| To register costs & commitments |  |
| You want to keep your project control as up-to-date as possible, therefore it is essential that the right costs and future costs are entered for, for example, your monthly reports. Commitments are a financial obligation that represent future costs. The commitment will be replaced by costs when the costs are actually made. Commitments can be booked in two ways: Manually. Automatically from the PRP run (this depends on the value of the Log Commitments (Purchase Transactions) field in the General Parameters (tppdm0100s000) session. The commitments are booked as soon as the purchase order is created and/or the goods receipt is registered in Order Management. Soft and hard commitments: If a commitment has a purchase order linked to it that is not yet actually delivered, it is called a soft commitment. You insert this commitment manually. The soft commitment becomes a hard commitment if the purchase order is actually delivered. After costs are recorded, the commitments must be offset by the same amount as the cost amount. If the costs are generated from a direct delivery or through a warehouse, the following steps are taken:
                               Direct Delivery      Through Warehouse Management
                                                    (a project warehouse)
    Purchase steps

     Create purchase order   + Soft Comm.        + Soft Comm.
     Receive goods           - Soft Comm.        - Soft Comm.
                               + Hard Comm.        + Hard Comm.
     Issue to Project        Not applicable      - Hard Comm.
                                                   + Project Costs
     Approve invoice
                               - Hard Comm.
                               + Project Costs
                               + Price Variance    + Price Variance
Commitments are only booked financially after they are confirmed and posted to Project. In the Material Costs (tpppc2511m000) session, commitments can be reconciled, which means that they become costs. Cost origins You can register costs in the Commitments (Material) (tpppc2510m000) session: Manually. By registering hours in People (The entered hours will be recorded as labor costs or sundry if you enter expenses). By direct delivery of purchased items on the project (this delivery can be one of the following cost types: material, subcontracting, and equipment). By delivery of items from a normal warehouse or project warehouse to a project. In Warehouse Management you can create a warehousing order (of cost type material). According to the results of invoices registered in Accounts Payable that are related and booked to Project. According to the results of surcharge calculations: You can cover indirect costs using cost surcharges, but these will be booked as sundry costs. If costs are the result of registering hours or if costs are the result of actions in Financials or Order Management, the calculation of these transactions takes place automatically. The surcharge percentage applied to registered costs can be defined by project, cost type, cost object, and cost component. Extensions are included in a surcharge calculation or excluded, depending on the extension definition. Confirm costs in the Approve Labor Costs (tpppc4582m000) session or in the Global Approving (tpppc4200m000) session. Process costs with the Process Transactions (tpppc4802m000) session to Financials, and Project history. Related topics To use the Progress and Monitoring To use progress processing To register revenues To register cost forecast To use the People package |