Introduction to project accounting MICROSOFT DYNAMICS® AX Welcome to the Introduction to Project Accounting module. RSM Technology Academy

Rachel Profitt Introduction Director, RSM Technology Academy Denver, Colorado Email: Rachel.Profitt@rsmus.com Twitter: @rachelprofitt LinkedIn: www.linkedin.com/in/rachelprofitt Blog: www.dynamics365lady.com

Gain general understanding of projects. Objectives Gain general understanding of projects. Understand how to create a new project. Understand the project hierarchy. Understand the project types. Create and understand project categories. Create purchase orders for a project. Create production orders for a project. The objectives are: Gain general understanding of projects. Understand how to create a new project. Understand the project hierarchy. Understand the project types. Create and understand project categories.

WORKING WITH PROJECTS This lesson builds core understanding of projects, when projects are used, and the various components and features of projects.

Lifecycle and Key Processes Project Management And Accounting Initiate Project Execute Project Analyze Project Create send and confirm quotations Create project contracts Create project and WBS Build project team Enter time and expenses Monitor and adjust the WBS Process project invoices Manage forecasts and budgets Procure products and services Recognize revenue Review profitability Review invoices Analyze utilization Analyze cash flow Create project forecasts and budget There are three primary phases: initiation, execution and analysis. During initiation, there are a number of key processes that occur: Labor, expenses, and materials are estimated and communicated out to the customer in the form of a project quotation.   Billing terms, limits, and agreements are recorded in a project contract.   Work is planned and estimated using a work breakdown structure.   Forecasts and budgets are created to guide the project execution.   Team members can be booked and assigned to planned work.   Then we move to execution of the project. At this point, team members or managers record work and expenses incurred using timesheets, expense reports, and other business documents. The project manager has tools to revise the work breakdown structure and to monitor the consumption of budgeted amounts for the project.  Project managers are able to order, pick, or procure materials for their use in projects using purchase orders and other business documents, and invoices are prepared and approved to bill customers for ongoing work. Finally, revenue is recognized during this process to impact the organization's financials.   As projects continue to be executed in the organization, Dynamics provides tools and documents to help understand profitability, cash flow, resource utilization, and other key metrics of the organization.  

Create a New Project Let’s look at what it takes to set up a simple time and material project. First, we will review some requirements when creating a project.

Project Creation Requirements Project Type Project Number Project Group Project Contract In the New project pane, there are several mandatory fields: Project Type – Defines whether the project is an internal or external project. Each specific project type has different features associated with them, from billing features to accounting features. Project Group – A way of grouping your projects that helps control what ledger accounts are used upon posting business documents. It also depicts how revenue is recognition for fixed price projects. This is filtered based on the project type. Project Contract ID – The project contract contain invoicing information which consists of the funding source, billing terms, billing address information, financial dimensions, and other billing rules. This is the way that you assign a customer to the project and indicate their billing terms. This field is mandatory and can be changed. Project Number – Each project requires a project number. Let’s take a look at creating a new project.

Demonstration Navigate to the All projects list page. Create a new project and define the settings. Set up some default values.

Project Hierarchies More often than not there are complexities that are suited better by having a project structure, also called a project hierarchy. For example, if you are implementing an ERP, you may gain more insight when distinct phases of the project’s activities are split into separate subprojects.

Project Hierarchy Concepts Parent Project Child Project (subproject) Header Project Parent Parent/Child Child Let’s review some of the concepts of creating a project structure. Parent Project – A parent project is project that has one or multiple sub-projects. It cannot be considered the top level of a project structure because you can technically have many parent projects in a structure. Child Project – If a project has a parent project associated with it, it would be considered a child or subproject. Header Project – Parent projects and header projects are very similar but the primary difference is that with header projects you cannot post transactions toward it. You will get the error: Project XYZ is defined as a header project. Registration should be done on a subproject.

Set up and Create a Project Hierarchy Define the subproject format. Demonstration Set up and Create a Project Hierarchy Define the subproject format. Create a project hierarchy. Define a project as a header project. Now that we’ve review the concepts and some additional information let’s get into the product and demo the setup and creation of a project hierarchy. Setup: Setup the subproject format in the parameters Creation Create a project and a few subprojects to show how the subproject format assigns. Show the header functionality and try to post a simple transaction.

Project Type Overview

Project Type Overview External Time & Material Fixed Price Internal Investment Cost Time This diagram represents the six project types offered in Dynamics 365, classified as either internal or external based on whether you can associate a contract to the project type. You can see that there are two external project types and four internal. Each one of these project types has its own specific characteristics that set it apart from the others. Typically these characteristics are based on accounting or invoicing.

Project Stages Project stages can reflect the different stages of a project and can control what actions you can and cannot perform within Dynamics. Let’s review this functionality.

Project Stages Created Estimated Scheduled In Process Finished Project stages determine what types of operations can be performed on projects. Each project is associated with one of the following user-defined stages. Created Estimated Scheduled In process Finished In addition, you are provided three optional user-defined stages. Even though project stages are set up for the different project types, you can move to the next stage by changing the current stage to a following stage, or by changing it back to a previous stage. You can only post transactions to a project with the status of In process or one of the user-defined stages. Stages can be customized from the Project management and accounting parameters form.

Create and Configure Project Purchase Orders This lesson is intended to give you an understanding of how you can use a project purchase order to purchase material needed for a project.

Project Purchase Order Parameters Set the cost price as the sales price Create Item Requirement Item Consumption

Demonstration: Project Purchase Order Create a Project PO Receive Invoice Review PO Open Project management and accounting > Item tasks > Project purchase orders. Click New Select a vendor, and be sure to enter a Project ID. Click OK and proceed to enter an item to purchase. Confirm, Receive, and Invoice the PO.

Create and Configure a Project Production Order Module 1: Create and Configure a Project Production Order Presentation Timeline: 30 minutes *** This modules is intended to give you an understanding of how you can use Project Production Orders in order to consume labor and materials to a project in Dynamics AX Project Management and Accounting Module. eLearning - You might choose to complement your classroom experience by leveraging various components of the eLearning for this course. If you look within the notes of the PowerPoint slide deck for this course, you’ll find the names of the various sections within the eLearning where each lesson and demonstration are covered. For the video on this lesson, use the section of the eLearning entitled, Module Overview.

Methods of Project/Production Consumption Finished Item Project transactions that represent the finished good from the production process. Item transactions are created as the production order is ended. Not recommended for long production cycles Consumed Consumes time and material as posted on the Production Order Item Transactions – Created as raw materials are consumed to the production order Hours Transaction – Created as Resource Hours are charged to the Production Order Recommended for companies with long production runs that need to recognize costs as they occur in the production process Demonstrate the bullets

Demonstration: Review Finished Item Review Parameters Create a Production Order Process the Production Order until it’s ended Review the Project Demonstrate the bullets.

Demonstration: Review Consumed Posting Review parameters Create a Project Production Order Consume Material via the production order Review the Project