The Six Project Types in the Project Management and Accounting Module of Microsoft Dynamics AX 2012
Posted on: September 27, 2016 | By: Jarrod Kraemer | Microsoft Dynamics AX/365
Authored by: Chris Rusing
It may often go unnoticed and underappreciated, but the project management and accounting module in Microsoft Dynamics AX 2012 is as robust and flexible as they come. There are many prebuilt integrations to the other modules in the system allowing your company to maximize efficiencies and leverage the functionality your company requires. Below I will provide a quick description of the six project types available out-of-the-box. This information should provide you with a better understanding of what you can expect from this module and if it is worth exploring as part of your implementation.
1. Time and material Project
a. This is your typical project in which the customer is invoiced for the hours, fees, items and expenses that are incurred during the lifetime of the project. For example, the construction of a new building. The hour transactions are made of the workers’ timesheets. There might be some administrative fees in which the customer will be charged. Items such as the raw material required to build the structure. Finally, expenses that the customer may be charged like transportation or meals for instance. Revenue is accrued after the project is invoiced for the transactions mentioned previously.
2. Fixed-price Project
a. This project type is slightly different from a time and material because instead of invoicing the customer for each transaction, you invoice based on a billing schedule that is setup in the project contract. The billing schedule can utilize either the completed contract method or the completed percentage method. For example, a project contract may be set at $100k. Revenue can be accrued through the completed contract method (project is complete and customer is invoiced $100k) or through the completed percentage method (25% of project is complete and customer is invoiced $25k). This project type would utilize WIP accounts to track costs so at the end of the project, margin can be calculated.
3. Internal Project
a. Internal projects are completely different in that they are utilized as projects specifically for your own company. For example, your company may be working on upgrading their IT infrastructure. This project type would allow you to book and manage your company’s resources for that project. Also, you will be able to track any expenses associated with the project. There are three subtypes of this project which are listed below.
i. Cost
1. This type of internal project tracks only transactions that are a cost to your company such as expenses. Hour transactions can also be counted as a cost to your company if they are setup in that fashion.
ii. Time
1. Time internal projects track only hours submitted by your company’s employees or resources. The intended use of this project type is to record the time in which workers are on vacation or off because of a holiday.
iii. Investment
1. In investment projects, costs of all transaction types are registered in these projects. These transactions are posted to P&L accounts, which are then moved to WIP accounts. They are finally moved to balance sheet accounts so they can be capitalized as an asset.
Hopefully this information will give you a better idea as to what to expect with the project and management accounting module. Please also be sure to check out both of these blogs (here and here) which provide a more in-depth look at the nuances within the project management and accounting module. For additional information please feel free to reach out to us at info@loganconsulting.com or (312) 345-8817.
All the best!
Logan Consulting
www.loganconsulting.com