Projects Internal Resources Cost Tracking Process

Business Facts:
* Project Internal Resources are all the resources within a project that are performing certain role, job, function, or activity
* Project Internal Resources can be first classified: either resource where I need and can plan number of hours for its work (With Capacity Planning) e.g. Civil
Engineer, Crane, Welder, ....etc, or resource where I needn't and can't plan number of hours for its work (Without Capacity Planning) e.g. project accountant,
store keeper, project admin, driver, furniture, office equipments, buildings....etc
* After defining resource type (Labor or Machine), it is then classified either Project Related (PR) means fully dedicated for the project, or Non Project Related
(NPR) means partially dedicated for the project.
* If the resource is With Capacity Planning, then this resource is classified either Labor or Machine resource
* Cost of resources Without Capacity Planning should be fully and directly posted and booked to the project regardless number of hours worked
* Cost of NPRs resources should be partially posted and booked to the project with the portion of cost they engaged by in the project
* Cost of PRs resources should be finally posted and booked to the project, with presentation to the utilized portion of cost and non-utilized portion of cost
* Utilization tracking is required for all PRs and NPRs resources in terms of number of hours, and Planned Vs Actual within the whole company as well as within
each and every project they are engaged in.
* Cost Rate / Hour for PRs resources varies from project to another
Project
Internal
Resrouces
With Capacity
Planning
Without
Capacity
Planning
Machine Labor
Project
Related
(PR)
Non Project
Related
(NPR)
Project
Related
(PR)
Non Project
Related
(NPR)
Project X
Full Cost
Full Cost
Full Cost
Partial Cost Partial Cost
Solution Notes
Solution Steps
O KP26 Plan Hours per CC + AT
O KP06 Plan Cost per CC + AT + Cost Element (G/L a/c)
O KSPI Calculate Std cost Rate per CC + AT
O CJ20N Plan Project number of hours required from each resource
O CJ20N Confirm Actual Hours
O FB50 Post Actual Costs by CC + AT
O KSII Calculate actual cost Rate per CC + AT
O CJN1 Re-valuate projects at actual cost rates
O KSU5 Re-allocate remaining departmental cost over project cost based
Example
P1 Project 1
P2 Project 2
WC 1 PR resource to Project 1
WC 2 PR resource to Project 2
WC x NPR resource to the two Projects
CC 1 Project 1 Cost Center
CC 2 Project 2 Cost Center
CC x Departmental Cost Center
* Project Activities Cost Centers (CC) will be only used to link each WBS with them for reporting and summarization purposes, and they will be BLOCKED from
directly posting to them, the posting will be done through the WBS which will consequently affect these cost centers
* For each resource With Capacity Planning and PR a Work Center has to be defined on the project level (per project) e.g. civil engineer in Algeria Project is
different Work Center from Civil Engineer in Qena Project.
* CC for each project has to be defined to capture PR resources cost ONLY and to have different cost rate for them per project, coded as follows:
Z02-Pxxxxx where xxxxx is the project Code
* For each resource With Capacity Planning and NPR a Work Center has to be defined on the company level (not per project) e.g. engineers in the technical
office
* ONE unified list of Activity Types (AT) has to be defined for all resources With Capacity Planning either PR and NPR, the activity type (AT) is the rate holder of
the resource, and it is ONLY linked to CC
* Work Centers of PR resources will be linked to Project CC and its correspondent AT
* By recording the actual hours through confirmation and the actual cost over the cost centers, the system will be capable to calculate Actual cost rate per
resource, and to perform cost revaluation for the projects with this actual rate.
