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Project order (POD)

Purpose of the Project order (POD) application

This is an internal work tool that can be used by companies that sell services, which include working hours, materials and other costs. The purpose of the Project Order (POD) application is to have a tool that can be used to provide a cost/price estimate in advance and along the way, and a place to log hours and follow up logistics after a project order has been started. This solution will also show correct accrued costs along the way and be the basis for invoicing to the customer.

There are two pricing models for project orders:

  • Time & Material (T&M) - The agreement is that the customer will pay based on the real incurred cost.

  • Fixed Price - The agreement is that the customer pays a fixed price regardless of the real incurred cost.

Regardless of the pricing model, a Project order (POD) can be partially invoiced during the entire process, for example monthly or when milestones are reached. A Project order (POD) can also be external or internal. If it is an external Project order (POD), it is always related to a customer. An internal Project order (POD) can be a development project, the cost of hours and materials can then be linked to this Project order (POD).

Cost and sales in project orders are not booked directly to the general ledger. The material cost is based in the same way as one calculates cost in stock, the cost enters the Project (POD) after one has confirmed the picking of material.