powerpoint presentation · view owning 1.1 performing 1.2 performing 1.3 psr by revenue $ - $ 22 $...

CP-26:Owning vs Performing Organizations

Brandye Thompson, Deltek

Jane Kranyak, Deltek

Agenda

2

» Definitions

» Setup

» Posting Options and Reporting Impacts

» Cost Transfer Journal Entry

» Redistribution of Revenue

» Summary

CONFIDENTIAL © Deltek, Inc. All Rights Reserved.

CONFIDENTIAL © Deltek, Inc. All Rights Reserved. 3

Definitions

What is an Organization?» 1 of the 3 Financial Pillars in Costpoint

» Can be anywhere from one level deep to many

levels deep

» The top level represents the overall company

» Lower levels represent divisions, departments,

etc.

» Recorded on every transaction to show who

within your business is responsible for this data


» Projects are typically owned by a specific node

within the company’s organization structure

» Responsible for procurement of the contract,

customer relations, and financial accountability

» Required for project setup in Costpoint

Owning Organization


Performing Organization» Any organization node which performs work on a

specific project

» May be the same as the Owning Organization

» May be other organizations which are “loaning”

labor or “cross charging” into a project



How Does The Organization Get

Recorded on a Transaction?

Setup

How Does The Organization Get Recorded on aTransaction?


» Labor

» Costpoint determines the default organization for timesheet entry

based on the following order of precedence:

» 1. The Organization value specified in Manage Employee Project Timesheet

Defaults screen

» 2. The Organization value specified in Manage Employee Proj-Acct-Group

Timesheet Defaults screen

» 3. The Organization value specified in Manage Labor-Group Proj-Acct-Group

Timesheet Defaults screen



» 4. The Organization value specified in Manage Project Timesheet Defaults

screen

» 5. The Organization value specified in the Timesheet Defaults tab of the

Manage Employee Information screen

» 6. The Home Organization value specified on the Salary Info tab of the

Manage Employee Salary Information screen

» For example, if an organization exists in both the 1st and 3rd options,

Costpoint uses the organization in the 1st option as the default for timesheet

entry.



» Non – Labor

» Project Master - Project Default to owning organization

» A single project node can only belong to a single owning organization

» Different levels of the project can have different owning organizations

» Data entry examples:

» Accounts Payable vouchers

» Journal entries

Sample Organization Structure

CONFIDENTIAL © Deltek, Inc. All Rights Reserved 11

Company

Division

1

Company

1.1

Division 1

1.2

Division 2

1.3

Administration


Posting Options and Reporting Impacts

Posting Options


Revenue by Owning

Org

Revenue by Performing

Org

Cost by Owning OrgOption 1 Not Possible

Cost by Performing

Org Option 2 Option 3

Setup - Project Master


Record Costs by Owning Organization – Option 1


» Labor and non-labor are recorded to the project’s owning organization

» Borrowed / loaned labor / cross-charging

» Project Reporting loses visibility of where labor originated

» No “what if” revenue analysis by performing organization

» Without unique accounts for each charging organization, labor would be

burdened with the rates of the project’s home organization, which may

not be correct.

Record Costs & Revenueby Owning Organization - Option 1


View Owning 1.1 Performing 1.2 Performing 1.3

General Revenue $ 55 $ - $ -

Ledger Costs $ 50 $ - $ -

Profit $ 5 $ - $ -


PSR Revenue $ 55 $ - $ -

Costs $ 50 $ - $ -

Profit $ 5 $ - $ -

16

Record Costs by Performing Organization - Option 2


» Labor is posted to the employee’s home organization

» Indirect burdens are based on the employee’s home organization

» Project Status Report Impact

» Separate PSR for each performing organization

» When printing by project or owning organization you will get a total

rollup of cost on the PSR

Record Costs by Performing Organization Post Revenue by Owning Organization - Option 2



PSR Revenue $ 55 N/A N/A

Owning Costs $ 50

Profit $ 5


PSR Revenue $ 55 $ - $ -

Performing Costs $- 20 30

Profit $ 55 ($ 20) ($ 30)

18



Prior to Cost Transfer Journal Entry (JE)



Ledger Costs $ - $ 20 $ 30

Profit $ 55 ($ 20) ($ 30)

19

Cost Transfer Journal Entry


» For financial statement purposes, income and expense will be reflected

in the same organization.

