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Good practice. Project Accounting. At what point the consumption should be reflected when material moved into the project?

Microsoft Dynamics AX Forum

Kim Johnson asked a question on 9 Nov 2018 5:04 PM
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Hi All, 

I would think the minutes you move that material into the project, then it should count as "consumption".  Is it a good practice if the consumption is showed up only after you invoiced that material. It's a consumption all right, but its a few weeks behind.

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Kim Johnson responded on 9 Nov 2018 5:15 PM
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Hi All, 

I would think the minute you move that material into the project, it should show as a "consumption".  Is it a good practice if the consumption is showed only after you invoiced that material?  It's still show as "Consumption" in both cases, but the consumption only after the invoiced is a few weeks behind.  If the consumption is not in the real time, it may lead to mismanage cost.  Does any one have any previous experience to share?  Thank so much!

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Hello Kim,

Most companies I worked with consume the material asap for their project to ensure that they see the costs early and are not surprised. I once saw a case where a very large amount - that was sitting in a PR, which was very late converted into a project related PO - affected the project. The project and finance managers were very much surprised and there were lengthy discussions on what to do. Finally, they decided to post those costs asap and to make use of the committed cost feature that gives them a very early insight into recorded but not posted transactions.

Hope this helps.

Best regards,

Ludwig

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Kim Johnson responded on 9 Nov 2018 6:35 PM
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Thanks, Ludwig, for your prompt feedback.

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Hello Kim,

Most companies I worked with consume the material asap for their project to ensure that they see the costs early and are not surprised. I once saw a case where a very large amount - that was sitting in a PR, which was very late converted into a project related PO - affected the project. The project and finance managers were very much surprised and there were lengthy discussions on what to do. Finally, they decided to post those costs asap and to make use of the committed cost feature that gives them a very early insight into recorded but not posted transactions.

Hope this helps.

Best regards,

Ludwig

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Kim Johnson responded on 9 Nov 2018 6:35 PM
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Thanks, Ludwig, for your prompt feedback.

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