Monitor Project Progress and Performance with WIP
As a Project advances, materials, resources, and other expenses are consumed and must be charged to the Project. Work in Process (WIP) is a feature that enables you to estimate the financial value of ongoing Projects in the General Ledger. In many cases, expenses are charged to a Project before an invoice is created. When only expenses have been posted, the financial statement will be inaccurate. For more information, see Understanding WIP Methods.
To track the value in the General Ledger, calculate WIP and post the results to the General Ledger.
Calculate WIP based on the Value Type, which is found on the Project Card > WIP, Recognition Settings & Allocations FastTab > Value Type field.
- Cost Value- Uses the cost amount from Project Ledger Entries.
- Sales Value - Uses the sales amount from the entries.
Within each of these two WIP calculation methods, decide whether to include Usage Entries, Budget Entries (when using Advanced WIP only), Sales Entries, or both Usage and Sales Entries. Further decide whether to include or exclude Resources, Expenses, Items, or non-chargeable transactions in WIP calculations.
To view the result using a different method, change the method and calculate WIP again. There is no limit to the number of times that you calculate WIP. When you run Calc. WIP, WIP is only calculated, it does not post to the General Ledger. After calculating WIP, post to the General Ledger by running the Post WIP to G/L process.
Key Terminology
For additional information on key terminology used with WIP, see the table below, or:
| Term | Calculated as |
|---|---|
| BTC (Budget to Complete) | Active Budget – Usage |
| BAC (Budget at Completion) | Active Budget |
| BC% (Budget Completion %) | Usage / Active Budget |
| ETC (Estimate to Complete) | Project/Task estimated remaining hours for Project/Task to be finished. |
| EAC (Estimate at Completion) | Usage + ETC |
| EC% (Estimated Completion %) | Usage / EAC |
| VAC (Variance at Completion | BAC – EAC |
Define a WIP Method for a Project
WIP, Recognition Settings & Allocations
When a new Project is created, the Project WIP method must be specified.
Choose the
Search icon, enter Projects, and then choose the related link for Project List.Choose the New action. For more information, see Create projects.
The WIP and Revenue Recognition page includes the ability to save a filter for future use. Search for and select WIP and Recognition List:
Select the filter icon
Click the +Filter
After creating the Filter, use the ellipsis (3 vertical dots) in the Views area and type in a name for the Filter.
Press Enter to save the new Filter.
After creating and saving the Filter, use the ellipsis (3 vertical dots) to access properties to Rename, Save As, Remove or Hide the Filter.
WIP Calculation
The fields on the Project Card > WIP Calculation FastTab allow you to manually set the WIP % (FP) value for Fixed Price Projects, or for Time & Material Projects, set the WIP % (TM) value. After the WIP calculation completes, it displays the Estimated WIP Amt. (Est. WIP Amt.) for the Fixed Price settings.
WIP Calculation FastTab -Time & Material
| Field Name | Description |
|---|---|
| Calculate WIP Until Date |
Specifies the “as of” date to use to calculate WIP. |
| BC % (TM) | Specifies the Budgeted Completion Percentage. After the Calculate WIP process is run, the calculated WIP for T&M Projects displays here. The BC % is calculated based on Budget To Completion Resource Usage Qty. where the Task Lines have a Contract Type = T&M. |
Tip
BC% (TM) is calculated as: SUM (Resource Usage / Resource Budget * 100).
Note
If BC% is greater than 100%, the field will be shown in red. (Non-Editable)
| EC % (TM) |
Specifies the Estimated Completion % and is calculated by the system based on the ETC Res. Usage Qty where the Task Lines have a Contract Type = T&M. |
Tip
EC% TM is calculated as: SUM(Usage Res. Qty. / (EAC = SUM(Usage) + SUM(ETC Res. Qty.)) *100 (Non-Editable)
Important
EC% TM is NOT used in WIP calculation and is for informational purposes only to identify potential Project risk in relation to BC%. If there is a risk for Write-offs, WIP % TM can be used adjust the valuation until Write-Off is a fact.
| ETC Risk Factor % (TM) |
Specifies the percentage part of the calculated WIP Amount. This field is user editable, and you can set the Risk Factor in the interval from 0 to 100. |
In general, WIP calculation is not changed unless WIP % is used to factor down the calculated WIP Amount. The calculated WIP Amount is based on settings for Entry Type and Value Type. Advanced WIP offers the possibility to use all combinations for each Usage Type.
