How to Track Project Costs with Microsoft Dynamics AX
Envisioning a project from start to finish is a challenge. Whether you are building a new site, planning a tradeshow, or setting up an implementation project, there are so many pieces of a project intertwined. Most projects fail because they don’t have the visibility into all of those moving parts.
The foundation of a successful project is simple – on time, within budget, and meets the expectations of the client. But we all know it’s not that simple when you are running separate tools that manage cost, budget, and resources.
Most companies are using spreadsheets to plan and track these projects, which include multiple layers of costs, schedules, resources, travel and expense reporting, forecasting, etc. Without an integrated solution to tie all of these areas together, it’s near impossible to see the big picture.
When you can’t see the big picture, there is a significant risk that you are also choosing projects that won’t be profitable in the future. Here are some signs that you are taking on the wrong kinds of projects:
- You’re missing deadlines
- Your project is constantly out of scope
- Your employees are stretched too thin
- Your estimates are inaccurate
- You can’t keep track of all the costs related to the project
- You don’t have access to how profitable your past projects have been
- There aren’t enough resources allocated
If you are experiencing any of these pains or frustrations, it’s clear that you might need to review what tools you are using. The risks associated with missed deadlines and resource allocation come at a bigger cost usually, putting your entire operation in danger of losing money or burning out your employees. So, how do you see the full picture of costs, resources, and existing projects?
Complete Projects On Time and On Budget
An integrated project management solution like Microsoft Dynamics AX will help you properly predict the scope of a project, manage the scheduling of resources, and track all costs coming in and going out. In one flexible system, you can set project milestones, manage tasks or activities, apply and manage budgets, and recognize revenue across multiple projects. You can also take advantage of the historical data collected over time to influence the approval and management of future profitable projects.
Microsoft Dynamics AX is an ERP solution that integrates project controls, financial capabilities, and real-time integration with supply chain and financial management processes. Here are three features included in Dynamics AX Project Accounting that will ensure your next project is profitable.
Cost Control and Reporting
When it comes to project management, it’s all about the costs. There are costs coming in and out of a multitude of areas, fixed costs, direct costs, contractors, assets you own, etc. In Dynamics AX, everything is tied directly to a project so you can get a full view of all the costs associated with it. For example, purchase orders can be linked directly to a project, so when a PO is created you can see what’s coming in and what has been received. Dynamics AX also tracks time and expense reporting as well as travel reporting. All of these pieces flow into cost buckets so direct and indirect costs related to a project, like travel and job site visits, are brought together in the same project view.
Dynamics AX Scheduling
A lot of companies get used to stretching their resources so thin that missed deadlines are a regular part of a project plan. They just don’t realize that there is a better way than spreadsheets to ensure enough resources are allocated to meet project requirements. Using the scheduling and management capabilities in Dynamics AX, you can see the resources you need, schedule when you need them, and track their availability. And you can do all this with multiple resources on multiple projects.
Dynamics AX Forecasting
With spreadsheets, most companies aren’t taking advantage of the historical data and previous project plans that have been created. Which means there’s no way that they can get a single view of all current and planned projects to help anticipate bottlenecks before they occur. During every step of a project, you need to be tracking your actuals vs. budgets. In a robust project management solution like Dynamics AX, you can create multiple forecasts to give you snapshots of your current status and projections. This is how you identify if you are on track for success, or if you’re headed down a trap of missed deadlines and sunk costs. By pulling data from the central Dynamics AX database, you can also set up and define new projects quickly using templates recycled from previous projects.
Other features in Dynamics AX for efficient project management include: project hierarchies, expense management, streamlined billing, revenue recognition, project supply chain, cost accounting, and production control.
Stop Taking on Projects That Aren’t Profitable
You need access to actionable data and reports to avoid committing to projects that you aren’t able to staff and therefore won’t be lucrative. In order to get an accurate view of profitability, you have to understand the true costs of the services you render. And the only way to do that is with software built for project management.
The way your projects are managed significantly influence your revenue and profitability. At Rand Group, our business revolves around accurate project planning and successful implementation and support. We understand the pains associated with project accounting and have extensive experience working with project-based businesses in the same situation. As a Gold certified Microsoft Partner, let us help you identify where the bottlenecks are in your current solution and come up with a better way to analyze your data and take on profitable projects. Contact us for more information.
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