PSA – Quotes (High Level Estimates)

This post is one of a series I’m creating connected with Project Service Automation (PSA) for Microsoft Dynamics 365. This time I will consider quotations and how they are used when creating your initial high-level estimate.

After creating an opportunity, the next stage in the sales cycle is to create one or more quotes from the opportunity. Much of the functionality used by PSA is leveraging the standard quote capabilities in Dynamics 365. If you haven’t used quotes before you can read about them here.

When you create a quote for the opportunity details from the opportunity and the opportunity lines will be carried forward to the quotation.

Tip, Entering opportunity lines is optional, if you haven’t entered the project and product lines on the opportunity then you can add them manually into the quote.

In addition to the standard quote functionality PSA adds in some additional information including an estimate on profitability. This is a very flexible and comprehensive part of PSA, meaning the quotation in Project Service Automation contains some significant extensions to the standard Dynamics 365 quote entity.

Quote Lines – Product Based

My quote shows any products that I entered on the opportunity, plus more can be entered. You may notice that cost amounts are shown that weren’t shown in the opportunity! This cost price will have come from the standard cost as defined in the product catalog. You edit the cost price and sales value on this quote if required.

Quote Lines – Project Based

On my quotation opportunity lines, will have been carried forward. As shown below.

Next we build our project estimate to finalise the quotation and confirm profitability.

When we open up each quote line a detailed screen similar to the one below is shown. Here I can start to build the estimate. Initially I decide what will be included from time, expense and fees. I then will continue to add quote line details.

At this point I am describing the process of adding a high-level estimate to the quote lines. You will notice that the project field is blank. Alternatively we can create a project and use information from that to replace these high-level estimates.

Quote Line Details

In the quote details section, we can add a high-level estimate that builds up this line in the quotation. In this example I have simply created three details lines for the implementation costs. These being design, build and test. Each detail line is associated with a role. This role is used to select the correct cost and sales prices from the price lists we earlier associated with the opportunity. An example of the quote line details screen is shown below.

A few things to notice;

  • The transaction class defines the type of “Time”. Below I am showing time as this line is for the time my architect will spend on the project. But other options of Expense and Fees are possible.
  • The Category column is typically used when the transaction class is Expense, as here we can record the type of expense. Such as airfare, hotel cost etc.
  • The quote lines are expressed in terms of the sales value, but you can also use the open cost detail option to be able to edit associated costs.

Quote Line – Chargeability View

When you are compiling the quote details a useful screen is the chargeability view, as this shows a matrix of sales and cost prices for the roles which you may wish to include in the quotation. The chargeability view can be found in the navigation area of the quote line.

Below you can see an example of the chargeability view. This is really useful as you can quickly see the sales prices, cost prices and margins for all resource types without need to jump around multiple price lists.

Notice that the units for my costs are all “Hour”. When I first created my cost prices I had them in days but my sales prices were in hours. You shouldn’t do that! Standardise on one base unit and ensure that is used. As this view assumes the same units for costs and sales.

In my example the cost price and sales price are both in the same currency. It is possible for your sales to be in a different currency. If you do this the Sales Price in Cost Currency is used so that you can still compare the sales and costs in the same currency.

Also notice the chargeable column, currently all of my roles are selected as they will all get billed to the customer. Unticking this will leave that role in the project in terms of cost but will show as a non-chargeble item. You may, for example, have a pre-sales consultant that is never charged but wish to count their costs when considering the profitability of a deal.

Another really useful feature of the changeability view the ability to edit sales prices for this individual quotation. When you view look at this view you will have a “Edit Sales Prices” option. As shown below. Clicking this will create a price list that is unique to this quotation.

Having clicked the edit price list button my price list changes to a new one that is unqiue to this quotation. And at that point the sales price field becomes editable. Also notice that there is a standard price column that will show the orginal price.

One neat feature of this editing is if the sales price drops below the cost price then the unprofitable line will turn red. (As shown below.)

Quote / Estimate Analysis

Having entered the estimate on my quotation I can review the profitability tab on the quotation. It will show me total chargeable costs, any non-chargeable costs, plus revenue details and margin. In addition I get a couple of useful charts to show the phasing of the revenue and costs.

Gross margin only included chargeable costs in the calculation. But adjusted gross margin will also take non-chargeable costs into account.

There is also a tab which compares the customers’ expectations to the estimate. This is in terms of completion date and budget. The estimate completion date will be based on the latest end date from the quotation detail lines.

Some of the fields in this analysis are CRM roll up fields. Meaning they may not reflect the latest data, if in doubt manually refresh them!

Quote Line – Expenses

As we saw when creating the quote line, it is possible to set the option “Include Expenses” as yes. This is used when we need to define how expenses are to be handled. Project time is billed on a basis of roles, whilst expenses are by expense category. You may, for example, want to show on the quotation details of expenses such as hotels or airfares. Below you can that I have created a quote line for airfares, with a customer budget of £5.000.

I have that added a quote detail line as part of the estimate. In my project estimate I have include three trips to India! With the estimated sales amount of £3,000. Notice how the quotation line is by category rather than role.

As with project time items I can use the chargeability view to see (and edit) the expected sales prices and calculation method.

We have three methods available for the billing of expense categories;

  • Per price unit, a fixed fee each time the expense happens.
  • At cost, the customer will be billed for the cost of the expenses.
  • Mark-up percentage, the customer will be billed a percentage mark-up on the cost of the expenses.

Also, notice below that we can opt for some project expense categories to not be billed to the customer.

Having created your quotation with a high level estimate you should now have a rough feel for the viability of the project. The next stage will be to create a project plan and start to add detail. I will cover those concepts in another post. J

3 thoughts on “PSA – Quotes (High Level Estimates)

  1. Pingback: PSA – Sales Cycle | Microsoft Dynamics CRM and Unified Service Desk

  2. Pingback: PSA – Complete Guide | Microsoft Dynamics CRM and Unified Service Desk

  3. Pingback: PSA – Invoicing (Part One) | Microsoft Dynamics CRM and Unified Service Desk

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