Cost, Hours and Revenue Reported to Activity

Costs, hours and revenue can be reported to an activity from a wide range of connected objects, e.g. Purchase Orders, Shop Orders, Work Orders, Sales Contracts, Document Packages, Tasks, Resources etc. (Refer About Activity Connections for a complete list of objects). As the connected object is planned and executed, values of cost, hours and revenue is reported back to the activity.

The cost and revenue values will always be reported from the connected objects in base and transaction currency. If multi-currency and/or project currency have been enabled for Budgeting and Forecasting purposes for the project, then cost and revenue will also be reported in base currency using the fixed Budgeting and Forecasting rate and/or the project currency. The values are displayed in base currency in all forms where cost and revenue are available, while the other currencies are displayed only in the Connections forms.

Note: This document explains how different objects report cost, hours or revenue to an activity, refer the tables below for detailed information about each object. For information on how connected objects retrieve progress and earned value, refe About Earned Value and Progress.

Cost/Hours

Connected objects can report cost and hours information to the activity. The type of information retrieved depends on the connected object. The information is reported using the project cost elements that are defined for the connected object. The cost/hours information can be viewed for each activity in the Project Navigator/ Activity, Activity /Cost or Activity/Hours tabs. It is also possible to view cost/hours per sub project or for the whole project in the Project Navigator window.In the Project Navigator/Connections or Activity/Connections tabs it is possible to view detailed information about the connected objects.

The possible stages of cost/hours values are:

• Estimated
  Estimated values represent the approximate values of cost or hours before the planning phase of the activity is carried out. Estimates are manually entered in the Estimate tab.
   
• Planned
  Planned values represent the current budget which is valid for the activity. Planned values are retrieved from various connected objects, for example, you can use tasks or document packages to define planned values, and these values will be summarized and displayed in the Planned columns. The value in the planned columns will be updated immediately when you change, add or remove objects that report planned cost/hours to the activity. You can also retrieve planned costs and hours from other sources by selecting a relevant Planned Cost Driver for the activity.
  
• Baseline
  Baseline values represent the current approved budget which is valid for the activity. Use this column to keep track of the original approved plan, with or without approved scope changes. After a baseline has been created for a project the values entered in the Planned fields will be copied to the Baseline columns. If the planned values are changed thereafter, another baseline will have to be created for the new planned values to be reflected in the Baseline columns.
   
• Planned Committed
  Planned committed values are the sum of cost or hours from connected purchase requisitions lines, purchase order lines, shop order requisition lines and shop order lines that have not been released yet.
   
• Committed
  Committed values are the sum of remaining costs/hours reserved or ordered by the objects connected to the activity. The total Committed value is reported first when the object reaches a status which commits its values (i.e. Released status on a Purchase Order) and decreases as Used values are reported from each connected object. For a connected purchase order, the committed value will be based on the remaining quantity to be received. For a connected shop order, the committed cost of material will be based on the quantity remaining to be issued, and the committed cost of work and hours will be based on the status and progress of the operation.
   
• Used
  Used values are the sum of costs/hours that have been used, as reported from each connected object. Used cost/hours are reported from the transactions (Inventory, Purchase, Operation or Project) created by the object until these are transferred to IFS/Accounting Rules and the corresponding voucher is created. Once a transaction receives the Transferred status it will stop reporting used cost/hours and the voucher will report the Used Cost/Hours instead. Voucher rows that are created and pre-posted with the Project ID and Activity sequence will always report Used cost. The utilized hours will be displayed in the Actual Hours field.
  
• Actual
  Actual cost is the sum of costs that have actually been used and is reported from the General Ledger (through General Ledger Voucher Row). Actual hours are the hours that have been reported as used, from each object.
  

Revenue

Connected objects can report revenue information to the activity. The type of information retrieved depends on the connected object. The information is reported using the project revenue elements that are defined for the connected object. The revenue information can be viewed for each activity in Project Navigator/Connections/Activity or Activity /Revenue tab. It is also possible to view revenue per sub project or for the whole project in the Project Navigator windowIn the Project Navigator/Connections or Activity/Connections tab it is possible to view detailed information about the connected objects.

