jde projects month end course - work orders

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JDE Projects with Work Orders1/2 Day CourseMonth End - OWP

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Housekeeping

Emergency Exit

Timing and Breaks

Mobile Phones and Email

Facilities

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Project Month End Process

Month End Process Cycle2

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Process Estimate at Completion4

Enter Claimed Quantities6

Process Revenue Accruals

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Enter Progress Earned Value Analysis

Process Profit Recognition

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Project Invoicing and Journaling

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Cost Codes

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Original Budgets and Revised Budgets

Phase Estimate to Complete11

Analyse and Post Over/Under Claims12

Enter Cost Accruals5

Inquiries and Reports13

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Account Structure - Example Where

(Does the cost belong)

What(is the cost)

Business Unit Object. . SubsidiaryCompany. . Subledger

30005 Project 6075 Purchased Materials8010 labour

WBS or Cost Code Workorder

15000 Cost Centre 8010 Labour8XXX Overhead Expenses

Not Used Can be used for additional breakdown

10000 Balance Sheet Assets, Liabilities , Equity

Analysis of accounts i.e Banks accounts

Not used

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Cost Code / SubsidiaryCost code Starting with:1xxxxxxx – Overhead Cost Codes 9xxxxxxx – Revenue Cost Codes

Direct Cost Codes:To identify programme and phase.Example: 50000110 is Ph1 eJV SU–Base Work2xxxxxxx – NSW Direct Cost3xxxxxxx – VIC Direct Cost4xxxxxxx – QLD Direct Cost5xxxxxxx – SA Direct Cost6xxxxxxx – WA Direct Cost

Cost Type: To identify what type of cost. Example: 6170 for subcontractor.

Subledger

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Cost Type Cost Type

6030

6075

6085

6120

6170

20005000

31005200

20005000

31005200

45008900

0141016

Job: Ergon Central Contract Services

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Sub Type: Work Order

W 789765

Work Order: Replace Cross Arm Pole A54, 123 Smith St,

Maryborough

Cost Code

20009110200091302000921020009310200094102000934020009330

S2299 - TAMWORTH WESTDALE

15985

Note: JDE Work Order/Subledger in JDE is a running number and we could not create to make it the same as site ID

• Every direct cost must have a work order

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Hubble – Cost Code Report

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Cost Codes

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Month End Process Cycle

Revised BudgetsProcess Estimate at

Completion (EAC)

Enter Cost Accruals Enter Claimed Quantities

Project Invoicing & Journaling

Enter ProgressReview / Finalise Earned

Value Analysis (EVA)


• Revenue Recognition• Manual Revenue

Accrual

Process ProfitRecognition

Phase Estimate to Complete

(ETC)Analyse & Post

Over/Under Claims

Blue = NationalRed = Regions

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Month End Process TimelineActivity Date CompletedRevised Budgets WeeklyEstimate at Completion Anytime before 30th each monthEnter Cost Accruals Day OneEnter Claimed Quantities Day OneInvoicing 15th & last day of each monthProgress Earned Value Analysis Day Two-ThreeRevenue Accruals Day FourProfit Recognition AutomaticPhase Estimate to Complete Day FiveAnalyse & Post Over/Under Claims

Day Six

Inquiries & Reports Anytime

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Cost Codes

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Original Budgets and Revised Budgets• All original budgets are based on PO’s received from

Optus and listed in VISZ as of the 1st of May 2016.• All revised budgets are based on changes to existing PO’s,

new PO’s received and cancelled PO’s received from Optus since the 1st of May 2016.

• D/C Rate is 70/30 standard across the board no matter the program or phase.

Note: Forecast Works previously in SMS that have not received PO’s will be loaded in separate cost codes named “Emerging Works”

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Variations

• Variation in JDE has a different meaning to OWP:Variations are the JDE mechanism to increase / decrease Original Budget, and derive Revised Budget.These two scenarios apply to new work:1. New scope: New work is awarded by the client. Revenue and

cost variations are entered, which increases the overall project budget.

2. Within scope: Work within the original scope is ordered by the client. Revenue and cost budgets for that work are transferred from Emerging Works budgets. The overall project budget does not change.

Variations are also used where there is a decrease in scope.• OWP’s term Variation is for any variation work listed in the

RTCNote: RTC Submitted to Clients will be loaded into separate cost codes and named “SPA – Variations”.

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Estimate At CompletionUnderstanding Estimate At CompletionEstimate At Completion is the projected revenues and costs at the completion of the project.

Purpose of Estimate At CompletionThe purpose of Estimate at Completion is to provide a forecast of revenue and costs to understand the profitability of the project, and to highlight any deviations from budget

Relevance to Profit RecognitionProfit recognition is calculated based on the Estimated at Completion values. Incorrect values will result in either over / understatement of profit.

