Chapter 11: Project Accounting and Operations

In this final chapter of our book, we are going to turn time into money! The preceding chapters have built everything up to the ability to perform billing and accounting for our work products. In this chapter, you will understand the implications of the billing methods we have chosen and you will see how they drive invoicing.

Furthermore, once billed, the conversation will turn to how we can make use of the data that has been generated. So, let's get this chapter started!

In this chapter, you will learn about the following topics:

• Recap of our learning
• Getting an overview of the billing process
• Invoicing
• Finance and Operations integration
• Costing and profit
• Learning about reporting and analysis

By the end of this chapter, you will know how the project operations system generates project accounting transactions.

Technical requirements

To perform the tasks in this chapter, you will need the following:

• An Microsoft 365 account and an Azure AD login
• A Microsoft Dynamics 365 Project Operations (C) license
• Potentially a Dynamics 365 Finance and Operations license
• A Microsoft Project Plan license
• The Project Billing Administrator security role
• A Finance and Operations accounting role and integration role suitable for running the integration

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Recap of our learning

We have journeyed together through 10 chapters and are now entering this final chapter together. In the past 10 chapters, we looked at the foundation of what a project-based business is and what the needs of that business model are. We then learned that project-based businesses are focused on delivering the project commitments that have been made to their clients.

When we looked at the Microsoft Project Operations solution, we outlined how we can build upon the Microsoft 365 and Dynamics 365 frameworks to provide users with an experience that is integrated with everything Microsoft. The benefit of this is that while leveraging the Microsoft framework, we can also gain some significant improvements for our people, processes, technology, and data.

When we looked at the Microsoft 365 framework closely, we outlined some of its key benefits by identifying how it gives you an overall platform for success, including Outlook, Teams, SharePoint, and OneDrive. With...

Getting an overview of the billing process

The billing processes in project operations will be different, depending on the type of deployment you have. Reflecting back, we have three different deployment types that we can use in project operations:

• Lite deployment – deal with proforma invoicing: This is a Dynamics CE-only deployment of project operations and is integrating with external ERP systems.
• Project operations for resource/non-stocked-based scenarios: This is the integrated version of Dynamics CE Project Operations to Finance and Operations.
• Project operations for stocked/production-based scenarios: This is the Finance and Operations-only deployment.

In this chapter, we are going to focus on the Lite deployment – dealing with proforma invoicing processes – because this particular deployment, with the out-of-the-box integration Microsoft provides into Finance and Operations for the billing functions, is the project operations for resource...

Learning about reporting and analysis

The purpose of reporting and analysis is to provide performance metrics to the users of the system who are responsible for project performance. To provide this, we have a few options that will provide value to the system.

With project Operations, dashboards are provided out of the box. As you may recall, Dashboards are available from Home | My Work | Dashboards. This section will provide you with dashboarding information that can be leveraged by your users.

Project Operations Dashboards

Project operations Dashboards are specifically designed visual graphics that are built upon views of the data in project operations. Specifically designed for the personas in use in a project business, these dashboards can have security assigned to them, expanded to include more data, and are generally made into what the users want and need to manage for the project business.

When viewing dashboards, you get to choose your dashboard and set it as a default...

Summary

In this chapter, we concluded our project operations conversation by reviewing some of the key elements of the project operations system, including contract types, finance and operations, and reporting and analysis. This hopefully has helped pull together the key concepts and learnings throughout the book.

In terms of contract types, we reviewed time and materials contracts and compared them to fixed-price contracts. We learned how the project that we built out with its various contract lines all came together in the invoicing processes. We then billed out our milestone invoice and printed a proforma copy. After that, we billed out our product and time and materials billings. In all of these, we learned about the integration points of our invoices and the other actuals transactions in the system.

Next, we reviewed some of the key elements in the Finance and Operations integration, including the Integration Journal, Financial Dimensions, and Revenue Recognition. When working...

Questions

1. Which deployment models were used to exemplify project accounting in this chapter?
2. In a time and materials project, each hour of time is transformed into what?
3. In a fixed-price contract, does the sales price per hour get calculated?
4. In a fixed-price contract, does the cost per hour get applied to the contract?
5. When invoicing a milestone, what initiates the fact that the milestone is to be placed on an invoice?
6. What is a common integration point for an invoice to be integrated into accounting?
7. True or false: Project Operations has robust tax engine capabilities and will therefore render a complete invoice in the CE system.
8. Can a single project invoice include time and material, product, milestone, and retainer billings?
9. The Finance and Operations Integration Journal is date-sensitive to what degree?
10. What is the benefit of financial dimensions?