Project fixed price - how to exclude indirect costs components from estimation

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Posted on by Zuzana J

Hello,

We have a customer which use the fixed price project. For hour categories we have setup the indirect costs components. Every month They want to run the estimation based on Cost template. I need to exclude the amounts calculated from indirect costs. I created a separate line for hour lines with indirect categories. We run the estimation and all costs are included into estimation. Is there any parameter or setup how to exclude them from estimation?

Thank you

Zuzana

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André Arnaud de Cal... 301,109 Super User 2025 Season 2 on at

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Hi Zuzana,

The Capitalization cost option on the line property manages if costs are included for estimation. Is this setting turned on or off?

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Ludwig Reinhard Microsoft Employee on at

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Hi Zuzana,

Why is it that you want to exclude those costs from estimates? If you do not need them there do you actually need the indirect cost feature?

Best regards

Ludwig

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Zuzana J on at

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Hi André, I have the capitalization option turned on. I need to have the costs included into the estimation with some indirect costs. But some of the indirect costs has to be not included.

Zuzana

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Zuzana J on at

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Hi Ludwig,

Our customer need to post indirect costs as overhad costs to the hour costs but some of them would not like to post to Work in process accounts. For the Work in process posting we use the estimation functionality.

Zuzana

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Ludwig Reinhard Microsoft Employee on at

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Hi Zuzana,

Many thanks for your feedback. As Andre mentioned the standard way to achieve this inclusion/exclusion is through the line property feature. You basically have to specify at the time when recording the costs whether they can be capitalized or not by selecting a line property that has the capitalized costs parameter activated or a different line property that does not have this parameter activated.

If you cannot make this decision at the time when transactions are posted somebody would have to post adjustments to those transactions that cannot be capitalized by assigning a different line property.

Best regards,

Ludwig

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Zuzana J on at

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Hi Ludwig,

thank you for your answer. I cannot use the line property. I use the indirect component group asigned to hour category. The indirect costs are posted automatically with the hour transaction posting. We have several lines in the indirect cost group assignment we have several and each line has its own category. Some of this lines I would not like to post into work in process. My idea was, that I can manage it with Estimate tempalte, but it looks, that it was wrong.

Best regards

Zuzana

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Ludwig Reinhard Microsoft Employee on at

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Hi Zuzana,

In the estimate template you can only select certain categories but cannot define whether they should be capitalized or not.

What you might do though is running the estimate and in the estimate form have a look at the cost template and the calculations made. Then you can either make adjustments there or modify the calculated POC that is responsible for the postings made.

Not sure if this workaround is feasible in your company because it requires manual interaction.

The other alternative is of course making a modification but before doing that I would recomment that you test a couple of workarounds you can think of.

Best regards,

Ludwig

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Zuzana J on at

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Hi Ludwig,

thank you for your information.

Best regards

Zuzana

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