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How to manage gWBS Accounts


How to manage gWBS Accounts

This article describes how to manage gWBS Accounts for progress reporting.   

        As you already know, relational database of D-E Accounting can supply wealth of current project cost information, allowing the Cost Engineer to assess immediately the current financial and time-cost position of his project, and also to generate rapidly various project cost reports, illustrated by histograms and S-Curves.  You also know that many Cost Accounts - containing costs of Construction, Materials and Engineering - may need their supporting gWBS Accounts, where the costs can be grouped, and the work progress can be monitored individually for each Cost Position.

        Our Article #14 explains how to create and how to load gWBS Accounts with the forecasted cost. This article shows how to manage gWBS Accounts to asses cost progress, using the concept of Earned Value and Earned Work.

         As you know, D-E Accounting uses the concept of dual-entry DEBIT=CREDIT, that in case of gWBS Accounts can be also defined as COSTS=EXPENSES.  Here the value of the progress, defined by incremental EARNED VALUE of Cost Accounts  (CONSTRUCTION, MATERIALS and ENGINEERING) must be equal the EARNED WORK of Expense Accounts (CONTRACTORS, SUPPLIERS and ENGINEERING FIRMS). The value of cost progress is defined always in monetary terms ($ expression) called EARNED WORK, equal to the increment of EARNED VALUE (% expression) multiplied by Forecast Value ($ expression). Click here to refresh your understanding of Earned Value and Earned Work, as they apply to D-E Project Accounting. 

         The structure of the gWBS Account is similar to the structure of WBS (Work Breakdown Structure), well known to all Cost Engineers. However, there are three major differences:

         To explain the progress recording procedure, provided below are examples of three typical gWBS Accounts (MATERIALS, CONSTRUCTION, and ENGINEERING) showing  program screens, generated by the new version 5.0 of TECA, where the data transfer between the gWBS Account and the Forecast Journal and Expense Journal is greatly simplified, as compared with the original version 4.1 of TECA (supplied so far with the book). Each example's screens can be viewed individually, and also by scrolling down the first screen.


EXAMPLE #1 - gWBS Account, type "Materials"

Here, the progress figures are obtained from the Procurement Report, issued by the Procurement Engineer, listing all purchase orders issued during the Project Period #3, and affecting some listed Cost Positions.  For each affected Cost Position, the name of the related Supplier shall be selected from the combo, and then the current Earned Value shall be set as 100%, what can be done easily by clicking the 'T' button.    

        Click here to review the structure of a typical Material-type gWBS Account, M0705.C - Special Lifting Cranes, showing the CREDIT (input) site.  There are ten (10) Cost Positions, amounting to $614,960, corresponding with the Total Forecast of the Cost Account, of the same ID# and name, displayed in the upper right corner of the screen. The progress is reported for the Project Period #3 - 12/31/2002. The sub-screen shows that Purchase Orders have been issued to the indicated Suppliers for the cranes identified by Cost Positions 1, 2, and 8. The local EARNED VALUE of each Cost Position is 100% (clicking T), and the GLOBAL EARNED VALUE is 18.87%, equivalent to GLOBAL EARNED WORK of $116,020. This sum of $116,020 is shared between the two Suppliers; click here to see the DEBIT (output) site site of this gWBS Accounts.  When you scroll down, you can see all below mentioned TECA screens, used here to explain this progress recording procedure.

        Prior to posting the cost progress in the Expense Journal, two current progress reports shall be generated  by pressing the buttons WBS Status Report and Earned Work Report; (click here and scroll down). These reports shall be kept as the bookkeeping evidence for the journal posting.

        In order to post, first on the gWBS Listing screen (click here), the related gWBS Account shall be checked, and then the button Make Expense Journal Entry shall be clicked. In response, TECA displays the Expense Journal screen, ready to be posted; click here. After the screen has been be put into the non-edit mode (by pressing VIEW button), the  button POST shall be pressed.  In response, TECA makes the posting and updates instantly all affected ledgers. After posting is done, the posting report shall be generated and kept as the evidence of bookkeeping; click here


EXAMPLE #2 - gWBS Account, type "Construction"

Here, the progress figures are obtained from the Field Report, issued by the Field Engineer, and affecting all listed Cost Positions.  For each affected Cost Position, first the name of the related Contractor shall be selected from the combo, and then the Earned Value, as indicated in the Field Report for each Cost Position, shall be typed into the data field 'Current Earned Value".           

