NAV4Cons on NAV2015

Now, we can to present our vertical solution NAV4Construction on the last NAV release – NAV2015. We have prepared and tested everything and it is stable system.

We have this solution on all clients, of course.

N4CWin

On previous picture, you can see the one of role centers on Windows Client and you can see the same role center on Tablet Client on next picture, as well:

N4CTab

In few following days, we will finish all necessary jobs about CfMD certification. After that, all of you who want, will be able to use this vertical solution in your environment.

AIA Billing Process in NAV4Construction

NAV4Constrution vertical solution for Microsoft Dynamics NAV fully provide AIA billing process for construction business. The AIA billing system is a standardized method of construction percentage of completion contract billing developed by the American Institute of Architects (AIA).

Typically, AIA billing system consists of two forms or pages and on the same way NAV4Construction works with them:

  • G-702 Contractors Application for Payment
  • G-703 Continuation Sheet

When you want to print Invoice from posted document, you can print both of these forms in the same moment or separate if you want this.

Complete process of AIA billing process is presented on the next flow chart:

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You can find here completed process with collection and correction systems. This is simplified process on flow chart, and in practice, you can find more milestones for these activities.

You can see part of G-703 Continuation Sheet on the next picture:

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This is the great benefit in operational work, because completing the AIA G-702 and G-703 forms by hand is usually frustrating and difficult with lot of possible mistakes. This is only one benefit among all other in this construction vertical solution.

Customer Success with Microsoft Dynamics Sure Step

First of all, I want to thanks to the people in Pack Publishing for this book review opportunity (especially to Sagar and Jay). I’m project manager with great ERP experience and I like this topic.

After many years spent in project management and many this topic books read, I was expecting another similar book. But, I was pleasantly surprised. Book is not only standard Sure Step manual. The author has pretty good researched the topics and give us some answers related to question why we need project management.

He is not limited only to the tight topic. He flirts successfully with other project methodologies when he feel this is necessary. Author is successfully introduce us in some new project management area as trusting is. He used parts from Covey’s book “Speed of Trust” and excellent combine them with Sure Step. I like to talk about this area as Trust Management and I think this is the new knowledge area in project management and we don’t think about that often enough.

All parts in book are described with facts, but author used practice examples, as well.

Book pretty good explain what is methodology and how we can choose the right tool for each specific case. Book introduce use in all available Sure Step tools, but also introduce us in tools by 3th party. Also, book teach us how to prepare own tool for specific needs. Very successfully, book explains to us that project management is not something you can learn by heart and this is serious discipline.

This book will be useful for absolute beginners, but also to people with years of experience in ERP or CRM implementation. Author summarized the main items that can make the project successful.

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I could have a lot of good to write, but in one sentence, this book should be read. I highly recommend this book.

If you want to buy this book, go to http://bit.ly/1jI9uZJ

Posting Operational Work (Subcontractors) – Part 8

When we post purchase invoice from subcontractor with construction position works, we get standard Posted Purchase Invocie, but with Type = Position on Invoice Line:

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Next difference, we can see when look at Navigate:

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Besides all standard entries, we can see new entry type – Position Ledger Entry. Job Ledger Entry is different, as well.

When we look at Jov Ledger Entry, the most importabnt thing is that we get entry type as Usage and G/L Account as type. We got G/L Account No. from Posting Groups Setup.

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When we look at Position Ledger Entry, we have standard NAV4Construction entry table, but Document Type is Invoice (that mean, we get invoice from subcontractor). We don’t have to post usage a Position again. System enable us to prepare Certificate for Sales Invoice by automatic.

