In any kind of business firm, it is necessary to know the profitability of a project. The services provided in a project invoiced based on ordered quantity or on the basis of timesheets cost of an employee. Considering all of the pipeline having an overview of profitability overwork could help us to decide whether we should continue the service or not.
Timesheets are also important, this provides the time spent hours by the employee on the project. So that they can measure the planned project over the actual project in progress. Project profitability can be effectively calculated when every employee completed their timesheets.
Odoo enables this by Project and Timesheets module. Firstly, install both modules from Odoo Apps.
Open the project module, it leads to a dashboard where one can see all created projects.
There may have tasks, Overview, subtasks and Planning for each project. At the Dashboard itself, one can identify the number of tasks in the project.
TASKS: Task is a piece of the project that can be assigned to employees to perform a portion of the project. A task can be again split into sub-tasks.
PLANNING: Planning is the same as forecast in Odoo 12. It refers to the assumed time to complete each task.
OVERVIEW: Overview is the overall report of the project in accordance with its timesheets and sales order. It shows the complete details of the project like timesheet hours, forecast, profitability, etc.
Here one can identify the profitability under overview. There are three factors that the profitability of a project mainly depends on:
1.Invoiced
Suppose a project has a sale order and may be invoiced fully when the invoicing policy is based on the ordered quantity and partially invoice when the invoicing policy is based on the timesheets cost of the employee. The amount of invoiced can be viewed as ‘ invoiced. ‘
2.To invoice
A project has a sale order and the timesheet is updated by the employee. That is the service to the customer was delivered, but not invoiced. This is shown as ‘To invoice’.
3.Timesheet costs
The amount that the organization spent on the project is explained by Timesheet’s cost. Timesheet cost is the product of delivered quantity and employee timesheet costs
Timesheet cost = Delivered quantity * Employee timesheet cost
Profitability calculation:
Profitability = Invoiced + To invoice – Timesheet costs
Here the invoiced amount is 19,800/- rs, amount to invoice is 9,900/-rs and timesheet costs 12,500/- rs. Thus profitability can be calculated as per the above equation, which is 17,200/- rs.
Profitability Using the analytic account
Using an analytical account one can also find profitability. To enable this feature one has to check in ‘Analytic Accounting’ in the settings of Account module.
An analytical account will automatically be created while creating a project, whose name is similar to the project name.
One can also change the analytical account using the EDIT option. To get the detailed report of the project Go To Accounting -> Reporting -> Analytical Report.
This shows various analytical accounts created for various purposes.
After creating a sales order, the timesheet is updated and invoiced for a project. Amounts are shown as Cost & Revenue in the analytical account now.
One can see the analytic account here and while updating the timesheet, the description is given by the user.
The total quantity is shown under Quantity ( total 1041). The first four sale order amounts are shown as the expenditure and the last sale order invoiced to 300,000/- rs. Thus current profitability of the project ‘PROJECT SECURITY’ is the final amount 196,400/-.
Based on the profitability, the business firm can decide whether this project needs to continue or not.