Parallel inventory valuation – an alternative approach (Part 4)


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After the purchase and internal standard cost variances have been analyzed, let’s now have a look at the production related standard cost variances and how to deal with them.

Within this fourth part we will have a look at the lot size variance (LSV) first, which arises for example if the good quantity from a production order differs from the calculation quantity that was used for the standard cost calculation of an item. The following graphic illustrates the composition of the finished item that will be used for the subsequent explanations of the production lot size variance.


The graphic above shows a finished good that is made of a raw material that has a standard cost price of $500 setup. In addition, another $500 route related costs – that consist of $490 assembly cost and $10 setup cost – are necessary to produce the item.


As the setup costs are independent from the quantity produced, the total production costs of an item decrease, as the production quantity increases. The next graphic illustrates this relationship for the sample item used.



To illustrate how the lot size variance arises and how to deal with this kind of variance, a production order for 10 pcs of the finished good is processed. The next screen print shows that a total of $9910 production costs arise for the production of the 10 items [$10 setup costs + 10 x ($500 material costs + $490 assembly costs)]. The illustrated lot size variance of $90 results from the fix cost degression effect shown in the previous graphic.


Similar to what has been shown in the previous post, the next accounting-like overview summarizes the production postings recorded (separated by the different production steps).


warningsign1 The grey highlighted lines offset each other and can thus be ignored for the analysis of the production costs.

For those readers who are not very familiar with ledger postings, the following financial statement overview has been prepared.


The financial statement overview shows a total inventory value of $10000 for the finished product on ledger account 140670. To produce those finished goods, raw materials with a total value of $5000 and $4910 labor costs have been consumed. The remaining difference to the standard cost value of the finished goods is assigned to the lot size variance that is recorded on ledger account 540630.

Further above, a realized cost amount of $9910 has been identified. Against the background of this actual cost amount, it can be concluded that the inventory value of the finished goods is overstated by $90 from an actual costing perspective.

If one of the produced items is sold later on, the inventory value is decreased by $1000 – the standard costs of the item. The financial statements illustrated below exemplifies this situation.


From an actual costing perspective, the decrease in the inventory value from the sale of the produced item is comparatively too high. The same holds for the cost of sales, which are recorded on ledger account 640650.

In order to arrive at an actual cost valuation, the lot size variance (LSV) needs consequently be adjusted and split up in a similar way that has been shown for the purchase price variance before. The next graphic exemplifies the necessary separation of the total lot size variance if one out of the ten produced items is sold.


To conserve space, the setup of the necessary ledger allocation rule is left as an exercise for the reader. If the allocation rule is later on processed, the following financial statements result:


The financial statement overview shows a total inventory value that is $81 lower than before. This reduction takes care of the difference between the actual and the standard cost price [9 pcs x ($1000 – $991)]. As the allocated lot size variance amount is recorded on a separate ledger account, a parallel standard cost and actual cost inventory valuation can be achieved.

Please note that this also applies for the COGS amount of $1000 that has been adjusted through a corresponding adjustment on ledger account 640651 to arrive at an actual cost value of $991.

Within the next post we will take a look at the other production related standard cost variances and how to deal with them from a parallel valuation perspective. Till then.

Parallel inventory valuation – an alternative approach (Part 3)


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The next standard cost variance type that has an influence on the parallel valuation approach concerns cost change variances, which can result from two different sources that will be explained in the following.


Source 1: Standard cost price differences between sites
Standard costs can be setup in a way that different standard cost prices are defined per site in order to incorporate cost price differences resulting for example from transportation costs, etc. The next screen print exemplifies an item that has different cost prices setup for site 1 and site 2.


In order to illustrate what influence these different cost prices have on the parallel inventory valuation approach, 100 pcs of the item have initially been acquired through an inventory adjustment journal for site 1. The resulting financial data can be identified in the following screen print.


After the items have been acquired, an inventory transfer from site 1 to site 2 for a single item is posted through an inventory transfer journal.


