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PoC on project planned cost

Hi Experts,

My customer recognizes his revenue based on percentage of completion on projects. The accrual method we are using is 108- Cost-to-Cost POC Project.

With this method, the PoC is calculated on total project planned cost. However, we would like to remove from the total project cost the planned cost of material and other expenses. The standard we are following is that as the revenue gain is mainly from labor, the rules is telling us that the way to calculate the revenue is aligned with the way that is revenue is gained.

Long story short, we need to have this kind of calculation :

Actual Labor / Labor project planned cost ONLY (instead of total project planned cost) = %

Is there a way we could trigger this calculation automatically from ByD ?

Any suggestions ?

Thank you for your attention,

Andréanne

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    author's profile photo Former Member
    Former Member
    Posted on Apr 22, 2016 at 08:47 AM

    Hi Andreanne,

    for the predefined accrual methods you cannot influence which cost will be considered... at least not out of the box.

    With respect to planned cost, a possible approach could be to use accrual method "Cost-to-cost POC" which requires you to maintain the planned cost on sales order item level. There, you could exclude non-labor cost. The downside is that the other accrual method considers plan changes done in the project, this method, however, requires manual interaction to update changes in planned cost in the sales order item.

    For the actual cost the approach is more complicated. You would have to use the SAP Cloud Application Studio and create an add-on. There, you have to use the enhancement option SalesAccruralsValuesGet. (Please note: the typo is in the Studio, not in this text). This, however, will take some effort to make it work smoothly. Unfortunately, I do not know anyone who has done this so far, thus the evaluation effort and confirming that this is really feasible would be with you.

    Alternatively, you could introduce sales order items to which you account assign the actual cost for expenses and material (by using the "correct" project tasks). For this SO item, you could then choose the accrual method "continue to defer". Thus, the revenue would only get recognized once the project is completed. But, still this would require you to not continue using accrual method 108 as described above.

    Best regards

    Otfried

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    • Hi Otfried,

      First of all, thank you for your reply !

      In our case, I think it won't be suitable to use the method 106-Cost-to-Cost PoC as this method doesn't give us a lot of flexibility on re-forecasting. This method has also other limits...

      We'll explore the possibility of creating an Add-on.

      Regards,

      Andréanne

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