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Fixed-Price Projects in Microsoft Dynamics 365 for Finance and Operations

Intro: RevRec Formulas

Cost-based Revenue Recognition
Cost posted / Total Estimated Cost * Contract Value

Quantity Revenue Recognition (used in example below)
Hours posted / Total Estimated Hours * Contract Value

  1. Create New Project
  2. Create new project in Dynamics 365 for Finance and Operations

    The new project should be of Project type “Fixed-price”. The Project group selected will determine which revenue recognition formula will be used on the project.

  3. WBS Setup
  4. WBS Setup

    WBS Setup in Dynamics 365 for Finance and Operations

    The Hours and cost estimates established on the WBS will be used as part of the revenue recognition calculation. Make sure to publish changes made to the WBS.

    Check Cost Price table

    If using cost-based revenue recognition, make sure that the Cost price table is appropriatelys setup for the project.

  5. Milestone Setup
  6. WBS Setup

    This process establishes Contract Value
    Contract value = sum of all milestones

  7. Invoicing
  8. Invoicing can be done at any time by creating an invoice proposal. Any milestones with Project date prior to the current date are available for selection on the invoice proposal.

    Invoice Proposal Invoice proposal

    Invoice Preview Screen Invoice Preview Screen

    The Invoice proposal review screen displays the associated transactions in the left window and a mock-up of how they will display in the Customer invoice in the right window.

  9. Maintain Forecast - transfer from WBS
  10. Maintain Forecast - transfer from WBS

    This process moves the estimates in the WBS to a forecast and establishes the Total Estimated Hours that will be used in the revenue recognition process.

  11. Enter Hour on Project
  12. Enter Hour on Project

    This process establishes Posted Hours
    Generally done through timesheet submission, approval, posting
    An hours journal can be used for testing convenience

    Hour on Project

    Hours and cost will now be posted to the project

    Voucher Transactions

    If you click on view voucher, you can see the accounting entries related to the posted hours.

  13. Revenue Recognition
  14. Create Estimate Create Estimate

    On the manage tab, in the process group, click estimates. From there, create a new estimate.

    Post Estimate Post Estimate

    Fixed-Price Setups

    Fixed-Price Project Group Fixed-Price Project Group

    In the Project group, a cost template and period code, and sales value category must be selected.

    Quantity-based Cost template Quantity-based Cost template

    Completion based on quantity means that hours will drive revenue recognition.

    Ledger-based Period code Ledger-based Period code

    The period frequency selected controls the applicable estimate dates for the revenue recognition.

    Fee Project Category Fee Project Category

    The sales value category selected must be of Transaction type Fee.

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About the Author

Josh Knox

Josh Knox

Josh Knox is a Functional Consultant for SAGlobal, where he helps provide strategic consulting services around the design and deployment of the client’s Dynamics ERP system. Josh identifies client requirements, assists with system setups and configurations, writes development specifications, provides training, and performs other project activities. He has significant experience helping professional services companies with their Dynamics 365 implementations, particularly in the areas of data migration, workflow design, business intelligence, and Projects+ – SAGlobal’s custom enhancements to the Projects module.

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