Back to P100: Project Implementation and Processing

Lesson 5: Capturing Costs for Projects

Part 2: Capturing of Costs for Projects

This lesson explains how you can use project transactions for tracking budget costs and revenue directly—either without updating the general ledger or with these GL updates.

Project Transactions: General Information

Project accounting is integrated with other functional areas of Acumatica ERP. Project-related information from other functional areas flows to projects by means of project transactions that are used for tracking budget costs and revenue. You can also create project transactions directly without involving other documents.

Learning Objectives

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

Capture project costs using project transactions
Make the system create a project transaction based on a GL transaction
Create a project transaction without posting to the general ledger
Review how the system has updated the project budget on release of the project transaction

Applicable Scenarios

You manually create project transactions if you need to directly capture project costs without updating the general ledger. The transactions created for a project update the actual values of the project budget with the incurred expenses that you may need in one of the following cases:

To control the amount of money spent on the project against the budgeted values
To bill the customer for the incurred expenses
To control the project profitability You manually create general ledger transactions for a project if you need to directly capture project costs without creating original documents (such as bills, purchase orders, or time activities).

Manual Creation of Project Transactions

You can create a project transaction directly on the Project Transactions (PM304000) form. When you specify the Debit Account and Credit Account for the project transaction and release the transaction, the system creates the following general ledger transactions on the Journal Transactions (GL301000) form, based on whether the amount of the project transaction is positive or negative:

For a positive amount, the GL transaction debits the debit account of the project transaction and credits the credit account.
For a negative amount, the GL transaction credits the debit account of the project transaction and debits the credit account. If either a debit account or a credit account is not specified in the project transaction, on the release of the transaction, the system does not generate the corresponding GL transaction. If the Subaccounts feature is enabled on the Enable/Disable Features (CS100000) form, you must specify the debit subaccount along with the debit account (if one is specified); otherwise, the project transaction will not produce a general ledger transaction. Similarly, you must specify the credit subaccount along with the credit account (if one is specified); otherwise, the project transaction will not produce a general ledger transaction.

Update of the Project Budget with Project Transactions

The project budget key is the combination of the project, project task, account group, inventory item, and cost code, if applicable. The system uses the project budget key to match the transaction with a project budget line. If a budget line with the same project budget key exists, the system updates the Actual Quantity and Actual Amount of the corresponding budget line. For a new project budget key that does not exist in the project budget, the system creates a new budget line. For a detailed explanation on the rules that the system uses to update or create budget lines, see Project Transactions: Update of the Project Budget Structure. For each line of a project transaction on the Project Transactions (PM304000) form, the system uses the following rules to update the budget of the corresponding project:

The system determines the number of lines to be updated as follows:

If an account group but no credit account group is specified in the project transaction line, the system will update one project budget line.
If the project transaction line has both an account group and a credit account specified, the system will update two project budget lines: the line with the project budget key that includes the account group, and the line with the project budget key that includes the credit account group.

The system updates the budget as follows, depending on the type of the account group specified in the Account Group or Credit Account Group column:

Expense: The system updates the cost budget line of the project on the Cost Budget tab of the Projects (PM301000) form.
Income: The system updates the revenue budget line of the project on the Revenue Budget tab of the Projects form.
Asset, Liability, or Oﬀ-Balance: The system updates only the project balance on the Balances tab of the Projects form; it does not update any revenue budget lines or cost budget lines of the project. The system also creates a line on the Project Budget (PM309000) form.

The system updates the actual amount in the project budget lines as follows:

If an account group of the Expense or Asset type was specified in the Account Group column, the system updates the actual amount by adding the amount in the project transaction line.
For an account group of the Income or Liability type that was specified in the Account Group column, the system updates the actual amount by subtracting the amount in the project transaction line.
If an account group of the Expense or Asset type was specified in the Credit Account Group column, the system updates the actual amount by subtracting the amount in the project transaction line.
For an account group of the Income or Liability type that was specified in the Credit Account Group column, the system updates the actual amount by adding the amount in the project transaction line.

