Registering costs and commitments
You want to keep your project control as up-to-date as possible, therefore it is essential that the right costs and future costs are entered for, for example, your monthly reports. Commitments are a financial obligation that represent future costs. The commitment will be replaced by unit costs when the unit costs are actually made.
Commitments can be booked in two ways:
- Manually
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Automatically from the PRP run
This depends on the value of the Log Commitments (Purchase Transactions) field in the Project Parameters (tppdm0100s000) session. The commitments are booked as soon as the purchase order is created and/or the goods receipt is registered in Procurement.
Soft and hard commitments
If a commitment has a purchase order linked to it that is not yet actually delivered, it is called a soft commitment. You insert this commitment manually. The soft commitment becomes a hard commitment when the purchase order is actually delivered. After unit costs are recorded, the commitments must be offset by the same amount as the cost amount.
If the unit costs are generated from a direct delivery or through a warehouse, these steps are completed:
| Purchase steps | Direct delivery | Through Warehousing (project warehouse) |
|---|---|---|
| Create purchase order | + soft commitments | + soft commitments |
| Receive goods | - soft commitments | - soft commitments |
| + hard commitments | + hard commitments | |
| Issue to Project | not applicable | - hard commitments |
| + project costs | ||
| Approve invoice | - hard commitments | |
| + project costs | ||
| + price variance | + price variance |
Commitments are only booked financially after they are confirmed and posted to Project.
In the Material Cost Entry (tpppc2511m000) session, commitments can be reconciled, which means that they become unit costs.
Cost origins
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You can register unit costs in the Cost Entry Overview (tpppc2811m000) session manually.
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By registering hours in People.
The entered hours will be recorded as Labor and the expenses either as Labor or Sundry Costs.
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By direct delivery of purchased items on the project.
This delivery can be one of these cost types: Materials, Subcontracting, and Equipment.
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By delivery of items from a normal warehouse or project warehouse to a project.
In Warehousing you can create a warehousing order (of cost type Materials).
- According to the results of invoices registered in Accounts Payable that are related and booked to Project.
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According to the results of surcharge calculations.
You can cover indirect costs using cost surcharges, but these will be booked as Sundry Costs.
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According to the result of the overhead calculations.
If unit costs are the result of registering hours or if unit costs are the result of actions in Financials or Procurement, the calculation of these transactions takes place automatically. The surcharge percentage applied to registered costs can be defined by project, cost type, cost object, and cost component. Extensions are included in a surcharge calculation or excluded, depending on the extension definition.
Confirm unit costs in the Approve Costs (tpppc4811m000) session or in the Global Approving (tpppc4200m000) session. Process costs with the Process Transactions (tpppc4802m000) session to Financials, and Project transactions.