When the WIP Amount is calculated the system multiplies the WIP Amount (based on defined Entry & Value Type) with the WIP % TM. When the WIP % TM = 0, no WIP is calculated. When WIP % TM = 100 100% WIP is calculated. WIP % TM cannot be more than 100.
WIP Calculation FastTab - Fixed
| Field Name | Description |
|---|---|
| BC % (FP) |
Displays the Budgeted Completion % that is calculated based on BTC Res. Usage Qty where the Task Lines have a Contract Type Fixed. |
Tip
BC% (FP) is calculated as: SUM(Resource Usage Qty / Resource Budget Qty *100.
| EC % (FP) |
Displays the Estimated Completion % and is calculated based on ETC Res. Usage Qty where the Task Lines have a Contract Type = Fixed. |
Tip
EC% (FP) is calculated as: SUM(Usage Res. Qty. / (EAC = SUM(Usage) + SUM(ETC Res. Qty.)) *100 (Non-Editable).
Important
The EC% (FP) field is NOT used in WIP calculation but is a calculated default value in WIP% (FP) which you can manually change.
| WIP % (FP) |
Use this field for WIP calculation with a default value coming from EC% (FP). Value can be changed by user. The system uses this field to calculate the WIP % on Fixed Price Projects. |
| Est. WIP Amt. | Displays the estimate WIP Amount calculated when you run Calculate WIP on Fixed Price Projects. |
WIP Postings
Posting WIP deletes all WIP entries related to the Project after posting the WIP calculation. Once posted, WIP G/L entries are inserted and are the audit trail for the WIP Posting.
Calculate WIP on T&M and Fixed Price Projects
WIP Calculation process
Navigate to the Project Card of an open Project. You can also run WIP from the Role Center > Processing > Calculate WIP, or from the Project Dashboard > WIP > Calculate WIP. Options for WIP processing include:
- WIP and Revenue Recognition
- Calculate WIP
- Post WIP to G/L
- Clear WIP
Caution
Setting the Project completed before running WIP is optional, but the Project does not have to be completed to calculate WIP. If you do set the status on the Project to Completed and run WIP, it will clear out all WIP entries and complete final accounting for the Project.
WIP and Revenue Recognition
Use the WIP and Revenue Recognition page to calculate and post WIP (Work in Process) on specified projects.
- Navigate to the Role Center > Processing > WIP > WIP and Revenue Recognition.
| Field Name | Description |
|---|---|
| Calculate WIP until Date | Specifies end date for WIP calculation. Change the date filter to view the effect of WIP calculations based on date entered. |
| WIP Posting date | Specifies Posting date for WIP Posting. |
| Include Contract Type Tasks TM | Specifies, if selected (true), to run WIP calculation for all tasks that have a Contract Type of 'Time and Material'. |
| Include Contract Type Tasks FP | Specifies, if selected (true), to run WIP calculation for all tasks that have Contract Type of 'Fixed'. |
From the ribbon, you can select other options:
| Field Name | Description |
|---|---|
| Project | View the Project Card or the Project Plan for the selected Project. |
| Entries > Entries | View the transactional entries in the Project Ledger for the highlighted Project. |
| Actions > WIP | |
| Calculate WIP: Calculate WIP for selected Projects. | |
| Post WIP to G/L: Post calculated WIP to General Ledger for all selected Projects. | |
| Clear WIP - This process will create and post entries to offset the WIP entries posted to the General Ledger. | |
| Update FP% Equal EC%: Update the WIP % (FP) to be equal to the EC % (FP) values. | |
| Update FP% Equal BC: Update the WIP % (FP) to be equal to the BC % (FP) values. | |
| Update ETC Res. Qty.: Updates the ETC Res. Qty. with the value from BTC Res. Qty. on task lines in the selected Projects. | |
| Reset ETC Res. Qty.: Resets ETC Res. Qty. to zero on all task lines in the selected Projects. | |
| Related > WIP Entries > WIP Project Entries | Displays WIP-related Project Entries for the selected Project. |
| Related > WIP Entries - WIP G/L Entries | Displays WIP G/L entries for the selected Project. |
