SAP-Centric Projects
In Charge and In Control
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As the fully integrated ERP system that it is, SAP has literally dozens of ways of charging actual cost to a project. Not all objects in the project hierarchy can receive costs, but only those that are set up as account assignments (through a checkbox on the WBS master record, and the object type in networks). Typical actual charges hitting WBS elements or activities are goods receipts or service receipts, accounts payable invoices, GL postings, settlements or other allocations. Commitments One step preceding actuals are what SAP calls "commitments". What constitutes a commitment can be freely defined in SAP, but typically is a purchase requisition or purchase order or a similar transaction. The idea is that an expenditure has been approved not just in principle but also for a specifically negotiated purpose and initiated. Such transactions should now reflect Duplication and Reconciliation: Typical Issues and Inefficiencies
In complex projects that deal with all three layers of enterprise projects as defined herein (enterprise layer, project layer, contractor layer), a lot of duplication of records happens. This is due to two reasons: (a) Each player in a project needs to keep their records in their own systems and such systems rarely are integrated. As an example, this may mean that a contractor keeps track of time spent in an EXCEL spreadsheet which then becomes the basis for posting against one's QuickBooks or Peachtree Accounting bookkeeping and invoicing system. The time is reported to the general contractor who consolidates it, charges it against the respective project activity, using these entries for project controls in their system and posting it against their own accounting system to be billed to the program or asset owner. As a result a third set of postings of the same content happens, now again in a separate system, in the enterprise (SAP) system. Any mistake in that chain leads to elaborate reconciliation efforts. (b) Typically, progress reporting and time reporting against project activities on the project layer is totally removed from the purchasing processes managed on the enterprise layer. Project owners need quick access to actual hours and in the end they are the ones who know whether to sign off or not on work performed. However, purchasing may be hesitant to allow them to post into their accounting system. This is a typical problem encountered when SAP is being introduced into a process. It speeds up the overall information flow if data is only entered once at the source - meaning in this case on the project layer. Actuals and External Systems
The ideal solution would be to enter actual time and expenses, and receive all purchases, through one system and in a way that projects, purchasing and financial records are taken care of.
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