Whats new in project accounting and management in Microsoft Dynamics 365 for Operations (AX7)

posted in: Cloud/SAAS, Microsoft Dynamics | 0

By:  Rahul Mohta

Project accounting is a unique practice; like cost accounting or nonprofit accounting, it has complexities an accountant may never have heard of while earning a CPA.

Among them is earned value management, a practice common to professional services firms, like architectural, engineering and construction (AEC) firms, and software development companies. The idea is to measure the value you have generated for the client versus the budget you have or have not spent. For example, an architectural design produces considerable value, even if it is early in a project lifecycle and lower cost than construction work.

While there are specialized project accounting solutions for a range of industries, Dynamics 365 for Operations also offers rich project functionality, and the rest of this article will explore some of the most important areas.

Dynamics 365 Project Accounting Elements

Business Intelligence/Power BI content packs

With the Power BI content pack for Project management and accounting, practice and project managers have quick access to project-related data and key performance indicators (KPIs), including cost, revenue, and hours analysis.

The Power BI content pack also includes earned value management KPIs, such as cost report, revenue report, Cost performance index and Schedule performance index (see graphics).

Dynamics 365 Project Accounting BI Dashboard Dynamics 365 Project Accounting - EVM

Dynamics 365 Project Accounting Practice Management Dashboard

Dynamics 365 Project Accounting Revenue

This Power BI report uses the same tables and views used by the Project management cube available in Microsoft Dynamics AX, however, the underlying data model and relationships have been built to enable easy customizations to calculations as well as modifications to existing reports.

Using the Power BI desktop tool, a power user can easily define new calculations or modify existing calculations. They can also easily create new reports or modify existing ones.

Earned value management

The Earned value management page contains a set of key performance indicators (KPIs) that indicate earned value for each project. In addition, Cost performance and Schedule performance indexes are shown for each project. Values below 1 are shown in red. Values above 1 are displayed in green. The KPIs are calculated using formulas defined within the Power BI content and they can be easily customized by a power user to reflect the needs of your organization.

Usability and productivity optimizations

The following usability improvements have been made to the Project management and accounting:

  • A work breakdown structure (WBS) ID and task name have been added to Hour, Expense, Item, Fee, and On-account forecast forms.
  • An option to clear selections on resource forms, including Resource availability and Resource fulfillment.
  • Ability to create a resource without having to select if it will be associated with an employee or contractor first.
  • The option to use multi-select on various setup forms (prices, delegates, journal names, etc.).
  • Visible cost prices are now related to the date of a task when resources are booked.
  • The Resource availability form now considers efficiency.
  • The project manager selected is automatically added to the team roster.
  • Timesheet workflow status is reset if workflow and document status are out of synch.
  • Ability to display detailed task information for resource requests that span multiple tasks is included.

Access estimated costs, revenue, and item requirements

Cost and revenue estimates, as well as item requirements for a specific work breakdown structure task, can be managed on the Details form for the project work breakdown structure task.

Funding source can be selected for a fee journal line

If the contract for a project contains multiple funding sources, a specific source can be selected when posting fees. If no specific funding source is selected, the funding rules specified on the contract are used to allocate the fee.

Detailed account setup for intercompany revenue and cost

Lending legal entity field has been added to the setup for intercompany costing. This allows posting intercompany costs to different main accounts per legal entity. Borrowing legal entity and Category options have been added to intercompany revenue setup to enable posting intercompany revenue to different main accounts per legal entity and category.

Project hours

Project hours now shows resource and project related hours that have been associated with each project.

Using this report, one can identify billable as well as non-billable hours by the resource. The report enables calculation utilization of resources and identify resources and projects where utilization goals are not being met.

Late selection option when posting invoice proposals in a batch

Project accountants can set up batch jobs to automatically pick up invoice proposals for posting if the proposals fulfill criteria specified on the batch job by selecting the option for Late selection when in the periodic process to Post project invoice proposals. This helps simplify the automatic posting of invoices.

Dynamics 365 Project Accounting - Post invoice proposals

Vendor prepayments in fixed-price project estimates

For project purchase orders, prepayments must be processed to release payment to vendors. These prepayment invoices are now available in the project estimation and recognition process for fixed-price projects.

Project resourcing enhancements

Project resource management functionality in Dynamics 365 for Operations has been significantly updated and improved to include the following:

  • A resource concept for project resource management. In previous releases, workers were used as project resources. Now operational resources are used as project resources. It is still possible to set a worker as a project resource in the Worker form, but now the system will automatically create an operational resource for this worker.
  • The ability to define the default resource role.
  • The project concepts of planned resources and auto-generating the project team.
  • Separation of resource bookings and assignments.
  • New capabilities to define project role-based pricing.
About Rahul Mohta

Rahul Mohta is one of the advisory members of Real Dynamics.  He has cultivated diverse and rich experiences working with global Dynamics AX customers and partners, enabling them to realize the full value of their ERP platforms. Rahul’s 15 years of experience spans across multiple geographies (Americas, Europe, Asia, India) and multiple domains – Financials, Supply Chain, Distribution, Manufacturing, Warehousing, Retail and Professional Services. Prior to joining Real Dynamics, he played consulting roles for Microsoft and Infosys. For more information on Real Dynamics services, please contact us at [email protected]