Review of new features for Project Management and Accounting in Dynamics 365 For Operations

Review of new features for Project Management and Accounting in Dynamics 365 For Operations

Dynamics 365 For Operations is a cloud based SaaS service, which provides rich features and functionalities to manage simple to complex business processes across all major industry verticals, such as Manufacturing, Professional Services, Financial Services, Retail, Distribution and more. It provides very rich features and functionality for project management and accounting for the professional services industry. In today’s post, we will review some of the key new features and enhancements that were released for project management and accounting, in Dynamics 365 for Operations (Update 3 released on NOV 1st 2016).

Let us review and discuss these new features in the order of what I think their significance would  be for customers.

Dedicated PowerBI Content Pack for Project Management and Accounting Reports and Dashboards:

The is the biggest enhancement /new  feature under Project Management and accounting in Dynamics 365 For Operations. Customers will now get access to  preconfigured PowerBI Content pack that comes out of the box and provides key project management and accounting related dashboards and KPIs that are readily available for consumption . This content pack offers the following dashboards and reports. (Note: You can get access to the .pbix PowerBI files via the shared asset library in Life Cycle Services)

Projects Overview Dashboard: Shows overview of projects by customers, budget performance and revenue and provides a bird’s eye overview of the projects so that you can promptly review projects that are either exceeding budget, underperforming in revenue to take actions.

proj-db

Project Cost and Revenue Details Dashboard: These 2 dashboards enables you to view the project cost and revenue trends easily by customer and various other classifications and also shows actual bs budget comparisons.

proj-cost

proj-rev

Earned Value Management: Earned value management(EVM) is one of the key project health and success measuring criteria for professional services firms. Traditionally, in the earlier version of Dynamics AX, there was no dashboards/KPIs available out of the box that shows EVM and associated KPIs such as Cost Performance Index(CPI) or Schedule Performance Index (SPI), even though you could develop or customize reports and dashboards for these. But in Dynamics 365 for Operations, the content pack provides these out of the box enabling organizations to measure EVM and associated KPIs easily for projects. A very welcome addition !! (In one of the upcoming posts, I will dive deep into EVM in D365 For Operations)

evm

Project Hours Details report: This dedicated dashboard page shows the hours/time details for projects and resources. This also allows you to measure resource utilizations in various perspectives.

proj-hours

Manage Estimated Costs, Revenues and Item requirements on WBS Task Details form of a project:

In the earlier releases of the New Dynamics AX (Update 2 and earlier) or even in AX 2012, you could always define the estimated costs and revenues for each task on the WBS for a project. In Dynamics 365 For Operations, you can add estimated costs and revenue lines for Hours, Expenses, Items and Fees on the WBS task under ‘Estimated Costs and Revenue Tab” as you were able to do in earlier versions, But additionally, you can also manage these on the “TASK Details” form. You can also add/setup “Item Requirements” on the WBS Task details form, so that when you save and publish the WBS, Project Item requirements will be automatically created. (It was also possible earlier, but you had to transfer the WBS Item estimates to Item requirements specifically). Small enhancement, but can be very useful !

wbs-details

Option to setup ledger accounts for intercompany cost and revenues based on lending and borrowing entities for projects:

The Intercompany timesheet and intercompany customer invoicing has been one of the very useful features of AX which enables organizations to deploy resources from multiple entities on the project of borrowing entity and automate the intercompany timesheets and invoicing and accounting. In earlier versions, you only setup one Ledger account for Intercompany Cost and One ledger account for intercompany Revenue postings, regardless of the resource borrowing and lending entities. Dynamics 365 For Operations now provides the option to setup multiple ledger accounts for intercompany cost and revenue posting based on the resource lending and borrowing entities respectively.

int-cost-account

int-rev-account

Enhancements to Project resource management:

There are some significant changes and enhancements to the project resource management feature in the Dynamics 365 For Operations release. I am listing some of those which I think are important, but will discuss them in greater detail in one of the future posts.