The possible stages of revenue values are:

• Estimated
  Estimated revenue is a speculated approximate amount of revenue that is expected to be generated from the activity. This value is entered before the activity has been properly planned. Estimates are manually entered in the Estimate tab.
  
• Planned
  Planned revenue represents either the budgeted values from an object (e.g. Invoicing Plan or Sales Contract Lines) or values generated through cost objects (e.g. Project Transactions) which have a sales price. The value in the Planned columns will be updated immediately when you change, add or remove objects that report planned revenue to the activity.
   
• Preliminary
  Preliminary revenue is always generated from a preliminary invoice.
   
• Posted
  Posted revenue is always generated from a Hold Table Voucher.
   
• Actual
  Actual revenue is always generated from a General Ledger Voucher and will also replace the value in the posted column.

Reporting

The following tables show how the different objects report cost, hours or revenue information to the activity. Any object which reports any type of cost, hours and revenue to projects will report these values on a cost/revenue element.

Cost/Hours

The Planned Cost Driver determines from where the Planned Cost and Planned Hours are retrieved. When the Planned Cost Driver for the activity is:

• Connected Objects - The planned cost and hours of the activity are retrieved from the objects that are connected to the activity as described in the table below, excluding values from Activity Estimates.
• Estimated Cost - The planned cost and hours of the activity are retrieved only from Activity Estimates. Values other than Planned are retrieved according to the table below.
• Activity Resources - The planned cost and hours of the activity are retrieved only from the resources allocated to the activity. Values other than Planned are retrieved according to the table below.

The objects report cost/hours to the activity as follows:

Note:

• All objects that report planned cost or hours will also contribute to Baseline costs and hours when a baseline is set for the project. The Baseline values are copied from the Planned values.

When the Purchase Order for a Part/No Part has been released. The committed values will be held by the purchase order line object.

Note:

• All objects that report planned cost or hours will also contribute to Baseline costs and hours when a baseline is set for the project. The Baseline values are copied from the Planned values.

Cost and hours will be as follows for different supply options in Customer orders.

Revenue

Updating of revenue on objects is performed against project revenue elements. Revenue objects do not report progress. The objects report revenue to the activity as follows:

A Step by step example on how important activity fields are used:

For this example we work on a project containing only one activity called "Specify and purchase engine for winch". In order to complete this activity some engineers have to do a detailed specification of which engine to buy, and later the purchase department is involved in the communication with the selected supplier. The planned cost driver for all of the objects is Connected Objects, except for the Activity Resources object, for which the planned cost driver is Activity Resources. The progress method is Connected objects.

Step 1

• Create the activity: A 01 – Specify and purchase electrical engine, Start date: 3 of July, End date: 28 of July, with number of workdays as 20.
• Enter estimated values for the activity. We estimate to buy the engine components for $100,000 and use 30 hours at a cost of $3000 for the specification.

Project Cost Element	Estimated Cost	Estimated Hours
Material	100,000
Work	3,000	30
Sum	103,000	30

Step 2

• Create and connect a document package with two documents; one drawing and one technical specification. Planned hours are 17 + 15 = 32. The cost is $100 per hour. We register the documents, but no progress is accomplished yet.

Now we get the following results:

Project Cost Element	Estimated Cost	Planned Cost	Estimated Hours	Planned Hours
Material	100,000
Work	3,000	3,200	30	32
Sum	103,000	3,200	30	32

Step 3

• One of our clever engineers have now started on both documents, and according to the milestones selected on the document package lines we have a progress of 50%. By reporting the progress we will get a value in the Earned Value column which indicates the work performed for this activity. Earned Value is equal to the progress of document package lines multiplied with the respective planned costs/hours.
• The Scheduled Work column indicates how much of the work that should have been performed if we do the same amount of work every day. We have now reached the 10 of July which means that we have spent one quarter (5 out of 20 days) of the scheduled days.
• If the engine for winch has a structure in IFS/Project Delivery, the part costs will show in Planned Material.

