Entering Estimates

Sage ERP Accpac Project and Job Costing 6.0

Entering Estimates

In setting up any contract in Project and Job Costing, you:

Create a new contract record.
Assign projects to the contract.
Assign to each project the cost categories you will use to classify project costs.
For standard projects, assign the resources you will use to complete the work on each project. For each project resource, you also assign categories to use to aggregate the costs for each resource.
Estimate both the costs required to complete the contract and the revenue you need to ensure a decent profit, as described in this topic.

Project Style Affects Project Estimation

Estimating Costs

You normally enter cost estimates before revenue estimates, so that you can better determine the amount of revenue you need to ensure a profit.

How you add cost estimates depends on the project style:

On a basic project, cost information is accumulated by broad cost categories. You assign categories to the project, and then enter cost estimates directly for each category.
On a standard project, cost information is accumulated by category for each resource. You define the cost categories you want to use in your project. You assign particular resources (such as equipment or material) to the project, and then you assign the cost categories to each resource. You enter cost estimates for each resource category.

Estimating Revenue

Project and Job Costing handles revenue estimates differently, depending on the project type:

For fixed price projects, you enter the fixed price you will charge your customer on the Totals tab of the Project Maintenance form. When you change the project status to Open, this amount appears as the revenue for the current estimate.

Project and Job Costing also calculates a revenue amount based on the markup percentage specified for the project and the estimated costs for each category (on a basic project) or resource category (on a standard project). If necessary, you can change the total revenue amount for a category or resource category as long as the project has an Estimate status. This revenue amount remains as part of the original estimate when you open the project.

For cost plus projects, the program automatically calculates the estimated revenue based on the cost plus percentage and the cost estimates you enter for each category.

To have the program calculate the cost plus percentage, you can enter a revenue amount for each category (on a basic project) or resource category (on a standard project).

For time and material projects, the program automatically calculates the estimated revenue depending on the billing rate and the quantity you enter for each category (on a basic project) or resource category (on a standard project).

If you prefer to have the program calculate the billing rate, you can enter revenue amounts for each category or resource category.

In a multicurrency system, you enter revenue amounts in your functional currency. The program converts the revenue amount to the customer's currency, if it is different from your functional currency, using the exchange rate specified on the project's Totals tab.

To enter estimates for a basic project

To enter estimates for a standard project

Entering an Estimate for an Unprofitable Project

From time to time, you may need to enter an estimate for a project where the expected revenue is less than the expected costs, or you may even have to revise the estimate of a previously profitable project.

To enter an estimate for an unprofitable cost plus project, you enter a negative cost plus percentage.
To enter an estimate for an unprofitable time and materials project, either enter a negative revenue amount or enter a billing rate that produces the expected negative revenue.

You cannot enter a negative revenue amount for a fixed price project.

Checking estimates

To check an estimate for a selected contract, click the Totals tab on the Contract Maintenance form.
To check an estimate for a project, select the project on the tree, then click the Totals tab on the Project Maintenance form that appears.
To check an estimate for a project category, expand the Category folder on the tree, then select the category you want to view. The estimate appears on the Estimates tab of the Category Maintenance form.
To check estimates for a resource on a standard project, expand the folder for the resource, then select the particular resource. The estimate appears on the Estimates tab of the resource maintenance form.
To check your estimate for a particular resource category on a standard project, expand the folder for the particular resource, then select the resource category. The estimate appears on the Estimates tab of the Category Maintenance form for the resource.

If you use multicurrency accounting, note that all costs are entered in your functional currency. The program displays revenue and profit in both currencies. The program converts the revenue and profit from your customer's currency to your currency using the exchange rate you entered for the project.

Revising estimates

Once you change the status of a contract from Estimate to Open or Approved, you cannot update estimates for existing projects and categories directly. You use the Revise Estimates form to update estimates — usually following a change order approved by the customer.

You can add a new project category or resource for an open project at any time, for which you can enter an estimate until you add the new category or resource.

Revised estimate amounts appear in the Current Estimates column of the project summary on the Project Maintenance form, and revised estimate transactions appear on the Transaction History form and on transaction listings.