Revenue Projects mapping & settlement

[Former Member]

Dear all,

Our client is into construction of solar plants and after completion of solar unit, will hand it over to the customer. All the purchasing activities will be carried out by our client. How to map this ? Land is not belongs to our client here.. so can i create that as plant and create a project.... and finally settle all the costs to PSG and sell it ?

Can we discuss all the pro & cons here ?..

Regds,

Kallu

[Former Member · Accepted solution]

Link a Sales Order item to your billing WBS element.  This will generate revenue when billed and, when configured properly, will post revenue to the project.

Create a Project where you will capture all costs and all purchasing activities including purchasing land.  This land is not an asset from your clients side.  It is a cost of goods sold.  It will be an asset for your customer eventually.

If you are using PA you can settle the entire project to PSG to measure your profitability.

[Former Member · Accepted solution]

Thanks Ken,

My understanding will be as below,

1. Project will be created with Budget assigned

2. Sale order will be created for the requirement with item category as TAS

3. SO will generate PR (Third party sales with item category as TAS) under respective WBS - There will be commitment

3. After PO, once i receive the goods, i will be posting statistical GR, where in it will update actual costs against respective WBS

4. will create commercial invoice for my customer to collect the money.

5. Finally will settle the costs to PSG to get the profitability.

Pls let me know, is my understanding of process is right..

regds,

Kallu

[Former Member · Accepted solution]

When you have a PS project you do not need to do step 3.  The Sales Order will not generate a Purchase Order.  Purchase Orders will be generated from the PS project.  The project will collect all costs and tranfer them through settlement.

3rd party PO's are for drop ship materials where your vendor sends something directly to your customer then you bill the customer.

[Former Member · Accepted solution]

Thanks Ken,

I will do some R&D and will get back in case of any issues... Thanks

Regds,

Channa

[Former Member]

Hi Channabasappa

We have mapped this same scenario in previous project

For Each Sales Order of Solar Plant create a project,

For each activity like civil work , Electrical work  required for installation of Solar Unit maintain as Internal Activity

and if you have agreement to bill stage wise you can maintain Milestone in Project

maintain Solar Unit  as FG and assign it to External Activity. After PR,PO and GR it becomes Project stock.

you can create Sales order with account assignment WBS and Create Delivery.

Please check and Revert Back

[Former Member]

Hi... Thanks

Here my issue is my client will have Budget for WBS. And he will create PR..PO against it. Most of the purchases will be High sea sales.... So he will be selling the goods to customer before it reaches our site.

When PR is raised.. there will be commitment.. even during PO there will be commitment.

As i seen few posts.. we can create statistical GR for High sea sales/purchases. When i create SO and do Delivery... what abt the actual cost which were posted after GR ?

Regds

Channa

[Former Member]

Hi Channabasappa

the scenario  which you discussed is third party sales where the third party suplies goods to customer on your behalf.

[Former Member]

HI,

As per your client requirement construction of Solar plants and selling to the customers.

So in this process each construction of an solar plant  can be considered as Capex project /Assert. And all the Cost of purchasing activities can  be booked against the project .

Assert means not only land, it can be other asserts also, , In your scenario: Construction of Solar plant itself an assert.

So all the cost will be captured to the respective WBS ,with AUC status , and finally we can settle all the cost to the main WBS to project to Assert, by this process we can capitalize the final assert.

But for booking the revenue this assert can be sold to the customer.

Please reward me, If it is helpful to you.

Regards,

vrkumar