Now we get the following results:

Project Cost Element	Estimated Cost	Planned Cost	Earned Value - Cost	Scheduled Work - Cost	Estimated Hours	Planned Hours	Earned Value - Hours	Scheduled Work - Hours
Material	100,000
Work	3,000	3,200	1,600	800	30	32	16	8
Sum	103,000	3,200	1,600	800	30	32	16	8

Step 4

• The specifications are now getting reasonably detailed to get a more exact price offer from the suppliers. On the 10th of July we also create a purchase order, and luckily the supplier seems to be able to sell us the equipment for $90,000 (10 pcs each at $9000). When the purchase order is created the Planned Committed cost will be updated and when it is released we’ll get the order value entered as Committed Material. When we release the order we have made an obligation to pay, and therefore the Committed column will have a value. We confirm the purchase order.
• Meanwhile the document package is completed, i.e. Progress for Work cost element is 100%.The overall Calculated Hours Progress will now be 100% as well. The Earned Value Hours will also indicate that the work is completed. The overall Calculated Cost Progress will be 3.4%, (The formula is Total EV cost/ Total Planned cost: 3,200/ 93,200) since only the document package has any progress at this time.

Now we get the following results:

Project Cost Element	Estimated Cost	Planned Cost	Earned Value - Cost	Scheduled Work - Cost	Committed Cost	Estimated Hours	Planned Hours	Earned Value - Hours	Scheduled Work - Hours
Material	100,000	90,000		22,500	90,000
Work	3,000	3,200	3,200	800		30	32	32	8
Sum	103,000	93,200	3,200	23,300	90,000	30	32	32	8

Step 5

• At the end of the week everyone reports their time in IFS/Project Reporting, and we will now get actual hours for the work done in the activity. We get the work cost for this reported through the project cost element defined for the Resource Group. This work costs $90 per hour. In total 10 hours are reported on this activity by two persons.
• The elapsed time of the activity is now 10 days which influences the values in the Scheduled Work column.

Now we get the following results:

Project Cost Element	Estimated Cost	Planned Cost	Earned Value - Cost	Scheduled Work - Cost	Committed Cost	Used Cost	Actual Cost
Material	100,000	90,000		45,000	90,000
Work	3,000	3,200	3,200	1,600		900
Sum	103,000	93,200	3,200	46,600	90,000	900

Project Cost Element	Estimated Hours	Planned Hours	Earned Value - Hours	Scheduled Work - Hours	Used/Actual Hours
Material
Work	30	32	32	16	10
Sum	30	32	32	16	10

Step 6

• We have now passed the end date of the activity, but the purchase is not yet completed. We have received half of the parts into Arrival. Therefore the Progress for the Purchase Order will be 50%. The Earned Value for the Purchase Order will be (50%90,000)*45,000. The Calculated Cost Progress for the activity will be 51.7% (Formula: Total Earned Value Cost/ Total Planned Cost: 48,200/ 93,200).
• As we have passed the end date the values in Scheduled Work is equal to the values in Planned.
• We have transferred half the values of the inventory transactions to General Ledger, i.e. 22,500. We have also transferred the project reporting transactions. The actual values are fetched from the General Ledger vouchers, and are displayed in the Actual column. The value here will be 50% of the Used Material cost + the Used work cost.
• The actual number of hours reported is only 25.

Now we get the following results:

Project Cost Element	Estimated Cost	Planned Cost	Earned Value - Cost	Scheduled Work - Cost	Committed Cost	Used Cost	Actual Cost
Material	100,000	90,000	45,000	90,000	45,000	45,000	22,500
Work	3,000	3,200	3,200	3,200		2,250	2,250
Sum	103,000	93,200	48,200	93,200	45,000	47,250	24,750

Project Cost Element	Estimated Hours	Planned Hours	Earned Value - Hours	Scheduled Work - Hours	Committed Hours	Used/Actual Hours
Material
Work	30	32	32	32		25
Sum	30	32	32	32		25