The Six Project Types used for Dynamics 365 Finance and Supply Chain Management
Posted on: November 11, 2021 | By: Guy Logan | Microsoft Dynamics AX/365, Microsoft Dynamics Manufacturing
In Microsoft Dynamics 365 for Finance and Supply Chain Management, there are six project types that allow for your company to maximize efficiency and leverage the functionality your company requires. In this blog, we will go over the descriptions of the different project types and then an example of its application.
Time and Material
The first project is the most common type. 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. Time and Material projects are generally used for larger projects when a scope isn’t firmly defined. Time and Material also allow for greater flexibility of billing timing. 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.
Fixed Price
Another commonly used type of project is Fixed Price. 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 set up 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 (the project is complete and the customer is invoiced $100k) or through the completed percentage method (25% of the project is complete and the customer is invoiced $25k). This project type would utilize WIP accounts to track costs so at the end of the project, the margin can be calculated.
Cost
There are two types of cost projects: internal (non-billable) or eternal (billable) projects. Normally, these types of projects are short-term internal projects that track expenses and item costs. However, hour transactions can also be counted as a cost to your company if they are set up in that way.
An external project would entail items that are either already in inventory or will trigger the production of the items being sold to a specific customer from this project. An internal project would entail costs and items that need to be tracked to a project that is not immediately purchased by a customer, which would result in revenue. An example of a Cost project would be creating a video game that will be available for purchase.
Investment
In investment projects, costs of all transaction types are registered in these projects. These projects are utilized for tracking costs only and are not billed to a customer for reimbursement. This type of project is helpful for human resource managers and the accounts team.
Internal
Internal projects are completely different in that they are utilized to track costs on a project that is internal to your company. It is also another type of project that is not billed to a customer. This type of project tracks all costs related to a project, but reimbursement cannot be sought. An internal project type is perfect if you are developing something within the company, for example, your company may be working on upgrading its IT infrastructure. This project type would allow you to book and manage your company’s resources for that project and track any expenses associated with the project.
Time
Time internal projects track only hours submitted by your company’s employees or resources. The idea behind this project type is to record the time in which workers are not working on a billable project, but still need their time to continue to be tracked.
For example, if an employee is taking vacation or sick time. When employees are booking time for this non-billable project, they appear as utilized so they will not be overbooked on other projects.
Next Steps
If you are interested in learning more about project categories as well as maximizing the use of Microsoft Dynamics 365 for Finance and Supply Chain Management contact us here to find out how we can help you grow your business. You can also email us at info@loganconsulting.com or call (312) 345-8817.