Projects that are available for WIP calculation are listed in the grid:
| Field Name | Description |
|---|---|
| No. |
Specifies the Project Number. |
| Description | Specifies identifying information about the Project. |
| Project Manager | Specifies the No. of the Resource assigned to manage the Project. |
| BC % (FP) | Specifies the Budgeted Completion %. Calculated based on BTC Resource Usage Quantity on Task lines of Contract Type: Fixed. |
| EC % (FP) | Specifies the Estimated Completion %. Calculated based on ETC Resource Usage Quantity on Task lines of Contract Type: Fixed. |
| WIP % (FP) | Specifies the risk factor percentage for calculation of possible unearned revenue due to changes, defaults, or refunds. . User can enter a risk factor in the interval from 0 to 100. |
| Est. WIP Amt. | Specifies the estimated WIP Amount for the Project. The amount in this field is based on: |
| - The setup chosen in Project Card > WIP, Recognition Settings & Allocations > FIXED > Fixed Price: Use full Contract Value for Basis. | |
| - The Project Card > WIP, Recognition Settings & Allocations > FIXED > Use Contract Amount Boolean: True/False. | |
| - The Project Card > WIP, Recognition Settings & Allocations > FIXED > Value and Entry Filter: Scheduled Billing Price or Budget Cost | |
| - Calculate WIP Until Date filter on the Project Card. | |
| Calc. WIP | Specifies the calculated WIP amount to be posted to the General Ledger. |
| Calc. WIP Clear | Specifies the calculated WIP amount, for entries to be posted to offset the WIP transactions posted to the General Ledger. |
| Posted WIP | Specifies the posted WIP amount. |
| Posted WIP Clear | Specifies the posted WIP Clear Amount. |
| WIP Checked | Specifies if selected (true) that WIP entries available for posting have been reviewed by the User ID in the WIP Checked by field. |
| WIP Checked by | Specifies the User ID for the Resource who reviewed the WIP data. |
| WIP Checked Date | Specifies the Date that WIP was checked. Populated by the system. |
Other fields are available by adding them using Personalize. For more information on this topic see: Personalize Your Workspace
| Field Name | Description |
|---|---|
| BC % (TM) | Specifies the Budgeted Completion %. Calculated based on BTC Resource Usage Quantity on Task lines of Contract Type: T&M. |
| EC% (TM) | Specifies the Estimated Completion %. Calculated based on ETC Resource Usage Quantity on Task lines of Contract Type: T&M. |
| Expense Budget Cost | Specifies the amount for planned expenditures for charges such as travel, hotel, meals, and mileage for the Task. |
| Expense Budget Qty | Specifies the total quantity of planned expenditures for charges such as travel, hotel, meals, and mileage for the Task. |
| Expense Usage Cost | Specifies the total amount of expenses for the Task. |
| Expense Usage Qty | Specifies the quantity of expenditures for charges such as travel, hotel, meals, and mileage for the Task. |
| Item Budget Cost | Specifies the amount for planned materials, articles, objects for the Task. |
| Item Budget Qty | Specifies total quantity of planned materials, articles, objects for the Task. |
| Item Usage Cost | Specifies the amount for materials, articles, and objects used for the Task. |
| Item Usage Quantity | Specifies the sum of the quantity of materials, articles, and objects for the Task. |
| Resource Budget Qty. | Specifies the sum of the number of hours for planned time usage of a Resource. |
| Resource Group Budget Qty. | Specifies the sum of the number of hours for planned time usage of a Resource Group. |
| Resource Usage Qty |
Specifies the number of hours recorded by the person(s) working on the Task. |
| Total Usage Cost | Specifies the sum of the amounts, for actual usage, for all Types. |
| WIP% (TM) | Specifies the percentage part of the calculated WIP amount. Risk factor can be set in the interval from 0 to 100. |
Calculating WIP
From the Project Card menu, choose WIP > Calculate WIP.
