Communications Pangea/September 04, 2020 /Dynamics 365/Finance/ 4 min read

Dynamics 365 Optimizes Your Investment Projects

Keep this entry for future references

First off, what are Investment Projects within D365 Finance?

In its simplest form, an investment project is a project type within the Project Management & Accounting (PMA) module. This type of project type allows you to capture costs, create budgets to compare actual vs. budget and assign resources to the project with the end goal of capitalizing the project as a fixed asset.

Our clients are initially overwhelmed by the number of options in setting up a project; however, with careful planning and some basic understanding, you will soon be able to configure your investment projects. That is the reason why I am creating this blog. 

I will summarize how Project Management and Accounting (PMA) in Microsoft Dynamics 365 Finance and Supply Chain Management can help you optimize your investment projects by managing and tracking costs effectively.

1. Project Management and Accounting Structure

Let’s display a hypothetical scenario; you decided to invest in building a cell tower; usually, you would have numerous excel spreadsheets with links and pivot tables that would require constant manual updating to track your costs and budget accurately. Well, Project Management and Accounting have a more robust way of helping you to automatically arrange all you need with three simple steps: Initiation, execution, and analysis.

The following graphic shows the process PMA undertakes to create a project:

Dynamics 365 Optimizes Your Investment Projects

Initiation is all about planning, and PMA optimizes your planning by allowing you to track and control the capitalized operations throughout the project by setting up a budget or forecast as guidelines for the execution.

With the budget, you will be able to break the work down into single activities to avoid unnecessary procedures and costs. Automatically, Microsoft Dynamics 365 Finance and Supply Chain Management will compare the budget you set up to the capitalized costs and let you know at all times when you are deviating from the project budget. As shown in the following image:

The key strength of the execution phase is documentation. Here, you can track work time and expenses through timesheets, reports, and any other business document that may have consumed part of the budget, such as vouchers. Also, your worker’s time can be tracked and valued in your primary currency. These features allow you to accurately track and control the project’s overall costs and maintain them within budget.

The analysis phase evaluates that everything is performed as expected. Here you can assess transactions, the precision of your forecasts and budgets, the utilization rates of your team, and the overall success of the project.

It seems like many steps for undertaking a single project. However, it all works simultaneously, and you can execute and analyze your project as soon as it is initiated.

2.    Automatically Turn Investment Projects into a Fixed Asset

Microsoft Dynamics 365 Finance and Supply Chain Management can be configured to automatically turn your investment projects into fixed assets, a ledger account, or a new project upon completion of the project.

It is a 3-step process! In our hypothetical situation, we were building a cell tower; once the investment project is over, it must be turned into a fixed asset. In Dynamics 365 Finance and Operations PMA, it would be something like this:

Select your investment project

Fixed asset screenshot 1

Configure it to be eliminated as a fixed asset

Fixed asset screenshot 2

Eliminate it

And that is it! The newly created asset will appear in your lists of fixed assets.

Fixed asset final screenshot
By providing an automated way of tracking an investment project’s costs and turning them into fixed assets or a new project, you allow your company to manage projects and easily keep them on track, within budget, and with minimum risk.

Thank you.

I hope it was useful to understand the many benefits you and your company can gain from a robust ERP solution such as Microsoft Dynamics 365.

Communications Pangea

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