  • Organization’s Operations resources such as Machines, Tools, Facility etc. can now be added as project resource and can be scheduled on projects. Earlier, only workers (Employees and Contractors) could be designated as project resource.
  • New Resource request workflow enabling a resource allocation manager to control the resource requests from various projects. (It was there in the AX 7 release as Planned resource, but it has be revised up to some extent)
  • Resource role based pricing and cost price visibility based on date of Task and booking.

resource-request

resource-request1

Miscellaneous usability enhancements across various forms:

The following are some of the miscellaneous usability enhancements.

  • WBS Task ID and the Task Name are now visible on the Project Forecasts Transactions forms. This will certainly make it easier to see the forecasts (Labor, Expense, Items, Fee etc.) at each Task level with easy identification of the task, instead of just looking at the Activity ID.

taskidname

  • On the Resource management screens such as Resource Availability, Resource fulfillment, clearing record selections for each date range is now possible and it a whole lot earlier and neat! Certainly a very useful enhancement.

clearresselections

  • Multiple record selections on various forms to take actions is now possible. An example is the price setup form.

multiselect

  • The Project resource availability form’s business logic now considers Employee’s efficiency rate. Earlier the resource availability was based on Competencies and calendar availability, but Efficiency rate might be a good addition. I am not sure yet if I would use/need it that much, it certainly is a good add-on.

res-avail

  • When you select the Project Manager on a project, it is automatically added to the Project Team under the Project Team and Scheduling tab. Make Sense and makes like a little easier 🙂 !!

pm-team-member

  • Timesheet workflow status is Reset if the workflow and Document status are out of Sync. I believe this enhancement is related to cases when the “Approval status” of a timesheet changes, but the corresponding workflow status does not change sue to unexpected intermittent issues. If this happens, my guess is the workflow status will automatically reset to match with the timesheet document/approval status. I was not able to review and test this feature yet.
  • You can now select a funding source specifically on Fee journal lines. This will prove to be a very useful enhancement, especially in cases where there multiple funding parties responsible for a project contract and when booking Fees for the contract, you can select a specific funding source if you want to bill the partially fee to that funding source. (Note: This was indirectly possible in earlier releases where you could do a Project Free Text invoice and select a funding source on the line, which in turn will post a project Fee transaction.

proj-fee-fundsource

Hope this was helpful! Till next time..

 

Committed Costs in Project Management in Microsoft Dynamics AX 2012

Committed Costs in Project Management in Microsoft Dynamics AX 2012

Efficient cost management in Projects is always one of the key aspects to ensure that the project remains optimally profitable, especially in cases of fixed price contracts where revenue remains fixed. A clear visibility of all aspects of the cost data in the project helps the Project Budget Manager or Project Controller to ensure that the expenses in the project are well controlled and the project is adequately funded on time.

The common practice followed widely by most of the Project organizations is to establish a project budget for the costs and then track the actual project costs(Realized costs) against it, to arrive at the remaining budget balances, % of work complete in the project etc., for the managers to take suitable actions on funding effectively.

While the actual costs/realized costs gives the required visibility to the remaining budget balances of a project, there is one other cost component which should be considered. This is called the “Committed costs”.

The “Committed costs” are the project expenses that are used over a period longer than the cost reporting period. An example of this is the materials and services(Subcontractors and Consultants) getting used in a project. Once a purchase order has been issued to a supplier or subcontractor, then the funds for that purchase order are “Committed” by the organization.

In today’s post we will take a look the “Committed costs” functionality for Projects in AX 2012 and discuss how this could be helpful for service industries such as the Construction, advertising and media where the subcontracting services are usually used for a longer time period.

The first thing to understand is the parameter setup under the project module. Notice that Dynamics AX 2012 makes it flexible and allows users to designate all the types of transactions which could form a cost component in a project, in stead of just limiting this to just Purchase orders and Vendor invoices. Users can select or deselect these transaction types to decide if they want those to be reflected as “committed costs” in the projects. Take a look at the screen below.

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In this case, I will consider the purchase order, Item journals and vendor invoices as committed costs. I will also create a Fixed price project and then allocate budget to it and finally post some purchase orders, item journals and vendor invoices for this project to see how the “committed costs” work.

