In the core modules of Dynamics GP, the defaulting of posting accounts is fairly straightforward. The system looks first to a master record, and if no accounts are specified, it then looks to the posting account setup. So, for example, when entering a payables transaction, the system will first look to the vendor card for default posting accounts and whatever it cannot find there, it will attempt to pull from the posting accounts setup (Tools>>Setup>>Posting>>Posting Accounts).
Project accounting presents users with a more flexible defaulting model, where default locations can be specified by transaction type and by account. Additionally, segment overrides can also be specified at the contract and project levels. This creates tremendous flexibility in terms of how the system can default accounts, and where accounts need to be set up in the first place.
So, to outline the different options...
For each cost transaction type in project accounting:
- Miscellanous Logs
- Equipment Logs
- Employee Expenses
And then for each account type (I only list a few of the basics below for the example that follows):
- Cost of Goods Sold/Expense
- Contra Account for Cost
- Project Revenue/Sales
- Accounts Receivable
For each account type, you can specify a "source" to pull the default accounts from:
- None (do not create distributions for this account)
- Customer (use Cards>>Sales>>Customer>>Project>>Accounts)
- Contract (use Cards>>Project>>Contract>>Accounts)
- Project (use Cards>>Project>>Project>>Accounts)
- Cost Category (use Cards>>Project>>Cost Category>>Accounts)
- Trx Owner (depending on transaction type, can pull from Employee, Equipment, Miscellaneous, or Vendor)
- Specific (enter one specific account to always be used)
- The expense account used on timesheets should vary by the cost category, but the project determines which department segment should be used.
- The offset to the expense (the contra account for cost) is determined by the employee's home department.
- When the labor is billed, the revenue account should vary by the cost category, but the project determines which department segment should be used.
- When the labor is billed, the AR account will be different based on the customer.
Sometimes it takes a bit of discussion to get items distilled down to the bullet points I show above. I actually start with a cost category worksheet that I have clients complete as homework that documents the cost categories and accounts they need in project accounting as a way to help us think through the requirements. Then, from that worksheet, we can discuss how to best set up the account sourcing. Feel free to post on this blog and I am happy to share the worksheet I use in case anyone is interested.
So, the outcome we came to for timesheets in the example above:
- Cost of Goods Sold/Expense- Source: Cost Category
- Contra Account for Cost- Source: Trx Owner
- Project Revenue/Sales- Source: Cost Category
- Accounts Receivable- Source: Customer
Then, at the project level, we will specify a sub-account format (Cards>>Project>>Project>>Sub Account Format Expansion Arrow>>Account Segment Overrides) that includes the department segment value and we will mark to override the segment on the Cost of Goods Sold/Expense and Project Revenue/Sales account. So this setting will substitute in the department value specified on the project, while pulling the remaining account segments from the cost category.
With the sources set as noted above, the client needs only specify accounts as follows:
- On the cost category (Cards>>Project>>Cost Category>>Accounts), enter the Cost of Goods Sold/Expense and Project Revenue/Sales accounts.
- On the employee (Cards>>Payroll>>Employee>>Project>>Accounts), enter a Contra Account for Costs.
- On the customer (Cards>>Sales>>Customer>>Project>>Accounts), enter an Accounts Receivable account for timesheets.
And, more importantly, the accounts do not have to set up repeatedly in multiple places. And, because the project determines the department segment, there is no need for cost categories to be set up for each department, only for each main account needed.
Although the effort involved in coming to this conclusion may make you feel like accepting the default of all accounts defaulting from the cost category, taking the time to set this up in the most efficient way possible will minimize mistakes in posting and simplify the setup in the long run.
As always, please feel free to share your experiences and perspectives. Happy holidays!