New Partnership for Deltek Vision and Deltek Professional Services consulting

I am excited to announce the official launch of Version X Solutions!

Version X Solutions is a new partnership that brings together a combined 30 years of Deltek Vision knowledge and experience under one umbrella.

We offer a wide and practical range of products and services including custom modules, custom reports, and even a cloud hosting service.

We’ve put together the beginnings of an inventory, and will continue to add to it as we come up with new ideas and do more interesting work for clients. If you have an extension we need, we’d love to hear about it!

Of course we still offer hourly consulting for nebulous or “figure it out as we go” projects.

You can read more about us and our current offering here.

What does this mean for existing customers?

Our new partnership will not adversely affect the existing relationships I have built with you over the years.

You will continue to get the same great friendly, responsive and most importantly, knowledgeable consulting services you have come to rely on from me.

Thank you for your continued business and I look forward to working with you in the near future.

From now on, please refer to the Version X Solutions site for information about products and services offered.

 

 

 

Deltek Vision: How to calculate WIP (work in process)

WIP is defined as the billable value of work you haven’t billed for yet.  Some companies will include this in their revenue calculations. Vision even has a feature where you can have it “generate revenue” based on this number.

This is great, but what if you are operating under the following conditions?

1. 95% of your projects are fixed fee projects that last several weeks or months
2. Presently you don’t have a project management tool that gathers percent complete data enterprise wide, thus Vision doesn’t know about percent complete on any particular project.
3. Since you don’t bill by the hour much, the possibility of calculating WIP by looking at the “billing value” of your unbilled labor is well… useless (also because you never know how one project will perform as compared to another when it comes to hours vs. estimated hours or actual labor billing vs. estimated labor billing).

Well you can find me, Loren Saunders, to come up with a round about way of calculating your WIP based on some basic assumptions which are as follows:

1. Projects on average will “spend” hours at the same rate as compared to % complete on that project (remember, we’re talking about the life of the entire project here. It’s understood that the spend rate will vary throughout the life… but in general we’re going to homogenize the rate for simplicity).
2. Your project managers report actual % complete on the project, and that’s what’s being billed for when invoices are produced. If your % billed vs. % complete is completely out of whack then this formula won’t work.
3. Your billing terms and Compensation amount field in projects are in synch. Meaning, for any given part of your project, the amount shown in “Compensation” is the sum of the fees in billing terms.

To calculate the WIP for fixed fee projects under these kinds of conditions you can use the following formula:

Find your % billed:
% Billed = Total Billed / Total Compensation

Come up with an EAC hours from % billed:
EAC Hours = 1 / % billed * Total Hours Billed

Figure out what the unbilled hours represent as compared to EAC Hours:
WIP Hours % = Unbilled Hours / EAC Hours

Multiply WIP Hours % by Total Compensation:
WIP Value = WIP Hours % * Total Compensation

There you have it. It’s rough, but it’s an OK estimation when you’re dealing with a limited information environment.

If you would like a SQL script that will do this for you, or perhaps a report to get this, get in touch. I’d love to hear from you.

A basic rule of thumb to consider when looking at business automation

I’ve just kicked off a rather large project with a well established engineering firm based out of Ohio.

In reviewing their business processes and the day to day operations of some of their accounting and project management functions, I have come up with a good rule of thumb for looking for inefficiencies in any business using Deltek Vision.

Here it is:

Anything you’re using excel for right now, should probably be looked at as a process that needs to be properly automated.

I’ve seen lots of companies taking data out of Vision, putting it in excel so they can sort and manipulate it, perform calculations and generate reports.

The problem with doing this is… just off the top of my head:

1. how do you know you did it right? Who is vetting your work?

2. how do you know you just did it exactly the same way you did it last time?

3. did it take you longer than 1 minute? If it did, that was too long.

4. are you trying to do calculations that your ERP platform is supposed to be able to do? examples: overhead allocation, revenue generation, WIP, AR aging, Payroll or other journal entry “adjustments”, “truing up the accounts” etc. etc. If so, then you’ve wasted money and time on a platform that is not living up to expectations, and time being wasted on work arounds.

5. Version control

etc.

Can you think of more reasons to not use excel? Go ahead and leave comments… or drop me a line.

 

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Fun with revenue recognition

Not being an accountant on a regular day to day basis, I don’t have to deal with these concepts very often, but when I do, I’m glad I sat through those basic and managerial accounting classes so long ago in college.

In Vision, when you enable revenue generation, you need to set up two accounts that get used by this system:

an asset account:
WIP (work in progress) aka “unbilled services”

and a revenue account:
Uninvoiced Revenue (the revenue side of WIP)

So this week we were testing out some new work breakdown structures in Vision that are more closely aligned with my client’s project structure and which did a better job of storing associated data points needed with the project like expected payment date, payment amount, actual invoice date, A/R status etc. (aka EAC, ETC etc.)

So I set up a rather complex project for my client to run some tests on… logging expenses and invoices against to see how things came out in the general ledger.

They came back to me and said “what is this ‘unbilled services’ account?  what is this ‘uninvoiced revenue’ account?”  “we haven’t seen this before… you’re screwing with our financials!”

After explaining to them that these were merely clearing accounts for the accrual concept of accrued value on projects I had to ask the question… “why have they not seen them before?”

The thing is, they had been using Vision for 2 years already.  Why all of a sudden is it posting to these accounts in test, and why has it not been posting to these accounts all along?

Checking the configurations (configuration/accounting/company settings/ general tab) I notice that in both test and live that revenue recognition is NOT enabled.  Then Vision shouldn’t be posting to these accounts at all right?

Apparently not….

Here is what I figured out:

If you have Revenue Recognition turned OFF
and
your project has Revenue Type set to ‘B’ (JTD Billings)
then
Vision will not post to the WIP and Unbilled Revenue accounts.

However, if you have a revenue type of ‘N’ (no revenue recognition), then Vision WILL post to these accounts for those projects even if you have revenue recognition turned off!

confusing?  yes.  counter-intuitive?  yes.

But that is apparently the way it works.