Implement the project
The implementation of projects is determined by the tasks, workers, forecasts, budgets, and work breakdown structure (WBS) that have been added to the project. During this phase, project managers will manage each element to ensure that the project is progressing as expected and that necessary changes are made.
Production orders, products, and services
During a project, you might need to create production orders, purchase products, or add services for it. You can link a project-related production order to a sales order, or an item requirement, by using the finished item method or the consumed item method. If you use the finished item method to link the order and project, then the project costs will be posted when the sales order is invoiced or when the packing slip is updated. Then, the cost will be posted as a finished item. If you use the consumed item method to link to your order, you can view actual project costs when the production status is Started. The costs are posted as multiple project item transactions for raw materials and hours consumed for production. Additionally, you can define the level of the bill of materials (BOM) hierarchy at which the project in the production is tracked.
Because the purchase and sale of items are prevalent activities in project-focused businesses, the purpose of the purchase order determines when the purchase order is consumed and when items are charged on a project. Several different methods for purchase orders are available, including creating a purchase order directly, from a sales order, or from an item requirement. Each method determines the purpose and how the items are consumed. For example, if you create a purchase order from a sales order, then the items will be consumed when the sales order is invoiced to the customer.
Sales orders can register the consumption of the items as well. You can order items from the company's inventory or purchase items from an external vendor. Similar to production orders, sales orders have different methods and purposes, which determine how the items are consumed. For example, if you order items by using an item requirement, the entered items won't be consumed immediately. It's a method that lets you track the number of items that have been consumed in a single item requirement record and the item transactions will be consumed when the packing slip is updated or posted.
Project invoices
The project type determines the invoicing procedure that should be applied to the project. Time and material projects and Fixed-price projects with project contracts are the only two types that you can invoice. Before you create an invoice for a project, you can create an invoice proposal to select project transactions to include in the invoice. Then, you can review the details before posting the invoice, sending it to a customer, or determining other sources of funds.
Calculate costs
To complete a project, you need to create a cost estimate of what it takes to complete the project. Methods for calculating this cost include:
Total cost - actual - Requires you to enter estimated costs manually. When the Total cost column or Total quantity column on the Cost estimate page is complete, the actual costs will be subtracted from the user-entered totals. This cost is for completing the project.
Total budget - actual - Actual costs are compared against the forecast model that was selected to determine the cost. We recommend that you use at least two forecast models for this method; one should contain the original forecast, and the other should copy the forecast transactions from another model. This method is only available for Fixed-price and Investment projects.
Remaining budget - Actual costs and forecasted amounts in the remaining budget model are added together to give you the total cost. You'll need to set up a remaining budget model to deduct transactions that are recorded in the system. You can apply this method only if a forecast model is attached to the estimate.
As previous estimate - Uses the previous period's estimate method and requires a forecast model if the previous period required one.
Set cost to complete to zero - Matches the total estimates with actual transactions that were posted. This method is used before the estimate project is eliminated. This method doesn't require a forecast model.
From cost template - Uses the cost to complete in the cost template that's associated with the estimate project that's applied to the project in question.
For more information, see Project management and accounting overview | Microsoft Learn.