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Good Morning Experts,
I have to configure " Project Management and Accounting" Module In AX 2012R2. I have never work on this module before. My client have requirement like below:
1) Create New projects. I think Time and Material is the appropriate type although they are a service company that does not bill for time nor materials. Our business is to buy services from a 3rd party supplier and resell those to our customers.
2) Add Revenue and Cost items to the project. Note that Revenues and Costs are not directly related (i.e. – revenues are not necessarily a markup of the costs items).
3) Create billings to our Customers from the Revenue Items
4) Process Vendor Invoices against the Costs Items
5) Manage Accruals into the General Ledger for any transactions that have not been billed to the Customers and invoices not received from the vendors.
Looking forward for your best suggestion for above requirement?
Thanks.
Regards
Visvash Walia
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Microsoft Dynamics AX is a first-in-class comprehensive enterprise resource planning (ERP) software solution. Dynamics AX software increases the speed of business by eliminating extraneous functions and focusing staff on best practices—reducing cost overhead and improving customer service.
Project Management in Dynamics AX– The project management module in Microsoft Dynamics AX allows users to plan, initiate, execute, and review projects. Using Dynamics AX in the project management module, managers and planners can define project metrics; measure costs and employee time committed to projects; measure the return on projects; and generate overall project metrics (like net yield). Using the project management module, it is even possible to compare two or more projects and determine which of several projects should be chosen for further investment.
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Hi Visvash Walia,
The parameter is called 'create item requirement' and can be found in the general project parameter tab.
Before you activate it be aware of the following
- it won't work for service items because they are typically not packing slip updated. That is companies do not 'receive' service items in their warehouse.
- Activating this parameter automatically deactivates the function to create purchase orders from the item requirement form. Not sure if you are using this but just be aware of it.
Best regards,
Ludwig
Thanks Ludwig,
Sorry for misunderstand the Accounting terms as i am not from background of Accounts. Anyways you cleared me all these. Thanks a lot.
Last question i hope from my side is :
what parameter need to set in Project Module so cost or Expense is posted to WIP account when Packing slip is recorded . can you please tell that parameter ?
Hi Visvash Walia,
From an accounting perspective the accrue option and the WIP posting option do not go togehter. Therefore, you cannot activate both.
As an example, if you post everthing to a WIP account, you do not have a cost transaction and can consequently not accrue revenue against your costs because you have shifted them to the WIP account in the balance sheet.
If, on the other hand side, you post the costs directly as expenses in your P&L Statement, you can accrue revenues in order to match it with the costs in order to calculate how the project is doing.
Hope you can understand this 'accounting' description :-)
Best regards,
Ludwig
Hi,
It is just this parameter setting that ensures that your costs are temporarily posted on the WiP account until you invoice the customer.
Best regards,
Ludwig
Thanks Ludwig for your great suggestion.
you says : "You can record the expenses on a WIP account simply by changing the project group ledger integration setup.
- This will ensure that all costs are initially recorded on a WIP account.
- At the time you invoice the customer, AX will reverse the WIP transaction and post the costs "
Can you please tell what parameter i need to setup for doing this in project Group ?
For you Understanding that Service Item is Non-stocked Inventory Item.
Thank you!
Hi Visvash Walia,
I will try answering those questions here as Brief and concise as I can. Yet, if you have the possibility, please also have a look at the Dynamics Learning Portal or other AX Project related training materials, that exemplifies these things in more detail.
Let's start with the situation where you want to pass duties and fees straight through:
- I assume that those duties and fees are project related expenses that are for example recorded in an AP invoice journal
- At the time you enter those fees you have to specify a project category and a line property.
- The line property basically says whether those duties and fees are billable
- The Project category can be used to setup a sales Price.
- If you do not know the sales price before hand you can directly enter it in the AP invoice journal in the project tab.
- So, as an example, if you record duties and fees of $50 and want to pass those costs through, just ensure that you record those expenses with a billable line property and that you setup a sales price of $50. This should do the job.
WIP:
- You can record the expenses on a WIP account simply by changing the project group ledger integration setup.
- This will ensure that all costs are initially recorded on a WIP account.
- At the time you invoice the customer, AX will reverse the WIP transaction and post the costs.
- That's it in a nutshell.
What I do not fully understand from above is the thing with the service item received. Does it mean that you will make use of purchase orders for recording those expenses? If this is the case, the expenses will be recorded - on a WIP or expense account, depening on your setup - at the time the invoice is posted.
For stocked products you have the opportunity to post the WiP or expense at the time the packing slip is recorded. There is a specific project module parameter available that allows you doing that. Unfortunately, this functionality is not available for service items as they are by definition 'non-physical' and can thus not be received in a warehouse. What might help though in this case is the activation of the committed cost Project Parameters because they allow you seeing and analyzing the costs at the time the PO is confirmed.
Hope this helps.
Best regards,
Ludwig
Hello Ludwig,
I know this is closed thread but I have some Queries on your suggestion (on your 1st Comment) that are directly related to only this thread. Can you please provide your valuable suggestion here ?
Your Comment : "The Project module allows separating the cost and Revenue side. That is you can e.g. invoice customers based on on-accounts, units delivered, progress, etc. which can be defined Independent from the costs you record e.g. through billing rules."
yes Agree, Revenue is Independent from Cost In Project Module but we also have cases where costs are billed without markup. US Customs Duties and Fees for example are straight pass throughs to the Customers. Please suggest on this ?
your comment : "The project module has its own (additional) accrual features that you can use. As an example you can accrue revenue at the time you post costs for the prospective sales Price. Those accruals are automatically reversed once you invoice the customer. There is also the committed cost Feature that allows you an early Investigation and Analysis of forthcoming costs."
We’ll want to accrue for Work in Process. On the expenses this most likely will occur when the user shows the service(item) as received. Please suggest on this.
I am really appreciated your advise on this.
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