The outcome of this transfer is an adjustment voucher that results in a corresponding increase in the inventory value. The adjustment voucher and the resulting inventory value increase can be identified in the following figures.



What one can identify from the financial statement reports exemplified above is that the total inventory value increased by $25 because of the item transfer from site 1 to site 2.

Before analyzing how to deal with that variance for the parallel inventory valuation approach, let’s have a look at the second possible source of cost change variances.


Source 2: Customer item return after standard cost price change

A second possible source for cost change variances are situations where standard cost items are sold to customers and returned after a cost price adjustment has been completed.

The following example illustrates this scenario where initially 100 pcs of a standard cost item with a cost price of $100/pcs are acquired – for reasons of simplicity – through an inventory adjustment journal. The next screen print shows the resulting financial statements.


After the items have been acquired, 5 pcs are sold for a sales price of $200/pcs. With a standard cost price of $100/pcs, the company’s inventory value is consequently reduced by $500, which can be identified from the next financial statement illustration.


Shortly after the items have been sold, the standard cost price of the remaining inventory items is adjusted from $100 to $130. The resulting accounting voucher and financial statements are shown in the next screen prints.



The screen prints above illustrate that the change in the standard cost price resulted in a $2850 higher inventory value [95 pieces x ($130-$100)].


After the standard cost price has been increased from $100 to $130, the customer decided to return 3 out of the 5 pcs sold. Posting the return order packing slip and invoice results in a number of transaction vouchers that are summarized in the next accounting-like overview.


warningsign1 The grey highlighted lines offset each other and can thus be ignored for the analysis of the production costs.


The transaction vouchers summarized above demonstrate that the item return resulted in a corresponding adjustment of the sales revenue and the receivables amount (3 pcs x $200 sales price / pcs = $600). At the same time, an adjustment of the COGS and inventory value was recorded. Yet, because of the cost price change, a $90 higher inventory value remains.

Expressed differently, selling and returning the 3 items resulted in a $90 higher inventory value, which can be identified in the following financial statement overview.



After having analyzed the sources of cost change variances, the question arises, how to deal with them in order to arrive at a parallel actual cost based inventory value? 

As mentioned in the previous post, standard cost price changes resp. differences typically do not reflect actual (market) price differences but rather cost/transportation/handling cost differences.

Moreover, in an actual inventory costing environment, internal movements of goods between different sites do not affect the company’s profit. That is, a company does not get richer or poorer by the mere fact that an item has been shifted from one location to the other, as it might be the case for standard cost items.

The same holds for the second source of the identified cost price changes; i.e. in an actual costing environment, a company does not get richer or poorer by shipping and returning goods to and from a customer, as it might be the case in a standard cost environment.

For those reasons and because cost change variances affect receipt transactions only, it can be argued that the complete cost change variance amount needs to be shifted from the company’s income statement to it’s balance sheet in order to arrive at an approximate actual cost valuation. This shifting can once again be realized by making use on an allocation rule similar to the one that has been introduced in the prior posts.

The next posts will deal with the production related standard cost variances and how to incorporate them in the parallel inventory valuation approach. Till then.

Parallel inventory valuation – an alternative approach (Part 2)


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After having analyzed how to deal with purchase price variances in order to arrive at a second (parallel) inventory value, let’s have a look at the second standard cost variance type – the inventory cost revaluation – and how to deal with those variances to obtain a second (parallel) inventory value for standard cost items.


At the end of a fiscal year, the standard costs of a first item are adjusted from $100 to $109. For a second standard cost item, the standard costs are adjusted from $100 to $95. As there are currently 100 pcs from each of the items on stock, a total inventory value of $20000 can be identified (before adjusting the standard cost prices) in the financial statements illustrated in the next figure.


warningsign1 For reasons of simplicity the inventory values/balances have been created by posting an inventory adjustment journal that resulted in an inventory receipt & profit transaction.


The aforementioned revaluation of the standard cost item is realized by recording and activating the new standard cost prices in the standard cost costing version, as exemplified in the next screen print.


