Project Accounting Considerations
To perform financial analysis and determine profitability for a specific project, you must complete these tasks:
Distinguish between project accounts and general accounts.
Maintain an ETO project as a standalone cost or profit center.
Transfer account information seamlessly from project-specific accounts to general accounts.
Integrate other systems, such as JD Edwards EnterpriseOne Sales Order Management, with project-specific accounts.
If you do not use the JD Edwards EnterpriseOne Job Cost system, you can either create a business unit specifically for the project or use the project branch/plant as the default business unit. If you create a business unit for the project, reported costs are transparent only for the project as a whole. Actual costs are reported by task, but are not visible on a task detail level, based on the account number.
If you use the branch/plant as the default business unit, any transaction journal entries that you create are not project-specific. Even though you report costs in the Project Workbench program and they are, in this sense, project-specific, no project-specific account structure identifies project costs for financial analysis.
For project-specific accounting without JD Edwards EnterpriseOne Job Cost, you can define a project GL class code on the Job Cost tab of the Add/Revise Project form. The automatic accounting instructions use this GL class code to determine which accounts can be used for a specific project.
If you select the Interface to Job Cost option for the project, you use the job business unit and the associated chart of accounts as the business unit for the project. This account structure is project-specific.
When you issue material, such as a project-specific subassembly or a purchased item, you debit a project-specific work-in-process (WIP) and credit a project-specific inventory account. In the case of a subassembly, the system creates journal entries by cost type instead of summing up all costs into cost type A1 or A2. When completing top-level items for a project, you complete them to project-specific accounts, not general inventory accounts.
When the JD Edwards EnterpriseOne Sales Order Management system determines whether inventory for an item is available to be sold, it searches general inventory accounts first. To enable the JD Edwards EnterpriseOne Sales Order Management system to access inventory that is produced in a project, you can create duplicate journal entries that credit a contra account (AAI 3140) and debit the general inventory account, in addition to project inventory and project WIP accounts.