1. Introduction to project accounting
MICROSOFT DYNAMICS® AX
Welcome to the Introduction to Project Accounting module.
RSM Technology Academy

2. Rachel Profitt Introduction Director, RSM Technology Academy
Denver, Colorado
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3. Gain general understanding of projects.
Objectives
Gain general understanding of projects.
Understand how to create a new project.
Understand the project hierarchy.
Understand the project types.
Create and understand project categories.
Create purchase orders for a project.
Create production orders for a project.
The objectives are:
Gain general understanding of projects.
Understand how to create a new project.
Understand the project hierarchy.
Understand the project types.
Create and understand project categories.

4. WORKING WITH PROJECTS
This lesson builds core understanding of projects, when projects are used, and the various components and features of projects.

5. Lifecycle and Key Processes
Project Management And Accounting
Initiate Project
Execute Project
Analyze Project
Create send and confirm quotations
Create project contracts
Create project and WBS
Build project team
Enter time and expenses
Monitor and adjust the WBS
Process project invoices
Manage forecasts and budgets
Procure products and services
Recognize revenue
Review profitability
Review invoices
Analyze utilization
Analyze cash flow
Create project forecasts and budget
There are three primary phases: initiation, execution and analysis.
During initiation, there are a number of key processes that occur:
Labor, expenses, and materials are estimated and communicated out to the customer in the form of a project quotation.  
Billing terms, limits, and agreements are recorded in a project contract.  
Work is planned and estimated using a work breakdown structure.  
Forecasts and budgets are created to guide the project execution.  
Team members can be booked and assigned to planned work.  
Then we move to execution of the project. At this point, team members or managers record work and expenses incurred using timesheets, expense reports, and other business documents. The project manager has tools to revise the work breakdown structure and to monitor the consumption of budgeted amounts for the project.  Project managers are able to order, pick, or procure materials for their use in projects using purchase orders and other business documents, and invoices are prepared and approved to bill customers for ongoing work. Finally, revenue is recognized during this process to impact the organization's financials.  
As projects continue to be executed in the organization, Dynamics provides tools and documents to help understand profitability, cash flow, resource utilization, and other key metrics of the organization.  

6. Create a New Project
Let’s look at what it takes to set up a simple time and material project. First, we will review some requirements when creating a project.

7. Project Creation Requirements
Project Type Project Number Project Group Project Contract
In the New project pane, there are several mandatory fields:
Project Type – Defines whether the project is an internal or external project. Each specific project type has different features associated with them, from billing features to accounting features.
Project Group – A way of grouping your projects that helps control what ledger accounts are used upon posting business documents. It also depicts how revenue is recognition for fixed price projects. This is filtered based on the project type.
Project Contract ID – The project contract contain invoicing information which consists of the funding source, billing terms, billing address information, financial dimensions, and other billing rules. This is the way that you assign a customer to the project and indicate their billing terms. This field is mandatory and can be changed.
Project Number – Each project requires a project number.
Let’s take a look at creating a new project.

8. Demonstration
Navigate to the All projects list page.
Create a new project and define the settings.
Set up some default values.

9. Project Hierarchies
More often than not there are complexities that are suited better by having a project structure, also called a project hierarchy. For example, if you are implementing an ERP, you may gain more insight when distinct phases of the project’s activities are split into separate subprojects.

10. Project Hierarchy Concepts
Parent Project
Child Project (subproject)
Header Project
Parent
Parent/Child
Child
Let’s review some of the concepts of creating a project structure.
Parent Project – A parent project is project that has one or multiple sub-projects. It cannot be considered the top level of a project structure because you can technically have many parent projects in a structure.
Child Project – If a project has a parent project associated with it, it would be considered a child or subproject.
Header Project – Parent projects and header projects are very similar but the primary difference is that with header projects you cannot post transactions toward it. You will get the error: Project XYZ is defined as a header project. Registration should be done on a subproject.

11. Set up and Create a Project Hierarchy Define the subproject format.
Demonstration
Set up and Create a Project Hierarchy
Define the subproject format.
Create a project hierarchy.
Define a project as a header project.
Now that we’ve review the concepts and some additional information let’s get into the product and demo the setup and creation of a project hierarchy.
Setup:
Setup the subproject format in the parameters
Creation
Create a project and a few subprojects to show how the subproject format assigns.
Show the header functionality and try to post a simple transaction.

12. Project Type Overview

13. Project Type Overview External Time & Material Fixed Price Internal
Investment
Cost
Time
This diagram represents the six project types offered in Dynamics 365, classified as either internal or external based on whether you can associate a contract to the project type.
You can see that there are two external project types and four internal. Each one of these project types has its own specific characteristics that set it apart from the others. Typically these characteristics are based on accounting or invoicing.

14. Project Stages
Project stages can reflect the different stages of a project and can control what actions you can and cannot perform within Dynamics. Let’s review this functionality.

15. Project Stages Created Estimated Scheduled In Process Finished
Project stages determine what types of operations can be performed on projects. Each project is associated with one of the following user-defined stages.
Created
Estimated
Scheduled
In process
Finished
In addition, you are provided three optional user-defined stages. Even though project stages are set up for the different project types, you can move to the next stage by changing the current stage to a following stage, or by changing it back to a previous stage. You can only post transactions to a project with the status of In process or one of the user-defined stages.
Stages can be customized from the Project management and accounting parameters form.

16. Create and Configure Project Purchase Orders
This lesson is intended to give you an understanding of how you can use a project purchase order to purchase material needed for a project.

17. Project Purchase Order Parameters
Set the cost price as the sales price
Create Item Requirement
Item Consumption

18. Demonstration: Project Purchase Order
Create a Project PO
Receive
Invoice
Review PO
Open Project management and accounting > Item tasks > Project purchase orders.
Click New
Select a vendor, and be sure to enter a Project ID.
Click OK and proceed to enter an item to purchase.
Confirm, Receive, and Invoice the PO.

19. Create and Configure a Project Production Order
Module 1: Create and Configure a Project Production Order
Presentation Timeline: 30 minutes
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This modules is intended to give you an understanding of how you can use Project Production Orders in order to consume labor and materials to a project in Dynamics AX Project Management and Accounting Module.
eLearning - You might choose to complement your classroom experience by leveraging various components of the eLearning for this course. If you look within the notes of the PowerPoint slide deck for this course, you’ll find the names of the various sections within the eLearning where each lesson and demonstration are covered.
For the video on this lesson, use the section of the eLearning entitled, Module Overview.

20. Methods of Project/Production Consumption
Finished Item
Project transactions that represent the finished good from the production process.
Item transactions are created as the production order is ended.
Not recommended for long production cycles
Consumed
Consumes time and material as posted on the Production Order
Item Transactions – Created as raw materials are consumed to the production order
Hours Transaction – Created as Resource Hours are charged to the Production Order
Recommended for companies with long production runs that need to recognize costs as they occur in the production process
Demonstrate the bullets

21. Demonstration: Review Finished Item
Review Parameters
Create a Production Order
Process the Production Order until it’s ended
Review the Project
Demonstrate the bullets.

22. Demonstration: Review Consumed Posting
Review parameters
Create a Project Production Order
Consume Material via the production order
Review the Project