Then drill down on its balance and show the result. I asked you to do that six posts ago. You need to understand that anything that appears there comes from something you have entered. I am trying to understand that source.
Okay, again here is the report of Project A with Suspense showed up, we cannot click on the Suspense as it is unclickable right
Project A direct cost showed up
Then we click the direct cost link, and the drill down is this, it is from Purchase Orders
On summary, no suspense account
@iman, you have finally posted enough information so I can tell what is happening. There is a bug, and I have moved this topic into the bugs category. I also edited the subject to more accurately reflect the problem.
Here is what happened. On your purchase orders, you have entered descriptions, but you have no defined items, such as inventory items. If you did, you would have identified income and/or expense accounts to which purchases or sales of the items would be posted. In that case, nothing would show up with the “Suspense” description. But since you have not created items, they show up as “Suspense.” But, because purchase orders have no financial impact, the transactions are not reported in the Suspense account of the Summary. In fact, they should not be reported in a project view at all.
@lubos, the bug is that purchase orders should not be accrued to a project in the first place. The
Project field might be included so that the project would already be identified when copying the purchase order to another transaction, such as a purchase invoice. But it should have no effect. This mistake occurs in the same fashion for all line items, irrespective of whether they are defined inventory or non-inventory items. The only difference is that when an income or expense account is defined for an inventory or non-inventory item, the accrued direct cost is not reported as “Suspense,” but as the appropriate account.
Finally you found the bug, thank you
This is not a bug. It’s a feature. In order to have complete view of project profitability, we need to have mechanism to assign uninvoiced costs to projects. Purchase orders serve as a good mechanism for that. Otherwise project profitability would not be known until all suppliers invoice you and that is not in your control when your suppliers do it.
So the main issue here is how we prevent double-up. Basically right now, if you assign costs to project from purchase order, then you are not meant to assign them again from purchase invoice. But this requires remembering and cross-checking.
What I suggest is this…
If purchase invoice is linked to purchase order, then it won’t be possible to select project on purchase invoice. It is assumed it was already selected when linked purchase order was created.
This will rule out possibility of two expenses being doubled-up. Thoughts?
But this is quite confusing to me – summing of planned and actual costs together – and I assume that that’s the case with other users as well judging by this thread.
I remember another thread where some members asked for project budgets and I managed to get this using a quick search:
If we can agree that POs are just planned costs until they’re actually invoiced, then maybe we can summarize all orders in a separate column called “budget” and call it a day.
To take it one step further, I think that a hybrid approach could be best suited since I acknowledge that there are some benefits to the method you propose @lubos. This method has three columns summarizing different aspects of cost:
|Planned cost||POs, SOs||Purely for budgeting purposes|
|Incurred cost||GL entries referencing project||Purely for tracking what has actually been incurred|
|Revised cost||POs, SOs + GL entries - double counting||To refine the plans in light of incurred costs that hasn’t been budgeted|
This looks to me like a win-win situation.
I concur with this. In international organizations and those non-profit ones that operate on grants it is normal to assign annual budgets to the P&L side because their “revenue” is already earned and need expending over agreed periods in agreed accounts (often use cost center jargon here) as stipulated in the project document. Financial monitoring is related to so called burn rates which is actually related to the accuracy and timeliness of expenditures agains budgets. An organization’s income from having these projects is earned through overhead costs that can only be earned based on actual expenses made. So it is important to keep continuous track of expenses against budget to prevent large over- and under- expenses. Treating project accounting as @Ealfardan describes would help with this.
In the latest version (126.96.36.199),
Project column on line items of purchase invoice won’t be visible if purchase invoice is linked to purchase order.
This will avoid duplicate cost issue where both purchase order and purchase invoice have projects defined.
This is simple solution but it’s important to keep this simple. When you click on the list of costs in the project, drilling-down into original entries need to be as straightforward as possible.
I have updated to the latest version, and it seems that the project column on purchase invoice won’t be visible if purchase invoice is linked to purchase order, so the issue of double cost is solved…
But here’s another issue, because in the purchase order, we cannot assign an item to an account (cost of goods sold, expense, etc), so the Project Summary listed this cost as Suspense…
So, any workaround on this? I think @Ealfardan suggestion to differentiate Purchase order as planned cost, and purchase invoice for incurred cost is good idea