and material

project the cost includes cost for HS expenses items and fees for example

constru ction product development Consulting whatever the cost we spent for that particular activity will build

from the we Bild to the customer and we'll get amount from the customer then it is fixed price project

uh in the fixed price project the invoices consists of all onac

transactions so only onac transactions we can invo in the fixed price project

inves according to the billing SC schedule that is based on the project contract whatever the contract project

contract says billing uh billing will be done on that uh conditions revenue for

the fixed price project can be calculated and posted throughout the project by using the completed

percentage method then alternatively Revenue can be

calculated and posted when the project is completed by using the complete contct

method and one more thing is that companies can often benefit from using

the value of work in progress to calculate the degree of completion of

the project or a group of projects so this is installation

Consulting uh construction these type of examples we can say and fixed price

project

and uh for external projects project contract is mandatory

and will associate funding source for that project

contract so here you can see uh clearly that I don't think so I

okay clearly you can see that uh when the project type when we are creating

the project when you select the time and material project type or fixed price

project type it contract is mandatory that is what I taken the screenshot and

highlighted here if it is these two types that these two types are external

projects one is time and material and another one is fixed PR project on

contra transactions we can uh

invise and internal project types we have four types investment internal cost and

time okay investment internal cost and time so investment

projects does not produce immediate so investment projects normally it will not

produce uh immediate earnings it is a long-term internal project where the

cost must be capitalized so cost must be capitalized in the investment projects

and only cost for items HS and expenses can be recorded for an investment

projects so cost for item HS and expenses we can record for the

investment project cost in the investment projects or track acted and controlled by using the estimate

functionality uh investment projects can be set up within option optional maximiz

maximum capitalization as the investment projects progresses you record its cost

in wiip that means here we mentioned that there is a point that uh where the

cost must be capitalized right so that's why it is going for the wiip accounts

where the cost are held until the project completion project is complete

till project completed it will book all the cost will be booked in the WAP

course the project is eliminated when the project is eliminated you will transfer the wiip value to the fixed

asset or a ledger account or a new project this is all about the investment

project the transactions on the investment projects are not shown on the project SC acred revenue or create

invoice proposal so it will not show in these uh Pages Pro post cost uh acrw

revenue or invoice proposal so cost project next is cost project it is

almost similar to the investment project uh where we can track uh track internal

projects us it to track cost uh cost for the internal projects uh only however

expense and items can be recorded for that for this project however the cost

projects are usually shorter duration investment projects are longterm but this is shortterm cost projects cannot

be capitalized to the balance sheet accounts so it is cost projects right so

uh it's not supposed to capitalized to the balance sheet account but the investment projects we are capitalizing

it and the transactions on the cost

projects are not reflected in this P same point and they they does not

usually have to be associated with the customer customer not required if

however if if your setup requires the item requirement be created for the

purchase order you must associate the project cost with the

customer Okay so it's not mandatory if you want you can

do that okay then internal

project internal projects are used to track the cost on the project that is

internally internal to your organization internal projects can provide planning

tool to manage the resource consumption that is internal project

time project uh it is is used to track time that is associated with the

non-chargeable and nonproductive activities such as project

such as project to track sick leaves for work transactions in time sheet projects

are not posted to the ler instead they are included in the customer utilization

report only however transaction can be recorded in the time

projects you can use hover Journal are time shifts to register the HS to this

project after the HS are registered they appear in the project transactions but

does not have corresponding V transactions okay this we can highlight

this is something Ro point I'll make

this okay so you can see here these are the

internal project investment uh investment in

internal and cost and time

project so investment internal cost and time so for if you when you select these

type of projects project contract grade out that means project contract is not necessary

for the for the internal

projects so I just review the transaction types however journals the

transactions are linked to financial consumption of project workers such as

Consulting installation or design uh expenses the transactions are associated

with the project unless the transactions are related related to items or costs

example includes travel expenses or vend Services item item transaction the

transactions are linked to item that are purchased for resale and to items that

are consumed in a project such as uh

such as when the customer purchases a new computer for the project through the

company and then it's fee fixed Revenue are associated with the time and

material project such as bonus for a early delivery of the project blueprint

plan and budget that means uh example service fee deliverable such charges on

transaction in addition to this uh types transaction Types on account

transactions uh represents prepayments for on time

and material project or schedule payments for the fixed price

projects okay

then we have business documents uh for H's journals it is from time sheet and

how jour and item for item from purchase order we

can do and sales order production order item Journal item requirements and AP

invoice for expenses exp expenses report AP invo Journal jeral Journal project

expense journal from these many places you can do the expense Journal Fe fees

and fee Journal always from the project management on account transactions on account and customer

