How to Handle Change Orders in Fixed Price Projects in Dynamics AX 2012

by | Updated January 3, 2018 | Dynamics AX

There are probably multiple ways to handle change orders in a fixed price project, but here is one way I recently rolled out at a client. They had projects that were not large, but sizeable, and would have situations where there could be multiple change orders during the project. How could they keep track of the hour, and even the item budgets on the projects? It is important to measure how the company is doing versus the budget. If you lose track of the budget, tracking and comparing get difficult. So, I came up with the following process which I will highlight briefly.

The best way I found to track these is with forecast models, such as the example I created below.

Forecast Model Example:

  1. Current, which is the current budget.
  2. Original, which is the original budget being worked against.
  3. Original1, which represents the first change order budget.
  4. Original2, which represents the second change order budget (I would create as many Originals as I thought I would have for any additional change orders, but they can also be created as needed).
  5. Reduction, which is the model against which hours, items and expenses are applied to show remaining.

After doing a run through of an original and three change orders, plus some hours transactions, here is what the hours forecast window looked like:

Change Orders - Forecast model

With the original, I had Engineering, Mechanical and Electrical Assembly (each with 100 hours). On the first change order, I added 50 hours of labor (20 each to Engineering and Mechanical Assembly, and 10 to Electrical Assembly). On the second change order, I reduced it back to the original 100 across the board. On the third change order, I added a new category of Fabrication with an additional 50 hours. After each change order, I would copy to the corresponding forecast model to and overwrite the Current one. I did this because when running reports on a specific forecast model, you need to have consistency over all projects to get the current forecast. It is a bit of duplication, but some projects may not have any change orders and if you want to run a report across multiple projects, you will know that Current will be your current budget.

Note: On the reduction model one thing to note, you do need to manually edit the hours column to account for the change order changes to hours. In that case, I strongly urge taking a screen shot of the window prior to edits as a backup to revert to in the event something goes awry.

I have written about only the hours forecasts here, but this would apply to item or expenses changes as well.

Related Posts

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Upcoming Events

september

01sep10:00 am10:30 amEnsuring Quality and Compliance for Batch Manufacturers in Life Sciences

01sep12:00 pm12:30 pmIs it Worth It to Move to the Cloud? A Look at Considerations for Current Agribusinesses Using Dynamics GP

01sep2:00 pm2:45 pmWhat’s New in Dynamics 365 Finance and Supply Chain

09sep11:00 am12:00 pmConfab Live with Stoneridge – Data Strategy and Reporting – Mining Decision Making Insights

15sep10:00 am11:00 amSolving the Biggest Challenges in Agribusiness Through Innovation and Technology

22sep12:00 am12:30 pmSimplifying Payroll and HR Management with ADP Workforce Now

22sep10:00 am10:30 amStreamlining Batch Manufacturing with Technology

22sep2:00 pm2:30 pmProcess Automation for Microsoft Dynamics D365 for Business Central, Finance and Operations and GP

23sep11:00 am12:00 pmConfab LIVE with Stoneridge - Riding the Wave 2 Release – Key Features Coming to Dynamics 365 this October

29sep10:00 am11:00 amTop Five Reasons Why NOW is the Right Time to Move from Salesforce to Dynamics 365 Customer Engagement

29sep12:00 pm12:45 pmUnderstanding Job Costing and Tax Management in Business Central

29sep2:00 pm3:00 pmDigitalizing Horticulture & Agriculture - How to Sell Plants Online and Simplify Business Management

30sep12:00 pm4:00 pmSecurity and Permissions Training for D365 Business Central or Dynamics NAV

october

06oct10:00 am10:30 amPreview of D365 Business Central Fall Release Features and Functionality

06oct12:00 pm12:30 pmInsider's Guide to New Features Available in the Fall Release of D365 Finance and Supply Chain

07oct11:00 am12:00 pmConfab LIVE with Stoneridge - Dataverse and Dynamics in Review – Let’s Get Technical

21oct11:00 am12:00 pmConfab LIVE with Stoneridge - Dataverse and Dynamics in Review – Let’s Get Functional

26oct(oct 26)9:00 am28(oct 28)5:00 pmStoneridge Connect Leadership and Community Conference

About Stoneridge
Stoneridge Software is a unique Microsoft Gold Partner, with emphasis on partner. With specialties in Microsoft Dynamics 365, Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP and Microsoft Dynamics CRM, we focus on attracting the most knowledgeable experts in the field to our team, and prioritize delivering stellar solutions with maximum impact for your business. At Stoneridge, we are deeply committed to your results. Each engagement is met with a dedicated team, ready to provide thorough, tailored, and expert service. Based in Minnesota, we intentionally “step into your shoes,” wherever you are. We focus on what you care about, and develop trusting, long-term relationships with our clients.

Subscribe To Our Blog

Sign up to get periodic updates on the latest posts.

Thank you for subscribing!

X