NAV4Construction is CfMD for NAV2015

Finally, our construction vertical solution NAV4Construction is officially registered as CfMD for Microsoft Dynamics NAV 2015 and has passed all tests by VeriTest and Lionbridge. CfMD meanings “Certified for Microsoft Dynamics”. CfMD is Microsoft Corp.’s highest standard for partner-developed software. This certification represents a significant step in elevating the standard for partner-developed software solutions for industry-specific business applications. Solutions with a successful software test have demonstrated development quality and compatibility with the Microsoft Dynamics product. VeriTest, a service of Lionbridge, performed independent and rigorous testing on the solution’s integration with Microsoft Dynamics.

CfMDpass

This vertical solution covers all construction and similar activities in regular ERP usage. You can find more about it on this blog or on YouTube channel.

Now, Microsoft Dynamics partners all around the world can order this solution and add it to their NAV implementation. Of course, before that, they have to make partnership with solution author.

Posting operational work (posting differences) – part 5

What is a main difference between using Output Order and Job & Position Journals?

As I wrote in my first post for this theme, we can post the operational work on next ways:

  • Using ‘Output Order’ – posting of Construction Position output work and Resource and Item consumption per Project in the same time;
  • Using ‘Position Journal’ – posting only Construction Position output work per Project; we need to post consumption separately;
  • Using ‘Job Journal’ (standard NAV functionality with some specific customizations) – posting only Resource and Item consumption per Project; we need to post output separately;

Advantage of the first method is that we can post all entries with the one document. We get posted document with ‘Navigate’ functionality. Also, this method enables us to have complete statistic of cost per every Construction Position for each Project.

As we look up in Construction Position Statistic for position posted using Output Orders, we can see Using (position cost), Sales (position revenue) and Profit:

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On previous picture we see position cost for each period.

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In previous example, I presented Construction Position Statistic from NAV, and this is shown only costs, revenue and profit, without analytics. Also, if we use Output Orders for posting, we can make deeper analysis with complete analytics of resources and items cost or quantities, as picture bellow (from BI4CONS):

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Failing of this method is that if we have many complex position works per day, it is too complicated to make evidence and post it.

If we choose posting without ‘Output Order’, we get simply procedure for posting. We use ‘Position Journal’ for evidence of work per all Construction Position we have and separately we use ‘Job Journal’ for evidence of consumption all Items and Resources, not linked with Construction Positions. On this way we get simpler method, but we lose connection of consumption with Construction Position output. Using this method of posting, we know revenue for each position on project, but we don’t know position cost and profit. We could know cost and profit only per complete project or combination project and project task, and of course we will know this data per required period. As we look up in Construction Position Statistic for position posted using Position and Job Journals, we can see only Using (quantity, not a position cost) and Sales (position revenue):

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On previous picture, we cannot see position cost.

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Position sales data (previous picture) are the same as when we use Output Orders. But when we try to see profit, we will get a wrong data with 100% margins.

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We cannot get all things and we must to decide what method we want. Good thing is that we can choose different method for each project, depend of complexity and project requirement. Good thing is also that we can set filter on Position Statistic and we can see complete data for position posted using Output Order on each project.

Cost Accounting for Resources (reporting) 4/4

Resource Cost Accounting has stay in many reports and analysis. These reports from Quantity Surveyor Section (in Bill of Material calculation), to Construction Management (actual costs per project) and Mechanization Management (detail costs of finer level of resources – each mechanization/vehicle resource).

The most of reports can make cost breakdown from total amount or amount per unit to amounts per cost types (depreciation, fuel, oil, maintenance…) for each capacity plan or usage in Job Ledger Entry or Resource Ledger Entry. System present complete breakdown cost structure, but present separately usage cost and standby cost also. We can see all deviations from G/L to calculated and applied entries.

Depends of options you choose, the most of these reports can give analysis with less or more details. Solution has many and many analysis, but I will recommend BI tools we have.

The best of these reports is that they can give you “smart” analysis and you can make right business decision, e.g. are you need to buy new resource or keep old one with maintenance. You can compare credit/leasing installment costs (with fuel/oil consumption for new machine) with maintenance costs (with increased fuel/oil consumption for old machine). Of course, you can use actual costs, not planned.

