Posting operational work (Subcontractors) – part 7

In my previous six posts I described posting of own work on projects, using different models. The base characteristics of this models is that we have our own resources and items consumption. Now, we have once more model for posting, when we use Subcontractors work. Target is the same, we need to make some contracted Construction Positions, but now we do not use own consumption.

We have two types of subcontractor’s engagement in our construction projects:

  • First, we can engage subcontractor for do some minor work on our positions. That means, we will work some part of job, and some part of job will made by subcontractors.
  • Second, we can engage subcontractors for doing complete job by position. This is very often when we work on complex construction with very vary business processes, as construction of houses, buildings, etc., because the main constructor often perform only one or two types of works and engage subcontractors for all other works.

I describe how we can planning that in Construction Position Norms in my old post about Construction Position and Norms – Cost Analyze and Bill of Quantities – (Subcontractors), but now I will describe posting of subcontractor usage.

Subcontractor’s minor engagement

This is the simply process. We get invoice from subcontractors for their part of work. For posting, we will use the standard NAV purchase documents, Purchase Order or Purchase Invoice. We will post this as our cost using G/L Account, but we must to set Job No. and Job Task No. in Purchase Lines. When we post document, we will get Job Ledger Entries with G/L Account types. Our own part of job, we will post using Job and Position Journals or using Output Orders. We will invoice position we posting using Position Journals or Output Orders, with the same quantity.

We can use this model for all planned or unplanned costs on project. NAV will be classifies our own usage as resource cost or as item cost, and all other costs as G/L Costs.

As I said, this is very simply process. Other posting method need more customization or more manual work. We choose customizations, and we make automatic model of subcontractors posting in our solution NAV4Construction.

Subcontractor’s complete position engagement

In this example, we engage subcontractors for doing complete job by position. We get invoices/certificates from them for complete position engagement as we have this job in our Bill Of Quantities.

Doesn’t meter I said is too complex process, we mad it simply. For posting, we will also use the standard NAV purchase documents, Purchase Order or Purchase Invoice, but with some customizations. We will post this using Position types (new NAV4Construction type), and we also must to set Job No. and Job Task No. in Purchase Lines.

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When we post this document, we will get Job Ledger Entries with G/L Account types (G/L Account from Posting Groups) as cost, and also Position Ledger Entry with output quantity and price from BoQ, and posting type Subcontractor, as well. With only one posting, we will get complete posting process, and we can prepare our invoice to customer.

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.

Posting operational work (Recurring Journals) – part 4

If you do not use Output Order and you have many similar entries for posting, you can use Recurring Journals. There are Recurring Position Journals (NAV4Construction functionality) and Recurring Job Journals (NAV standard with customization). You can use them, when you do many days the same works. E.g., you can make many days one-by-one, on first building-site excavation, on second building-site wall building, on third building-site concrete works. If you do this the same works for e.g. 10 days, you can use recurring functionality. You need to input these position works by projects at one Recurring Position Journal and resource and item consumption, again by projects at one Recurring Job Journal. Everything you need is to fill quantities for each day and post it.

Recurring Journals has the same columns as standard Journals, except two fields:

  • Recurring Method – The recurring method determines what happens to the quantity on the journal line after posting. For example, if you use the same quantity each time you post the line, you can reuse the same quantity after posting as the same main data (Type, No., Position no., Description, Location Code, Work Type Code, Ongoing Code, Division Code, Division Type…). If you want to use the same accounts and text on the line, but the quantity varies each time you post, then quantity should be deleted after posting. There are two recurring methods:
    • Fixed: The amounts (Unit Costs, Unit Prices, Standby unit cost and/or Position price) on the journal line will remain after posting as all quantities (Quantity, Waiting Time, Extremely Stagnation Time, Ongoing Quantity, Mileage).
    • Variable: The amounts (Unit Costs, Unit Prices, Standby unit cost and/or Position price) on the journal line will be deleted after posting.
    • Recurring Frequency – Enter a recurring frequency if you have indicated in the Recurring field in the job journal template that the journal is a recurring journal. The recurring frequency determines how often the entry on the journal line will be posted. The field must be filled in. For example, if you want the journal to be posted every month, enter 1M. After every posting, the date in the Posting Date field will be updated to the same date in the following month. The codes for recurring frequencies are:
      • D (day)
      • W (week)
      • M (month)
      • Q (quarter)
      • Y (year)

If you want to post an entry on the last day of every month, you should post the first entry on the last day of a month and enter the formula 1D+1M-1D (1 day + 1 month – 1 day). With this formula the program takes into account the different number of days in each month.

After posting, we get the same data as posting standard Job Journals or Position Journals.

Posting operational work (Construction Management) – part 1

In NAV4Construction, 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. 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. 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.

Output Order

New ‘Output Order’ we get with ‘New’ command on the ribbon. We need to put Project and Task we work on them and choose Construction Position for posting. System will make automatic filter for positions and we get only positions we define on Bill of Quantities.

