Single-Tier Change ManagementLesson 10

Tracking Changes to Commitments

Back to P120: Project Accounting Basic Scenarios

Lesson 10: Tracking Changes to Commitments

Part 5: Single-Tier Change Management

This lesson describes how you can use the functionality of change orders to track changes to the project

commitments. This gives you the ability to control the profitability of every change initiated by a customer. Change Orders for Commitments: General Information

By using the change order functionality in Acumatica ERP, you can manage changes to a project's committed values if the commitment functionality has been configured for project accounting. For more information on commitments, see Committed Costs: General Information.

Learning Objectives

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

  • Create a change order class for tracking commitments
  • Update cost commitments with a change order
  • Review the changes to the project budget that have been made with change orders
  • Make changes to closed commitments

Applicable Scenarios

You turn on the change order workflow for a project and enable commitment tracking if you want to distinguish purchases within the cost budget of a project, control changes made to the committed values of the project budget, and track these changes at the budget level. To make changes to the project budget, you create change orders, which do not alter the original committed values.

Configuration of a Change Order Class

If the Internal Cost Commitment Tracking check box is selected on the General tab (General Settings section) of the Projects Preferences (PM101000) form, the system exposes commitments on the Commitments (PM306000) form. To allow users to make changes to commitments, you configure a change order class on the Change Order Classes (PM203000) form. On this form, you select the Commitments check box to allow changes to committed values.

Change Orders for Project Commitments

You can track changes to project commitments that have been created based on project-related subcontracts and purchase orders that have the Normal and Project Drop-Ship type. On the Change Orders (PM308000) form, in a change order with the On Hold status, you can process the following changes to a project's committed values:

  • Creating a new purchase order or subcontract for a project
  • Adding a new line to an existing purchase order or subcontract
  • Adjusting an existing purchase order or subcontract by adding a new negative line
  • Making an addition to or deduction from an existing purchase order or subcontract with a positive or negative amount
                   The amount of a negative change order line may not exceed the Line Total amount of the
               purchase order.
  • Making an addition to or deduction from an existing purchase order line or subcontract line with a positive or negative amount The quantity and amount of a negative change order line may not exceed the received or billed quantities and amounts of the purchase order.
  • Reopening a purchase order or subcontract When you release the change order, based on the Quantity and Amount of a commitment line on the Commitments tab of the Change Orders form, the system updates the related commitment document or creates a new one, depending on the type of the commitment line, and updates the Committed CO Quantity, Committed CO Amount, Revised Committed Quantity and Revised Committed Amount of the corresponding cost budget line of the project on the Projects (PM301000) form. For more information, see Change Orders for Commitments: Commitment Updates on Release of Change Orders.

Workflow of Managing Changes to Commitments

The following diagram illustrates the workflow of managing changes to commitments.

Change Orders for Commitments: To Create a Change Order Class

This activity will walk you through the process of configuring a change order class.

Story

Suppose that you, as the system administrator of the SweetLife Fruits & Jams company, need to configure a change order class to be used by a purchase manager for creating change orders for project commitments. The change order class must prevent users from changing the revenue and cost budgets of a project.

Configuration Overview

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
  • Change Orders, which gives you the ability to track changes to projects with change orders

Process Overview

You will configure a change order class on the Change Order Classes (PM203000) form.

System Preparation

To prepare to perform the instructions of this activity, sign in to the system as the system administrator by using the gibbs username and the 123 password.

Step: Creating a Change Order Class To create a change order class that will be used for creating change orders for project commitments, perform the following instructions:

  1. On the Change Order Classes (PM203000) form, add a new record.
  2. In the Summary area, enter the following settings:
  • Class ID: COMMITMENT
  • Description: Change orders to commitments Notice that the Active check box is selected by default.
  1. Clear the Cost Budget and Revenue Budget check boxes, and leave the Commitments check box selected. With these settings, for the change orders with this class selected, users can make changes to only commitments without the cost and revenue budgets being affected.
  2. Save the change order class.
    You have defined a change order class that can be used for creating change orders that affect project commitments.

Change Orders for Commitments: Process Activity

In this activity, you will learn how you can track changes to project commitments with change orders.

