2611112 - Incurred Costs on Customer Sales Project Realized on the Wrong Project Task

• An employee has recorded time on project task XYZ-XX of customer sales project XYZ (XYZ represents the project ID; XYZ-XX represents the project task on which the time was initially recorded).
• The expense got realized on the expense account defined for Internal Service Confirmations.
• However, the expense is no longer associated with project task XYZ-XX but now realized on project task XYZ-YY (XYZ-YY represents a different task of project XYZ).

SAP Business ByDesign

In general, two business transactions are generated for expenses of customer projects with sales integration: 1. the expense posting and 2. the expense assignment to sales order (creation of the customer project expense list (CPEL)).

1. The original expense posting, for example, an internal service confirmation: 

   Example:

   An employee records time on project task XYZ-XX incurring a cost of 100,00 LC*.

   Expense posting (expense gets associated with the project task:

   G/L Account Internal Services:	Credit: 100,00 LC
   Deferred CoGs/ G/L Account (Origin): Internal Services:	Debit: 100,00 LC	Project Task XYZ-XX

2. The expense assignment to sales document Item is generated [the Customer Project Expense List (CPEL)]:

• With this posting the expense gets assigned to the respective project-based sales order item; In the ideal scenario this posting happens automatically at the time of the expense posting. 
• Or, the CPEL is posted once the expense got manually assigned to the sales order item in Project Management. 

If no Accrual Method is assigned to the Sales Order item, 

• All incurred project costs get assigned to a sales order item on the deferred Cogs account and then realized on the respective P&L account at the same time: On the expense account the project task assignment switches from XYZ-XX to XYZ-YY: 

  Deferred CoGs/ G/L Account (Origin): Internal Services:	Credit :100,00 LC*	Project Task XYZ-XX
  Deferred CoGs/ G/L Account (Origin): Internal Services:	Debit  :100,00 LC	Project Task XYZ-XX	Sales Order Item ABC-AA**
  Deferred CoGs/ G/L Account (Origin): Internal Services:	Credit : 100,00 LC	Project Task XYZ-XX	Sales Order Item ABC-AA
  G/L Account Internal Services	Debit: 100,00 LC	Sales Order Item ABC-AA	Project Task XYZ-YY (assigned to Sales Order Item ABC-AA)

If an Accrual Method is assigned to the Sales Order item,

• the incurred project costs get assigned to a sales order item on the Deferred Cogs account with the expense account defined as G/L account (Origin) during the Expense Assignment posting:

  Deferred CoGs/ G/L Account (Origin): Internal Services:	Credit :100,00 LC*	Project Task XYZ-XX
  Deferred CoGs/ G/L Account (Origin): Internal Services:	Debit  :100,00 LC	Project Task XYZ-XX	Sales Order Item ABC-AA

• The expense gets realized only with the revenue recognition run. revenue recognition run credits the project task associated with the sales order item, here XYZ-YY*** 

  Deferred CoGs/ G/L Account (Origin): Internal Services:	Credit :100,00 LC*	Project Task XYZ-YY	Sales Order Item ABC-AA
  G/L Account Internal Services	Debit  :100,00 LC	Sales Order Item ABC-AA*	Project Task XYZ-YY (assigned to Sales Order Item ABC-AA)

* (LC represents Local Currency)

** (ABC-AA represents the Sales Order item ID)

*** NOTE:With an accrual method assigned, the expense cleared on sales document item and project level, but not necessarily on project task level [(see columns in bold) If the expense assignment occurs separately (i.e., not directly with the expense posting as it happens usually for internal service confirmations), then the expense is not cleared on project task level on the Deferred CoGs account]

To find both Business Transactions,

1. navigate to the Sales Document Items view of the Cost and Revenue work center. 
2. Open the advanced search. 
3. In the Project ID field enter XYZ (XYZ represents the project ID) and press Go. 
4. Now all sales order items connected to the project appear. 
5. Select one of the sales order items and press Reports and choose Sales Document - Line Items for Project. 
6. In the report add Associated Source Document ID to the rows and filter for Employee Time Calendar XXX (XXX represents the ID of the Internal Service Confirmation).
7. Press Go.
8. Now add further characteristics to the Rows and sort all characteristics as follows (All other characteristics can be removed from the current report selection):

• G/L Account
• G/L Account (Origin)
• Associated Source Document ID
• Business Transaction
• Journal Entry ID
• Project Task
• Associated Sales Order and Item

You notice two business transactions for the expense: The Expense Assignment to Sales Document (the CPEL posting) and the Internal Service Confirmation.

If no Accrual Method is assigned to the Sales Order Item:

• The expense, for example, Employee Time Calendar XXX is associated with Project task XYZ-XX.
• But the Expense Assignment is associated with project task XYZ-YY, realized on the Expense Account for Internal Service Confirmations.

If an Accrual Method is assigned to the Sales Order Item:

• The expense, for example, Employee Time Calendar XXX is associated with Project task XYZ-XX.
• The Expense Assignment is associated with project task XYZ-XX and Sales Order Item ABC-AA.
• The Revenue Recognition run realizes the expense on Sales Order Item ABC-AA but Project Task XYZ-YY.

• Costs and revenues recorded for customer sales projects are always realized on the project task associated with the sales order item to which the expenses got assigned to.
• During the expense assignment the specifications of the sales order items, such as the associated project task, product or the profit center take priority over the assignment settings of the original, incurred expense.

In the given example, the expense of time recording XXX gets associated with project task XYZ-YY because the sales order item ABC-AA is assigned to project task XYZ-YY. Therefore, the project task from the time recording switches from task XYZ-XX over to XYZ-YY when the expense gets realized.

To verify the sales order assignment

1. Go to the Sales Document Items view of the Cost and Revenue workcenter. 
2. Find sales order item ABC-AA. 
3. Go to the Associated Objects tab. 
4. You now see that the item is associated with project task XYZ-YY. 

You can further verify this with the Sales Documents - Line Items report (Report ID FINPRFU24_Q0001) as above: Add the Associated Sales Order and Item to the rows..

• You can see that Sales Order item ABC-AA is assigned to the expense [Another way to check the assignment, would be to directly look at the Journal Entry of the Expense Assignment (CPEL) posting].

If project costs from time recordings (or any other expenses, such as expense reports, goods receipts, supplier invoice items) are to be realized on the project tasks for which the expense was incurred, or on any specific project task of your choice, you need to ensure that the expense gets assigned to the Sales Order item which is associated with this exact project task.

If you, for instance, create a new project task, XYZ-XX, in project XYZ and expenses are to be realized on this project task, then you need to create a new sales order item which you then assign to this new project task XYZ-XX.

All existing expenses on project task XYZ-XX  that are not yet invoiced can get reassigned to the new sales order item so that they get realized on the project task.

For all expenses that got invoiced already you can create a manual journal entry voucher for sales documents to move the amounts from project task XYZ-YY to XYZ-XX.

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