Once the new standard cost prices are activated, the financial statements show a $400 higher inventory value. This can be identified from the next figure.


The overall increase in the inventory value can be explained by the value increase of the first standard cost item [($109-$100) x 100 pcs] and the value decrease of the second standard cost item [($95-$100) x 100 pcs]. If the revalued items will be sold subsequently, the newly activated standard cost prices will be used for posting the issue transactions.


At this point the question arises whether the inventory cost revaluation amount can remain in the income statement as illustrated in the previous screen print or whether an adjustment similar to the one that has been shown in the first part for the purchase price variance (PPV) is required in order to get a second (parallel) inventory value?

This question can be answered by stating that no split and allocation of the cost revaluation is required, if the cost revaluation is done in a way to adjust the standard cost prices to an ‘actual’ market price. If this is the case, any previously recorded adjustment and allocation of the PPV needs to be reversed in order to avoid an over-adjustment of inventory values towards actual market prices/values.

In practice, most companies do not adjust their standard cost prices in a way to reflect ‘actual’ (market) cost prices. Otherwise, they would have chosen an alternative actual cost price valuation model right from the beginning. Against the background of this common adjustment behavior, it can be argued that an adjustment of the recorded standard cost revaluation amount is necessary in order to arrive at an approximated actual inventory cost price. The main question in this context is then how such an adjustment can be realized?

From the authors’ perspective, the complete cost revaluation amount needs to be shifted (allocated) from the income statement to the balance sheet in order to arrive at an actual cost valuation amount. That is because only those items that are currently on stock (or in process) – that is receipt transactions – are affected by the cost change variance. If those items are sold or consumed later on the adjusted higher/lower standard cost price will ensure that the cost revaluation amount that has been allocated to the balance sheet is successively eliminated. For that reason no split up and allocation of the cost revaluation amount is necessary.

The next part of this series continues with analyzing cost change variances and how they need to be incorporated into this parallel inventory valuation approach.

Parallel inventory valuation – an alternative approach (Part 1)


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In one of my prior posts I already had a look at the parallel inventory valuation issue. For details, please see this site.

While the prior post focused on the Russian dual warehouse functionality, this post focuses on an alternative parallel valuation approach I recently came across. A major advantage of this alternative approach compared to the Russian dual warehouse functionality is that it does not depend on country-specific features but rather makes use of generally available functionalities that can be applied in every Dynamics AX/365 for Operations environment.

Let’s get started by having a look at the underlying business scenario for this parallel inventory valuation approach.


The following illustrations and explanations are based on a company that makes use of standard costs but requires an ‘actual cost’ evaluation for external reporting & tax purposes.

In order to explain the underlying parallel inventory valuation approach, the following sample transactions have been recorded for a trading item; that is, an item which is not used in the production process.

203_0015 (DOM = Day Of the Month)

The sample transactions illustrated in the previous figure start with the purchase of 50 pcs of the trading item for a price of $110. As the item is set up with a standard cost price of $100, a purchase price variance (PPV) of $500 results.

The second sample transaction also relates to a purchase order where another 150 pcs of the item are purchased for a price of $95. The major difference between the first and this second transaction is that the second one is only packing slip updated whereas the first one is packing slip and invoice updated.

The third and fourth sample transactions represent (internal) inventory adjustment postings for which no purchase price variance arises.

Those internal transactions are followed by a third purchase order related transaction where another 250 pcs of the item are purchased for a cost price of $105.

Finally, 50 pcs of the trading item are sold to a customer. As the item is set up with standard costs of $100, the inventory value is reduced by a total of $5000.

After all sample transactions are recorded, an inventory value of $45000 remains in the balance sheet (BS) and a PPV of $1000 in the income statement (IS). The next figure illustrates the respective financial statement reports.


