Back to P100: Project Implementation and Processing

Lesson 3: Working with Fixed-Price Projects

Part 1: Implementation of Project Functionality

This lesson explains how you create a project in Acumatica ERP, specify its settings, and work with the project during the project lifecycle.

Project Creation and Processing: General Information

A project in Acumatica ERP is a one-time endeavor with its own budget, costs, and revenues; the funding and deliverables of a project are usually finite. In the system, a project contains various specifications that aﬀect project completion, such as the date range, customer, and resources (including employees and equipment).

Learning Objectives

In this lesson, you will learn how to do the following:

Plan a project structure
Create a project and specify its settings
Plan the structure of the project budget
Process a project during its lifecycle

Applicable Scenarios

You create a project to plan work to be performed for a customer, define budgets for the planned work, track the progress of completion of the planned work, bill the customers for the provided services, and track the costs and revenues of the provided services.

Type of Projects

You can use projects for tracking activities involving customer interaction (external projects) and in-house work (internal projects). The key objective of external projects is balancing costs and income to make sure the organization remains profitable, while meeting project goals and maximizing customer satisfaction. The scope of internal projects is typically limited to the physical and organizational boundaries of your organization; these projects serve the needs of the organization and never produce any revenue. Depending on which activities you are going to track, you can configure projects of the following types:

A fixed-price project, which is an external project in which services and products are provided to customers at a fixed price; the price of the project is defined at the beginning of the project and is not changed during its completion (unless any change orders are processed for the project).
A cost-plus project, which is an external project in which the prices are calculated as a percentage of the costs. The final price of the cost-plus project depends on the overall cost of fulfilling the project, and the costs may be billed with or without a premium.
An internal project, which is used to track activities completed within your company. The scope of these projects is limited to the physical and organizational boundaries of an organization; these projects serve the needs of the organization and never produce any revenue. Internal projects have budgets, do not include billing settings, and are not associated with any customer.

Project Settings

You create a new project and specify its settings on the Projects (PM301000) form. When you are manually adding a new project to the system, you enter the following information:

General information: This information includes the description, the start and end dates, the project manager, the project address settings, the project currency, and the branch to which the project belongs. You can also specify the billing rule to be assigned to project tasks by default.
Billing schedule: You define whether you will use direct AR invoices when billing the project, or use the pro forma invoices. Then you determine when the project is billed: on the date of the customer statement, at the end of each month, at the end of each quarter, or at the end of each year.
Project tasks: You define the project tasks of the project. A project task in a project is a separate work unit with its own lifecycle, budget, cost, revenue, and billing rule. Budgeted, revised, and actual amounts in the project are tracked by account group balances, each of which is the total of all the corresponding amounts in the project tasks. That is, the project does not have any balances beyond those in the project tasks of the project. You can define one of the project tasks to be used by default in lines of records with this project specified. For more information, see Project Tasks: General Information.
Budget: You define the level of detail for the cost budget and for the revenue budget. The structure of the revenue budget of the project is determined independently from the cost budget structure. Then you specify the budget, which holds the estimated expenses and revenues for a project.
Default GL accounts: You define the general ledger accounts to be used by default in project-related documents. Project Creation and Processing: A Project’s Lifecycle
In Acumatica ERP, a project is a one-time or recurring endeavor with a specific scope, time frame, and budget. The following sections describe the common stages of a project’s lifecycle: estimation, acceptance, execution, and completion.

Project Stages and Statuses

The following diagram shows the stages a project goes through and the statuses it is assigned from the project’s initiation to its completion.

