How to track project profitability by project phase

Applies to: 1C:Drive 1.5.1
Related modules: Accounting
Created on: July 1, 2023

Objectives

1C:Drive versions 1.4.3 and 1.5.1 introduce new features that allow you to record and monitor income and expenses by project or project phase. 

After completing this tutorial, you will:

• Know general project management settings.
• Know the project settings required to record income and expenses by project and project phase.
• Learn how to create a project and project phases.
• Learn about a tool for selecting projects or project phases in business documents
• Learn how to choose in which document section to show a project or project phase: the Additional information tab or in the product list.
• Learn how to use reports for monitoring income and expenses by project and project phase.
• Learn how to customize reports so that they show the details that you need to.

Prerequisites

To complete this tutorial, it is recommended that you:

• Have a basic understanding of project management. To learn about it, see Project management.

Case description

Best computers is a wholesale company that sells personal computers (PCs) and their components. The company also provides technical support. Each big customer is considered a separate project. 

To analyze profitability of projects and different business activities, Best computers decided to use two project phases:

• PC and component sale
• Technical support

Let’s see how to arrange and do project accounting for Best computers in 1C:Drive.

Key steps

1. Project management settings
2. Creating project and project phases
3. Recording purchase for stock replenishment
4. Recording a sales order for project phase
5. Recording a sales invoice for project phase
6. Running month-end closing
7. Generating reports
   • Income and expenses by project
   • Cost of sales by project report

Project management settings

Let’s start with making several changes to 1C:Drive default settings. These changes are needed to complete the tutorial.

Use project management

Project management is an optional feature in 1C:Drive. This feature provides tools for creating projects and project phases and tracking their status.

In the 1C:Drive demo version, project management is enabled by default. If you install 1C:Drive with an empty infobase, this feature is disabled. To enable it:

1. Go to Settings > Company
2. Under Project management, select the Use project management checkbox.

Then, Project management items will appear in the Company menu:

Project-based accounting

1C:Drive provides an additional option for managing income and expenses by project. 

In the 1C:Drive demo version, the option is enabled by default. If you install 1C:Drive with  an empty infobase, this feature is disabled. To enable it:

1. Go to Settings > Company
2. In the Project management section select the Project-based accounting checkbox.

Then, you will see following changes:

1. In documents (for example, sales invoice), on the Additional information tab,  Project/Project phase field is shown.

2. In documents, you can choose the location of the Project/Project phase field:  on the Additional tab or on the tab with the product list. To do this, use the document settings in More actions (A). For example, select In tabular section (B) to view the Project/Project phase field  on the tab with the product list.

Creating project and project phases

To create project and its phases:

1. To create a project, go to Company, click Projects, then click Create.
2. Fill in general project details:

• Name. In this case, PC retailer as we create a project for this customer. 
• Company. In this case, Best computers.
• Counterparty. In this case, customer PC Retailer.
• Start date and End date. In this case, 1/ 2/2023  and 12/29/2023.

3. Best computers needs to monitor income and expenses by project phase. So, in the project settings, select the Track income and expenses by project phase checkbox. Then you will be able to select project phases in business documents.
   Note. If you keep the checkbox cleared, you will be able to select only the project in business documents, not its phases (even if they exist).

4. To set up project phases, click Project workplace and navigate to the project workplace. 
5. Best computers needs to monitor income and expenses by the following project phases:

• PC and component sale 
• Technical support

So, in the project workplace, add these phases. To do this, click Add and fill in the phase details.

Now the project and its phases are completely set up for the Best computers company. We can continue to record business transactions for the project.

First, stock replenishment is required. See Recording purchase for stock replenishment.

Recording purchase for stock replenishment

For stock replenishment, Best computers needs to purchase 1000 optical mouses “MOUSE IBALL FREEGO MINI”.

Then, create a purchase order. To do this, go to Purchases > Purchase order, click Create and fill in the purchase order.

When the order is delivered and invoiced, record a supplier invoice. To do this quickly, open the order and generate a supplier invoice by clicking Generate > Supplier invoice.

The supplier invoice details are filled from the order. Then post the supplier invoice. This records the fact the optical mouses have been replenished.

Now we can continue to sell them. See Recording sales order for project phase.

Recording sales order for project phase

Best computers receives an order from Customer 1:

Shipment date	Customer	Product/Service	Quantity	Price	Project	Project phase
5/10/2023	PC retailer	MOUSE IBALL FREEGO MINI	500	60	PC retailer	PC and component sale
	PC retailer	Technical support service	1	100	PC retailer	Technical support

Then, let’s create a sale order and fill it in accordingly. To do this:

1. Go to Sales > Sales orders and click Create.
2. Fill in general details:

• Set Lifecycle status to In progress.
• Set Customer to PC retailer.
• Set Company to Best computers.