My next step was making a manual inventory value calculation for the sample transactions in order to get an impression of the theoretically correct actual cost inventory value. To achieve this, an average cost price has been calculated before recording the different (internal and external) issue transactions. This calculation is similar to what one can identify in Dynamics AX for a weighted average cost price valuation and is exemplified in the following figure.


warningsign1 Depending on how the average values are calculated – before each issue transaction or for the whole period – different actual cost inventory values result. As an example, if a single average cost price is calculated and used for the valuation of the issue transactions, a total inventory value of $45849.06 results. Those valuation differences do, however, not matter here because they have only been shown for explanatory purposes.


What matters though is the fact that the issue transactions, which have been recorded with the standard cost prices, require some adjustments in order to arrive at an actual cost value. The way how those adjustments can be calculated is illustrated in the following figure.


What can be identified from the previous figure is that the total PPV is split up based on the relationship between the total receipt and total issue transactions. As an example, the $868.85, which are assigned to the total receipt transactions are calculated as follows: $1000 / ($53000 + $8000) * $53000.


warningsign1 If only external receipt and issue transactions are taken into account; that is, if the inventory adjustment transactions, which did not generate a PPV are excluded from the calculation, the following PPV amounts are calculated and can be assigned to the receipt and issue transactions recorded.



Building upon the last separation of the total PPV, an actual cost inventory value can be approximated by shifting the fraction of the PPV that can be assigned to the receipt transactions from the income statement to the balance sheet. The next illustration exemplifies this.



After having analyzed the theoretical concept how an actual cost inventory value can be approximated for a company that uses standard costs, the question arises how this theoretical concept can be implemented into Dynamics AX/365 for Operations?

The answer to this question are General Ledger (GL) allocation rules that can be used for transferring the part of the PPV, which relates to the receipt transactions, into the company’s balance sheet.

The next screen print shows the allocation rule used. Please note that this rule is set up with the ‘basis’ allocation method.


The ledger account that records the PPV for the trading items – account no. 540400 in the example – is included in the ledger allocation source form and will be used as the basis for the subsequent allocation calculation.


warningsign1 Please note that the allocation basis is defined in combination with the financial dimension ‘item group’, which has been assigned to all trading items. Referring to the item group rather than using separate allocation rules for each individual trading item is a simplification that will not result in an individual but a group-based inventory valuation of the item. From the author’s perspective, this simplification appears to be justifiable, as companies regularly do not report inventory values on an individual item basis in their external financial statements.


The next setup required for using ledger allocation rules concerns the offset account, which should be different from the PPV account that is used in the ledger allocation source form shown above in order to allow users tracking the original and adjusted PPV.


Finally, ledger allocation rule destinations have to be set up that define the account-financial dimension combinations to which the PPV will be allocated.

The next screen prints show that the part of the PPV that relates to the issue transactions is recorded on the income statement account 540401. The part of the PPV that relates to the receipt transactions is, on the other hand side, recorded on the balance sheet account 140499.

203_0060 203_0065

Once the ledger allocation rule is setup and activated, it can be processed. Processing the exemplified allocation rule results in the following voucher, which debits the PPV income statement account 540401 for the part of the PPV that remains in the income statement. The remainder of the PPV is consequently shifted to the balance sheet account 140499. In order to avoid a double counting of the PPV, the credit transactions on the income statement account 540409 offsets the posted PPV.


The following screen print summarizes the resulting balance sheet and income statement reports after the allocation rule is processed and posted.



The parallel inventory valuation approach illustrated in this post requires that all items are set up with an ‘item group’ or ‘item’ financial dimension. In addition, separate issue and receipt accounts need to be set up for the different inventory transaction types.

Apart from those setup considerations, major disadvantages of the approach demonstrated here comprise:

  1. That the ‘actual’ inventory cost value can be identified at the General Ledger level only, and
  2. That the approach illustrated requires the use of standard costs.