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If we eventually must post position out-of-BoQ, we can press ‘Show All’ and we will get complete Construction Position code list. After that, we need to fill ‘Quantity’ field with output quantity for this position in presented Unit of Measure. If this is not first posting for this position on this project, we can see previous posted quantity for this position. We also can see contracted position quantity from BoQ. On this way, we have control before posting this values. If we want to see what we post for this position previous, we can press on ‘Position Executed Quantity’ field and we will get complete evidence from Position Ledger Entry.

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We can fill another specific filed, depend of construction type (civil-engineering, building construction, road, maintenance…), but I will explain this in some other posts.

When we fill all necessary header fields, we have to fill lines with consumption data. We can fill lines automatic or manually. Results is the same, but automatic can make work easier if we have good normatives for construction positions.

Automatic fill process can be started by the ‘Import outputs’ command. System will use all normative lines for position in header, recalculate consumption quantity with position quantity on header and fills it. I have to notice, these are planned quantities and I am sure, we need to change some of them.

If we have manually input of data, we need to choose line Type (Resource or Item) and choose desired Resource/Item. After that, process is different depend of line type:

Item

For Item, we need to fill ‘Location Code’. We can get default location code for project if we make this setup on Project Card. We need to fill item quantity, as well and this is all. All costs and prices for the item will be filled automatically.

Resource

For Resource, we can fill more fields. There are not all mandatory and this depend of setup for company and/or project. It is necessary to fill quantity per Unit of Measure and we can choose ‘Work Type Code’ for different Unit of Measures/Cost/Price. If this is people type of resource, this is enough and as items, costs and prices will be automatic filled. But if we choose machine resource type, we can fill more fields.

First of them are ‘Waiting Time’ and ‘Extremely Stagnation Time’. ‘Waiting Time’ is time when resource did not work because bad organization. System will be calculate cost for all quantity time, but price for (‘Quantity’ – ‘Waiting Time’) if ‘Waiting Time’ is acceptable. If this time is not acceptable, system will calculate price based on specific formula (this is very complex setup, and I will explain it in independent post). ‘Extremely Stagnation Time’ is time we use only for evidence. This is a time when we was prevented for work (nasty weather or some other force majeure).

We can fill ‘Mechanization Resource Code’ if we know exactly what machine is worked. System can propose only machines for choosing resource. If we in advance know what machine worked, we can fill this field, and ‘Resource No.’ will be filled automatically. If we have configured machinist for mechanization resource, this field will be filled automatically, but if we have not it, we can choose ‘Employee No.’ for machinist from filtered employee list only from departments who use machines.

Know we know what time machines spend for making position, but we don’t know what they are worked exactly. Because of that, we have ‘Ongoings Code’ where we can define what our machine really do. ‘Ongoings Code’ list has Unit of Measures and they are configured depending resource types. When we choose this code, we need to fill ‘Ongoings Quantity’.

If our machine is the vehicle, we can fill additional fields: ‘Mileage’ and ‘Tour Quantity’.

This is only base story about this process and I will detailed explain some specifics in some new posts.

Posting

Before posting, we need to change status. Changing status make checking of all necessary fields input. NAV will make evidence of username, date and time for making document and for status changing, because these are very important data.

After that, posting process is simply. For each posted document, we can make storno (correction) document very easy, but I will explain it in later posts.

Operational work on construction project

We finished with contracting process, We start with quote requirement from potentional customer and we have gone through full cycle contracting process. Quantity Surveyors finished their Bill of Quantites and customer accepted our quote; contract is signed.

Now we have to start with operational process. Our people and mechanization are on project site. They have own first working day and we need to monitor their activities. Before that, we had to prepare dynamic schedules and our Gantt Chart, but I will explain this process later. Curently, in next posts I will devote to operational work. I will explain all about posting of output and consumption on project. First, I will explain own consumption, and after that subcontractors work.

Tomorow, I will writte about “Output Order” in NAV4Construction…

Bill of Quantities – (Fixed Cost) part 5

When we start with calculation for project, for each Bill of Quantities, we could have specific fix costs. I described full calculation process for each Construction Position, but all of them where variable costs. That means, when we have to complete some position work, we need to consume some items (goods or materials) or some labor (mechanization, vehicle or person). As we have more Construction Positions work, we would have more item and resource consumptions (or subcontract work, as well). All of them are variable costs.

On the other hand, we could have some specific costs who are not linked to Construction Position execution, bit there are linked to complete project. These are e.g.: some project taxes, project preparation, project insurance, staff accommodation… All of them are fixed costs and we cannot link them to one of the positions.

For each BoQ, we can add them to project by insert in linked table ‘Fixed Project Costs’ and fill their cost. When we fill of them, on BoQ Header, we can see Total BoQ Fixed Cost.

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We can insert fixed costs by starting command (three points) near field and after that we need to insert cost values by specification. When we finish cost inserting, we need to assign this cost to positions. We can assign total fixed cost to all positions or only for selected. If we want assign cost only for selected, we need to mark/unmark fields ‘Cost Using’ for each line. After that, we need to start command ‘Apply Fixed Cost’ and NAV will place parts of fixed cost to each selected position. System use proportional method of placing costs. When this is finished, field ‘Assigned Fixed Cost’ on header will be marked as sign that fixed cost is placed to lines.