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Posting operational work (resource costs/price calculation) – part 6

Using NAV4Construction, we can use specific resource cost or price models. When we post resources, we have next quantity fields:

  • Quantity – total time of resource engagement
  • Waiting time – time when resources do not make usage, because poor site organization
  • Extremely Stagnation Time – time when resources do not make usage, because force majeure
  • Effective Time – calculative field = Quantity – (Waiting time + Extremely Stagnation Time)

In NAV4Construction, we use Cost field for actual resource cost and Price form internal resource cost (transfer price for internal needs). Cost and Price are not calculate in the same way. Definition of them are placed on:

  • Quantity:
    • Cost – ‘Direct Unit Cost’ on Resource Card
    • Price – ‘Unit Price’ on Resource Card
  • Waiting time:
    • Cost – same as Quantity Cost
    • Price – ‘Standby Unit Price’ on Resource Card (using of this price depends of setup)
  • Extremely Stagnation Time:
    • Cost – no
    • Price – no

Cost Calculation

Cost Calculation is always the same. This calculation is based on resource usage and we calculate it by next pattern: Direct Unit Cost X ( Quantity – Extremely Stagnation Time )

If we want to use total quantity in calculation, we need to put ‘Extremely Stagnation Time’ blank.

Price Calculation

Price Calculation is more complex and depends of setup in ‘Res. Utilization Margin %’ field at Construction Setup. In this field we need to configure what is ‘acceptably utilization’ for us. In our example I will define that it is 70%. That means that if (Quantity-Waiting Time) is 70% or more in regard to total Quantity, this is good usage. Based on this, we have two different models of price calculation (we will use factor 0,7 instead of 70%):

Model 1: ( Quantity – Waiting Time ) >= 0,7 X Quantity

( Quantity – ( Waiting time + Extremely Stagnation Time ) ) X Unit Price

Model 1: ( Quantity – Waiting Time ) < 0,7 X Quantity

( ( Quantity – ( Waiting time + Extremely Stagnation Time ) ) X Unit Price ) + ( Waiting time X Standby Unit Price )

These Costs and Prices are the base of Construction Position cost and price calculation, based of their actual consumption.

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.

4 Mistakes to Avoid in Construction Bidding

This article is borrowed from Dexter+Chaney blog, because I think it is a great story and it is related with my topics:

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I’m pleased to introduce Byron Largen, CPA from Mountjoy Chilton Medley LLP (MCM), as this week’s guest blogger. MCM is a CPA firm with a team of accountants dedicated to construction accounting.

Construction markets remain competitive, so it comes as no surprise that construction companies have to be at the top of their game throughout a project. One of the biggest stumbling blocks, though, is often at the beginning of a project – during bidding – but there are key areas to avoid in order to make sure your teams stay on track.

1. Overlooking Your Indirect Costs

With advanced construction software to help you, identifying your direct costs on a job is probably pretty easy. But one area that leads to problems is forgetting the indirect costs — those not directly attributable to the project at hand but still likely to be in play.

For example, if you completely own a piece of equipment, you probably estimate the amount of fuel that it uses on a job, but may not consider including the depreciation, insurance, maintenance, and other costs associated with running it. All of these expenses are important to include for your bid to be accurate.

2. Missing the Mark on Profitability

With an ongoing shortage of construction jobs, it can be tempting to bid at every one that comes along, whether or not they’ll actually earn you a profit. That said, calculating profit margin can be tricky, so be sure you don’t undercut your own profitability as the number start flying. Use historic job performance as a predictor, be sure you have the latest labor rates and material prices, and if the math doesn’t add up to profitable work, be prepared to walk away.

3. Not Keeping Up with Technology and Construction Software

Used correctly, technology can give you a competitive edge For example, bids generally begin with estimates. And how can you improve your estimates? By upgrading your technology.

With the multi-dimensional capabilities of BIM now integrated into many software applications, estimators can see all angles of their work in vastly more detail than before. For instance, an estimator can separate construction components from the overall structure to scrutinize them individually.

4. Ignoring the “Other Guys”

Don’t make the mistake of underestimating your competition. When working on a bid, you’re assessing the project with respect to your company’s capabilities, but if you consider the competition, it may change the way you bid, or even your decision to bid. If two of your main competitors are known for bidding low, you may have to reduce your bid comparatively. Is the job still worth it?

Science Meets Art

Some contractors might say that bidding is a science — you crunch the numbers and stick to them. Others might say that it’s an art — when your gut says a project will be profitable and elevate your visibility in the marketplace, go for it.

The truth probably lies somewhere in between. Now more than ever, you’ve got to do the math and make sure your cash flow can handle the burden of every job. But, at the same time, no one knows your local market and construction company like you do. So your gut certainly deserves a say.