In AX 2012, we have the ability to add indirect costs to a project. These types of costs could be expenses such as rent, office supplies, phone charges, and per diem expenses. Here is a demonstration on how to set up the indirect cost components in AX, as well as what the financial voucher looks like.

  1. First, we’ll need to set up the indirect cost shared category. Go to Project management and accounting | Setup | Categories | Shared categories. Click “New”, and enter a “Category ID” and “Category” name. Check the box for “Can be used in Project”. Close the form.  


  2. Next, we’ll need to set up the project category. To link the project category with the newly created shared category, go to Project management and accounting | Setup | Categories | Project categories. Click “New”, and select shared category we just created for the “Category ID”.  Select the "Category group” that contains the posting setup for this project category. Check the box for “Indirect cost component”, and “Active in journals”.  Close the form.


  3. There are three forms for setting up indirect costs. The “Indirect cost component” maps the indirect cost component header (name) to the project category. Go to Project management and accounting | Setup | Indirect costs | Indirect cost components. Click “New”, enter a name of the indirect costs for the “Indirect cost component” and “Name”, and select the project category we created earlier for the “Category”. Close the form.


  4. The next form is the indirect cost component groups. This form stores the calculation methods, rates, and rules for calculating the indirect costs. Go to Project management and accounting | Setup | Indirect costs | Indirect cost component groups. Click “New”, and enter a name for both the “Indirect cost component group” and “Indirect component group name”. Ctrl+S to save the record, then click “Assign indirect cost components”.


  5. On the form that opens, click “New”. Enter a date that this cost component and rate is active for, and select the indirect cost component we created earlier for the “Indirect cost component”. Choose a “Calculate method” to specify how AX will calculate the value. “Unit rate” will calculate the indirect cost amount by multiplying the cost rate by the number of hours. Percentage will use the worker’s hourly rate multiplied by the rate we enter on this form as a percentage. Enter the value for the “Cost rate”, “Revenue rate”, and “Invoice rate”. Close the form. 



    * Open the Model rates form, where you can view the calculated hourly values for cost, revenue, and invoice amount for an indirect cost, based on the compounding rules and calculation method that you selected. You can also create compounding rules to increase the value added to a project for the selected indirect cost. For more information on compounding rules, see the following TechNet article:

    http://technet.microsoft.com/en-us/library/hh227384.aspx

  6. The final form for indirect cost components is the indirect cost component group assignment rules form, which is used to assign an indirect cost component group to a worker, project, or both. Go to Project management and accounting | Setup | Indirect costs | Indirect cost component group assignment rules. Enter an “Effective” date, and select our cost component group that we created for the “Indirect cost component group”. You can specify specific workers, contracts, categories, projects, customers, or any combination to activate the indirect cost components. Close the form. 

To test the indirect cost component, I posted a project hours journal to project 10001 for Julia Funderburk:

 

When we look at the voucher for the hours journal, we can see the indirect cost posted for the $10 amount:

For additional information on project indirect cost components, review the following TechNet articles:

About indirect costs for projects:

http://technet.microsoft.com/en-us/library/hh242374.aspx

Indirect cost component (form):

http://technet.microsoft.com/en-us/library/hh208810.aspx

Indirect cost component groups (form):

http://technet.microsoft.com/en-us/library/hh209621.aspx

Assigned indirect cost components (form):

http://technet.microsoft.com/en-us/library/hh209589.aspx

Indirect cost component group assignement rules (form):

http://technet.microsoft.com/en-us/library/hh227451.aspx

Compounding rules - Cost (form):

http://technet.microsoft.com/en-us/library/hh227384.aspx

Compounding rules - Revenue (form):

http://technet.microsoft.com/en-us/library/hh209617.aspx

Compounding rules - Invoice (form):

http://technet.microsoft.com/en-us/library/hh242812.aspx

Model rates (form):

http://technet.microsoft.com/en-us/library/hh227605.aspx


Tyler Lewin

Senior Support Engineer - Dynamics AX