Story

Suppose that the HM's Bakery and Cafe customer has ordered the services of installation and employee training on operating the previously bought juicer from the SweetLife Fruits & Jams company. The project accountant of SweetLife has created the project in Acumatica ERP and ordered the following services from the Squeezo Inc. vendor:

  • Three hours of juicer installation
  • Eight hours of training on operating the juicer The vendor has provided the services. Acting as the project accountant, you will create a purchase order with both of the provided services in the appropriate quantities. You will then receive the invoice from the vendor and realize that the quantity of the provided services differs from the quantity of the ordered services as follows:
  • An hour of an additional service, the site review, was provided.
  • The vendor also provided and installed a feeder basket for the juicer.
  • The installation took one hour more than the ordered number of hours.
  • The training took two hours less than the ordered number of hours. Per the agreement with the vendor, you will adjust the provided services within the created purchase order and create a new purchase order for the feeder basket.

Configuration Overview

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

  • On the Enable/Disable Features (CS100000) form, the following features have been enabled:
  • Project Accounting, which provides support for the project accounting functionality
  • Change Orders, which gives you the ability to manage changes to the project’s budgeted and committed values
  • Inventory and Order Management feature, which provides the functionality of purchase orders
  • On the Projects (PM301000) form, the HMBAKERY12 project has been created and the INSTALL project task has been created for the project. This project task is also the default task of the project. On the Summary tab of the form (Project Properties section), the Change Order Workflow check box is selected for the project so that users can track all the changes to the budgeted values by using change orders.
  • On the Non-Stock Items (IN202000) form, the SITEREVIEW, INSTALL, and TRAINING non-stock items have been defined.
  • On the Stock Items (IN202500) form, the BASKET stock item has been defined.
  • 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. On the Commitments (PM306000) form, you will review the commitments that the system has made to the project based on the purchase order. You will also review the corresponding committed values of the project budget on the Projects (PM301000) form. On the Change Orders (PM308000) form, you will create a change order to adjust the created commitments. You will then modify and process the created change order on the Change Orders form.

System Preparation

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

  1. Sign in to the system 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 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 Commitments for the Project To create a purchase order for the project, which entails the creation of commitments, do the following:

  1. On the Purchase Orders (PO301000) form, add a new record.
  2. In the Summary area, enter the following settings:
  • Vendor: SQUEEZO
  • Description: Purchase for HM's Bakery and Cafe
  1. On the Details tab, add two purchase order lines, and specify the settings shown in the following table in the lines you add.
        Inventory ID                 Order Qty.                  Project                     Cost Code
    INSTALL                      3                           HMBAKERY12                  00-000

    TRAINING                     8                           HMBAKERY12                  00-000


               The system inserts INSTALL as the project task in each line because this is the default task of
               the HMBAKERY12 project.
  2. Save the purchase order.
  3. On the form toolbar, click Remove Hold. The system assigns the purchase order the Open status and creates commitments for the project.
  4. In the Summary area of the Commitments (PM306000) form, select HMBAKERY12 in the Project box, and make sure the other boxes are cleared. In the table, review the commitments that the system created when you saved the purchase order with the Open status. There are two commitments:
  • The commitment with the INSTALL item and committed original and revised amounts of $240
  • The commitment with the TRAINING item and committed original and revised amounts of $320
  1. On the Projects (PM301000) form, open the HMBAKERY12 project, and on the Commitments tab, notice that the project has only one related purchase order, which is the one you have just created. On the Cost Budget tab, review the original committed values and the revised committed values. Notice that the original committed quantity of each line equals the revised committed quantity (8 for the TRAINING item and 3 for the INSTALL item) and the original committed amount of each line equals the revised committed amount ($320 for the TRAINING item and $240 for the INSTALL item).

