December 2017

Billing rules - Project management Microsoft Dynamics AX

Hello Guys,

Hope all of you had blasting New Year celebrations! I wish you a very Happy New Year and hope all of us will make the whole year wonderful. In this post, I will describe the different billing rules used on project contract for project under project management and accounting for Microsoft Dynamics AX 2012 and Dynamics 365 for operations.

Types of billing rules

Milestone
Unit of delivery
Progress
Time and Material
Fee

Here is the detail explanation for Milestone and Unit of delivery type of billing rule. I will cover Progress, Time and Material and Fee rules very soon.

Milestone:

Use this billing rule, when the customer invoiced based on predefined milestone achieved.

Let us take example for this. Suppose you are software vendor and you have an agreement with the customer for software development worth 1,00,000.

Agreement is,

Milestone 1: Project start (FRD): 20 % payment (Advance) – 20,000

Milestone 2: Design and Analysis (FDD): 30% payment – 30,000

Milestone 3: Development: 30 % - 30,000

Milestone 4: GO Live, Project completion: 20 % - 20,000

Now, when project starts, requirement gathering (FRD), you raise the first invoice with the 20,000 as per first milestone achieved. Go to billing rule and mark the milestone as achieved. Create invoice proposal, show only achieved milestone to bill, and invoice to customer.

Second invoice, when milestone 2 design and analysis achieved

And so on over the period Milestone 3 and Milestone 4.

In this case, invoice amount is fix and the date mentioned for each milestone

Go through Billing Rule – Milestone Billing Project Management Dynamics AX for details information with example

Unit of delivery

Use this billing rule, when the customer invoiced based on the quantity of item delivered.

Example: Assume you are manufacturer of corrugated box and deal with the packing company to deliver 10000 box of 12x12x12 inch size in next 4 month. Price for each box is 10.

Delivery Date	Pcs	Invoice Amount
30th January	3000	30000
20th Feb	2000	20000
30th March	3000	30000
30th April	2000	20000

Above is the schedule for delivery of pcs over the period of 4 months.

Now, First delivery of 3000 pcs completed. Update the status of item ready to invoice to 3000. Create invoice proposal, which will show the updated invoice amount. Create invoice and post.

In this case, suppose if for second delivery date only 1500 pcs are ready to delivery then update 1500 pcs as ready to invoice and create invoice proposal, which will allow invoicing on for 1500 pcs. This where this billing rule differ with Milestone based rule.

Same way for rest delivery schedule.