Committed Costs: Process Activity

This activity will walk you through the creation of a purchase order for a project and tracking this purchase order as a commitment to the project cost budget.

Story

Suppose that the HM's Bakery and Cafe customer has ordered the installation of three juicers it previously purchased from the SweetLife Fruits & Jams company. Acting as SweetLife's project accountant, you have created a project related to the planned installation work. The installation, which is performed by the vendor of the juicers, has been provided for each juicer. Based on the agreement with the vendor, your company will be billed in two parts—that is, first for the installation of the first two juicers and then for the installation of the third juicer. Acting as the project accountant, you need to capture the first part of the installation cost as a commitment to the project.

Configuration Overview

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

• The following features have been enabled on the Enable/Disable Features (CS100000) form:
  • Project Accounting, which provides support for the project accounting functionality
  • Inventory and Order Management, which provides the purchase order functionality
• On the Projects (PM301000) form, the HMBAKERY8 project has been created and the INSTALL project task has been created for the project. This task is the default project task.
• On the Non-Stock Items (IN202000) form, the INSTALL non-stock item has been configured. On the General tab, the Require Receipt check box is cleared for the item. On the Price/Cost tab (Standard Cost section), the Current Cost of the item has been set to 80.00. On the same tab, Purchases is selected in the Post Cost to Expenses On box. On the GL Accounts tab, the 54200 - Project Subcontract Expense account has been specified as the Expense Account.
• On the Account Groups (PM201000) form, the SUBCON account group has been created. The 54200 - Project Subcontract Expense account has been mapped to the account group.
• On the Vendors (AP303000) form, the SQUEEZO vendor has been created.

Process Overview

In this activity, you will create a purchase order on the Purchase Orders (PO301000) form with lines related to the project. You will review how the committed amounts are shown in the project budget on the Projects (PM301000) form. You will then create a partial bill for the purchase order and release the bill on the Bills and Adjustments (AP301000) form.

Finally, you will review how the processed commitments affect the project budget on the Projects (PM301000) form.

System Preparation

To sign in to the system and prepare to perform the instructions of the activity, do the following:

1. Launch the MYOB Acumatica website and sign in as Pam Brawner using the brawner username and 123 password.
2. 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 1/30/2024. If a different date is displayed, click the Business Date menu button, and select 1/30/2024 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
3. On the General tab (General Settings section) of the Projects Preferences (PM101000) form, select the Internal Cost Commitment Tracking check box to expose commitments and committed values in the project budget, and save your changes to the project accounting preferences.

Step: Creating Commitments for the Project

To process a purchase order for the project that updates the project budget with committed values, do the following:

1. On the Projects (PM301000) form, open the HMBAKERY8 project, and on the Cost Budget tab, review the cost budget of the project. Because tracking of cost commitments is enabled in the system, the table contains columns for the original committed, revised committed, committed received, committed invoiced, and committed open values. In the only cost budget line of the project, all these values are zero.
2. On the Purchase Orders (PO301000) form, create a purchase order, and specify the following settings in the Summary area:
   • Vendor: SQUEEZO
   • Description: Purchase for HM's Bakery & Cafe
   • Date: 1/30/2024
3. On the Details tab, add three purchase order lines, and specify the settings shown in the following table in the lines you add.

   Inventory ID	Line Description	Order Qty.	Project	Cost Code
   INSTALL	Installation of the first juicer	3	HMBAKERY8	00-000
   INSTALL	Installation of the second juicer	4	HMBAKERY8	00-000
   INSTALL	Installation of the third juicer	5	HMBAKERY8	00-000

   Tip: The system automatically selects the INSTALL project task when you select the project of the line because this task is the default task of the HMBAKERY8 project.
4. Make sure the Ext. Cost of the added lines is 240.00, 320.00, and 400.00, respectively; these represent the costs committed to the project.
5. In the Summary area, make sure that the Detail Total value, which is the sum of the Ext. Cost values of the three lines, is 960.00, and save the purchase order.
6. On the form toolbar, click Remove Hold. The system assigns the purchase order the Open status.

   When the Open status is assigned to the purchase order, the system creates the commitments for the project.

7. On the Projects form, open the HMBAKERY8 project, and on the Cost Budget tab, review the updated cost budget line.

   Notice that the committed quantities and amounts of the cost budget line have been updated and the Original Committed Amount, Revised Committed Amount, and Committed Open Amount columns contain the purchase order total (960.00).

8. On the table toolbar, click View Commitment Details to review the commitments that correspond to the cost budget line on the Commitments (PM306000) form, which the system opens in a pop-up window. Notice that the system has created a commitment for each purchase order line and that all the commitments correspond to one cost budget line.
9. Close the pop-up window and return to the Projects form with the HMBAKERY8 project.
10. On the Commitments tab, click the link in the Order Nbr. column to open the purchase order that you have created earlier in this activity.
11. On the More menu of the Purchase Orders form, which the system opens, click Enter AP Bill to create a bill for the purchase order.

    The system creates an accounts payable bill and opens the bill on the Bills and Adjustments (AP301000) form.

12. On the Details tab of this form, delete the line with the Quantity of 5.00 to bill the purchase order partially, as your company agreed on with the vendor.

    When you delete the line, the amount in the Detail Total box in the Summary area becomes 560.00.

13. On the form toolbar, click Remove Hold to assign the bill the Balanced status, and then click Release to release the bill.
14. Return to the Projects form with the HMBAKERY8 project, press Esc to refresh the form, and review the updated cost budget on the Cost Budget tab.

    Notice that the billed quantity and amount (7.00 and 560.00, respectively) of the purchase order have been subtracted from the committed open quantity and amount, which is now equal to 5.00 and 400.00, respectively. The billed quantity and amount have been added to the committed invoiced quantity and amount, to the actual quantity and amount, and to the received committed quantity, as shown in the following screenshot.

    
    
    

15. On the General tab (General Settings section) of the Projects Preferences (PM101000) form, clear the Internal Cost Commitment Tracking check box, and save your changes to the project accounting preferences.

You have processed the commitment to the project.