Project Estimation

During the project estimation stage, you specify project settings on the Projects (PM301000) form, define activities, plan the project tasks, estimate the time required for the completion of each project task, and populate the project record with employees, resources, and equipment. The system assigns each new project and its tasks the In Planning status once it has been saved. Users cannot select projects and project tasks with the In Planning status in any records, except for the following types of records that are available for planning:

Employee activities on the Activity (CR306010) form
Tasks on the Task (CR306020) form
Email activities on the Email Activity (CR306015) form
Purchase orders on the Purchase Orders (PO301000) form
Subcontracts on the Subcontracts (SC301000) form For instance, you can add an employee activity for planning budgets for project tasks, or record a project commitment. However, if your user account does not have the Project Accountant role assigned on the User Roles (SM201005) form, these documents can be processed further only aer the Active status is assigned to the project task. If your user has the Project Accountant role, you can release employee activities with project tasks that have the In Planning status.

Project Acceptance

The acceptance stage involves reaching an agreement with all the stakeholders, including customers and employees, as well as estimating the budget for the project and the expenditures it will entail. If the approval of projects is not required in your system, the project manager takes the project oﬀ hold to assign it the Active status. If the approval of projects is required in your system, the system submits the project for approval and assigns it the Pending Approval status once it is taken oﬀ hold. If all assigned employees have approved the project on the Approvals (EP503010) form or on the Projects (PM301000) form, the system assigns it the Active status. If at least one of assigned employees has rejected the project, it is assigned the Rejected status. You can assign the In Planning status to the project again so that you can edit its details and resubmit it for approval. For more information on approvals, see Specific Approvals: Projects, Project-Related Documents, and Time Activities.

Project Execution

During the execution stage, the project retains the Active status, indicating that it is in progress and project transactions can be posted to it. Users can select active projects and their project tasks on the forms of the functional areas in which the projects are visible.

          A user can select the project tasks with the Completed, Canceled, or In Planning status on data entry
          forms only if this user has the Project Accountant role assigned to their user account on the User Roles
          (SM201005) form.

By default, in newly created transactions and documents, the system inserts the non-project code. When you create a project-related transaction or document, you need to specify the particular project and project task to indicate that this transaction or document must be tracked within the project; also, you can specify whether the transaction or document is billable. If the non-project code is specified in these transactions, they are not tracked in any project. If any budget changes occur during the course of the project, the system preserves the initial budget amounts, and tracks the revised figures for the project budget. If your company has decided to temporarily pause all activities on the project, you can assign this project the Suspended status. A suspended project is not available for selection on data entry forms, except for forms where employee activities and project commitments can be entered. When work on the project resumes, you can reactivate the suspended project.

Project Completion

The statuses of individual project tasks do not directly aﬀect the status of the corresponding project. Thus, the system does not automatically set a project’s status to Completed if all of its project tasks have been completed. However, to be able to complete the project, you first need to complete all project tasks included in this project. For more information about project task completion, see Project Tasks: Tracking Task Completion. Once the project is finished, the project accountant completes it by manually assigning it the Completed status, and then analyzes the project profitability. Project transactions can no longer be posted to a project with the Completed status.

          To simplify the tracking of the project completion percentage, you can create a separate dedicated
          task and use it exclusively to manually specify the project completion percentage, which you
          evaluate by using all the information available about the progress of project tasks and project-related
          transactions.

Alternatively, a project can be canceled. The Canceled status indicates that the project has been stopped before its actual completion. A canceled project can be activated again.

Project Creation and Processing: To Create a Fixed-Price Project

This activity will walk you through the process of initial creation of a simple fixed-price project.

Story

Suppose that the Lake Cafe customer has ordered a juicer from the SweetLife Fruits & Jams company, along with two hours of site review and four hours of installation services. The work will start on 1/1/2025 and must be completed by 1/30/2025. SweetLife's project accountant has decided to create a project to track costs and revenues for the performed work. The project will be completed in two phases: Phase 1 will be the site review, and phase 2 will involve the sale and installation of the juicer. To track the progress of each phase separately, the project accountant has decided to define the phases as separate project tasks. Also, the project accountant will specify the revenue budget information for each project task and inventory item. The project will be billed once, when both of the project tasks are completed. Also, the project accountant has decided to skip the creation of pro forma invoices, because all amounts have already been budgeted and agreed upon with the customer, so the direct AR invoice will be created during the billing process. Acting as the project accountant, you will create the new project and specify all needed settings.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

On the Enable/Disable Features (CS100000) form, the Project Accounting feature has been enabled to support the project accounting functionality.
On the Stock Items (IN202500) form, the JUICER10 stock item has been defined.
On the Non-Stock Items (IN202000) form, the SITEREVIEW and INSTALL non-stock items have been defined.
On the Billing Rules (PM207000) form, the PROGRESS billing rule has been defined. This rule is configured for gradually billing the projects at a fixed contract amount.

