To Understand the Project Actual Costing

Article • 6/18/2026 • 3 min read

The Actual Cost for a project phase is determined based on how the item is sourced — Make, Stock, or Buy. Each type follows a distinct cost calculation method.

Make Items

For Make Items, the JO postings directly roll up into the Actual Cost for the associated project phase. These costs represent in-house manufacturing effort, including material usage, labor hours, and overhead applied through defined costing method.

Stock Items

For Stock Items, the system uses the Item Master to calculate cost. Actual Cost is calculated as Unit Cost × Quantity.

Note: Stock Item costs are based on the current valuation in the Item Master at the time of transaction and automatically update the project’s Actual Cost when linked to the Project and Phase.

Buy Items

For Buy Items, the cost is derived from the Purchase Order once an Accounts Payable Invoice (APINV) is created. These costs represent materials or components procured from vendors and include item purchase price, applicable taxes, and additional charges such as freight. The total AP Invoice value rolls up into the Actual Cost for the associated project phase.

Over/Under Amount

The Over/Under Amount in Project Costing is calculated at the Project level, allowing users to understand how much amount should be recognized based on the project’s financial progress rather than its operational completion.

The system determines project-level revenue amount by comparing Actual Cost incurred against the Estimated Cost, deriving a completion percentage. This percentage represents how much of the project’s total work (in financial terms) has been performed. That completion rate is then applied to the Estimated Revenue to determine how much revenue amount should have been recognized to date.

If the calculated value > 0, the project is Under Recognized (less revenue recognized than expected).
If the calculated value < 0, the project is Over Recognized (more revenue recognized than expected).
If the calculated value = 0, the project is Accurately Recognized.

Note: Revenue Over/Under Amount under Project Costing is driven by project-level financial progress and not by the existing M2M Revenue Recognition screen.

To Review Project Performance

The Project Costing screen provides key financial and progress indicators that help evaluate overall project performance:

Cost — Compares Estimated Cost with Total Actual Cost (from AP Invoices and Job Orders).
Revenue — Compares Estimated Revenue (from Sales Orders) with Actual Invoiced Revenue (from AR Invoices).
Dates — Displays Planned Start/End versus Actual Start/End.
Status — Shows the current user-defined project stage (e.g., Planning, Started, Completed).

Note: These indicators reflect the financial progression of the project rather than production floor activity.