Time registration in Industrial Equipment Manufacturing

Dec 6, 2016 8:00:56 AM
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Two ways to handle time registration and invoicing of external resources in project-based manufacturing

Project-based manufacturers often outsource subcontracting work from a job to external workers or resources. In Industrial Equipment Manufacturing for Microsoft Dynamics NAV, you can follow two main scenarios to manage the time registration and invoicing of such external resources. The main difference between them is how time registration takes place, and the key question is whether or not an external resource registers time worked in a time sheet in Industrial Equipment Manufacturing. Understanding these two methods for managing the time registration and invoicing of external resources will help you work effectively in Industrial Equipment Manufacturing.

Time registration with a time sheet

The user is assigned a resource code which is connected to a user ID to provide access to Microsoft Dynamics NAV. You can grant the resource access as a limited user, who can navigate to the Resource Portal to register hours on a time sheet.

Time registration is handled in the same way as all other resources: The resource is planned on a resource planning line, from which assignments are created and maintained in the resource task. The resource task is selected in the time sheet that sets the process of registration, approval, and posting in motion. The time lines also post the resource planning lines, enabling project managers to follow progress.

However, the resource or the resource’s employer will send an invoice for the actual time. That needs to be matched with the time posted. A function in Industrial Equipment Manufacturing called Get External Resource Lines in the purchase invoice line makes this possible. By using this function, you can retrieve resource ledger entries of the type Usage as purchase invoice lines, thereby creating the purchase invoice detail. The retrieved entries are from those resources marked as Job Purchasing Resource and for which a vendor number is specified.

When posted, the purchase invoice creates resource ledger entries of the type Purchase. No postings are created in the job, because they were already made through the time registration system.

This time-sheet scenario implies that there is no direct link between time and invoice posting. Hours are posted to the job through the time registration system and costs are taken from the resource card. The vendor invoice is created based on the retrieved resource ledger entries with the same cost.

A recommendation: In this scenario, it is a best practice to create the invoice detail on behalf of the vendor. If you take that step, matching and posting the vendor-approved purchase invoice is a snap.

Time registration without a time sheet

This scenario bypasses the time registration system and is more closely connected to the actual invoicing. In this case, the external resource is not linked to a user ID and therefore cannot access Microsoft Dynamics NAV.

The resource is still being planned on the resource planning line. However, in this case a purchase order is created instead of an assignment to a resource task.

The external resource submits the hours worked to the back office, where resource planning lines can accordingly be posted. From this posting, you can print a payment certificate as an invitation to the vendor to create an appropriate purchase invoice.

With the vendor invoice, you can post as invoiced the purchase order created earlier. Industrial Equipment Manufacturing lets you link the purchase order line to a source, job, and ledger entry. When the purchase order is posted as invoiced, job ledger entries are updated accordingly to reflect the costs and quantities actually invoiced.

In this scenario, all related job ledger entries are updated with the new, average unit cost. Here is an example to show how it works:

On a job, 40 hours were purchased from an external resource. For these hours, three separate postings were made, resulting in three job ledger entries. Initially, the cost per hour was calculated as 50.60 per hour.

The invoices came in at three different rates. The average cost column shows the rate for each job ledger entry once the invoice is posted. For instance, after the posting of the final invoice each entry has a cost of 51.98.

Job Ledger entries

Cost

In-direct 10%

 

Rate

Avg Cost

Calculation

16

46,00

50,60

Invoice 1

45,00

49,50

(45,00+10%*16)/16

12

46,00

50,60

Invoice 2

47,50

50,67

(((45,00+10%)*16)+((47,50+10%)*12))/28

12

46,00

50,60

Invoice 3

50,00

51,98

(((45,00+10%)*16)+((47,50+10%)*12)+((50+10%)*12))/40

 

If you want to learn more, or see a demo of the time registration capability and other features in Industrial Equipment Manufacturing, please get in touch contact To-Increase.

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About Author
Luciano Cunha

Luciano Cunha

Chief Executive Officer (CEO) For Luciano, being responsible for To-Increase’s global sales and marketing means unleashing the company’s insight, innovation, and creativity to tell our story and help customers achieve their goals. On the road much of the time, he travels the world to meet with customers, understand their challenges and ambitions, and find the most effective ways to help them advance. Luciano develops and mentors our marketing and sales team, and creates strategies to help the To-Increase worldwide partner channel thrive and grow.
Making Customer Needs the Main Business Driver Luciano and his team have daily conversations with the To-Increase research and development organization to bring customers’ requirements and concerns into the road maps and design of our solutions. Luciano brings his insight to the marketing group to make sure the company’s communications resonate with customers and speak directly to their experience.
“I’m awed by customers’ innovative spirit in taking business management technology past its limits and by their generosity in letting us participate and empower them. I hope to transform our organization to become even more customer-centric than we are today. That means making more resources available to spend productive time with both our customers and partners, so we can ensure that we place into customer businesses effective solutions that fit the evolutionary stage of their operation and the way their people and processes work.”
Empowering a Global Channel
Because To-Increase only sells through partners, readying the channel to be successful in helping customers is a business-critical effort. Luciano aims to meet partners where their interests are. Partners who consider the relationship with To-Increase strategic can rely on our industry specialists to work with them as they plan their growth and serve customers. If partners prefer a less collaborative relationship, they still receive the rich To-Increase expertise and resources to ensure they win the business, perform a successful deployment, and retain a satisfied customer. In working with partners and their customers, Luciano brings to bear his experience of many years of creating successful, customer-focused business development and marketing strategies in many of the world’s countries and regions.
Enabling Customer Success in Challenging Business Environments
Looking into the near future, Luciano expects that customers will continue to expect To-Increase to help them make business sense of unfolding trends and technologies. For example, the internet of things (IoT) will thoroughly revolutionize manufacturing, engineering, and supply chains. Big data will be meaningful and valuable when decision-makers can use technology solutions to transform it into actionable business intelligence that supports key roles and business processes. Mobility will help companies become digital enterprises and move business processes forward from any location, at any time. Team To-Increase harnesses innovation to help customers translate the promise of these technologies into business results.
Before his current role, Luciano for several years was one of To-Increase’s global industry directors, responsible for our industry solutions. His experience also spans more than 17 years in IT and manufacturing management roles. These positions took him into various areas at IBM Brazil, serving as product manager for several software development companies, and included working in senior management at a manufacturing organization in the U.S.
Luciano is married with two young children. Away from work, he enjoys participating in a soccer class together with his son and daughter as well as taking relaxing walks in natural environments with his family.

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