advances next is some basic

points like project management workspace if you go to the project

management workspace we can do a few

activities like we can see the all projects in planning project

templates uh that that we have and we can create the H Journal expense Journal

item journal from E itself and you can post the invo you can run the invoice

proposal and project invoice as well and you can run the few reports project

reports and project transaction report uh resource reservation estimate

inquiry okay you can create the project as well from

here so this is workpace and uh coming to next

point so I already highlighted the screenshot here and navigation you all

know modules project management accounting that is the

navigation so now what we can see that what what we can do that uh creation of

project let's do One

Creation project management

accounting one second I'll open this

in browser itself because alt tab is not

working for

me

um

it will be easy from here I can use alt tab

so where we are currently we are at creation of

project right how to create project project management

accounting all

projects time and material project if I select this I'll show fixed price

project if I select contract is mandatory time and material contract is

mandatory when I take investment project contract gone so not mandat

so when I take uh time and material project contract is mandatory time and

material

tm1 maybe I'll use

tm1 and you need to select the group project group that we'll discuss later

currently I'll use one of the group which is available and you

can uh select the contract whatever you need uh if you want to use this

contract so how to create the project I showing you so I I just selected the

project group and project contract which is already available

so that project group creation and contract creation maybe I'll will discuss later so this is just a simple

uh project

creation

this is the project that we created now so I have mentioned here uh in

detail like if the project is time and material and fixed price project

contract is mandatory if it is investment internal cost and cost or

Time Project is not project contract is not mandatory and project hierarchy is

the next one uh project hierarchy how we can create

the sub projects that we'll discuss

now so for [Music] example we'll create a sub project for

this project that we just created

so create some project new so this is the project ID

dh01 iph 01 it is coming based on the parameters that the format defined in

the Pro uh defined in the project parameters what is the format for the

sub Project based on that it is giving

hy01 so

parameters um that will be

in here default of project ID format iph

two uh symbols are there so that's why i01 if you change that it will uh give

the different way for example if I want

dot instead of iphon I can use that as

well it's just refresh thing I'll go

back it's not changed here

still

it's okay I'll create phase

one see this is the way it's created if you want to create one more uh phase two

under time and material project you need to select this and create the sub project if you create uh sub project by

selecting this one it will come under phase one uh phase two hierarchy will

come so if you want to create on time and material project phase two

you need to select the header so you got this

way okay so this is what uh project sub project

creation how you can do the sub

projects if you want to do the header project or project

template that will be in the project hierarchy

tab

here so head if you want to use this as a header project you can use it if you

want to use this project as project template you can do

that okay

then project number sequence I'm not discussing you know the number

sequence concept project management parameters we have number sequence for the project