Despite those disadvantages, the inventory valuation approach demonstrated here seems to be much better suited than alternative approaches the author came across, such as creating specialized and complex inventory transactions reports that are used for recording manual adjustment postings at the General Ledger level or doing some ‘creative’ Excel calculations in order to arrive at an actual cost value amount which is subsequently posted in the system. What is more, the approach illustrated here is in line with the ‘specific identification’ valuation methods that are allowed to be used by IFRS and US-GAAP.

The next post will extend the approach exemplified here to the other standard cost price variances. Till then.

Return order cost prices & devaluations


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Recently, I was asked by a colleague how to devalue items that have been returned from a customer. As I believe that the one or other reader came across similar issues, I summarized some of the pitfalls one should be aware of when recording item returns from a customer.


Some time ago 1000 pcs of an item have been purchased for a cost price of $100/pcs. Later on, 100 pcs were sold to a customer for a sales price of $200/pcs. After the customer noticed that he ordered too many of the items, he returned 20 pcs, which shall be devalued as they have been polluted.

The return of the items from the customer was recorded through the standard return order form. As the originally sales order through which the items have been sold was not known, the ‘find sales order’ button was used. The next screen print illustrates this.


Once the sales order was identified, the return quantity was entered in the return quantity field and confirmed with OK.


Confirming the return quantity this way resulted in the automatic creation of a return order line that was linked to the original sales order. For that reason, the return cost price – which can be identified in the return order line details section below – could not be edited.


Once the returned items were registered and packing slip updated, I tried to outsmart the system by changing the return cost price in the sales order form right before posting the credit note for the customer.


Unfortunately, this trick did not help and had no effect on the cost price that was posted with the item return. The next screen print demonstrates this by showing a posted return cost price of $2000 for the 20 pcs recorded.


warningsignklein Please note the highlighted lot id fields, which illustrate that the original sales order (no. 000800) is linked to the return order (no. 000801).


Because the return order was posted with the original cost price, I tried recording a cost adjustment through the inventory closing and adjustment form illustrated in the next screen print.


Unfortunately, also this did not help because the only transaction available for adjustment was the original purchase order through which the items were originally purchased.


warningsignklein After posting an inventory close, the on-hand adjustment form/option became available. Yet, as I was interested in adjusting only a subset of the total on-hand amount, I gave up on this way of making the value adjustment.


Rather than trying to correct the return order transactions with hindsight, I created a second ‘test’ return order for 10 pcs in order to differentiate it from the first one. This time the return order was recorded without making use of the search functionality but by entering the return order line directly. As the return order line was not linked to the original sales order, I could adjust the return cost price that was finally used when posting the return order credit note. The next screen prints illustrate this.



warningsignklein As the return order was not marked against the original sales order, I was even able to make an adjustment to the return cost price through the inventory closing and adjustment form. For details, please see the next screen print.


warningsignklein An alternative to manually entering the return order lines without referencing (marking) the original sales order is making use of charge codes that can be linked either to the return order directly or to the disposition codes as exemplified in the next figure.


The major disadvantage of those charge codes is that they cannot be setup for item transactions and can thus only be used for creating general ledger accrual transactions that do not have a direct influence on the inventory value in the inventory module.


This post summarized some of the pitfalls one should be aware of when it comes to the devaluation of item returns from customer. The main issue one needs to be aware of is that the search functionality in the return order form marks the original sales order and the return order, which does not allow users modifying the return order cost price.



It is now over two years that I started this blog.
I would like to take this opportunity to thank all of you for reading, sharing and commenting on the various posts that have been published here.

To makes things even better in the future and write about topics that are of interest to you, I prepared some short questions and would be happy if you could provide me some feedback.

Feel free to leave additional comments. Many thanks for your help!
P.S. For those of you who answered the questions and who are interested in purchasing the project accounting and controlling book that has been released recently, here is a $15 discount voucher that is valid for 2 weeks time (SXAD3AFC) for purchases through the CreateSpace e-shop.

Link multiple Management Reporter reports



Linking different Management Reporter (MR) reports is a common finance scenario when for example the profit/loss from the Income Statement (IS) is linked to the equity section of the Balance Sheet (BS).