Step 2: Changing the Project Commitments To change the project commitments by using a change order, do the following:

  1. While you are remaining on the Projects (PM301000) form with the HMBAKERY12 project selected, on the More menu, click Create Change Order. The system creates a change order and opens it on the Change Orders (PM308000) form.
  2. In the Summary area, specify the following settings:
  • Class: COMMITMENT
  • Description: Adjustment to the purchase orders from Squeezo Inc.
  1. On the Commitments tab, to increase the quantity and amount of an existing line of the purchase order, do the following: a. On the table toolbar, click Add Commitments. b. In the Add Commitments dialog box, which opens, select the unlabeled check box in the line with the INSTALL inventory item and a line amount of $240, and click Add Lines & Close. The system adds the selected purchase order line to the change order and closes the dialog box. Notice that the status of the added line is Update. c. In the added line, enter 1 in the Quantity box. When you update the Quantity value, the system automatically calculates the Amount value ($80) based on the Unit Cost of the line. The system also calculates the Potentially Revised Quantity value, which is 4, as the sum of the Order Qty. and Quantity values (3 + 1), and calculates the Potentially Revised Amount value, which is $320, as the sum of the Ext. Cost and Amount values ($240 + $80).
  2. To decrease the quantity and amount of an existing line of the purchase order, do the following: a. On the table toolbar, click Add Commitments. b. In the Add Commitments dialog box, select the commitment with the TRAINING inventory item by selecting the check box in the unlabeled column, and click Add Lines & Close. The system closes the dialog box and adds the selected purchase order line to the change order. Notice that the status of the added line is Update. c. In the added line, enter -2 in the Quantity column. When you update the Quantity value, the system automatically calculates the Amount (-$80), Potentially Revised Quantity (6), and Potentially Revised Amount ($240) values.
  3. To add a new line to the existing purchase order, add a new row and specify the following settings for it (see the screenshot below):
  • Project Task: INSTALL
  • Cost Code: 00-000
  • Inventory ID: SITEREVIEW
  • Quantity: 1
  • Unit Cost: 40
  • Commitment Nbr.: The reference number of the purchase order
               This is the same reference number as was used in the two previous lines.
  • Description: Site review Notice that the system has assigned the line the New Line status.
  1. To add a new purchase order for the project, add a new row, and specify the following settings for it:
  • Project Task: INSTALL
  • Cost Code: 00-000
  • Inventory ID: BASKET
  • Quantity: 1
  • Unit Cost: 250
  • Vendor: SQUEEZO
  • Description: Feeder basket Notice that the system has assigned the line the New Document status.
  1. Save your changes to the change order. The Commitment Change Total in the Summary area must be equal to $290, as shown in the following screenshot. Figure: Changes to project commitments
  2. On the form toolbar, click Remove Hold to assign the change order the Open status, and then click Release to release the change order.
  3. On the Purchase Orders (PO301000) form, open the purchase order that you have prepared earlier in this activity, and review how the purchase order has been modified as follows: a. On the More menu, notice that the Hold command is unavailable. You cannot put the purchase order on hold and make changes to the purchase order because the purchase order has a related change order. b. On the Details tab, make sure the purchase order now contains three lines. Make sure that the Order Qty. is set to 4 in the line with the INSTALL item and 6 in the line with the TRAINING item. Also, notice the newly added line with the SITEREVIEW item and a quantity of 1. c. On the Change Orders tab, make sure that three change order lines related to the purchase order are displayed. 10.On the same form, open the second purchase order that was created on release of the change order. This purchase order to the SQUEEZO vendor was created based on the change order line with the New Document status and has the order total of 250.00. 11.In the Summary area, review the description of the created purchase order, which contains the number of the change order that the purchase order is based on. 12.On the Details tab, make sure that the order has a single line with the BASKET inventory item and a quantity of 1. On the Change Orders tab, make sure that the corresponding change order line is displayed.

Step 3: Reviewing the Updated Commitments To review the commitments that the system has updated based on the change order you have processed earlier in this activity, do the following:

  1. Open the Commitments (PM306000) form.
  2. In the Summary area, select HMBAKERY12 in the Project box. In the table, review the commitments that have been updated. Notice that the commitments that have been updated with the change order have nonzero Committed CO Quantity and Committed CO Amount values. The Revised Committed Quantity and Revised Committed Amount values of these commitments also differ from the Original Committed Quantity and Original Committed Amount values, respectively. Figure: Project commitments updated with the change order
  3. On the Projects (PM301000) form, open the HMBAKERY12 project, and on the Cost Budget tab, review the updated committed values of the cost budget lines. Notice that the system has updated the revised committed values that have been calculated as the sum of the original committed values and committed CO values.
  4. On the Commitments tab, make sure that the second purchase order created based on the change order has appeared in the table.
    You have finished processing a change order for the project commitment.