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Estimate At Completion

Exercise 3: Estimate at Completion without Work OrderExercise 4: Estimate at Completion with Work Order

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Cost Codes

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Enter Cost Accruals

Demonstration & Discussion:• Cost Accruals

Review JSI Calculate Accrual Entries Create Accruals Review & Post Accruals

• Journaling – Financials Lite

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Enter Cost Accruals

Purpose:Cost accruals are an accounting process to record expenses that have been incurred, but not yet recognised. Cost accruals are created after a review of project costs.

Practice:Exercise 7: Create Cost AccrualsExercise 8: Create Cost Accruals with Work OrderExercise 9: Post Cost AccrualsExercise 10: Review Cost Accrual Entry and Reversals

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Enter Cost Accruals

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Journal Entry – Standard

Discussion:Journal Entry program is used to add or adjust account balances in the General Ledger. Amounts are designated as a credit during journal entry by entering a minus sign before the amount.

Practice:Exercise 2 – Enter a General Journal

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Enter Claimed QuantitiesUnderstanding Enter Claimed QuantitiesEnter Claimed Quantities is the process of updating the number of units completed for billing purposes. Typically the date of entry will be determined by the contract.

One line entered per region from the Payment Claims submitted to Optus as a reversing journal each month

Break

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Invoicing and Journaling• All invoices are raised in National as one invoice under

420029.5020.91080050.• The invoices are then journal out to each region by cost

code and work order.• All National invoices (bank fee’s, change management

etc.) are raised under 420029.5020.91065050 and are then journal to itself to add the work order details.

• All sundry invoices raised are done directly into the region but still need to be journal out to itself so that the work order can be added.

• Every invoice should be allocated to a work order by journal entry

• This data can be reviewed via the One View G/L Inquiry

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Enter ProgressRegions will no longer need to enter progress for works or revenue. This should free up a significant amount of time.This will be done by National using percentage % cost completion. Example: If your site, Estimate At Completion (EAC) is $10,000. and you have incurred Actual Cost of $5,000, then your percentage cost completion is 50%. National will progress your site and revenue to 50%.

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Manual Revenue Accruals

Purpose:The purpose of a manual revenue accrual is to either:1. Record revenue earned but not yet invoiced

• Claimed not invoiced (Claimed)• Earned but not claimed (Underclaim)

2. Reduce revenue to reflect items not earned (Overclaim)

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Revenue Recognition

Understanding Revenue RecognitionRevenue recognition is a system process to recognise revenue earned but not yet invoicedA manual accrual may be required to recognise amounts invoiced but not yet earned (reducing the revenue)

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Phase Estimate to CompleteUnderstanding Estimate to Complete:Estimate to Complete is the difference between actual costs at the end of the reporting period, and the Estimation at Completion. JDE phases the Estimate to Complete based on the working days each month, and the dates assigned to the cost code. The phasing can be adjusted to correctly reflect when costs will be incurred or revenues recognised, which in turn is used to project cash flow. The phasing can be done at either the job or cost code level

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Under / Over claims Analysis

Understanding Under/ Over ClaimsThe Profit Recognition process generates either Costs in Excess, or Billings in Excess. This is further analysed to report the components:

• Under Claim: the amount claimed is less than the work performed, or other entitlement under the contract

• Over Claim: the amount claimed exceeds the work performed, or, although entitled under the contract, can’t be recognised yet

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Under / Over claims Analysis Types of Under Claim• Work Completed Not Claimed

Work completed which can be recognised as revenue however not yet claimed.• Contractual Claims

Claims for which there is contractual entitlement but not yet claimed• Insurance Claims

Claims for which there is entitlement under an insurance policy but not settled by the insurer• Variations Underclaimed

Variations recognised in accordance with the Company's revenue recognition policy but not yet claimed.

• Performance IncentiveKPI/Gain Share recognised in accordance with the Company's revenue recognition policy but not yet claimed.

• Earned Value ShortfallCosts exceed earned budget

• Materials on SiteMaterials purchased and on site, however not consumed and contractually can't be claimed

• Effects of Unbalanced BidCosts eg Mobilisation which contractually can't be claimed when incurred, but must be claimed over an extended period of time.

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Under / Over claims Analysis Types of Over Claim• Work Claimed Not Completed

Revenue claimed however can't be recognised, either under contract or based on work performed.

• Uncomp. Portion of Cont. Claim Claims for which there is contractual entitlement but the entitlement isn't realised

• Variations Over claimed Variations claimed but can't be recognised under the Company's revenue recognition policy.

• Earned Value SurplusCosts less than earned budget (see definition Earned Value).

• Contingency to Date The amount of contingency that has been claimed for which there is no corresponding expenditure

• Effect of Unbalanced Bid Costs which contractually can be claimed before being incurred, however can't be recognised under the Company's revenue recognition policy.

• Provision for Future Loss The Company's revenue recognition policy requires that if a project is in a loss position, the full loss is recognised.

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Reports

Discussion:• Reports

Open Order Report Purchase Order Details Inquiry Cost Analysis Enquiry – G/L One View Inquiry AP Ledger Inquiry Hubble

jde projects month end course - work orders

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