Initiate projects and setup
The initialization phase of the project is the start of everything. In your project plan, you'll want to account for all activities, forecasts, estimates, and budgets.
Project quotes
A quote provides a customer with a non-binding offer that allows them to view the items and services that are offered within the quote. These services include basic contact information, special trade agreements and discounts, and possible taxes and surcharges. Letters of guarantee for a project quote transaction can also include issues between your organization and the customer. After you've created the quote, you can create the letter of guarantee request for the customer, submit it to the bank for approval, and then issue it to the customer.
Project contracts
The type of project contract that you create will determine the method that's used to invoice project customers. The project type connects to the contract to determine the project type. Contracts allow you to invoice one or more projects simultaneously and help guarantee a consistent invoicing procedure for every subproject in the project structure. Every project that will be invoiced must be associated with the contract, and it can specify one or more sources of funding. You can split the billing, set up funding limits, and set up funding rules for charging expenses.
Work breakdown structures
Projects that you create might require high-level tracking toward estimates and quotes. Some projects that have a low tolerance for slippages in schedule or cost can require detailed work breakdown structures (WBS) and diligent tracking of work progress and cost. Generally, work breakdown structures have three major purposes: to describe the breakdown or composition of work in tasks, to schedule the project work, and to estimate the cost of each task. Before creating a work breakdown, you'll need to set up a default calendar, the default working days, and working hours. The default calendar will inform the working schedule that's needed for the work breakdown structure. Additionally, you'll need to set up cost and sales prices of labor, expenses, and fees. By establishing all areas, you can better estimate the cost of the work.
To create a work breakdown structure (WBS), you'll need to create three components during the process:
Work decomposition - Breaks down the work into manageable tasks.
Work schedule - Estimates the time that's required to complete a task.
Cost estimation - Estimates the costs for each task.
Your industry determines how granular the project progress is tracked through the WBS. The project progress will have three views:
Planning - Displays the planned or baseline estimate of the schedule and cost importation but has no features for tracking the version and baseline for a project.
Effort tracking - Displays the tracking of a project for the tasks in the WBS, which compares the accumulated actual effort hours for a task to the planned effort hours. It can display a projection of the effort variance for a task. Occasionally, a project manager or another person who's tracking the project will need to revise original estimates on the task. The task might be moving more quickly or slower than expected, and this view will allow for a reprojection of the effort.
Cost tracking - Displays the tracking of cost consumption for a task. The actual cost that has been spent on a task to date is compared to the planned cost for the task by using several formulas.
For more information, see Work breakdown structures overview | Microsoft Learn.
Forecasts and budgets
Projects require forecasting if your organization has an operational perspective and if it focuses on the revenue and costs that are derived from specific transactions. If your organization requires more focus on financial amounts, budgeting is more appropriate. Each method has advantages for each project. When you use forecasting, you can enter forecast transactions in forecast pages for each transaction type. Using this selection leads to attributes that are available for an actual transaction, which you can use as a forecast transaction. Forecast transactions make up forecast models, which are automatically suggested.
Conversely, budgeting is a simpler method than forecasting, even if it integrates with forecast models. Budgets use a single-entry form for original budget details and revisions, but it also allows for projections that are based only on amount, category, or activity. Every original budget and revision must be sent to a project workflow for approval, which gives you more control over the process and creates a change history.
Project types
You can create six different types of projects, and each project type can have different setups for costs and revenue recognition. The project type that you choose depends on the purpose of the project.
The different project types are:
Time and material - Projects that are time and material are for when the customer is billed for all costs that are incurred on a project, including hours, expenses, items, and fees.
Fixed-price - Fixed-price projects have invoices that consist of on-account transactions, and they're invoiced according to a billing schedule that's based on the project contract. You can calculate and post revenue throughout the project.
Investment - Projects that don't produce immediate earnings are considered Investment projects. Investment projects are typically used for long-term, internal projects where the costs must be capitalized. You can record and track costs for items, hours, and expenses by using estimate functionality.
Cost project - Cost projects are similar to Investment projects because they're typically used to track internal projects. They're short duration, and you can't capitalize them to balance sheet accounts.
Internal - Internal projects track costs on a project that are only internal to your organization, and they can provide planning to help you manage resource consumption.
Time - These projects are for tracking time that's associated with non-chargeable and non-productive activities, such as sick time for workers. The transactions in Time projects aren't posted to a ledger but are included in worker utilization reports. You can record only hour transactions in Time projects, and you can use an hour journal or timesheet to register the hours toward the project.
Workers, categories, and resources
The resource scheduling functionality of projects can schedule worker resources, deploy workers efficiently, and quickly find the most qualified workers who are available to work on the project. This functionality allows you to use information about the worker's attributes, such as education and skills, to match the requirements of a project, use information about the worker's calendar and availability to match the project calendar, review the capacity of workers to ensure that they're being used effectively, and much more. This capability is useful in helping to ensure that the resources for each project are accurate for on-time project delivery. Project managers also have the ability to group, sort, and edit resource assignments via a time-phased grid. These actions can be carried out directly in the project’s main form.