{"id":102207,"date":"2018-03-01T00:00:00","date_gmt":"2018-03-01T05:00:00","guid":{"rendered":"https:\/\/sisn.com\/understand-true-estimated-cost-completion-projects-2\/"},"modified":"2025-02-13T16:28:24","modified_gmt":"2025-02-13T21:28:24","slug":"understand-your-true-estimated-cost-at-completion-for-all-projects","status":"publish","type":"post","link":"https:\/\/sisn.com\/en-gb\/understand-your-true-estimated-cost-at-completion-for-all-projects\/","title":{"rendered":"Understand your TRUE Estimated Cost at Completion for all Projects!"},"content":{"rendered":"\t\t
\n\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

Can you\u2026 Measure cost and productivity through the full life cycle of enterprise level projects? Accurately bill and automatically do Revenue Recognition according to percent complete?<\/i><\/b><\/p>

GAAP accounting dictates the Percentage of Completion (POC) method primarily for Fixed Fee or Lump Sum projects. This means determining the Percentage of Completion to date on a project and using this as the basis for booking Revenue for financial reporting purposes. The POC can be determined based on multiple methods including Cost-to-Cost, Effort, or Units of Delivery. For discussions purposes we will focus on the Cost-to-Cost method\u00a0because the other two methods can be converted to a Cost-to-Cost method.<\/i><\/p>

Revenue is booked at the end of every fiscal period typically monthly. Percentage of Completion (POC) is computed as Cost to Date \/ Estimated Cost at Completion. Every projects starts with a Cost Budget also labelled as Original Budget. The Current Budget reflects the Original + Change Orders + overages. The Estimated Cost is the \u201cguesstimate\u201d of the Project Manager who is required to re-estimate the Project based on various factors periodically, which is typically monthly. The Estimated Cost at Completion must be reviewed every period and adjusted as necessary so that financials can be stated accurately.<\/p>

The out of the box capabilities within Dynamics AX\/Dynamics 365 for Operations can be cumbersome for necessary POC calculations. In addition, ensuring the integrity of Revenue Booked is a difficult proposition since the Contract Values (original + approved change orders) are not period sensitive.<\/p>

The SIS\u00a0Project Cost Management<\/a>\u00a0(PCM) module for Microsoft Dynamics 365 solves all of these issues. The Budgeting functionality in SIS PCM is built with period sensitivity for all Budgets and Change Orders. There is a separate ECAC (Estimated Cost at Completion) functionality that is also built with period sensitivity. In addition, recognising this is a tool for Project Managers, and Project Accounting, it is extremely easy to use with visibility to variances and margin gain\/fade at all phases during the project. It is also built with audit trails so that management can review historical performance and variance\/margin gain-fade for specific projects or a specific Project Manager. The above functionality combined along with the SIS PCM WIP and Revenue Recognition Preview reports, makes implementation of Percentage of Completion (POC) revenue recognition a breeze.<\/p>

Estimated Cost At Completion Table<\/p>

\"\"<\/a><\/p>

SIS developed the Project Cost Management solution so that Project Managers could quickly respond to these questions from owners and project stakeholders.<\/p>