3. On the Products tab, add “MOUSE IBALL FREEGO MINI” (D) and technical support service (E).

4. To specify a project phase in a sales order, use the Project/Project phase field. By default, it is located on the Additional information tab. For this sales order, you need to specify a separate project phase for each ordered item. So, move the Project/Project phase field  from the default location to the Products tab. To do this, in the sales order, click More actions (A) and select Settings (B).

In the displayed dialog, select In the tabular section for Project / Project phase field and click OK.

The Project / Project phase field appears on the Products tab.

5. To specify the “PC and component sale” phase for “MOUSE IBALL FREEGO MINI”, use the tool for selecting projects or project phases. To do this, double-click the Project / Project phase field and click .  The tool is displayed. 

By default, all projects are shown. For Best computers, project “PC retailer” is created under the current user. So, to quickly spot the project, select Show only my projects checkbox (A). Then click  (B) to view the project phases. The project phases are shown. 

Select the “PC and component sale” phase (С) and click Select (D).

6. To specify the “Technical support” phase for Technical support service, use the same tool as on step 5.  

Now each ordered item is related to the project phase to track income and expenses by. Then, post the sales order.

Now we can continue to invoice the sales order. See Record sales invoice for project phase.

Recording sales invoice for project phase

Best computers has a sale order from PC retailer with shipment date 5/10/2023. On this date, Best computers needs to invoice the sale order. To do this quickly, open the sales order and generate a sales invoice by clicking Generate > Sales invoice.

A sales invoice is displayed. Its data is filled from the sales order. Each invoiced item is related to the project phase to track income and expenses by. Then, post the sales invoice.

Now we need to calculate and record the cost of sales by running month-end closing. See Running month-end closing.

Running month-end closing

To calculate and record the cost of sales for Best computers, run month-end closing. To do this:

1. Go to Company.
2. Under Financial transactions, click Month-end closing.
3. Set For company to Best computers.
4. A sale to PC retailer was in May, so select the May tab.
5. To take into account all calculation elements, select all the checkboxes.
6. Click Month-end closing.

The calculation takes some time. When it is completed, the cost of sales is recorded.

Generating reports

To monitor income and expenses by project or project phase, use the Income and expenses by project report.

To monitor cost of sales by project or project phase, use Cost of sales by project report.

Note. From the Analysis menu, you can also generate other reports by project and project phase such as Net sales by projects, Sales trend by projects.

Income and expenses by project report

In this case, company Best computers made a sale to PC retailer in May, 2023. PC retailer is considered a separate project “PC retailer”. Best computers monitors income and expenses by the following project phases:

• PC and component sale
• Technical support

Then, to generate Income and expenses by project report:

1. Go to Analysis.
2. Under Financial result, click Income and expenses by project.
3. Specify report settings:

• Accounting period is from 5/1/2023 to 5/31/2023.
• Company is Best computers.
• Project is PC retailer.
• Project phase is PC and component sale.

4. Click Generate.
   The report is generated. It shows income and expenses by the selected project phase.

To view the report for the Technical support phase, select this phase and click Generate.

To view the report for all phases, clear the Project phase checkbox (A) in the report settings and click Generate.

In this case, by default, the report shows GL accounts (B).

You might need to view income and expense items instead. To do this:

1. Click Set up (C), select the Structure tab (D), click Advanced (E) and double-click Business area - detail by item (F).

2. In the displayed dialog, double-click GL account (G), select Income and expense item (H), and click Select (I).

3. Click Finish editing.

4. Click Close and generate.
   
   

Now the report shows income and expense items:

You can also customize the report to view also the documents that recorded the transactions. To do this, click Set up again, select the Structure tab, select the Movement document checkbox. and click Close and generate.

Now the report shows the documents:

Cost of sales by project report

In this case, company Best computers made a sale to PC retailer in May, 2023. PC retailer is considered a separate project “PC retailer”. Best computers monitors income and expenses by the following project phases:

• PC and component sale
• Technical support

Then, to generate Cost of sales by project report:

1. Go to Analysis.
2. Under Financial result, click Cost of sales by project.
3. Specify report settings:

• Accounting period is from 5/1/2023 to 5/31/2023.
• Company is Best computers.
• Project is PC retailer.
• Project phase is PC and component sale.

4. Click Generate.
   The report is generated. It shows income, expenses, and profit by the selected project phase.

To view the report for the Technical support phase, select this phase and click Generate.

To view the report for all phases, clear the Project phase checkbox in the report settings and click Generate. By default, the report shows GL accounts. You can view income and expense items instead. Also, you can customize the report to view the documents that recorded the transactions. To do this, use the same settings as for the Income and expenses by project report. Click here for details.