Analytical Accounting within Microsoft Dynamics GP has its place; it’s great for smaller organizations or for companies who have a limited number of projects and whose needs are restricted to having a general idea of their different projects costs. Others organizations will use a hybrid of Analytical Accounting with some detailed account segments to define these different projects, this does work and it is possible to get the information you need, yet there does come a time when you need more than just Analytical Accounting to meet your project accounting needs. Here are a few signs:
You manage over 50 projects a year. This is usually the threshold for when it starts becoming more difficult to manage projects within your GL. There is also an increased risk for potential errors since there is no concept of a closed project therefore expenses can be continued to be placed into this account even if this project has been completed.
The project billing portion is taking an increasing amount of time. Since Analytical Accounting simply tracks costs, you cannot complete any transactions like invoicing or crediting to a particular project. This causes the Finance Department to be more reactive than proactive when they are trying to bill particular projects.
There are complaints that the Project Manager needs to know more about the project than just its costs. This could mean that your organization needs to know how many hours have actually been recorded into the system to date or what has already been billed versus what is outstanding in a particular account. Since Analytical Accounting is primarily a reporting tool, one of the limitations is the amount of information that you can extrapolate. Traditionally the data in the GL is usually quite basic and therefore requires a significant amount of manipulation in order to obtain this level of detail.
Managers’ requests for reports are difficult to extrapolate. This is usually a symptom that there is not enough data in order to properly understand the current status of a project. By having more levels in your Work Breakdown Structure, you allow yourself to be more flexible since things can be more easily transferred to a different group or department. By having this possibility to further drill down and obtain a greater level of detail, you have more options when you want to create a specific report.
Employees are manually entering timesheets. With a project accounting solution, there is normally a timesheet application that will automate this process and there are usually integrations to Dynamics GP’s HR and Payroll modules available as well, therefore eliminating manual entries which in turn will reduce the possibilities of duplicate entries, input errors, and resources dedicated to this task.
It’s not only Professional Service Firms who benefit from a