Enter project features

The Project Accounting Settings Features tab contains settings for budgeting, overhead absorption, and committed costs and accrualsThe process of matching expenditure or income to the accounting period in which it was incurred rather than paid; for instance, a rent cheque or utility charges..

You can choose to record budget information for your projects and to track this against the value of transactions logged. You select which levels of the project structure you want to record budgets against, and whether you want to record budgets for cost and/or revenue items.

Once you have set up your budgets, you can enter revised budgets for jobs that are subject to change, and to track changes from the original budget values. Any budget analysis produced will automatically use the revised budget rather than the original.

You can apply additional costs to your projects to account for your overheads or Uplift costs,

You can post committed costs to projects to give y known as overhead absorption.ou a better idea of profit, once costs are fully recorded.

To enter settings

Open: Project Accounting > Utilities > System Setup > Project Accounting Settings | Features.

Select from the following settings:

Record and track project budgeting

Select this to enter budgets for your projects. Budget analysis can help you improve business profitability and identify overspending. All businesses use some level of budgeting. You can set up project budgets that are as simple or as detailed as you require. To choose the type and level of budgets required, click Settings.

Choose whether to use budgets with your projects:

Record and track project budgeting

Select this if you want to enter budgets for your projects.

To choose the type and the level of your budgets, click Settings

Select Settings and choose the type of budgets you want to use:

Record and track cost budgets.	Select this to allow cost budgets to be recorded and analysezd.
Record and track revenue budgets.	Select this to allow revenue budgets to be recorded and analysed.

Choose the level of budgeting required:

Project only budgets

Select this to set budgets at a project level only.

Once selected , you cannot set budgets for a group or project item.

Project and group budgets

Select this to set budgets at a project or group level.

Once selected, you cannot set budgets for a project item.

Project, group and project item budgets

Select this to set budgets at a project, group or project item level.

Note: If you have already set budgets for groups or project items, you may not be able to change this setting.

Record and track overhead absorption

Do you want to use overhead absorption?

Select this to apply additional overhead costs to you projects when direct costs are entered and see these costs reflected in your profitability reports, affecting the Gross profit of your projects.

Note: You can choose whether to include the uplift costs or not when reporting profitability.

Do not select this if you want to see overheads reported separately to the direct costs, and not to affect Gross Profit. You can then create project items types that are designated as an Overhead Project Item type. This is set on the Default tab for each Project Item type (Utilities > System Setup > Project Structure Settings >ProjectItem Type). The costs posted to these items are reported separately in the profitability reports, affecting Net profit but not Gross profit.

See an example

If Overhead absorption is selected

If overhead absorption is not selected

Revenue of £2,000 is posted to the project.
Direct costs with 10% uplift (£120) are posted to the project.

Revenue of £2,000 is posted to the project.
Direct costs of £1200 are posted to the project.
Extra cost of £120 are posted to the project using a project item for overheads.

The profit report including the uplift costs:

Revenue	2000
Direct Costs	1320
Gross Profit	680
Overheads	0
Net profit	680

The profit report:

Revenue	2000
Direct Costs	1200
Gross Profit	800
Overheads	120
Net profit	680

Select Record and track overhead absorption to apply additional overhead costs to your projects. To enter the type and amount of uplift costs, click Settings.

Enter Overhead uplift rates for each project item type:

Modifier

Select whether the cost will be modified by a Percentage or a specific Amount.

If the project item type has no uplift rate, set this to Not applicable.

Value

Enter the uplift percentage or amount for the project item type.

Select Set project specific overhead uplift rates if you want to be able to override the defaults you have set here on individual project items.
Select Post overhead absorption journals to the nominal ledger if you want to create nominal ledger postings for overhead absorption.

Once selected, enter the nominal account reference (A/C Ref, CC and, or Dep ) for each project item type. The accounts that you select must be posting accounts.

Note: If you do not select this option, the uplift costs applied to your projects are not posted to the Nominal Ledger. This will make it difficult to reconcile your projects to the Nominal Ledger.

An example of applying uplift costs

You have project items of the type Plumbing. When timesheets for your plumbers are entered, these will post costs to your Plumbing project items. You also want to record additional employment costs for your plumbers, for sickness and holiday pay, of 20%. To do this, you apply a Percentage uplift of 20% to the Plumbing project item type.

You also have a project item type called Subcontract. When Purchase invoices are submitted by the subcontractors working on your projects, costs are posted to these project items. As there are no additional employment costs associated with subcontractors, you do not want to add overhead costs to your Subcontract project items. To do this, you choose Not Applicable for the Subcontract project item type.

Track project committed costs and accruals

Including committed costs in your projects gives you a better ides of the profit you can expect once your costs have been fully recorded.

Select Record and Track Committed Costs if you want to record committed costs for your projects, and click Settings.

Default balance sheet nominal code for accrued cost posting

Select the default nominal account to which accrued costs will be posted. This will be displayed as the default nominal account when entering a project accrual.

Default project up for service items is when:

Specify when project records will be updated for service items. They can be updated when the invoice is recorded or when goods are received.

These options are only enabled if you have chosen to record the confirmation of service items in the POP Settings. These options cannot be changed if there are purchase orders on the system that have not yet been invoiced.

Default project update for free text items is when:

Specify when project records will be updated for free text items. They can be updated when the invoice is recorded or when goods are received.

These options are only enabled if you have chosen to record the confirmation of free text items in the POP Settings. These options cannot be changed if there are purchase orders on the system that have not yet been invoiced.

Note: The costs of stock items are only realised when the stock is issued to the project and not when the goods are received or the invoice is recorded.