management then it is copy

project

then it is copy project how we can create the project

with uh copy

functionality so let's do that

sorry copy project so we need to click

Visual and can select

the template which is

available so that is the template I am

using I want to create new project so I selected new project and contract ID

given customer ID given if you want to change it you can do that as

well Dimensions you can change it

if so this is the project just we

created okay you can see which was created

today by adding the insert

lines

maybe you can do that stage wise

cre so this is the project stage

so this is the project that created

okay 479 and coming to next

thing project stages so project stages it will be

defined in the

parameters

so in the parameters we have project

stage so these are the projects available this is standard stage name

and custom user defin stage names also we have we can uh Define here

uh manually whatever we require stage name uh maybe in place of release I'll

give in process it is in

progress if I select like this when you go to the all

projects stage it is in progress now so if you if

I want for time and material project this is not required technically

completed I'll save this and when I go to the project

uh

so here

created and in progress okay so there is no

Technical and we have uh project stage rules as

well so we have time and material project type create beginning

balance create Focus or budget create quotation what the what are the

activities that you can perform at the time of uh created

Stitch when it is uh fixed price project what is the things you can do in the

created stage if it is estimated stage what what and all activities you you

need to perform that is there here

okay you want to disable this

we can do that and estimated stays if you want to enable this thing

create beginning balance you can enable

it okay these are the things you can

perform in the progam object stage for from the

parameters okay next is

that so I have

completed project stages these are the topics I have in this

documents let me go to another

document so before going to this uh document this document will take uh time

uh uh give me 5 minutes break I'll I'll Take 5 minutes break and come back

[Music] again

for

for

for

for

for

e

for

e

for

for

for

e

start

after

start and analyze the how

the type

of

create

one I'm not going to create any project but I'll use the which are

available so we have project group project type is time

and material we have two types one is no

WAP w w we are doing and another one is

we are hting to

the

so first is one is w and another one is

non we'll do

witha and I'm assigning

the project

contract

so this is the

is in cre stage

stage

first first is that go with our joural

uh our Journal so this is with W when you

create the this project it won't allow

because stage the

stage let's change the project stage

toess

200 and sales price is 350 this sales price cost price this will discuss later

we

areac

I have this the project po transaction

so these are the I have has beened project C is

anded the payroll allocation and we are to the W uh so project W

value approv Revenue s value so these are the entries which was

most for the joural we are

approving so it

isation so let's see this it has

been and the project cost and this will be from the

project

this

have so it is Project

500 but I need to check

soory

belongs is from here

transaction cost and next ISR

allocation 100 is and project

value 16 100 is 100 and last one is Project appr

sales

sales

okay are and once it is poed those are the

transactions let me do the invoice proposal

now so this is the transaction this

transaction posting

the

so now it will Revenue transactions

what this is the customer deed and project

approv from where these accounts are picking is you can go to

the so this is this first line will come from

customer second one is Project

inv

will this is the one so these are the

entries that are posting at the time ofing the entry and at the time

of booking the for the

project

so this one no W one

change I'll close the H we need to anal how it

is working what are the changes what are

thees so we are going we are currently discussing about only

the

how

so now see you have only we are

not because we selected

the which is not enabled for the W so that's

why okay so let me do the inv proposal as

well for this transaction will

customer

you can see this transaction in the

customer

custom contct this

Isom

okay so this is so this is

the so now what we

analy

comp for one project it's posted only two lines while

looking the transactions and for another one

is because we have selected this project it has been

W because this project gr

contains

this so when you use this project it

will

and enable

when I goes to the

and are from

the so this is

the so when we use the

w and

pro

one from the category so when

IAP the mains at the category level that projectm is the category selected

for for

that project it will

from ceg and project invoice proposal once we

run the invoice proposal it has

been like project value

isly this is customer

Pro

WC this

is then non when we the journal

Pro you can see the

St

so 3,500 is your revenue and cost is

200 sorry 2000 we don't

have and quantity is 10 cost price is 200 is

2al this

is

r

is

expence

so this is coming from

[Music] theault

default

soory automatically B that

you

EXP let's see the

increase

transaction projected the journal that

is Project approve value appr value

this is the entry post you can go and check the

St here revenue approv revenue

is 1150 and cost expens is

W you have W value 1150

1150 consumption 200 this

isense

3,000 once you close the inv journ

and

this is the expense thees

so whatever customer will be deed

and project inv and

w

there is no because it's posted and the

of here you can see 200 is the cost for the is the expense cost expenses we here

we have revenue 4,650 and

inv W there is

w000 1050 3,500 expense

1150 is the price total is 4650

is okay so this is the expense

transaction when we

have you have for the project

group I'm creating

the now it will be directly project and what

default will will

only project cost is coming from the another from

the uh default of I'm doing the invoice

now

customer deed

project don't

have

okay

so next is item

Journal select the

item

so fter so

speak

the transactions so as you are

using taking project Group which contains

so that's the entry

and

ISS

exension

item you

not the time of invo is

customer

it's

spe

and it is

without fincial

and and at the time of invoice it will be customer lied Pro

then

so so then uh F Journal uh there is no

entry

poed

for

without deal entry

inv entry and un

transactions

let's try

this item Journal till item Journal we

guess mostly it

is

Fe journal for w project

let

full straight

value when w is there this is the

entry

at the time of invo it is customer deed

project appr sorry

project same entry and at the time

of without W no entry the and

the

so now un transactions for no project entry

and

let maybe try

withs

Le

transtions

this is the we just

created

step

trans

so check the wult

of the next

things next is fix price project I have

created project and we have

project

for

okay let's create one except

project project GRS

completion contract so we have complete

contract so if I go here tempate they have

SEL

progress these are the methods we

have and these are the types of

Js

so I'll stop here maybe in the next class next live

session