Below screenshot shows the total budget which I have defined for this project for the items and the subcontracted labors.

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We will now post some costs on this project by booking few hour journals to record some actual costs on the project. See the screenshot below which shows all the details in the Project budget balances screen. This shows that there are no commitment costs/committed costs.

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Now let us create a purchase order(Do not post) and book a vendor invoice and see the impact on the committed costs. After creating the purchase order and vendor invoice for the project, navigate to Project Management and accounting > Periodic > Committed costs > Generate committed costs and click OK button. (Ideally this could be set to run in batch automatically).

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Now let us enquire the project budget balances and see how system automatically shows these as committed cost so that project budget manager or project controller gets a better visibility of the costs for this project.

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Also, you can navigate to Project > Control Tab > Costs > Committed costs button and system will show the details for all the committed costs on the project in this screen and users can click the Item tasks button to go to the source document which forms the basis of the committed cost and then take suitable actions.

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Hope this post was helpful.

Thanks

Sandeep

Taking advantage of the On hold funding sources in Project Contracts in Microsoft Dynamics AX 2012

Taking advantage of the On hold funding sources in Project Contracts in Microsoft Dynamics AX 2012

Hi,

Hope everyone is doing well and having great times in this festive season.

In today’s post I will discuss a very small and useful functionality which is introduced in the project management and accounting module of AX 2012. This is the new “On hold funding source type” for project contracts.                                                                       

When you use the funding limits on the project contracts, the “On hold” funding source can prove to be very useful in allocating any transaction amounts which exceeds the specified funding limits for the other funding sources present in the project contract. The on hold funding source is referred to one of the internal organizations of AX 2012, which are the business units setup in the company.

Let me now elaborate this with an example.

Let us say there is a project contract with one customer as funding source and one on hold funding source. Also there is a funding limit of $2000 for the customer which is the funding source for the project contract. Take a look at the screen below for such a project contract.

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Now, let us post few transactions on the project belonging to this project contract, such that the amount exceeds $ 2000 and see how the on hold funding works. The below screenshot shows an hour journal posted on this project such that the total sales amount exceeds $2000, the funding limit for the customer.

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If we go to the project posted transactions and take a look at the funding allocation, this will show how the exceeded amount of $100 is allocated to the On hold internal funding source and the allowable $2000 is allocated to the customer funding source.

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Now that the exceeded amounts are allocated to the On hold funding source, you can use adjustment function later to allocate these amounts back to the funding source when funding limit changes after agreement with the customer. The advantage of having the On hold funding source is that, it will allow posting of transactions even if the sales amount exceed the specified funding limits for the funding customers in the project contract.

Let us now change the funding limit to $3000 as the customer has agreed upon the same and then run adjustment for the transaction to see how the amount which was allocated to the On hold funding source, gets allocated back to the customer.

Funding limit change is shown in screen below.

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After you change the funding limit for the customer in the project contract, adjust the transaction to see the impact how the transaction gets allocated back to the funding source.

Select the adjusted transaction and verify the transaction to see that the amount $2100 is now allocated to the funding source which is Forest wholesale.

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Powerfully Simple. Microsoft Dynamics AX 2012.

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Feel free to ask any queries about this.

Thanks

Sandeep

Managing Travel Requisitions in Microsoft Dynamics AX 2012

A travel request is a business process where the employee/traveler takes a pre-trip approval from their managers or superiors. A travel request/requisition may contain information such as the date, destination, purpose of the travel and also details about  transportation, accommodation, cash advances and overall estimated cost of the travel.

The travel requisition functionality in Microsoft dynamics AX 2012 is a system aided way of managing the submission and approval of business travel trips. This is a source document which contains the details of the expenses which will be incurred on a travel.

In today’s post I will explain the travel requisition process functionality of AX 2012. Before we look at the steps for processing a travel requisition in Microsoft Dynamics AX 2012, let us  know how it can help organizations to control expenditures, specifically when they work on fixed price projects and the travel expenses must be under the budget of the project.

