Time and Material Project – P&L Scenario

MS Dynamics AX 2012 Project Management and Accounting Module leverages different types of projects and its respective accounting treatment based on the given project types and different setup options like Project Group, Line Properties etc.

Time and Materials Project is mainly used where costs can be matched with revenue on each transaction and project in invoiced as work progresses. Possible accounting treatments are described below in the form of relevant accounting entries:

Ledger Posting –  Accrual Scenarios

Setup > Posting > Project Groups

1

 

Setup > Line Properties > Line Properties

2

 

Note: For all accrual scenarios, it is assumed that Line Properties > WIP Posting > Accrue Revenue is checked. If this option is not selected, Accrual Ledger posting will not occur. Where Chargeable is not selected on Line Property, Ledger Transactions at the time of Invoice Posting will not occur. Rest will stay the same

Hour Journal
 At the time of posting hour journal
Project Cost
  Payroll Allocation
WIP – Sales Value
     Accrued Revenue – Sales Value
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
Accrued Revenue – Sales Value
   WIP – Sales Value
Expense Journal
At the time of posting Expense Journal
Project Cost
    Offset Account (Mentioned at the time of posting journal line)
WIP – Sales Value
     Accrued Revenue – Sales Value
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
Accrued Revenue – Sales Value
   WIP – Sales Value
Item Journal
At the time of posting Inventory Journal
Project Cost
   Inventory Issue (Inventory Module)
WIP – Sales Value
   Accrued Revenue – Sales Value
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
Accrued Revenue – Sales Value
  WIP – Sales Value

Fee Journal
At the time of posting Fee Journal
WIP – Sales Value
   Accrued Revenue – Sales Value
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
Accrued Revenue – Sales Value
    WIP – Sales Value

 

 

Ledger Posting Scenarios –  No Accrual

Setup > Posting > Project Groups

3

 

Setup > Line Properties > Line Properties

4

 

Note: Where Chargeable is not selected on Line Property, Ledger Transactions at the time of Invoice Posting will not occur. Rest will stay the same

Hour Journal 
At the time of posting hour journal
Project Cost
  Payroll Allocation
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
Expense Journal
At the time of posting Expense Journal
Project Cost
    Offset Account (Mentioned at the time of posting journal line)
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
 Item Journal 
At the time of posting Inventory Journal
Project Cost
   Inventory Issue (Inventory Module)
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue
Fee Journal
At the time of posting Fee Journal
No Ledger Posting
At the time of Invoice Posting
Summary Account (AR)
   Invoiced Revenue

 

About the author

Zeeshan Haider is a Senior Advisory Business Analyst, with a few additional alphabets to his name (CA Finalist, CIA, OCP, MCP). With more than five year of experience in implementing Enterprise Resource Planning (ERP) Solutions in particular, Oracle R12 EBS and Microsoft Dynamics AX 2012, in public sector and large private sector organizations; he is one of the key players in our Dynamics team. Zeeshan has exposure, local as well as international, in business process/systems within organizations, and proven technical skills in the areas of developing Internal Controls and Risk Mitigation Strategies, along with ERP implementations.

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