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 tasks that will be performed during the completion of a project.
On the Revenue Budget tab, you will define the planned revenue budget for the project.

System Preparation

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

Sign in to the system as Pam Brawner by using the brawner username and the 123 password.
In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to 1/1/2025. If a diﬀerent date is displayed, click the Business Date menu button, and select 1/1/2025 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:

On the Projects (PM301000) form, create a new record.
In the Summary area, specify the following settings:

Project ID: INSTLAKE01
Customer: LAKECAFE (Lake Cafe)
Project Manager: EP00000001 (Pam Brawner)
Description: Installation project for Lake Cafe

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: 1/1/2025
End Date: 1/30/2025
Change Order Workflow: Cleared You clear this check box because for this simple fixed-price 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: PROGRESS This predefined rule will be specified by default in all project tasks added to the project.

                    For details on configuring billing rules for billing by progress, see Billing Rules: Progress
                    Billing and Progress Billing: To Configure a Progress Billing 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.

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

Step 2: Adding Project Tasks To add project tasks to the project, do the following:

On the Tasks tab, add to the project the two tasks listed in the following table by clicking Add Row on the table toolbar for each and specifying the listed identifier, task type, and description in the row.

    Task ID                               Type                                Description
    PHASE1                                Cost and Revenue Task               Site review

    PHASE2                                Cost and Revenue Task               Installation

   Notice that the PROGRESS billing rule has been automatically specified for both added tasks.

On the table toolbar, click Activate Tasks to change the status of the added tasks from In Planning to Active.
Save your changes to the project. Notice that the project still has the In Planning status even though you have activated both of its project tasks.

Step 3: Specifying the Project Revenue Budget To specify the project revenue budget, do the following:

On the Revenue Budget tab, add each line of the project revenue budget that is listed in the following table by clicking Add Row and specifying the listed settings in the row.

    Project Task           Inventory ID          Account Group         Original Budgeted           Unit Rate
                                                                       Quantity
    PHASE1                 SITEREVIEW            REVENUE               2.00                        50.00

    PHASE2                 JUICER10              REVENUE               1.00                        1,500.00

    PHASE2                 INSTALL               REVENUE               4.00                        100.00

Make sure that the original and revised values in the revenue budget lines have been calculated, as shown in the following screenshot. Figure: Revenue budget of a fixed-price project

    For each budget line, the system automatically calculated the Original Budgeted Amount as the Original
    Budgeted Quantity multiplied by the Unit Rate. The system also filled in the Revised Budgeted Quantity
    and Revised Budgeted Amount columns with the values of Original Budgeted Quantity and Original
    Budgeted Amount columns, respectively.

Save your changes to the project. You have not configured the cost budget for the project because you do not need to track if the project expenses are within the budgeted values. When you enter project transactions that represent the project expenses, the system will automatically populate the cost budget with the actual values.
You have finished configuring the project.

Project Creation and Processing: To Process a Fixed-Price Project

This activity will walk you through the lifecycle of a fixed-price project.

Story

Suppose that the Lake Cafe customer has ordered a juicer from the SweetLife Fruits & Jams company, along with the site review and installation services. SweetLife's project accountant has created a fixed-price project to account for this work. In January 2025, the company employees have performed work related to the project tasks. Acting as the project accountant, you need to support the project during the entire project lifecycle.

Configuration Overview

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.