  • It can be made mandatory for employees to get approval of a travel request prior to the travel.
  • Several travel request policies can be setup at the Project, customer, and resource levels in terms of expense amounts on different expense categories.
  • Travel requisitions can apply in cases whether the employees are charging the expenses to a corporate credit card, using cash from a cash advance or even out-of-pocket expenses which employees may incur and gets reimbursed for those later.

Travel requisition business process:

The first step involved in the travel requisitions management process in AX 2012 is to configure a workflow as desired by the business. Configure this workflow under the Travel and expenses module.

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The next step is to set up all required travel request policies as per the business needs. Do the required policies setup under the Travel and expenses module.

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If the business needs that pre trip approval is mandatory before employees submit their expenses, optionally enable the required parameter in the travel and expense parameters.

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Once the prerequisites are all configured, let us now have an employee submit a travel request.

Navigate to Employee self-service portal > Expenses > Travel Requisitions.

Create new travel request and key in all the required details as shown in screen below.

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In this post, the focus is only to highlight the prerequisites and various capabilities of the travel requisition functionality in Microsoft dynamics AX 2012.

You can proceed further in the process to complete the following and see the real-time impacts and results.

  1. See the travel request policies and workflow in action when employee submits the travel requisition.
  2. Submit the travel requisition.
  3. Travel request gets reviewed and approved by Managers.
  4. Employee has come back from the travel trip and prepares his expense report for submission.
  5.   See the travel request mandatory in action during expense submission.
    Feel free to ask any related questions on this and I will be glad to answer.
    Thanks
    Sandeep

Employee Cash advance management in Microsoft Dynamics AX 2012

Hi Friends,

Tracking the money that employees spend when incurring expenses for your business is a real key of Expenses management in an organization.

In today’s post we will discuss about the employee cash advance management feature of AX 2012.

We will start with the process of employee submitting a request for cash advance, the approver reviewing and approving it, paying the employee and then we will also see a little bit of process how the employee can return his cash advances.

Employee Submits Cash advance request in Employee self-service portal :

1. Navigate to the Manage Expenses > Cash advance request area in the Enterprise portal.

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2. Click New Cash advance request and key in required details for this request. Save and close after filling in the details. Then, submit the request for approval.

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Two easy to use steps for employees to submit cash advance request !!

Approver reviews the Cash advance request:

1.  Approver logs into enterprise portal and finds the cash advance request assigned to him/her for review.

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2. Approver opens the cash advance request and then reviews and approves it.

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Just two clicks !! QUICK and Easy for the reviewer/approver.

Finance team pays to the employee after the request got approved :

1. The finance teams logs in to AX and navigates to view the approved cash advance requests.

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2. One click PAY !! The finance team member/user just clicks the Pay and transfer button and AX 2012 does the rest. Employee gets PAID !! System automatically creates and posts the required financial voucher entry for this transaction based on the setups which are done.

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See below the automatic financial journal created and posted in the system.

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The cash advance payment cycle for the employee is completed in few simple steps.

Let us now take a quick look at how the employee can return the cash back or how an employee can expense his cash advances in AX 2012.

1. Employee logs into the Enterprise portal and navigates to expense management area and create a new expense report and clicks Other > Return cash advance.

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2. System automatically shows all your reconciled cash advances. Select the one you want to expense and select the expense category and submit the expense report.

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DONE !!

System creates the necessary financial journals after the expense report is approved and posted.

Simply POWERFUL Smile

Till next time !!! Keep reading

Accelerated billing/invoicing for Projects in Microsoft Dynamics AX 2012–(Progress based billing)

Automated, accurate and faster billing in Projects is one aspect, which every professional service organization look as one of the winning factors, when they choose an ERP application for their organization.

Microsoft Dynamics AX 2012 ERP is equipped with a powerful project billing engine, which helps in faster invoice processing by providing the various capabilities.

  1. Transactions to be billed in a given time period are recommended automatically.
  2. Automated workflow for invoice and submission and approval.
  3. Automated and accurate progress based billing based on % of work complete in the project.
  4. Support for complex billing scenarios such as T&M based, Milestone based, unit based billing etc.
  5. Option to specify complex billing scenarios such as T&M based, Milestone based, Per unit billing etc.