Microsoft provided a detailed description, which exemplifies how this linkage between the IS and BS reports can be established. For details, please see the following website.

Some time ago I was confronted with the requirement of linking multiple MR reports to a newly created one. As Microsoft already provided a detailed description of the necessary setup steps, I initially thought that linking multiple MR reports just follows the same principle, which is required for linking a single report.

For that reason (and based on the Microsoft guideline), I simply added two instead of a single row link in my MR row definition to get the data from the BS and IS report loaded into my newly created report. The next screen-print exemplifies this setup, where the first row link (‘BS’) links to the Balance Sheet report and the second one (‘IS’) links to the Income Statement report.

The row definition of my newly created report consequently includes two rather than a single column that reference the cells in the already existing MR reports through the ‘@WKS(…)’ fields.

The column definition used was identical to the one used in the Microsoft guideline and included only a single FD (financial dimension) column. The next screen-print illustrates the setup of this so-called column definition.

After having done all the setups that I considered important, I was very much disappointed once I noticed that the report did not include the IS data.

Some additional investigation of the report creation process lead me to the report queue status form where I noticed the following message:

Based on this warning message, the report setup with the two row links obviously seemed to be the wrong approach to incorporate data from multiple other MR reports into my newly created one. To get this corrected, I first changed the link type for the Income Statement data to ‘Management Reporter Worksheet’.

In line with this change, the cell reference was changed from ‘@WKS(B=C35)’ to ‘C35’ and a column restriction was incorporated into the row definition setup, which is exemplified in the next screen-print.

In addition, a reporting tree was setup, which linked to the different financial dimensions/worksheets specified in the row definition setup form. Example:

warningsign1 It is important that all financial dimensions/worksheet references, which are specified in the row definition form are included in the reporting tree. Otherwise, the report generation will interrupt with an error message.

The last setup required relates to linking the different reporting tree elements to the report columns. How this linkage can be established is illustrated in the next screen-print.

With those report modifications in place, the report could finally be created and showed all the data retrieved from the other MR reports. The report could of course be further refined by including the values shown in the FD and WKS column into a single one. For reasons of brevity this exercise is, however, skipped here and left as an exercise for the reader.

warningsign1In order to allow you a direct comparison with the Microsoft guideline referenced in the beginning, all setups and reports exemplified in this post have been created with the MR version CU12. In more recent MR versions, the link type ‘Financial dimension + Worksheet’ has been removed. As a result, linkages to multiple MR reports can only be realized through the ‘Management Reporter Worksheet’ link that has been used for incorporating the IS data above.

A note on committed project costs


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Project related expense invoices can be recorded in a number of different forms and journals, such as the Accounts Payable (AP) invoice journal, the project expense journal or the AP invoice workbench, to mention only some. When it comes to expense invoice recording for projects, an important consideration is the time at which those expenses can be identified at the project level. The timing aspect is important especially in companies that face long invoice throughput times due to detailed invoice control and approval procedures.

To identify process related differences in expense invoice recording, an expense invoice for $150 will be recorded next through a standard AP invoice journal. This process will then be compared with entering a similar invoice through the so-called invoice workbench.

Let’s get started with the process of recording an expense invoice for a project through a vendor invoice journal, which is shown in the next figure. Please note that the vendor invoice line and the project to which the expenses are posted to, are shown in the upper part of the next screen-print whereas all project specific information is included in the project tab shown in the lower part of the same screen-print.


As one might expect, after recording the invoice but before posting it, no costs can be identified at the project level. Please see the next figure.


Once the invoice is posted, the respective project expenses are recorded as actual project costs. This can be identified from the actual cost column of the cost control window shown in in the next screen-print.




Let’s now have a look at what difference recording a similar invoice through the vendor invoice workbench – exemplified in the following screen-print – makes.


Except for the way how the expense invoice data are entered, the same information is recorded in the vendor invoice workbench shown below.


