A Look at D365 Project WIP Reporting: Budget vs. Actual

In our past virtual session, “A Look at D365 Project WIP Reporting: Budget vs. Actual” with Judi Irion, we dove into the options for managing budgets in Dynamics AX/365 Project Management and Accounting. We also explored solutions for tracking project WIP reporting for service-oriented organizations, focusing on comparing budgeted versus actual hours and amounts. Additionally, we showcased numerous use cases for project-based businesses. Follow along in this blog as we highlight all of these key points!

Understanding WIP Reporting in Dynamics AX/365

Work in Progress (WIP) reporting is a crucial aspect of project management for professional services and other project-based companies. Dynamics AX/365 offers comprehensive tools to manage and report on WIP, ensuring that businesses can accurately track the progress of their financials and projects.

1. Defining WIP: WIP refers to the cost incurred on a project that is still in progress and has not yet been billed to the client. This includes labor, materials, and overhead costs.
2. Importance of WIP Reporting: Accurate WIP reporting helps in understanding the true financial position of a project, ensuring that all incurred costs are accounted for, and helps in forecasting project completion and profitability.

Reconciliation of Budget vs. Actual

One of the common pain points for businesses is reconciling budgeted amounts versus actual expenditures and hours. This session provides insights into how Dynamics AX/365 helps in this reconciliation process.

1. Setting Up Budgets: Dynamics AX/365 allows project managers to set up detailed budgets for labor, materials, and other project-related expenses.
2. Tracking Actuals: As the project progresses, actual hours worked and amounts spent are recorded in the system. This data is crucial for ongoing monitoring and comparison against the budget.
3. Reporting and Analysis: The system offers robust reporting tools to compare budgeted figures with actuals, highlighting variances and enabling corrective actions if necessary.

Leveraging Project Budget Options

Dynamics AX/365 provides various options for setting and managing project budgets, which can be tailored to suit different business needs.

1. Fixed-Price Projects: For projects with a fixed price, the budget can be set based on the agreed-upon contract value. This helps in monitoring costs to ensure they stay within the budget.
2. Time and Material Projects: For projects billed based on time and materials, budgets can be more flexible, allowing for adjustments as the project progresses.
3. Mixed Projects: Some projects may involve a mix of fixed-price and time and material elements. Dynamics AX/365 can handle these complexities, ensuring accurate budgeting and reporting.

Use Cases for Project-Based Businesses

This session highlights several use cases for project-based businesses, demonstrating how Dynamics AX/365 can be leveraged to manage and report on WIP effectively.

1. Professional Services: Consulting firms, IT services, and other professional service providers can use WIP reporting to ensure that all billable hours and expenses are accounted for, improving profitability.
2. Construction: Construction companies can track labor and material costs against project budgets, ensuring that projects stay on track financially.
3. Manufacturing: Manufacturers involved in custom projects can use WIP reporting to track the progress and costs of each project, ensuring timely and cost-effective completion.

Conclusion

Managing and tracking project WIP is essential for the financial success of project-based businesses. Dynamics AX/365 offers robust tools and features to help businesses effectively manage their budgets and compare them against actual expenditures and hours worked. By leveraging these tools, businesses can gain better control over their projects, improve financial accuracy, and enhance overall profitability. Learn more by watching the whole virtual session here.