This blog is about the possibilities of implementing ERP solution Microsoft Dynamics NAV in the construction industry. We will discuss about question „Is construction industry ready for ERP?
Of course, I will post about standard NAV, as well :)
As I said in my last post, we need to choose WIP Methods in the same-name field on Job Card. We have linked table from where we choose method, but on this table different WIP methods are configured. If we want edit them we need to press ‘Advanced’ on window, but if we want to create new we need to press ‘New on window. We can create a new Job WIP methods that reflects the needs of our organization. After we have created it, we can set it as the default Job WIP calculation method that will be used in our organization.
NAV supports multiple ways to calculate WIP and recognition of sales and costs:
In addition, it is possible to create our own formula for calculating the WIP associated with a job, but not now about this.
Create a code for the method, add a description, and then select the appropriate values for the ‘Recognized Costs’ and ‘Recognized Sales’ fields. By design, the ‘System Defined’ check box is not selected, but three others are selected. There are next fields:
We are wrote about ‘Recognized Costs’ and ‘Recognized Sales’ fields. These fields has very complex methods to configure and I describe that in the following:
Cost value calculations start by calculating the value of what has been provided by taking a proportion of the estimated total costs based on percentage of completion. Invoiced costs are subtracted by taking a proportion of the estimated total costs based on the invoiced percentage.
This calculation requires that the Contract Total Price, Schedule Total Price, and Schedule Total Costs be correctly entered for the whole job.
Cost of Sales:
Cost of Sales calculations begin by calculating the recognized costs. Costs are recognized proportionally based on Schedule Total Costs.
This calculation requires that the Contract Total Price and Schedule Total Costs be correctly entered for the whole job.
Sales value calculations recognize revenue proportionally based on Usage Total Costs and the expected cost recovery ratio.
This calculation requires that the Contract Total Price and Schedule Total Price be correctly entered for the whole job.
Percentage of Completion:
Percentage of Completion calculations recognize revenue proportionally based on the percentage of completion, that is, Usage Total Costs vs. Schedule Costs.
Completed Contract does not recognize revenue and costs until the job is complete. You may want to do this when there is high uncertainty around the estimates of costs and revenue for the job.
All usage is posted to the WIP Costs Account (asset) and all invoiced sales are posted to the WIP Invoiced Sales Account (liability) until the job is complete.
Job Setup is placed on Jobs->Administering->Job Setup.
This setup specifies the setup of jobs and the treatment of work in process (WIP) in our organization. We have few field and there are their description for configure:
In my last blog I wrote about ‘Job Posting Group’ configuring on Job Card and on Job Task Card. There are details about Setup ‘Job Posting Groups’. One aspect of planning jobs is deciding which posting accounts to use for job costing. To be able to post jobs, we need to set up accounts for posting for each job posting group. We can use different posting groups for each job (or each job task) if we need it. This is rarely needs, but if someone need, he can do this.
Job Posting Groups are placed on Jobs->Administering->Job Posting Groups.
Fill in the account fields as described in the following:
Great post - I have 2 questions for you:
1)Cost Value Calculation the formular:
•Estimated Total Costs = Contract Total Price x Schedule Cost Ratio - how do you define Schedule Cost Ratio?
2) Are the 4 cost methods set up by default in Cronus Demo in NAV2013 (system) equal to the 4 cost methods in Nav2009, only diffenence that some setting are now avalible under Job WIP Methods set up?
Thank you in advance :-)
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