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
- Create New Project
- WBS Setup
- Milestone Setup
- Maintain Forecast - transfer from WBS
- Enter Hour on Project
- Revenue Recognition Create Estimate
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.
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.
This process establishes Contract Value
Contract value = sum of all milestones
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 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.
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.
This process establishes Posted Hours
Generally done through timesheet submission, approval, posting
An hours journal can be used for testing convenience
Hours and cost will now be posted to the project
If you click on view voucher, you can see the accounting entries related to the posted hours.
On the manage tab, in the process group, click estimates. From there, create a new estimate.Post Estimate
Fixed-Price SetupsFixed-Price Project Group
In the Project group, a cost template and period code, and sales value category must be selected.Quantity-based Cost template
Completion based on quantity means that hours will drive revenue recognition.Ledger-based Period code
The period frequency selected controls the applicable estimate dates for the revenue recognition.Fee Project Category
The sales value category selected must be of Transaction type Fee.
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