On the Project Calculate WIP page, complete the following fields:
Field Name Description Posting Date Specifies the posting date for the entries. Calculate WIP until date Specifies end date for WIP calculation. Change the date filter, before posting the WIP entries, to view the effect on WIP calculations. Document No. Specifies the number of the document created by the calculation. The user can change the reference number. Include Contract Type Tasks TM Specifies if selected/true then run WIP Calculation for all Tasks that have a Contract Type of Time and Material. If not selected/false, then WIP Calculation will exclude all Tasks that have a Contract Type of Time and Material.. Include Contract Type Tasks FP Specifies if selected/true, then run WIP Calculation for all Tasks that have a Contract Type of Fixed. If this is not selected/false, then WIP Calculation will exclude all Tasks that have a Contract Type of Fixed. Click OK.
The Project WIP entries created by running the batch Project will have the Project Complete check box selected to show that they are completion entries.
For Time & Material Projects, the BC % (TM) field displays the updated WIP calculation(s).
For Fixed Price Projects, the WIP % (FP) calculation takes the percentage that was entered in the WIP % (FP) field and calculates the est WIP Amt. amount. The percentage is multiplied against either the Budget Cost, the Contract Amount, or the total of the Scheduled Billing Payments, depending on the option selected in WIP and Recognition Settings > Fixed section).
Closed by Date and Closed by Entry No
The Closed by Date is used by WIP Calculation to more accurately assess when a transaction is partially or fully invoiced, and a Closed Status and Date in order to determine an accurate WIP posting.
It's important to understand how the Closed by Date and Closed by Entry No. fields are updated when running the WIP Calculation process. When a transaction is closed, the Open field in the Project Ledger Entry is not selected (FALSE) and the transaction is updated with a Close Date and a Close Entry #. The line is not closed by partially invoicing it - it is closed when fully invoiced with the last invoice. When a transaction is closed, the system populates the Close Date and Close Entry # fields.
For more information on the Closed by Date and Closed by Entry No. fields and how they interact with WIP processing results, see: Closed By Date and Closed By Entry No.
Scenarios that set the Closed by Date and Closed by Entry No
| Scenario | Source of Closed by Date |
|---|---|
| Full Invoice of a Transaction |
Closed by Date = Invoice Date when it was fully invoiced |
| Use 'Close Invoice Lines' in Invoice Suggestions | Closed by Date = Work Date |
| Partial Invoice and then use 'Close Invoice Lines' | Closed by Date = Work Date |
| Uncheck 'Chargeable' | Closed by Date = Work Date |
| Move Entries with Audit - non-chargeable | If non-chargeable, new entry will have Closed by Date of original transaction |
| Move Entries with Audit - chargeable | If chargeable, original entry will have Closed by Date = Posting Date of reversing entry |
Move transactions: When moving a transaction (for example, moving a transaction from one task to a different task), the following entries occur in Project Ledger Entries after running WIP Calculation:
- The original line:
- Open field is unselected (false).
- The Closed by Entry No. is assigned.
- A new transaction is created as a reversing entry to offset the original entry.
- The Open field is unselected (False).
- The Closed by Entry field on this new transaction matches the Closed by Entry field of the original transaction.
- The Closed by Date value matches the Closed by Date (original transaction's posting date) value.
- A new transaction is created for the "move to" task.
- The Open field is selected (true).
- The Closed by Entry field is 0 (no value).
- The Closed by Date is blank.
- The original line:
Chargeable value:
- When you change a transaction from "chargeable" to "non-chargeable" (by deselecting the Chargeable field on the transaction), WIP Calculation sets the Closed by Date on the transaction to the current business date and sets the Open field to unselected (FALSE).
