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ques on project invoicing for material purchases on project

Please advise if my approach is correct. Trying to understand what is the best practices here :

  1. Client has material purchases against a project. They don’t plan for individual material , but need a placeholder item to enter the planned value of all material purchases.
  2. Also, When they invoice , currently the project invoice request is not picking the PO amount automatically. They key it in manually. This is because they are currently using a fixed price service as a placeholder line item to invoice these expenses.

On Point 2, I recommended them to use expense time and material item type instead , because that is the only way for system to pick the PO expenses automatically in the invoice. In all other instances the final price is picked from the sales order .

Client however thinks they should use a material placeholder instead . They say this will allow them to also plan for these material . So use this placeholder material on the planned material tab and plan for all materials. Then use the same placeholder material to invoice for the purchased materials. But in this approach, the system is not picking the PO amount automatically

My approach is

  1. Use a material placeholder to plan for material ( this will take care of their req for seeing planned and actual on the same tab)
  2. But when it comes to SQ and SO use the expense time and material as placeholder for invoicing ( this way the system will pick actual PO expenses)

Any thoughts ?

Regards

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1 Answer

  • Apr 17 at 02:57 PM

    Dear Jean,

    in regards to invoicing purchased materials to the customer your suggestion is perfect.
    If they use a Sales Order item with type Expense Time and Material then the actual expense amount will be the default invoicing amount for the project invoice item.


    In regards to planning they could maintain a planning item for all materials that they are planning to use:
    For this they could either create a separate project task and here enter the planned material amount in the Materials tab.
    Or they could maintain the planned materials per each project task separately.

    The planned and actual values can then be viewed in the related reports such as the Project Cost and Revenue Details by Project report.

    After this, they could create purchase order items for these materials directly from the project.
    Or, if it is not fully clear which and how much of the materials shall be used eventually, the customer could create a limit item in an external purchase order (created for the Purchase Requests and Orders workcenter), enter a material product category, a planned value in the Value limit field and then assign the item to the respective project task.
    If they are planning materials for different project task they could create limit items for each project tasks separately.

    In the next step, they could assign the respective material when creating the goods receipt from the Goods and Service Receipts workcenter.

    In regards to the cost of sales the expenses from the posted goods receipts can then be assigned to the expense sales order item.

    They will be realised on the G/L account assigned to the Material Account determination group.
    But they will be associated with the product category of the Expense product used in the sales order item.


    [In order to automate the sales order assignment the customer could create assignment rules for sales order items:

    In Project Management go to the Not invoiced times and expenses and click Edit Time and Expenses.
    In the new screen click on Edit Assigment Rules and select view all rules*.
    *For Sales Order items of type Expense the system automtatically creates a default rule for expense reports.

    To create a new rule:
    Press Add Row.
    Enter the Project task (if there is a specific material related project task) and the specify the source, e.g. Goods and Service confirmation and the Time and expense type, e.g. material, as well as the material ID if needed.
    Then assign the Sales order item of type expense time and material.
    Ensure that this rule takes priority over all other rules associated with the same project task as the automatic sales order item assignments works through a hierarchical rule selection.]

    I hope this helps.

    Kind regards,

    Caroline

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