The system updates the actual quantities in the project budget lines as follows:

For the account group that was specified in the Account Group column, the system updates the actual quantity by adding the quantity in the project transaction line.
For the account group that was specified in the Credit Account Group column, the system updates the actual quantity by subtracting the quantity in the project transaction line. Project Transactions: GL Transactions Related to Projects
On the Journal Transactions (GL301000) form, you can directly create a general ledger transaction related to a specific project and project task. To associate the transaction line with a project, you specify this project in the Project/Contract column and the applicable project task in the Project Task column.
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        If a general ledger transaction has a project and project task specified, in the Account column on the
        Journal Transactions form, you can select only an account that is mapped to an account group on the
        Account Groups (PM201000) form.
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Creation of Project Transaction

When a batch of GL transactions is released, for each transaction line in the batch with a project and project task specified, the system creates the corresponding project transaction with the following settings specified in a row of the table on the Project Transactions (PM304000) form:

Project: The project associated with the GL transaction
Project Task: The project task associated with the GL transaction
Inventory ID: The inventory item associated with the GL transaction If no item is associated with the GL transaction, the system uses the empty item code, which is <N/A> by default and specified on the Projects Preferences (PM101000) form.
Debit Account: The account of the GL transaction
Account Group: The account group to which the account of the GL transaction is mapped on the Account Groups (PM201000) form
Credit Account: Empty

GL Batch Nbr.: The batch number of the GL transaction

        When a transaction is generated in another functional area of Acumatica ERP—such as accounts
        receivable, accounts payable, order management, or time and expenses—and posted to the general
        ledger, the system generates the corresponding project transaction in the same way as on release of
        GL transactions.

Amount and Quantity in the Project Transaction Lines

For each line of the project transaction that has been generated on release of a general ledger transaction, the system uses the following rules to specify the amount:

For the debit side of the GL transaction, the system specifies the actual amount in the corresponding project transaction line as follows:
If the type of the GL account matches the type of the account group, then the system copies the debit amount of the GL transaction line to the project transaction line with the same sign.
If the type of the GL account does not match the type of the account group, then the system copies the debit amount of the GL transaction line to the project transaction line with the reversed sign.
For the credit side of the GL transaction, the system specifies the actual amount in the corresponding project transaction line as follows:
If the type of the GL account matches the type of the account group, then the system copies the credit amount of the GL transaction line to the project transaction line with the reversed sign.
If the type of the GL account does not match the type of the account group, then the system copies the credit amount of the GL transaction line to the project transaction line with the same sign. For each line of the project transaction that has been generated on release of a general ledger transaction, the system uses the following rules to specify the quantity:
If the type of the GL account matches the type of the account group, the system copies the quantity of the GL transaction line to the project transaction line with the same sign.
If the type of the GL account does not match the type of the account group, the system copies the quantity of the GL transaction line to the project transaction line with the reversed sign.

Project Transactions: Process Activity

This activity will walk you through the process of creating project transactions from general ledger transactions and from scratch.

Story

Suppose that the Thai Food Restaurant customer has ordered training from the SweetLife Fruits & Jams company on how to use a juicer the company previously bought. Based on the agreement with the customer, SweetLife’s project accountant has created a project and has created the following tasks corresponding to the phases of training:

PHASE1: Training is going to be provided within this task and is subject to billing. Any additional expenses incurred during the completion of this task will not be billed.
PHASE2: If additional training is required aer the initial training in the first task, it will be provided within this task and will not be billed. In the first phase, a consultant has provided eight hours of training and spent $50 on a taxi. Then the customer requested additional training, and the consultant has provided four extra hours of training in the second phase. Acting as the project accountant, you need to enter the general ledger transactions to directly capture the costs involved with delivering the first phase of training. The Thai Food Restaurant company covers travel expenses, so they should not aﬀect the project budget. Then you need to enter the project transaction to capture the costs involved with delivering the second phase of training, but the costs should not aﬀect the general ledger.

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 provide support for the project accounting functionality.
On the Projects (PM301000) form, the TOMYUM1 project for the TOMYUM (Thai Food Restaurant) customer has been created, and the PHASE1 and PHASE2 project tasks have been created for the project.
On the Account Groups (PM201000) form, the LABOR account group has been created. The 54100 (Project Labor Expense) account has been mapped to the account group.
On the Non-Stock Items (IN202000) form, the TRAINING non-stock item has been configured. The 54100 (Project Labor Expense) account has been specified as the expense account of the item.

