Change Requests: To Process Cost and Revenue Changes to a Project

The following activity will walk you through the processing of extra costs and revenues for the project by using the two-tier change management workflow.

Story

Suppose that ToadGreen Building Group is a general contractor building an Italian restaurant for the Italian Company customer. The ToadGreen project accountant has created a project for the work to be performed and the budget has been agreed upon with the customer. The construction work has been started.

Then suppose that on April, 15, 2024, a worker of a subcontractor, Acme Doors & Glass, arrived at the construction site to perform cleaning work. The worker found out that the French-style window specified in the plans does not fit the framed opening and notified the ToadGreen project manager about this. The project manager has estimated that five days will be needed to fix this issue, and this will cost $3,500. Also, the ToadGreen manager has decided to add an extra markup in the amount of $1,450 for the work to be performed.

Acting as the project manager, you need to agree upon the cost budget with the engineer and the revenue budget with the customer. For this purpose, you will prepare a change request with the related project issue, and then process the cost change order along with the related commitments to make changes to the project cost budget. After the work is finished in June, you will process the revenue change order to record the revenue.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • On the Enable/Disable Features (CS100000) form, the Construction and Change Orders features have been enabled.
  • On the Account Groups (PM201000) form, the REVENUE account group has been configured.
  • On the Projects (PM301000) form, the ITALIAN project has been configured. For the project, the Change Order Workflow check box is selected on the Summary tab.
  • On the Project Management Classes (PJ201000) form, the FIELD class has been created to provide the default settings for project issues.

Process Overview

You will create a change request on the Change Requests (PM308500) form; also, you will create a project issue to be linked to this request on the Project Issue (PJ302000) form. You will create a change order for the cost part of the change request on the Change Orders (PM308000) form. After that, you will create a second change order for the revenue part of the change request. Finally, you will make sure that the processed documents are correctly reflected in the cost and revenue budgets of the project.

System Preparation

To prepare to perform the instructions of this activity, do the following:

  1. As a prerequisite activity, complete the Change Requests: To Configure Project Markups to define the markups for the project.
  2. Sign in to a company with the U100 dataset preloaded. You should sign in as construction project manager by using the ewatson username and the 123 password.
  3. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 4/15/2024. If a different date is displayed, click the Business Date menu button, and select 4/15/2024 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
  4. Download the Window-Rough-Openings.jpg file to your device.

Step 1: Creating a Change Request with the Related Project Issue

Create a change request and a project issue by doing the following:

  1. On the Change Requests (PM308500) form, add a new record.
  2. In the Summary area, specify the following settings:
    • Project: ITALIAN
    • Change Date: 4/15/2024
    • Contract Time Change, Days: 4
    • Description: Issue with French-style window
  3. Click the Edit button to the right of the Project Issue box.
  4. On the Project Issue (PJ302000) form, which opens with the new project issue, specify the following settings:
    • Summary: French Style Window doesn't fit in framed opening
    • Project: ITALIAN
    • Class ID: FIELD
    • Owner: Ricky Thompson
    • Schedule Impact: Selected
    • Schedule Impact (days): 5
    • Cost Impact: Selected
    • Cost Impact: 3500
    • Details (tab): The ACME DOORS & Glass on-site worker reported that the French-style window specified on the plans does not fit in framed opening.
  5. Click Save & Close on the form toolbar to return to the change request on the Change Requests form. Make sure that the reference number of the created project issue is shown in the Project Issue box in the Summary area of the form.
  6. On the Detailed Description tab, type: The ACME DOORS & Glass on-site worker reported that the French-style window specified on the plans does not fit in framed opening. This needs to be addressed with the engineer, architect, and subcontractors.
  7. Save the change request.
  8. Click Files on the form title bar. The Files dialog box opens.
  9. Click Browse, navigate to the Window-Rough-Openings.jpg file, and select this file.
  10. Click Upload, and close the Files window. On the form title bar, notice Files (1), which indicates that the image has been attached to the change request.
  11. On the Estimation tab, enter a line with the following settings:
    • Project Task: 08
    • Account Group: SUBCON
    • Cost Code: 08-100
    • Inventory ID: SUBCONTR
    • Quantity: 20
    • UOM: EA
    • Unit Cost: 52
    • Price Markup (%): 7
    • Revenue Task: 08
    • Revenue Account Group: REVENUE
    • Revenue Code: 08-000
    • Vendor: ACMEDO
    • Create Commitment: Selected
  12. Enter another line with the following settings:
    • Project Task: 08
    • Account Group: SUBCON
    • Cost Code: 08-520
    • Inventory ID: SUBCONTR
    • Quantity: 17
    • UOM: EA
    • Unit Cost: 50
    • Price Markup (%): 7
    • Revenue Task: 08
    • Revenue Account Group: REVENUE
    • Revenue Code: 08-000
    • Vendor: ACMEDO
    • Create Commitment: Selected
  13. On the form toolbar, click Remove Hold. The system saves the change request with the Open status.
  14. On the Projects (PM301000) form, open the ITALIAN project, and on the Change Requests tab, make sure that the change request is now shown in the table.
  15. On the Cost Budget tab, review the cost budget lines. In the 08-100 (Doors - Exterior) line with the SUBCON account group, and in the 08-520 (Windows - Wood) line with the SUBCON account group, based on the amount and quantity of the change request, the system has updated the values in the Potential CO Quantity and Potential CO Amount columns (see the following screenshot).
    Figure 1. The updated potential amount and quantity in the project


