Settling a Project

Objectives

After completing this lesson, you will be able to:
  • Review settlement rules
  • Settle projects

Settlement Rules

The trade fair was a great success for the company! Now that you have gathered every relevant posting and cost on your project, you want to go over the steps to credit the project to the cost center of the Sales Department. You want to understand the best way to analyze the transferred data after the settlement.

Generally, actual costs are collected on projects only temporarily, at most until they are completed. The projects are then settled to one or more receivers as part of period-end processing in order to have their costs allocated to these receivers.

Settlement Rule

The settlement rule is defined in the project master data, using for example the Project Control – Enterprise Projects app.

To be able to settle the project, a settlement rule needs to be defined for the sender. This settlement rule determines where and how the costs are to be settled.

This graphic gives an example of the settlement of costs from a project to a cost center.

When analyzing a settlement rule, you can focus on:

  • The receivers to which the costs are settled (project/WBS element, cost center, G/L account …).
  • The percentage specified for the distribution to each receiver. From complex distributions to complete settlement on a single object.
  • The settlement type to identify exactly which amounts are to be settled.
  • The periodic and full settlement for which settlement is to be run.

Note

Settlement type Periodic Settlement settles only the costs for the period you specify. Settlement type Full Settlement settles all costs on a sender object that have been incurred until the point of time you want to settle your project.

Settlement Run

You can use the Run Settlement-Actual app to:

  • Run the settlement of a single project, a WBS element (with or without hierarchy)
  • Perform a test run without affecting actual data
  • Perform an update run affecting actual data
  • Run settlement in parallel ledgers, if needed

Note

You can only run settlements per ledger.

To run a settlement, the steps are:

  1. Open the Run settlement – Actual tile.
  2. Select the Cost Object Type Project.
  3. Select your project.
  4. Choose Test or Run depending on whether you want to affect the actual data or not.

Note

You can cancel a settlement, using the Reverse option.

The figure shows the data set development when the settlement of a project is executed.

Step 1: During the month, some expense was posted to the project through a G/L posting. It is about some marketing expenses on a primary G/L account. There is no posting yet on the receiver.

Step 2: At closing, a settlement is run for the project for the current period. 100% of the costs will be sent to the receiver. ​

As a consequence a new line item is generated to credit the project for the same amount and using the same account. You can check that the project has a zero balance. As a counterpart, the receiver object, defined in the settlement rule, is debited for the same amount of 200 euros using the original account. ​

There is no impact at the company level. It is just a reassignment for analytical purposes.​

The Display Settlement Documents app can be used to track the different settlement runs for a specific project. This app allows you to display documents containing transaction details that were created during the settlement and reversal process for a WBS element

Once the project is finished and completely settled, to be sure that no other cost will be posted on it, its status should be set to Closed.

Settle a Project

ExerciseStart Exercise

Close a Project

ExerciseStart Exercise

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