Project Inventory Tracking: To Track Project Inventory by Quantity and Cost

The following activity will walk you through the process of tracking the costs and quantities of the items being used for a project.

Attention: This activity is based on the U100 dataset. If you are using another dataset, or if any system settings have been changed in U100, these changes can affect the workflow of the activity and the results of the processing. To avoid any issues, restore the U100 dataset to its initial state.

Story

Suppose that the ToadGreen Building Group company is building a hotel for the Equity Group Investors customer. A ToadGreen project manager has created a project to track the progress of work, expenses, and revenues. The project work began in mid-February, 2023. To plan the purchases of items and be sure that there will be enough materials to proceed, the project manager needs to reserve stock items for this particular project. Also, because of regulatory requirements, the materials used for work must be issued at the exact cost at which they have been purchased.

On January 30, 2023, the project manager purchased 360 pallets of bricks and 480 concrete blocks and requested that the items be delivered to the company's warehouse. Later, a project architect revised the blueprints and found out that the initial estimation of materials was insufficient. As a result, the project manager decided to buy 120 pallets of bricks and 80 concrete blocks in addition to the previous purchase. To speed up the process, the construction project manager decided to purchase the materials from another vendor, who agreed to deliver the materials in two days but at a higher price. Then some of the purchased materials were shipped to the project site.

Acting as a construction project manager, you will process a purchase of items for the project. Then you will issue the quantity of the purchased items that were shipped to the project site.

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 following features have been enabled:
    • Project Accounting and Construction, which provides support for construction projects
    • Inventory and Order Management, which provides the sales order and purchase order functionality
    • Inventory, which provides the stock item functionality
  • On the Customers (AP303000) form, the EQUGRP customer has been created.
  • On the Stock Items (IN202500) form, the CONCRBK8 and REDBRICK stock items have been defined.
  • On the Vendors (AP303000) form, the CONCRESUP and STONEC vendors have been created.
  • On the Projects (PM301000) form, the HOTELR project has been created and activated. In the project, Track by Project Quantity and Cost is selected as the inventory tracking mode.

Process Overview

On the Purchase Orders (PO301000) form, you will create two purchase orders with lines related to the project. You will receive the purchased items to a company's warehouse by processing purchase receipts on the Purchase Receipts (PO302000) form. Then you will process an inventory issue transaction on the Issues (IN302000) form to record that a partial quantity of the materials has been used for the project.

System Preparation

Before you start creating a project and processing a purchase, do the following:

  1. Launch the MYOB Advanced website, and sign in as a construction project manager. You should sign in by using the ewatson username and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Advanced screen, make sure that the business date in your system is set to 1/30/2023. If a different date is displayed, click the Business Date menu button, and select 1/30/2023 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.

Step 1: Purchasing Project Inventory

To create and process purchase orders for the project, do the following:

  1. On the Purchase Orders (PO301000) form, create a new record.
  2. In the Summary area, specify the following settings:
    • Type: Normal
    • Vendor: CONCRESUP
    • Description: Purchase of project materials (masonry)
    • Date: 1/30/2023
  3. On the Details tab, add a purchase order line, and specify the following settings in the added line:
    • Inventory ID: REDBRICK
    • Warehouse: TGCONSTR (specified automatically)
    • Order Qty.: 360
    • Unit Cost: 75
    • Project: HOTELR
    • Project Task: 04
    • Cost Code: 04-210
  4. Add one more purchase order line, and specify the following settings in the added line:
    • Inventory ID: CONCRBK8
    • Warehouse: TGCONSTR (specified automatically)
    • Order Qty.: 480
    • Unit Cost: 180
    • Project: HOTELR
    • Project Task: 04
    • Cost Code: 04-220
  5. On the form toolbar, click Remove Hold. Then click Enter PO Receipt. The Purchase Receipts (PO302000) form opens with the purchase receipt.
  6. On the form toolbar of the Purchase Receipts (PO302000) form, click Release.
  7. Set the business date to 2/15/2023.
  8. On the Purchase Orders form, create one more purchase order, and specify the following settings in the Summary area:
    • Vendor: STONEC
    • Description: Purchase of project materials (masonry)
    • Date: 2/15/2023
  9. On the Details tab, add a purchase order line, and specify the following settings in the added line:
    • Inventory ID: REDBRICK
    • Warehouse: TGCONSTR (specified automatically)
    • Order Qty.: 120
    • Unit Cost: 85
    • Project: HOTELR
    • Project Task: 04
    • Cost Code: 04-210
  10. Add one more purchase order line, and specify the following settings in the added line:
    • Inventory ID: CONCRBK8
    • Warehouse: TGCONSTR (specified automatically)
    • Order Qty.: 80
    • Unit Cost: 195
    • Project: HOTELR
    • Project Task: 04
    • Cost Code: 04-220
  11. On the form toolbar, click Remove Hold. Then click Enter PO Receipt. The Purchase Receipts form opens with the purchase receipt.
  12. On the form toolbar of the Purchase Receipts (PO302000) form, click Release.

Step 2: Issuing Stock Items for the Project

To directly issue stock items for the project (to record that some of the materials have been delivered to the project site) and capture the issued cost to the project, do the following:

  1. Open the Issues (IN302000) form.
  2. On the form toolbar, click Add New Record, and in the Summary area, type Materials issued at project site in the Description box.
  3. On the table toolbar of the Details tab, click Add Items. The Inventory Lookup dialog box opens.
  4. In the line with the REDBRICK item in the table, type 160 in the Qty. Selected column.
  5. In the line with the CONCRBK8 item, type 200 in the Qty. Selected column.
  6. Click Add & Close. The system closes the dialog box and adds rows to the table on the Details tab of the form.
  7. In the row with the REDBRICK item, specify the following settings:
    • Unit Price: 75
    • Reason Code: INISSUEPROJ
    • Cost Layer Type: Project
    • Project: HOTELR
    • Project Task: 04
    • Cost Code: 04-210
  8. In the row with the CONCRBK8 item, specify the following settings:
    • Unit Price: 180
    • Reason Code: INISSUEPROJ
    • Project: HOTELR
    • Project Task: 04
    • Cost Code: 04-220
  9. Save the inventory issue transaction and press Esc to refresh the form.

    In the table footer, notice that the system shows the quantities of the items that are currently available for the project.

  10. On the form toolbar, click Release to release the inventory issue transaction.
  11. On the Projects (PM301000) form, open the HOTELR project.
  12. On the Cost Budget tab, make sure that new lines with the 04-210 and 04-220 cost codes have been added to the cost budget. The actual values in these lines have been specified based on the amounts of the project transaction lines.
  13. Click the line with the 04-210 cost code, and on the table toolbar, click View Transactions. The system opens the Project Transaction Details (PM401000) form with the list of transactions that correspond to this cost budget line. The lines in the amount of 27,000 and 10,200 correspond to the purchases that you have processed earlier in this activity. The cost of purchased items has been recorded to the accrual account. The other two lines are the project transactions generated on release of the inventory issue; these transactions move the cost of the issued items from the inventory account to expense account.

You have issued a partial quantity of the stock for a project.