Process Overview

You will activate the project to indicate that it has been started. Then you will create and release a project transaction on the Project Transactions (PM304000) form to record the provided services. You will bill the project on the Projects (PM301000) form and review the prepared AR invoice on the Invoices and Memos (AR301000) form. Then you will close the project, and review the profitability report on the Project Profitability (PM624000) report form.

System Preparation

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

Download the INSTLAKE01_Project_Transactions file provided with the course to your computer.
Ensure that you have created the INSTLAKE01 project, as described in Project Creation and Processing: To Create a Fixed-Price Project.
In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to 1/30/2025. If a diﬀerent date is displayed, click the Business Date menu button and select 1/30/2025 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.

Step 1: Activating the Project To indicate that the INSTLAKE01 project has been started, do the following:

On the Projects (PM301000) form, open the INSTLAKE01 project, which you have created in the previous activity.
On the form toolbar, click Activate. The system assigns the project the Active status.

Step 2: Uploading Project Transactions To upload and process the transactions of this project, do the following:

On the Project Transactions (PM304000) form, add a new record.
In the Summary area, specify the following settings:

Module: PM
Description: The services for the INSTLAKE01 project

On the table toolbar of the Details tab, click Load Records from File.
In the File Upload dialog box, which opens, click Choose File, select the file path to the INSTLAKE01_Project_Transactions file, and click Upload.
In the Common Settings dialog box, which opens, leave the default settings, and click OK.
In the Columns dialog box, which opens, leave the current column mapping, and click OK.
Make sure that the Total Amount in the Summary area is 1,600.00.
On the form toolbar, click Save, and then click Release.
On the Projects (PM301000) form, open the INSTLAKE01 project, and make sure that the Actual Expenses box in the Summary area now shows 1,600.00. On the Cost Budget tab, notice that the system has updated the cost budget of the project—that is, three cost budget lines have been added based on the project transaction that you have released. Also, the Actual Quantity and Actual Amount columns have been populated with the amounts from the corresponding lines of the project transaction.

Step 3: Billing the Project To create an accounts receivable invoice for the project, do the following:

While you are still viewing the INSTLAKE01 project on the Projects (PM301000) form, on the Revenue Budget tab, specify 100.00 as the Completed (%) in each of three revenue budget lines to indicate that the project tasks have been fully completed. The system calculates the Pending Invoice Amount of the revenue budget lines as $100, $400, and $1,500. The Pending Invoice Amount Total in the Summary area is $2,000.
Save your changes to the project. Because the project is billed on demand and has a nonzero pending invoice amount, you can now bill the project.
On the form toolbar, click Run Billing. The system creates an AR invoice, which should look like the one shown in the following screenshot, and opens it on the Invoices and Memos (AR301000) form. The system creates the invoice lines based on the revenue budget lines of the corresponding project with amounts that are equal to the pending invoice amounts. The invoice total, which is $2,000, is equal to the pending invoice total.
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    Figure: The AR invoice created during the billing
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On the form toolbar of the Invoices and Memos form, click Remove Hold to assign the Balanced status to the accounts receivable invoice, and then click Release.
Return to the Projects form with the INSTLAKE01 project opened, and press Esc to refresh the details. In the Summary area, make sure that the Actual Income box now shows 2,000.00, which is the amount the customer has been billed.

Step 4: Closing the Project To complete the project and analyze its profitability, do the following:

While you are still viewing the INSTLAKE01 project on the Projects (PM301000) form, on the Tasks tab, specify the following settings for both lines in the table:

Status: Completed
Completed (%): 100 (inserted automatically when you change the task’s status to Completed)
End Date: 1/30/2025 (inserted automatically when you change the task’s status to Completed)

On the form toolbar, click Complete. In the Status box of the Summary area, the system changes the status of the project from Active to Completed.
On the form toolbar of the Project Profitability (PM624000) report form, click Run Report, and review the line with the INSTLAKE01 project. The calculated profit margin is $400 (20%).
You have finished working with the project. Part 1: Implementation of Project Functionality | 26