Process Overview

On the Journal Transactions (GL301000) form, you will create a batch of general ledger transactions with the project and project task specified to record the work related to the first phase of the training. You will release the batch, which will generate the corresponding project transaction. Then you will review this transaction on the Project Transaction Details (PM401000) form. Finally, on the Project Transactions (PM304000) form, you will create and release a batch of project transactions that represents the second phase of the training and does not aﬀect the general ledger.

System Preparation

To prepare to perform the instructions of the activity, 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: Creating General Ledger Transactions To create a batch of general ledger transactions to represent the first phase of the training (the PHASE1 task), do the following:

On the Journal Transactions (GL301000) form, add a new record.
In the Summary area, make sure GL is selected as the Module.
In the Description box, type A training session for the TOMYUM1 project.
On the table toolbar, click Add Row to add the first row, which represents your training expenses within the first phase of the project, and specify the following settings in the row:

Account: 54100 (Project Labor Expense)
Project/Contract: TOMYUM1
Project Task: PHASE1
Cost Code: 00-000 (inserted automatically)
Debit Amount: 320
Transaction Description: 8 hours of training for the customer's employee

Add the second row, which represents the non-project (travel) expenses, and specify the following settings in the row:

Account: 81000 (Other Expenses)
Project: X (inserted automatically) This transaction will not aﬀect the project budget of the TOMYUM1 project.
Cost Code: 00-000 (inserted automatically)
Debit Amount: 50
Credit Amount: 0
Transaction Description: Travel expenses

Add the third row, which balances the batch of transactions, and specify the following settings in the row:

Account: 23015 (Accrued Expenses)
Project: X (inserted automatically)
Cost Code: 00-000 (inserted automatically)
Credit Amount: 370 (inserted automatically)
Transaction Description: Project and travel expenses

On the form toolbar, click Remove Hold to assign the general ledger transaction the Balanced status, and then click Release. When you release the general ledger transaction, for the row with the specified project and project task, the system creates the corresponding project transaction. In the created project transaction, the system specifies the account group to which the account in the transaction row is mapped.
On the Project Transaction Details (PM401000) form, in the Selection area, select TOMYUM1 as the Project. Make sure that the Account Group and Project Task boxes are cleared. In the table, review the project transaction that has been created based on the GL transaction that you have processed earlier. Notice the following:

The system has created only one project transaction because only one row of the general ledger transaction has the specified project and project task.
The reference number of the corresponding batch of general ledger transactions is shown in the GL Batch Nbr. column.
The Debit Account is 54100 (Project Labor Expense).
The Debit Account Group of the project transaction is LABOR. The system selected the LABOR account group as the debit account group of the transaction because the 54100 (Project Labor Expense) account is mapped to this account group.
The Credit Account and Credit Account Group columns are empty in the row.

Step 2: Creating a Project Transaction Without Posting to the General Ledger To create a project transaction that does not aﬀect the general ledger and represents the training expenses within the second phase of the training (the PHASE2 task), do the following:

On the Project Transactions (PM304000) form, create a new record.
In the Summary area, make sure PM is selected as the Module.
Enter A 4-hour training session as the Description.
In the table on the Details tab, add a new row, and specify the following settings:

Project: TOMYUM1
Project Task: PHASE2
Cost Code: 00-000
Account Group: LABOR
Inventory ID: TRAINING
Quantity: 4
Billable: Cleared
Amount: 160 You leave the Debit Account and Credit Account columns empty, so that the corresponding general ledger transaction will not be created. The system also will not use this transaction for billing because you cleared the Billable check box in the line.

On the form toolbar, click Save and then Release to save your changes to the project transaction and release it. Notice that the GL Batch Nbr. column is empty, as shown in the following screenshot, indicating that no corresponding general ledger transaction has been created.
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   Figure: The project transaction that produces no GL transaction
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On the Projects (PM301000) form, open the TOMYUM1 project, and on the Cost Budget tab, notice that the cost budget now includes two budget lines:

The line with the PHASE1 project task and the <N/A> inventory item that has been added to the budget based on the project transaction created on release of the general ledger transaction. This line will be included in the next billing.
The line with the PHASE2 project task and the TRAINING inventory item that has been added to the budget based on the project transaction that you created and released. This line will not be billed. The actual values in both lines have been updated based on the project transactions that you have processed.
You have captured the costs for the project.