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In today’s post I will highlight one of the billing/invoicing features of AX 2012 which is the billing based on the progress of work in the project. This feature of AX 2012 allows professional services firms to automate the billing process without having the need of their project accounting staff spending days and weeks to determine the accurate completion stage of the project.

In Microsoft dynamics AX 2012, the project managers can set up the project in the system and define a budget for the project and then, the system can calculate the progress based periodic billable amounts automatically.

This can just be accomplished by executing the below simple steps.

1. Setup the Project and required basic details for it.

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2. Setup the appropriate billing rule in the Project Contract.

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3. Estimate the Project and establish a project level budget.

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With the above minimal setup done, when project transactions are posted, AX 2012 system can calculate the current completion stage/percentage of the project automatically without having you the need of the project accounting staff doing to manually which will take a considerably longer time.

Based on the % complete for the project, system will automatically calculate the amount to be billed at the current state of the project.

This was just one method in the billing engine of AX 2012 and there are several others, which supports more complex billing scenarios.

Simple, Powerful !! This is it for today. Please contact me if you need further detailed and expert advise on billing capabilities of Microsoft dynamics AX 2012.

Keep DAXING Smile

Sandeep

Intercompany Timesheets Management in Microsoft Dynamics AX 2012

Hi All,

I had been very busy with several things on my plate at work. Work keeps all of us busy.

It feels bad for not being able to spend time on my blog and finally decided to take out some time and write here.

In today’s post, we will explore and discuss about one of the important functionality in the Project Management area which is “Intercompany timesheets functionality”.

Intercompany Timesheets

In every mid sized to a large-sized professional service industry, it is a common practice that employees/workers of the organization keep working on the projects of different legal entities where as they will be employed in only one legal entity.

The loaning and borrowing activity of employees between the legal entities is essential to make efficient utilization and putting right people if the right job possible. When working on the projects of legal entities other than their employing legal entity, Microsoft Dynamics AX 2012 make it simple for the employees to register their times/hours directly on the projects of the contracting company/resource borrowing company, without having the need for the employee to enter times at multiple places and multiple times.

NOTE : Intercompany Timesheets Management functionality will be available only if the AX 2012 feature pack is installed.

In the subsequent steps and paragraphs of this post, we will explore the various setups and the overall intercompany timesheets operation in AX2012.

Let us refer the two legal entities which exchange the employees as the Loaning entity/Resourcing and the Borrowing/Contracting entity.

The following setups needs to be completed in AX 2012 in the Loaning legal entity.

1. Enable the intercompany timesheets management in the project parameters screen.

Project Parameters

2. Setup pricing details for the employees who are to be loaned. This includes setting up the cost price and the transfer price. The cost price however is ideally setup for all employees weather they will be loaned or not. The transfer price represents the price which the loaning legal entity charges to the borrowing legal entity.

Transfer price setup:

Price setup

Cost price setup:

Price setup

3. Setup the ledger accounts for the inter company cost and revenue.

Intercompany Ledger Accounts setup

4. Make sure that the debit and credit accounts for the intercompany transactions are setup.

Intercompany accounts mapping

This completes the setup required in the loaning/resourcing company.

Now, let us complete the setup needed to be done in AX 2012 in the borrowing legal entity.

1. Setup sales prices for the borrowed resources which the the actual selling price in the project.

Sales price setup

2. Setup the debit and the credit accounts for the legal entity the worker will be borrowed from.

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3. Further additional setups can be done, like assigning projects and categories to the borrowed worker if the validation functionality is implemented.

Now that we are done with the minimum setups required for the intercompany timesheet functionality to be operational, let us take a look at the steps/process by which the borrowed employee can submit this timesheets in the borrowing/contracting company.

  • Employee logs into AX 2012 enterprise portal and navigates to the new timesheets screen.
  • Notice the new Legal entity field in the timesheet line which gets enabled when we enable the intercompany timesheets in AX2012.

New Timesheet

  • Also notice that the loaning and the borrowing/contracting companies are displayed in the look up of the legal entity field. The worker will select CEE as the legal entity and enter their times in.