        Click here to review the structure of a typical Construction-type gWBS Account, C006.C - Reactor Building, Unit #2, Structure, showing the CREDIT (input) site. Notice that this is not the first progress reporting, because the previous Earned Value figures are well evident. There are nine (9) Cost Positions, amounting to $67,338,100, corresponding with the Total Forecast of the related Cost Account, displayed in the upper right corner of the screen. The progress is related to Project Period #26 - 09/30/2008. The sub-screen shows that Progress have been reported for all nine Cost Positions, and credited to the indicated Contractors. The EARNED VALUE of each Cost Position corresponds with the Field Report, and the incremental GLOBAL EARNED VALUE for this reporting period is 13.78%, equivalent to GLOBAL EARNED WORK of $9,276,116. This sum is shared between the five (5) contractors; click here to see the DEBIT (output) site site of this gWBS Account.  When you scroll down, you can see also all below mentioned TECA screens, used here to explain this progress recording procedure.

        Prior to posting this cost progress in the Expense Journal, two current progress reports shall generated  by pressing the buttons WBS Status Report and Earned Work Report; (click here and scroll down). These reports shall be kept as the bookkeeping evidence for the journal posting.

        In order to post, first on the gWBS Listing screen (click here), the related gWBS Account shall be checked, and then the button Make Expense Journal Entry shall be clicked. In response, TECA displays the Expense Journal screen, ready to be posted; click here. The screen shall be put into the non-edit mode (pressing VIEW button), and after that the  button POST shall be pressed.  In response, TECA makes the posting and  updates instantly all affected ledgers. After posting is done, the posting report shall be generated and kept as the evidence of bookkeeping; click here


EXAMPLE #3 - gWBS Account, type "Engineering"

Here, the progress figures are obtained from the Office Progress Report, issued by the Project Engineer, and affecting all listed Cost Positions.  For each affected Cost Position, the name of the related Engineering Firm shall be selected from the combo, and then the Earned Value, as indicated in the Office Progress Report for each Cost Position, shall be typed into the data field 'Current Earned Value".  

        Click here to review the structure of a typical Engineering-type gWBS Account, E006.C - Other Indirect Engineering, showing the CREDIT (input) site.  There are six (6) Cost Positions, amounting to $11,137,900, corresponding with the Total Forecast of the Cost Account, displayed in the upper right corner of the screen. The progress is related to Project Period #26 - 09/30/2008. The sub-screen shows that Progress have been reported for all six Cost Positions, and credited to the indicated Engineering Firms. The EARNED VALUE of each Cost Position corresponds with the Office Report, and the incremental GLOBAL EARNED VALUE for the reporting period is 30.11%, equivalent to GLOBAL EARNED WORK of $3,353,726. This sum is shared between the two (2) engineering firms; click here to see the DEBIT (output) site site of this gWBS Accounts.  When you scroll down, you can see also all below mentioned TECA screens, used here to explain this progress recording procedure.

        Prior to posting this cost progress in the Expense Journal, two current progress reports shall generated  by pressing the buttons WBS Status Report and Earned Work Report; (click here and scroll down). These reports shall be kept as the bookkeeping evidence for the journal posting.

        In order to post, first on the gWBS Listing screen (click here), the related gWBS Account shall be checked, and then the button Make Expense Journal Entry shall be clicked. In response, TECA displays the Expense Journal screen, ready to be posted; click here. The screen shall be put into the non-edit mode (pressing VIEW button), and after that the  button POST shall be pressed.  In response, TECA makes the posting and updates instantly all affected ledgers. After posting is done, the posting report shall be generated and kept as the evidence of bookkeeping; click here


How to set up the next Project Period

To set up the next Project Period, the button NEXT PERIOD shall be pressed, and the subsequent prompt must be confirmed. In response, TECA resets the Project Period to one number up, calculates and updates the previous Earned Values, and sets the Incremental Earned Value to zeros for every Cost Position. Click here to see the Example #1 already set up to the next Project Period #4.


How to post several gWBS Accounts as one group

Several gWBS Accounts with the same Project Period can be posted into the Expense Journal as one group. To do that, all these gWBS Accounts shall be checked on the gWBS Listing screen (click here), and the selected option made on the radio button SELECT. Prior to posting cost progress of all selected gWBS Accounts in the Expense Journal, two current progress reports shall generated  by pressing the buttons Earned Work by Object and Earned Work by Participant; (click here and scroll down). These reports shall be kept as the bookkeeping evidence for the journal posting.

        After that, the button Make Expense Journal Entry shall be clicked. In response, TECA displays the Expense Journal screen, ready to be posted; click here. The screen shall be put into the non-edit mode (pressing VIEW button), and after that the  button POST shall be pressed.  In response, TECA makes the posting and updates instantly all affected ledgers. After posting is done, the posting report shall be generated and kept as the evidence of bookkeeping; click here


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