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Dynamics 365 for Finance and Operations: Project Management

Dynamics 365 for Finance and Operations: Project Management

It’s been a while since we last talked about the features and benefits of the Microsoft Dynamics 365 software, and much has changed since we last did so. As we continue to tackle the basics, we look forward to sharing some of the updates, enhancements, and additional functionality, as well as take a look at the multiple lines of Dynamics 365 available to businesses.

This is a continuation of our introduction to Microsoft Dynamics 365 series. You can view part 1 and part 2 of our look at the core functionality for Dynamics 365 for Financials here, our look at Inventory Management within Dynamics 365 Finance and OperationsSales Management, Purchasing, and a look at the Dynamics 365/LinkedIn Integration here.

Dynamics 365 for Financials Features

Project Management in Dynamics 365

Today’s focus is the project management module within Dynamics 365, and this is an important feature for many businesses in need of easy-to-use project management from budgeting to completion.

A project is a group of activities that is designed to provide a service, produce a product, or achieve a result, and each project has dozens of moving parts that need to happen in tandem in order for a project to go off without a hitch.

Many types of Projects Dynamics 365

Microsoft Dynamics 365 is designed to handle the management and accounting functions throughout the multiple phases of a project—initiation, execution, and analysis.

Project Initiation

During project initiation, several key processes occur. You can use a project quotation to communicate the estimated labor, expenses, and materials to the customer. Throughout the initiation process, Dynamics 365 empowers project-based businesses to simplify the ramp-up process:

  • Project Quotations: In the initial sales phase of a project, a project quotation lets you provide a customer with a non-binding offer. Dynamics 365 makes it easy to add elements to the quotes.
  • Project Contracts: When you enter into a contract with a customer or other funding source to complete a project, you must first create a project contract. Then, when you create the project, you must assign it to the corresponding contract. The type of project that you create for a project contract determines the method that is used to invoice the project customers.
  • Work Breakdown Structure: The degree of detail in a WBS depends on the level of accuracy that is required in estimates and the level of tracking that is required against those estimates. Projects that have very low tolerance for slippages in schedule or cost usually require a more detailed WBS, and also require diligent tracking of work progress and cost against the WBS.
  • Create Forecasts and Budgets: Forecasting and budgeting are two different procedures, and depending on the way you do business, you can easily choose between the two.
  • Six Types of Projects: You can create six types of projects in Microsoft Finance and Operations—Time and Material, Fixed-Price, Investment, Cost Project, Internal, and Time—depending on how you work with clients.
  • Assigning Workers, Categories, and Resources: You can schedule worker resources based either on the requirements and schedule of a project, or on the skills and availability of workers. This is important, as it allows you to control billing, allocation of resources, and calendars.

Project Execution

The next step in completing a project is the project execution process. During project execution, team members or managers record work and the expenses that are incurred, by using timesheets, expense reports, and other business documents.

Dynamics 365 makes the execution process easy by allowing project managers the ability to monitor every detail of the project, control the flow of materials, and prepare invoices with minimal hassle. Among the key features:

  • Work Breakdown Structures: Moving from initiation to execution, the Work Breakdown Structure plays an important role. A WBS is a hierarchy of tasks that represents not only the work for each task, but also the size, cost, and duration of the task. Throughout execution, the WBS will keep tasks in order.
  • Manage forecasts and budgets throughout the project: During the project execution process, your project needs to stay on budget. As your project moves from initiation to execution, a well-integrated solution will track ongoing costs, revenues, and other financial metrics.
  • Production Orders: Throughout execution, materials, labor, and the like have to be accounted for and transferred to the client. Dynamics 365 supports finished item and consumed item methods, with optional linking to order.
  • Purchase Orders for Projects: The purpose of the purchase order determines when the purchase order is consumed and, therefore, when items are charged on a project. Dynamics 365 allows you to create purchase orders in many ways and link them to the project—create one directly, create a purchase order from a sales order, or create a purchase order from an item requirement.
  • Sales Orders for Projects: In Project management and accounting, you can register the consumption of items in several ways. You can sell items or purchase items from a project, or reserve items for a project. There are many ways to order items and track them—sales order, inventory journal, item requirement, and purchase orders.
  • Process Invoices: The invoice process (and whether or not you issue an invoice) depends on many factors. Dynamics 365 allows for the easy creation of invoices from preliminary invoices or proposals, reviewing and sending them from within the platform.
  • Calculating the Cost to Complete: When you create an estimate, you can choose the method that is used to calculate the cost to complete the project. There are many factors that go into this. Track the variables in Dynamics 365 with ease including actuals, remaining budgets, estimates, templates, and others.

Learn more about the project execution process within Dynamics 365 from their product capabilities overview.

Project Analysis

In order to ensure profitable, timely projects in the future, it pays to analyze projects so you know how to improve the results in the long run. From cash flow to cost review to utilization and more, Dynamics 365 makes it easy to analyze the success of projects and improve them in the future.

  • Cash Flow: Use cash flow monitoring to review both the forecasted cash flows and the actual cash flows for a project. You can review cash flows while a project is in progress, or you can view the cash flows of a completed project. By monitoring cash flows, you can evaluate a single project, use the reports to view multiple projects, and transfer project cash flows to the cash flow forecasts in the general ledger.
  • Cost Control: You can monitor the costs that your organization incurs during a project on the Cost control page. By comparing the original budgeted costs for the project with the current actual costs and the committed costs, you can determine whether the project is on track, over budget, or under budget.
  • Utilization Analysis: The utilization rate is the percentage of time that a worker performs billable or productive work in a specific working period. Billable hours are the worker’s hours that can be charged to a specific customer.

See the entirety of the project analysis functionality by reading it here.

Get to Know Dynamics 365

Project management is often a challenge that plagues companies looking to make the most of their business, and this is a decent—albeit brief look at the project management process in Dynamics 365. Learn more about the functionality here, and stay tuned for an upcoming blog on the enhancements that have been made since the introduction. Ready to learn more about taking your business further with Microsoft Dynamics 365? Contact us today.


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