For companies using Microsoft Dynamics GP as their ERP system, who are interested in keeping track of financial information as it relates to projects, the first and most obvious choice is to simply use the Dynamics GP Project Accounting Module which is standard built-in functionality. However, one should be aware that there are other choices as well. In this blog, I will be focusing on one particular alternative to Dynamics GP Project Accounting. It’s a third party add-on product from Encore called
Many Microsoft Dynamics GP users are confused about why one would opt to use a third party product instead of the built-in functionality. At first glance, it would seem that the Project Accounting Module should always be the preferred choice; however, this is not the case.
There are some things you should know about Dynamics GP’s Project Accounting module before you embark upon implementing it. It’s super complex, and therefore, can be very difficult to configure. Microsoft Dynamics GP Project Accounting is very flexible and powerful. For instance, you can configure the general ledger distributions mappings in a myriad ways, pulling accounts from the project, the cost categories, the vendor, the inventory item, overriding segments of the account number based on the project, or using default accounts that are either global to the system, or specific to an individual project or project budget line. Figuring out the best way to configure these general ledger mapping distributions, through the entire T-Account flow from the start of the life cycle to the closing of the project, is a very intense process. One can easily become confused as to where and how the general ledger distributions are being generated, and whether or not they make any true accounting sense.
Because Microsoft Dynamics GP Project Accounting was developed to be a full featured and highly flexible Project Accounting system, it is difficult to configure properly, and it has onerous data entry requirements.
The built-in reports are generally not used very much, because these reports include all the fields available in the system, by default, whereas most companies only use a small fraction of the fields. Additional reporting options are available with the
The designers of GP Project Accounting decided to store each type of transaction in a separate physical SQL table, which was a very unfortunate design decision as far as reporting goes. In other words, timesheet entries are in their own table, purchase order entries are in their own table, employee expenses are in their own table, etc. The problem is compounded by the fact that GP requires separate tables for work (un-posted), open (posted), and history (posted and paid) transactions. You end up with having to “union” together in SQL programming language dozens of tables to produce a comprehensive report that looks at all the costs hitting a project. If you want to include revenue as well, then you are into dozens of more tables. These SQL joins and union statements become very unwieldy.
Encore Project Tracking is a much simpler product to configure, and all the transactions go into a unified table which makes reporting much easier. There is a work, open, and history table, but all the transaction types go in the same table. Also, Encore Project tracking has an Advanced Analytics feature which is a powerful drag and drop ad-hoc query tool, which has pivot table functionality. Encore project tracking has a budgeting feature, so you can compare budget to actual, and thereby provide variance reporting. With Encore you can attach project related information to most types of GP transactions in any module, whereas with GP Project Accounting, project related information must be processed through the Project Accounting module itself, which tends to be very cumbersome for some kinds of transactions, for instance GL journal entries, or Accounts Payable Vouchers that are not Purchase Order related.
I would recommend using Encore Project Tracking instead of Dynamics GP Project Accounting, if all you are doing is trying to attach costs to projects and track that against a budget, unless you really need the more serious project accounting functionality related to billing and revenue recognition, such as the following:
- Automated Revenue Recognition
- Automated Cycle Billing
- Time & Materials vs. Fixed Price vs. Cost Plus Project Types
- Accounting Methods such as When Performed vs. When Billed vs. Effort Expended
- Percentage of Completion
- Retainer Fees
In other words, if you are not doing project billings and don’t have any advanced automated revenue recognition requirements, you probably want to look at Encore as a way to simplify your project accounting setup and reporting in Dynamics GP.
By: Ren Bellu, RSM McGladrey - Gold Certified Microsoft Dynamics AX, GP, SL, CRM Partner