» At a financial statement level only, using non-project accounts, it will

move cost from the performing organization, to the owning organization

» Direct cost is moved

» Burden cost is moved at target or actual rates

» It is expected that anyone who posts revenue by owning organization

but posts cost by performing would calculate and post this entry

20





Ledger Costs $ 50 $ - $ -

Profit $ 5 $ - $ -

After Cost Transfer Journal Entry (JE)

21

Record Costs & Post Revenue by Performing Organization -Option 3


» Like option 2, labor and non-labor costs are posted to the performing

organization, indirect burdens are based on the performing organization

» Revenue by performing org will be incomplete because Costpoint does

not know how to distribute profit, loss, award fee, or revenue adjustments

to performing organizations.

Record Costs by Performing Organization Post Revenue by Performing Organization - Option 3



PSR by Revenue $ - $ 22 $ 33

Performing Award Fee $ 5 $ - $ -

Costs $ - $ 20 $ 30

Profit $ 5 $ 2 $ 3


PSR by Revenue $ 55 N/A N/A

Owning Award Fee $ 5

Costs $ 50

Profit $ 10

Before Revenue Redistribution

23




General Revenue $ - $ 22 $ 33

Ledger Award Fee $ 5 $ - $ -

Costs $ - $ 20 $ 30

Profit $ 5 $ 2 $ 3

Before Revenue Redistribution

24

Redistribute Revenue


» Fixed revenue formulas ( non transaction based), ceilings and revenue adjustments all post amounts “plugs” to the owning organization of a project no matter which revenue posting method you use

» To get accurate performing organization revenue a redistribution has to happen

» It will redistribute based upon the revenue calculated in each task/performing organization

» If you are posting revenue by owning organization, redistribution will only have an impact on performing organization PSR’s

» If you are posting revenue by performing organization, there will be both an income statement and a performing org PSR impact. The owning organization “will be cleared” of any revenue amounts

25




PSR by Revenue $ - $ 22 $ 33

Performing Award Fee $ - $ 2 $ 3

Costs $ - $ 20 $ 30

Profit $ - $ 4 $ 6


PSR by Revenue $ 55 N/A N/A

Owning Award Fee $ 5

Costs $ 50

Profit $ 10

After Revenue Redistribution




General Revenue $ - $ 22 $ 33

Ledger Award Fee $ - $ 2 $ 3

Costs $ - $ 20 $ 30

Profit $ - $ 4 $ 6

After Revenue Redistribution

Option 3 With Different Revenue Formulas


» Transaction Based

» Redistribution of revenue is only needed if you have award fee or revenue adjustments

» Cost Plus Fee on Cost

» Loaded Labor

» Non-Transaction Based

» Redistribution of revenue is always needed

» Costpoint does not know how to distribute profit, loss, award fee, or revenue adjustments to performing organizations.

» Contract Value times % complete

» Fixed Amount Year To Date

Redistribute Revenue by Project


» Redistribute revenue that was computed at higher levels of a project (particularly revenue from fixed amount formulas) to the lowest level of a project

» If you do not use the redistribute process, the revenue shown on the Project Status Reports for some project nodes may seem incorrect.

» Amounts cannot be specifically linked to a particular node of the project (such as fixed revenue formulas, revenue adjustments, and over ceiling amounts)

» These amounts are stored in the PROJ_SUM table at the revenue level of the project.

» Using this process, you can redistribute these plug amounts to the entire project.

» This screen calculates using amounts for a specific subperiod only.

» This is different from the Redistribute Revenue screen, which is a YTD process.

Redistribute Revenue by Project


» Revenue can be redistributed at target, actual, or both

» Costpoint calculates the allowed cost for each node on the project tree as a percent of the total allowed cost for the project

» You can modify the percentages for any node as long as they sum to 100%

» Costpoint will redistribute the total revenue from the PROJ_SUM table for the project to each node based on the percentages

» After revenue has been assigned to each node, it is further allocated to each account/organization combination within that node based on the allowed cost of each account/organization combination to the total allowed cost for the node.

Summary

31

» Costs are normally recorded by performing organization

» Revenue can be tracked by owning or performing organization

» This can be determined on a project-by-project basis

» Reconciliations are simpler if all projects in a company use the same method

» If revenue is tracked by owning organization, and costs by performing organization:

» Cost Transfer Journal Entry should be used to move costs to owning organization for financial statement reporting

purposes

» Redistribute Revenue can be used to move revenue to performing organization and to lower project levels for PSRs

only, but will not affect posting to G/L

» If revenue and costs are tracked by performing organization:

» Cost Transfer Journal Entry is not applicable

» Redistribute Revenue can be used to move revenue to performing org for both PSRs and revenue posting (and to

lower project levels for PSRs only)

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