| Log Commitments (Purchase Transactions)Not An exception is hard commitments in case a purchase order is
delivered directly to a Project site. In that case, a hard commitment line is
created. In the case of a direct delivery to a project site, the cost of WIP is
posted to Finance. Hence, the commitment in Project becomes cost in Finance. This is done because of the timing of the next step: "invoice
approval". The moment of the invoice approval is not controlled from Project
but from Finance. Therefore, the cost of WIP is posted to Finance . So, on one hand we cannot wait until invoice approval for
registering WIP costs because this in many cases will be late. On the other
hand, there is still commitment, because the goods are only delivered (not
consumed) to the project and may be returned to a warehouse (for example, the
goods have been ordered, but are not used). Order and Delivery Commitments are logged at the point of ordering and at the point
of delivery (when the goods or services are received)or at the point of
releasing the stage payments. Delivery Commitments are logged only at the point of delivery or at the
point of releasing the stage payments.
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