Yet, different from before, the project expense can already be identified at the project level, once the invoice has been recorded. For details, please see the project expense amount shown in the committed cost column of the cost control form that is illustrated in the next figure.


It is this ability of showing recorded project expenses early that differentiates the process of entering project related expense invoices through the vendor invoice workbench from recording them through vendor invoice journals. A knowledge of this difference is important especially in companies that see long invoice throughput times because an early identification of (forthcoming) project expenses can avoid wrong interpretations and subsequent actions.

Note: A prerequisite for becoming able to identify project expenses early through the committed cost functionality is the activation of the corresponding project cost control parameters shown in the next screen-print.


In addition, a periodic batch job needs to be setup that identifies and illustrates the committed costs at the project level. Example:


Using the committed cost functionality can be of vital importance for companies that face comparatively long invoice throughput times. Companies with short invoice throughput times do, on the other hand side, not considerably benefit from using the committed cost invoice feature that is only available for invoices recorded through the vendor invoice workbench. Expressed differently, companies, with short invoice throughput times have a greater flexibility when it comes to entering expense related project invoices.

Timesheets & missing working time


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Before invoicing project customers and/or preparing the month-end close, it is a common practice to verify that all employees have recorded their working time. Dynamics AX supports this verification process through the missing timesheet report shown in the next screen-print.


Note: The manager that can be identified in the last column of the missing timesheet report is the one that is specified in the ‘reports to’ field of the employee’s position assignment and can be found in the Human Resource (HR) module.

An alternative to generating the missing timesheet report is using the periodic missing timesheet email notification functionality. This periodic process sends automatic email reminders to those employees – not their superiors/managers (!) – that have not recorded their working time through timesheets. The content of the email is thereby defined in an email template, which needs to be linked to the Email Id field in the project parameters form shown in the next figure.


A major problem with the missing timesheet report (and the email notification process) is that it only verifies that some working time has been recorded. It does, however, not check whether and how much time is missing. The following screen-prints demonstrate the aforementioned by showing the content of the missing timesheet report for an employee (‘Julia’) that creates and saves her timesheet in a first step, submits it later on and finally gets it posted.

Step 1: Create & save timesheet


Step 2: Submit timesheet


Step 3: Post timesheet


As one can identify from the previous screen-prints, the missing timesheet report does not include the employee (‘Julia’) anymore once the timesheet has been posted. This outcome is quite astonishing because only a single hour of working time has been recorded, which is by far less than what has been contractually agreed upon with the employee (40 hours/week).

Against the background of this result, it can be summarized that the missing timesheet functionality and the periodic email notification process are per se not sufficient to ensure that employees recorded all of their working time.

If the missing timesheet functionalities are not sufficient to verify whether or not employees recorded all of their working time, the question arises what other additional instruments are available that can help ensuring that employees record at least their contractually determined working time.

The main instrument available for that purpose is the timesheet policy feature. Provided that the contractual working time of employees is setup in a calendar and given that the timesheet policy prevents employees from submitting their timesheets if less than the contractually determined working time has been recorded, one can ensure that employees record their complete working time. The following example demonstrates how this can be achieved based on the timesheet policy configuration shown in the next screen-print.


The timesheet policy illustrated in the screen-print above prevents users from submitting and posting timesheets with less than 40 hours working time recorded. Timesheets that include less hours – such as the one shown below – cannot be submitted and will consequently be picked up in the missing timesheet report. The following screen-prints exemplify this system behavior.

en_140_0035 en_140_0040

Please note that what has been said for timesheets that include less time than the one specified in the timesheet policy also applies for employees that have not even created a timesheet. It is thus the combined application of the timesheet policy and the missing timesheet report which help ensuring that employees recorded all of their working time.

Note: The illustrated timesheet policy and application of the missing timesheet report assume (a) that employees submit their working times only once a week in a single timesheet and (b) that employees record their full working time including absence times for holiday, illness, etc. Through a slightly different setup, the same result can also be achieved if employees are supposed to record their working time on a daily basis.