Project Creation and Processing: To Create a Cost-Plus Project

This activity will walk you through the process of configuring a simple cost-plus project from its initial creation.

Story

Suppose that the Lake Cafe customer has contacted the SweetLife Fruits & Jams company and ordered training of its employees on operating the juicer it purchased from SweetLife. The training sessions will start on 1/1/2024 and must be completed by 1/30/2024. The project accountant has analyzed the requirements and decided to create a small cost-plus project (with only a single task for the training of employees); the expected project profitability is 20%. Because the number of training sessions may be changed during the project completion by the customer's request, the project will be billed once when all training sessions have been provided. The project accountant has decided to skip the creation of pro forma invoices, because the price of the provided services has already been agreed upon with the customer.

Acting as the project accountant, you will create the new project and specify the needed settings.

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 Project Accounting feature has been enabled to support the project accounting functionality.
• On the Non-Stock Items (IN202000) form, the TRAINING non-stock item has been defined.
• On the Billing Rules (PM207000) form, the TM billing rule has been defined to calculate the line amount as the project transaction line amount multiplied by 1.25.
• On the Account Groups (PM201000) form, the LABOR account group has been defined.

Process Overview

On the Projects (PM301000) form, you will create a new project and specify its general settings on the Summary tab. Then on the Tasks tab, you will add the project task that will be performed during the completion of the project. On the Cost Budget tab, you will define the budget for the project.

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 to a company with the U100 dataset preloaded; you should sign in as Pam Brawner by using the brawner username and the 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 1/1/2024. If a different date is displayed, click the Business Date menu button, and select 1/1/2024 on the calendar.

Step 1: Creating a Project and Specifying Its General Settings

To create a new project and specify basic settings for it, do the following:

1. On the Projects (PM301000) form, add a new record.
2. In the Summary area, specify the following settings:
   • Project ID: INSTLAKE02
   • Customer: LAKECAFE (Lake Cafe)
   • Description: Training project for Lake Cafe
3. On the Summary tab, specify the following settings:
   • Revenue Budget Level: Task and Item

     You select this option to include more detail in the revenue budget structure. With this setting, you will be able to select an inventory item in a revenue budget line.

   • Cost Budget Level: Task and Item

     You select this option to include more detail in the cost budget structure. With this setting, you will be able to select an inventory item in a cost budget line.

   • Start Date: 1/1/2024
   • End Date: 1/30/2024
   • Project Manager: Pam Brawner
   • Change Order Workflow: Cleared

     You clear this check box because for this simple cost-plus project, no changes will be required.

   • Billing Currency: USD (selected automatically)
   • Billing Period: On Demand

     You select the On Demand billing period to indicate that the billing can be performed at any time.

   • Billing Rule: TM

     This predefined rule will be specified by default in all project tasks added to the project.

     Tip: For details on configuring a billing rule for billing by time and material, see Billing Rules: Time and Material Billing and Billing Rules: To Configure a Time and Material Rule.
   • Create Pro Forma Invoice on Billing: Cleared

     You are clearing this check box because you want to create accounts receivable invoices when you bill the project without preliminary creation of pro forma invoices.

4. Save your changes to the project (which currently has the In Planning status in the Status box of the Summary area).

Step 2: Adding Project Tasks

To add project tasks to the project, do the following:

1. On the Tasks tab, click Add Row on the table toolbar, and add the project task with the following settings:
   • Task ID: TRAINING
   • Type: Cost and Revenue Task
   • Description: Training on juicer usage
   • Status: Active

   Notice that the TM billing rule has been automatically specified for the task.

2. Save your changes to the project.

Step 3: Specifying the Project’s Cost Budget

To configure the project’s cost budget, do the following:

1. On the Cost Budget tab, click Add Row, and specify the following settings in the added row:
   • Project Task: TRAINING
   • Inventory ID: TRAINING
   • Account Group: LABOR (selected automatically)
   • Original Budgeted Quantity: 16
   • UOM: HOUR
   • Unit Rate: 40

   The system automatically calculates the Original Budgeted Amount for the cost budget line ($640) as the Original Budgeted Quantity multiplied by the Unit Rate.

2. Save your changes to the project.

   You have not configured the revenue budget for the project because you have not agreed with the customer on the number of training sessions and this number may be changed during the project completion at the customer's request. When you bill the project based on the incurred expenses, the system automatically populates the revenue budget with the actual values.

You have finished configuring the project. Now you can complete the Project Creation and Processing: To Process a Cost-Plus Project activity to practice completing the project lifecycle.