Step 2: Processing the Cost Part of the Change Request

Process the cost change order for the change request by doing the following:

  1. On the Change Orders (PM308000) form, create a new record.
  2. In the Summary area, specify the following settings:
    • Class: INTERNAL
    • Project: ITALIAN
    • Change Date: 4/15/2024
    • Approval Date: 4/15/2024
    • Description: Extra costs for the Italian Restaurant project
  3. On the Change Requests tab, click Select Change Requests on the table toolbar.
  4. In the Select Change Requests dialog box, which opens, select the unlabeled check box in the row of the change request you created earlier (Issue with French-style window), and then click Add Change Requests & Close. The system adds the line with the change request to the table on the Change Requests tab and specifies cost budget and commitment details on the Cost Budget tab and the Commitments tab, respectively.
  5. On the form toolbar of the Change Orders form, click Remove Hold, and then click Release to release the change order.
  6. On the Change Requests tab, notice that the status of the change request is still Open, because the revenue part of the change request has not been processed yet.

Step 3: Processing the Revenue Part of the Change Request

Process the revenue part of the change request by doing the following:

  1. On the Change Orders (PM308000) form, create a new change order and specify the following settings:
    • Class: EXTERNAL
    • Project: ITALIAN
    • Change Date: 6/29/2024
    • Approval Date: 6/29/2024
    • Description: Additional revenues for the Italian Restaurant project
  2. Add the remaining revenue part of the previously created change request as follows:
    1. On the Change Requests tab, click Select Change Requests, which opens the Select Change Requests dialog box.
    2. In the dialog box, select the unlabeled check box for the Issue with French-style window change request.
    3. Click Add Change Requests & Close.
  3. Save the change order. On the Revenue Budget tab, make sure that two revenue budget lines (with the 02-000 cost code and 08-000 cost code) have been added. The line with the 02-000 cost code is the result of the markups being applied to the change request. Notice that on the Cost Budget tab and the Commitments tab, there are no lines, because you have already processed the cost part of the change request.
  4. On the Change Requests tab, make sure that the change request is now closed (and has Closed in the Status box).
  5. On the form toolbar, click Remove Hold, and then click Release to release the change order.
  6. On the Projects form, open the ITALIAN project.
  7. On the Revenue Budget tab, review the revenue budget lines. Make sure the values in the Budgeted CO Amount column for the lines with the 02-000 and 08-000 cost code have been updated with the amounts from the change order (1,574.58 and 2,022.30, respectively).

You have finished the processing of a change request with cost and revenue parts.