New Timesheet - Legal entities

So the employee will be able to submit his/her times in the project of the other legal entity without having to be an employee of that legal entity.

The back end accounting is then done automatically based on the setups done.

For any queries regarding the inter company timesheets functionality, please do not hesitate to contact me.

Till next time !!!

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Ledger Postings Management of Fixed Price projects in Microsoft Dynamics Ax 2012 – Scenario I

Friends,

Hope all is well your way. I Did not get chance to spend time on my blog this month.

We keep hearing a lot of questions on the ledger posting scenarios, revenue recognition etc in case of fixed price projects in Microsoft dynamics AX. Well,I thought, I will explain the various ledger posting scenarios in the life cycle a fixed price project in few of my subsequent posts.

The ledger postings in case of a fixed price project is controlled through the setup done in the Project groups. Based on the these setups, the ledger posting in a FP project can happen in 8 different ways.

We will analyze each one of the setup options one by one and verify the ledger postings. I will name these 8 ways of ledger posting as Scenario 1 to 8. We will analyze the scenario 1 in today’s post.

The 3 parameters in the project groups form which controls these ledger posting are as follows.

  • On-account invoicing.
  • Revenue recognition accounting rule.
  • Matching principle.

Scenario 1 :

On-account invoicing Balance
Revenue recognition rule Completed percentage
Matching principle Sales value

Refer to screenshot below for the new project group which I have created.

Project Group Setup

I have created a new cost template and a fixed price project and attached this to the a new project group with above setup.

Take an example where a company owns a fixed bid contract of $500000 and agreed upon with the customer for a milestone based invoicing plan as depicted below screenshot.

On-account invoice schedule

Costs are incurred in the project during its progress as indicated in the table below. We will post Estimates for the project at the end of every month and eliminate it in the month of SEP.

Month Cost in project
APR $20,000
MAY $25,000
JUN $40,000
JUL $30,000
AUG $55,000
Total Cost $170,000

Take a look at the tables below which shows the P&L and WIP statistics in the Project at each month before and after the estimates are posted.

I am not able to provide the AX screenshots here as I have some issues in my AX environment.

Project Profit & Loss Statement before posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
Accrued revenue – sales value Credit 0 0 0 0 0 0 0
Revenue 0 0 0 0 0 0 0
Cost Debit $20,000 $25,000 $40,000 $30,000 $55,000 0 $170,000
Gross Margin -20,000 -25,000 -40,000 -30,000 -55,000 0 -170000

Project WIP Statement before posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
WIP– sales value Debit 0 0 0 0 0 0 0
Gross WIP 0 0 0 0 0 0 0
WIP invoiced on account Credit $250,000 0 $200,000 $50,000 0 $500,000
Net WIP -250000 -200000 -50000 0 -500000

Note : The project on account invoices appear in the WIP-invoiced On account ledger.

Project Profit & Loss Statement after posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
Accrued revenue – sales value Credit $58,800 $73,500 $117647 $88,236 $161765 0 ~500000
Revenue $58,800 $73,500 $117647 $88,236 $161765 0 ~500000
Cost Debit $20,000 $25,000 $40,000 $30,000 $55,000 0 $170,000
Gross Margin $38,800 $48,500 $77,647 $58,236 $106765 $1,70,052

The values for the accrued revenue are calculated based on the % complete/ Degree of completion in the project as the setup is done to be “Completed Percentage” rule.

You may notice rounding issues in the values above as I have taken random examples.

Project WIP Statement after posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
WIP – sales value Debit $58,800 $73,500 $117647 $88,236 $161765 -500000 0
Gross WIP $58,800 $73,500 $117647 $88,236 $161765 0 ~500000
WIP invoiced on account Credit $250,000 0 $200,000 $50,000 -500000
Net WIP -191200 -73,500 -82,353 -88,236 -111765 0 0

I hope my explanation of this scenario of posting in the fixed price project was clear. Please post your queries if any pertaining to this.

Till next time !!!!

Thanks

Keep DAXING Smile