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Cost Accounting for Resources (calculation) 3/4

Applying Calculated Cost automatic calculation process recalculate evaluated Resource Costs to actual Resource Cost. Actual resource costs are the really costs bookkeeper posted as payables costs on G/L accounts (energy, fuel, oil, tires, maintenance, depreciations, payrolls…).

Complete Applying Calculated Cost automatic calculation process is based on next steps:

1)     Setting the actual mapping

2)     Starting the calculation

3)     Configure date rang

4)     Getting Resource Cost Calculation results

5)     Applied Costs to entries and choosing model of applying

We will discussed about all of them:

Setting the actual mapping

We can make more resource mapping variants in the same time. When we want to apply specific mapping to entries, we must to set mapping name on Resources Setup, on Default adj. res. Name field. This name, we must configure on all mapping line on Adjust Resources Cost table.

Starting the calculation

We need to start Calculate Resource Cost command. When we start this function, we need to choose calculation variant:

  • based on actual quantity in entries
  • based on planned quantity

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Configure date rang

System make calculation for specific date rang. To get correctly data, we always have to set start date as first day in year. End date is the last date for calculating period. As this setup, system will always make cumulative calculation.

Resource Cost Calculation results

When function finish procedure, system used value in Cost Posted to GL, and depend of choice calculated next:

  • Actual Quantity: value in Cost Posted to GL divide with actual resource quantity for period in field Resource Quantity on the same table
  • Planned Quantity: value in Cost Posted to GL divide with planned resource quantity configured on Resource Card

This results was multiplicity with percent in Share of Cost on G/L Account % field and put it value in Calculated Cost field.

We have choice in calculation because these costs is used in offering process. Sometimes, resources did not works at specific period. If we calculated with actual quantity we can get abnormal resource costs for desired period (e.g. civil-engineering machines on winter period). Later in same year, we can recalculate complete costs for complete period with actual quantities.

Applied Costs to entries

When calculate process finished, difference from Calculated Cost and Unit Cost placed in Adj. Direct Unit Cost. This is value for update existing value in Resource Ledger Entry and Job Ledger Entry.

We can look up values and analyze them. We can continue to use planned values in Unit Cost field or apply calculated values. If we want to apply calculated values, we need to start Apply Calculated Cost command.

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What and where to apply?

When we start this command, we must to choose method of applying or we can cancel job:

  • Apply cost calculation: NAV will only update calculated values to Direct Unit Cost and Unit Cost; new entries will be using new costs.
  • Apply cost calculation and post to entries: NAV will update values to Direct Unit Cost and Unit Cost and update all values in Resource Ledger Entry and Job Ledger Entry on desired period.

When process is done, NAV will marking field Applied Calculated Costs.

What else?

Usually, we don’t use the same Unit of Measures for all resource usage. Sometimes, we use kilometers for vehicle usage, but sometimes we use work hours or transported volume, or combination of them, or…

We have standard solution for posting this solution, we can use Work Types with configured additional Unit of Measures. But, how to calculate cost of them? There no exist completely exact way to do this, but we can get “enough exact” way. First, we need to use Unit Price for internal reason (or external, it doesn’t matter). We must to use this for standard resource price and for all work types.

We have to set that we want to use that calculation system on Resource Setup and Default Cost Type (Fixed, % Extra, LCY Extra). When we start this functionality, NAV will automatic calculate cost per work types using Unit Price for work type and Price/Profit Calculation and Profit % values on Resource Card fields.

True Story: NAV4Construction in Civil-engineering company

A.D. „Novi Pazar – put“ (eng. “Novi Pazar Road”) is a company with half a century long tradition in construction and maintenance of road and other civil engineering structures. Company owns a large and powerful fleet of vehicles and machinery, with own forces for their maintenance, as well as facilities for the production of asphalt, concrete, stone extraction and production of stone aggregates. AD “Novi Pazar – put” (eng. “Novi Pazar Road”) is a member of the “Putevi” group (eng. “Roads Group”)

You can find a case study:

http://www.nps.rs/fileadmin/Content/nps.rs/Dokumenti/Novi_Pazar_put_-_Case_Study__engl..pdf