* Remaining Cost in the Departmental cost center will be re-allocated "Virtually" over projects Cost Based representing the unutilized cost portion
* All resources With Capacity Planning either PR or NPR required to have "Confirmation" function from PS Module
* Confirmations will have the role to perform two tasks: 1) record actual worked hours for the resource 2) automatically allocate the cost portion against the
actual hours worked from the CC to the Project
* Costs of all resources With Capacity Planning either PR or NPR will NOT be directly posted to the project, but they will be posted First to Cost Center, and then
through the confirmation the system will absorb the related portion of the cost from the cost center and allocated to the project/WBS
* Work Centers of NPR resources will be linked to Departmental CC and its correspondent AT
* Cost and Quantity Planning for AT + CC has to be performed to calculate Std cost Rate per resource either PR or NPR
* Actual Costs of all resources Without Capacity Planning will be posted directly to the project using Cost Element (G/L a/c) + Work Breakdown Structure (WBS)
Actual Plan Actual Plan
Cost Cost
P CE WC x cost O 1,200.00 1,000.00 O S CE WC x cost O 600.00 800.00 O
P CE Other Cost O 2,100.00 2,000.00 O S CE WC 1 cost O 1,440.00 1,620.00 O
S CE Cost absorbed from P1 O (600.00) (800.00) O S CE WC x revaluation at actual rate O 360.00
S CE Cost absorbed from P2 O (150.00) (200.00) O S CE WC 1 revaluation at actual rate O 560.00
S CE Revaluated Cost in P1 O (360.00) S CE Re-allocated Cost from CC x O 1,130.18
S CE Revaluated Cost in P2 O (90.00) Total 4,090.18 2,420.00
S CE Re-allocated cost from CC x O (2,100.00) Hours
Total - 2,000.00 WC x O 60.00 80.00 O
Hours WC 1 O 80.00 90.00 O
WC x total capacity O 75.00 100 O
Rate
WC x rate / hr O 16.00 10.00 O
Actual Plan Actual Plan
Cost Cost
P CE WC 1 cost O 2,000.00 1,800.00 O S CE WC x cost O 150.00 200.00 O
S CE Cost absorbed from P1 O (1,440.00) (1,620.00) O S CE WC 2 cost O 1,400.00 1,800.00 O
S CE Revaluated Cost in P1 O (560.00) S CE WC x revaluation at actual rate O 90.00
Total - 180.00 S CE WC 2 revaluation at actual rate O 900.00
S CE Re-allocated Cost from CC x O 969.82
Hours Total 3,509.82 2,000.00
WC 1 total capacity O 80.00 100 O Hours
Rate WC x O 15.00 20.00 O
WC 1 rate / hr O 25.00 18.00 O WC 2 O 70.00 90.00 O
Actual Plan
Cost
P CE WC 2 cost O 2,300.00 2,000.00 O P CE Primary Cost Element (Real Cost) 7,600.00
S CE Cost absorbed from P2 O (1,400.00) (1,800.00) O S CE Secondary Cost Element 7,600.00
S CE Revaluated Cost in P2 O (900.00)
Total - 200.00
Hours
WC 2 total capacity O 70.00 100 O
Rate
WC 2 rate / hr O 32.86 20.00 O
CC 1
CC 2
P2
CC x P1
Final Conclusion
See Templates in Sheet 2
* In the Fixed Asset register, each fixed asset item which is considered as a resource With Capacity Planning should be mapped ONLY to Either Project CC +
AT or Departmental CC + AT, "NEVER Map it to WBS"
* In the payroll sheet, each employee which is considered as a resource With Capacity Planning should be mapped ONLY to Either Project CC + AT or
Departmental CC + AT, "NEVER Map it to WBS"
* Resources (either labor or machine) Without Capacity Planning should be mapped ONLY to either Departmental CC or WBS "NEVER Map it to Project CC or
AT"
Fixed Asset Register
Cost Center
Dep CC / Prj CC
Asset 1 - General Dep CC x
Asset 2 - Project General x
Asset 3 - PR resource Prj CC x x
Asset 4 - NPR resource Dep CC x x
Payroll Sheet
Cost Center Baisc Salary Overtime
Dep CC / Prj CC SAP G/L a/c SAP G/L a/c
Name 1 - General Admin Dep CC x $$$ $$$
Name 2 - Project Admin x $$$ $$$
Name 3 - PR resource Prj CC x x $$$ $$$
Name 4 - NPR resource Dep CC x x $$$ $$$
Activity Type WBS
Activity Type WBS
allowances
SAP G/L a/c
$$$ $$$
$$$ $$$
$$$ $$$
$$$ $$$
Total