Usage line: When you generate and post an invoice on a usage line, WIP Calculation does the following:
- The Usage line:
- Closed by Date will be set to the invoice date of the associated Sales line.
- Closed by Entry No. will be set to match the Closed by Entry No. of Closed Entry No. of the associated Sales line that closed it.
- Sales line:
- Created as a reversing entry where the Total Cost offsets the usage line Total Cost.
Important
The Closed by Date works in with the combination of settings in the Project Card > WIP, Recognition Settings & Allocations > Value Type = Sales Value or Cost Value AND Entry Type Filter = Usage and Sales - open entries.
- The Usage line:
TM Usage Entries
TM Usage Entries uses the Posting Date and Chargeable field to determine if a transaction is included in WIP Calculation.
- WIP will continue to accumulate - the Closing Date is not used.
- Closing Date does not clear WIP.
- The only way to reverse TM entries is to use the Clear WIP process. For more information on Clear WIP, see: Running Clear WIP
Post WIP to G/L
You can post WIP on multiple Projects at one time by accessing Post WIP to G/L from the Role Center > Processing > WIP > Post WIP to G/L, or from the Project List, Project Plan or Project Card> WIP > Post WIP to G/L.
You can post WIP for multiple Projects at one time or you can do individual Projects by using filters. The WIP entries can be posted in the WIP and Revenue Recognition page by selecting Actions > WIP > Post WIP to G/L.
To post WIP to GL from an individual Project Plan or Project Card, select WIP > Post WIP to G/L.
- On the Project Post WIP to G/L page, fill in the fields, as necessary.
- Posting Date: Specifies the posting date for the General Ledger Entries that are posted by this function.
- Document No.: Specifies a document number for the General Ledger Entries that are posted by this function.
- Use Posting Date in GL/WIP Entries: Specifies if you want to use the reversal date as the posting date for both the reversal of the previous WIP calculation and the posting date for the new WIP calculation. This is useful when you want to calculate and post the historical WIP for a period that is already closed. You can reverse the old postings and post the new calculation in an open period by choosing a reversal date in the open period.
- Adjust Pay.Inv.: Specifies the value of the Adjust Payment Invoice field.
Tip
The Project WIP General Ledger Entries created by running the Post WIP to G/L process will have the Project Complete check box selected to show they are completion entries.
Create Invoice Suggestions
Running the Invoice Suggestion process pulls existing chargeable Usage lines into the Invoice Suggestions section so you can create an invoice. For more information on Invoice Suggestion, see: Invoice Suggestion
After you have created a Sales Invoice (see Direct Invoicing - Sales Invoice page) and posted it, you can then run the WIP Calculation process again to relieve the WIP balance that was created by the Sales Invoice posting.
Repeat this process through the life of the Project until the Project is complete.
Running Clear WIP
When the Project is finished, run the Clear WIP process to complete all WIP postings and run the Post WIP to G/L to post these results.
To run the Clear WIP process on multiple Projects at once, access the option from the Role Center > Processing > WIP > *Clear WIP. You can either specify an individual Project Number or clear the Number filter to run it on all Projects.
You can also access Calculate Clear WIP via an individual Project by opening the Project and navigating to WIP > Clear WIP.
Enter any Options or Filters and click OK.
To review the WIP Entries in the Project G/L Ledger, navigate in the Project Plan to WIP > Project WIP Entries.
To view Project Ledger WIP entries
All Project-related entries are recorded in Project registers and are numbered sequentially. From the Project register, you can get an overview of all Project Ledger Entries.
Navigate to the Project Plan you wish to review posted WIP entries.
Select WIP > Project WIP Entries or WIP > Project WIP G/L Entries to review Project WIP entries posted to the G/L.
You can also review posted and unposted WIP Entries on the Project Card > WIP Postings FastTab. The left-side displays WIP Entries To Post and the right-side displays WIP Entries that are Posted. To review entries, click the numbers that display to open Job WIP Entries page (in the To Post section) or Job WIP G/L Entries page (for Posted section).