Project Item Consumption via Sales Documents#

General#

In Microsoft Dynamics 365 Business Central¹ Standard, sales documents referencing a project are used for posting the proceeds, but posting the consumption is not included. Here the system neither posts items from the inventory nor debits a project with resource time and materials. Project consumption entries are generated from recorded project data (journals), project shipments, purchase documents, and time tracking data. For more information, see: Time & Materials

Usually, items are scheduled using budget lines and posted from the inventory to the project via a project shipment. This process creates an item ledger entry of the NEG. ADJMT. ledger entry type (inventory item is consumed) and a project ledger entry of the CONSUMPTION ledger entry type (corresponding costs are debited to the project). Posting a sales shipment creates neither item ledger entries nor project ledger entries. Only once the invoice has been posted, a project ledger entry of the SALE ledger entry type is created to assign the proceeds to the project.

Ledger entries involved when using the project shipment:

In addition, other ledger entries, such as value entries or customer ledger entries, are generated. However, these are irrelevant to the current process.

This behavior can be changed via the Project Item Consumption via Sales Shipment workflow. In this case, no project shipment is required because item consumption and project debiting are posted via the sales shipment. This means that the sales shipment replaces the project shipment.

In addition, other ledger entries, such as value entries or customer ledger entries, are generated. However, these are irrelevant to the current process.

Setup#

Projects Setup#

Activating the Project Item Consumption via Sales Shipment function#

This function extension can only be used if it has been activated globally on the Manufacturing and Warehouse FastTab in Projects Setup by enabling the Project Item Consumption via Sales Shipment toggle.

This toggle can only be turned on if the Project Purchase Incl. Inventory toggle has been activated before. Otherwise, it would not make sense to post items via a sales document if the items have already been assigned to the project by posting a purchase transaction and are therefore no longer available in the inventory.

Item Posting Type#

In Projects Setup, you not only activate the workflow, but also define the ledger entry type for the item ledger entry via the Item Posting Type. Proj. Cons. By Sales Doc. field.

The item consumption ledger entry usually has the SALE ledger entry type, as in the case of commercial shipments. If project shipments are used, item ledger entries are posted with the NEG. ADJMT. ledger entry type.

Sales & Receivables Setup#

For correct posting, especially in the case of cancellations, you must ensure that the following toggles are turned on in Sales & Receivables Setup: Shipment on Invoice, Return Receipt on Credit Memo, and Exact Cost Reversing Mandatory.

Inventory Setup#

If you select the SALE item ledger entry type (see Item Posting Type), the Expected Cost Posting to G/L toggle in Inventory Setup must be turned on.

The reason is that, if a sales shipment has been posted but not invoiced yet, the item continues to be included in the inventory value. At the same time, a project consumption ledger entry is posted, adding to the WIP. This means that the item is recorded both in the inventory and in the project value. This requires expected cost to be posted. It is not possible to restrict this posting behavior to particular cases. Once expected cost posting has been activated, the function is applied globally.

Master Data Setup#

Whether an item will be removed from the inventory or not when you post a sales transaction depends on the setup of the item itself or on its location. Both the Item Card and the Location Card include the Project Item Consumption via Sales Shipment toggle. Only if this toggle is turned on, the inventory workflow will be carried out independently of the item or inventory.

Please note that only items of the Inventory type can be used for this workflow.

Using this Functionality in the Workflow#

All sales documents that involve posting of shipments and return shipments as well as cancellation functions are supported.

These include, for example:

• Posting a sales shipment from within a sales order
• Canceling a warehouse shipment related to a posted sales shipment
• Creating a corrective credit memo from within a posted sales invoice
• Cancellation from within a posted sales invoice
• Correction from within a posted sales invoice
• Creating a credit memo via Copy Document

Referencing a Budget Line#

Project item consumption posting from Sales workflow is only activated for sales lines that include an item or a location that has been set up accordingly. In addition, the sales line must be associated with a project budget line.

The system assumes that items that are consumed via a sales line are also scheduled in the project. The security check in the project shipment, which is meant to avoid double consumption, is based on references to project budget lines.

Sales Line#

Two fields in the sales line indicate whether and how this workflow is performed: The Project Item Consumption via Sales Shipment field controls the posting process in general, while the Item Posting Type Proj. Cons. By Sales Doc. field indicates whether the item ledger entry will have the SALE or NEG. ADJMT. ledger entry type.

These two fields are required to launch the workflow during operation or to change the item ledger entry type. For posted sales lines, it is mandatory to maintain the previously used method for further posting. Both fields cannot be changed manually; they are set automatically according to the above-mentioned settings.

Items Billed by Time and Materials#

When you post a sales shipment for an item that is billed by time and materials, please observe the following:

To allow posting of an invoice directly from within a sales order, i.e. without creating an invoice suggestion, the system creates automatic invoice entries for the order line when the shipment is posted. These entries close the associated project ledger entries.

If you want to use the invoice suggestion for invoicing, make sure to use the Delete Invoice Entries from Sales Orders option. This option removes these entries from the sales order and suggests the project ledger entries for invoicing (referencing the sales order).

Project Shipment#

To prevent duplicate consumption posting, the system prevents the creation of a project shipment line for a project budget line if the latter is already contained in a sales order or sales invoice line that is intended for posting the consumption from within this sales document.