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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Cost accruals in PMA (...
Finance | Project Operations, Human Resources, ...
Suggested Answer

Cost accruals in PMA (in D365)

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Posted on by Rob UK 10

Hi all, we are introducing D365 to our business, which is property construction based, and I've just been told that we can't enter cost accruals to the projects in PMA, they can only post to the GL main account. I'm very surprised by this as I was expecting this to be normal functionality within PMA.

I have read some answers about created committed costs and these can force an accrual into the project, but I wanted to know if anyone had a simpler solution.

One thing I thought of was whether we can enter a reversing journal through the GL journal, and link these to the projects, but I haven't asked yet whether this will work, could anyone confirm whether reversing GL journals can be posted to projects, as surely that will essentially be an accrual.

Thanks, Rob

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  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hello Rob UK,

    I am not sure if I understood your sentence that one can't enter cost accruals to the projects but only post to the GL main accounts.

    Do you refer to overhead costs that you want to distribute to your projects?

    Assuming that this is the case, then you have two options in my opinion:

    (a) have a look at the indirect cost component function in project that can add an overhead percentage on hour postings.

    (b) have a look at this post for a 'workaround' dynamicsax-fico.com/.../

    Best regards,

    Ludwig

  • Rob UK Profile Picture
    Rob UK 10 on at

    Hi Dr Ludwig, sorry I haven't been clear. I want to be able to accrue for costs incurred on construction projects where the invoice has not yet been received.

    For example, a builder may have been working on a building project for 3 weeks as we hit a month end, we want to accurately report the costs of the build at the month end but we don't have an invoice to pay.

    I would like to be able to debit the project with the estimated build costs, with a credit to creditors/accruals, however I'm told this isn't possible, and the only place I can debit is the general ledger for these reserves for costs.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hello Rob UK,

    Many thanks for the clarification.

    If you have a purchase order where the items that have been ordered and consumed are available then you can enable the committed cost functionality and you will be able to see those 'forthcoming costs' in the cost control form for you project. The committed costs are just calculated and not posted though. For that reason, you will not find them - for example in your management reporter reports.

    An alternative would be posting an expense journal for your project that is reversed on the first day of the following month to record a kind of accrual. The problem here is, however, what value would you like to post, i.e. how do you estimate the costs that you expect? If you have an idea of those costs then you can automate the process for example by leveraging MS PowerAutomate and create a posting on the last day of the months that is then reversed on the first day of the following month. 

    Best regards,

    Ludwig

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