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Create invoice schedules on a project-based contract line

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Applies To: Project Operations for resource/non-stocked based scenarios

You can add an invoice schedule to a project-based contract line. Invoicing is allowed only after the contract is won and you're creating a project contract. An invoice schedule enables draft invoices for a project-based contract line to be automatically created. However, if you only manually create invoices, you can skip the creation of invoice schedules on contract lines.

Create a time and material invoice schedule for a contract line

When a project-based contract line has a time and material billing method, you can create a date-based invoice schedule. To automatically generate a date-based invoice schedule, complete the following steps.

  1. Go to Settings > Invoice frequencies and set up an invoice frequence.

  2. Go to the project contract record, and then, on the Summary tab, in the Requested Delivery Date field, select a date.

  3. Open the Time and Material contract line that you're making the date-based invoice schedule for.

  4. On the Invoice Schedule tab, select the billing start date and the invoice frequency.

  5. On the subgrid, select Generate Invoice Schedule. The invoice schedule is generated, and the Invoice Run Date, Transaction Cutoff Date and Run Status fields are set in the following way:

    • Invoice Run Date: This date is dictated by the invoice frequency.
    • Transaction Cutoff Date: The day before the invoice run date.
    • Run Status: Automatically set to Not Run. When the automatic invoice creation job runs for a certain invoice run date, this field is updated to Run Successful or Run Failed.

Create a fixed price invoice schedule for a contract line

When the contract line has a fixed billing method, you can create a milestone-based invoice schedule.

Note

Milestones can be created only on contract lines that a project is mapped to.

Complete the following steps to generate a milestone-based invoice schedule for a fixed set of equally distributed milestones for the calendar period.

  1. Go to Settings > Invoice frequencies and set up an invoice frequence.

  2. Go to the project contract record, and then, on the Summary tab, in the Requested Delivery Date field, select a date.

  3. Open the Fixed Price contract line that you're creating the milestone schedule for. On the Billing Milestones tab, select the billing start date and the invoice frequency.

  4. On the subgrid, select Generate Periodic Milestones. The invoice schedule is generated, and the Milestone Name, Milestone Date, and Milestone Amount fields are set in the following way:

    • Milestone Name: This name is dictated by the invoice frequency.
    • Milestone Date: This date is dictated by the invoice frequency.
    • Milestone Amount: This amount is calculated by dividing the contract amount on the contract line by the number of milestones as dictated by the frequency, billing start, and requested delivery dates.

    If the contract line has a value in the Estimated Tax amount field, then this field is also apportioned to each milestone equally when generating periodic milestones.

Billing milestones must equal the contracted value of the contract line. Otherwise, you receive an error on the Contract Line page. You can fix the error by creating, editing, or deleting milestones to ensure that the total billing milestones equal the contracted value of the line. After the changes are made, refresh the page to remove the error.

Manually create milestones

You can manually generate fixed price milestones when they aren't periodically split. Follow these steps to manually create a milestone.

  1. Open the fixed price contract line that you're creating a milestone for, and then, on the Invoice Schedule tab, on the subgrid, select Create new Contract line milestone.

  2. On the Milestone Creation page, enter the required information, based on the following table.

    Field Location Description Downstream impact
    Milestone Name Quick Create A text field for the name of the milestone. This field is carried over to the project contract line milestone and the invoice.
    Project Task Quick Create If the milestone is tied to a project task, use this reference to add custom logic that sets the milestone status based on the task status. This reference to a task has no downstream impact in the application.
    Milestone Date Quick Create Set the date when the automatic invoice creation process should look for the status of this milestone to consider it for invoicing. This field is carried over to the project contract line milestone and the invoice.
    Invoice Status Quick Create When a milestone is created, this status is always set to Not Ready for Invoicing or Not Started. This field is carried over to the project contract line milestone and the invoice.
    Line Amount Quick Create The milestone amount or value that is invoiced to the customer. This field is carried over to the project contract line milestone and the invoice.
    Tax Quick Create The tax amount that is applied on the milestone. This field is carried over to the project contract line milestone and the invoice.

  3. Select Save and Close.

Create a progress billing invoice schedule for a contract line

Progress billing lets you invoice customers based on the percentage of work that is completed instead of fixed milestones or time and materials. Progress billing is useful in long-term projects or contracts where the work spans months or years.

To use this feature for Microsoft Dynamics 365 Project Operations non-stocked/resource-based scenarios, ensure that the following requirements are met:

  1. You're using Project Operations Dataverse version 4.124.0.x or later.
  2. You're using Dynamics 365 Finance version 10.0.43 or later.
  3. Activate the Enable Progress billing on Project Operations for resource based/non-stocked scenarios feature in the Feature Management workspace in Finance. Progress billing is enabled in Dataverse by default.
  4. Run the dual-write map for Progress billing milestone header, version 1.0.0.0 or later.

When the contract line uses a fixed billing method, you can select Progress-based in the Invoice schedule type field. This field enables the creation of milestone headers on the Invoice schedule tab. For each header, a default milestone is automatically generated. During the invoicing process, you can specify the Next invoice percentage or Next invoice amount value and update the milestone header's invoice status to Ready for Invoice.

To generate a progress-based invoice schedule, follow these steps.

  1. In Dataverse, go to Sales > Project contracts, and select New.

  2. On the Project contract lines tab, select New project contract line.

  3. In the Name field, enter the name of the contract line.

  4. In the Billing method field, select Fixed price.

  5. In the Invoice schedule type field, select Progress based.

  6. On the Invoice schedule tab, on the subgrid, select New milestone header.

  7. On the Milestone header page, enter the required information, based on the following table.

    Field Location Description Downstream impact
    Name Quick Create A text field for the name of the milestone. This field is carried over to the project contract line milestone and the invoice.
    Task Quick Create If the milestone is tied to a project task, use this reference to add custom logic that sets the milestone status based on the task status. This reference to a task has no downstream impact in the application.
    Date Quick Create Set the date when the automatic invoice creation process should look for the status of this milestone to consider it for invoicing. This field is carried over to the project contract line milestone and the invoice.
    Billing Status Quick Create When a milestone is created, this status is always set to Not Ready for Invoicing or Not Started. This field is carried over to the project contract line milestone and the invoice.
    Line Amount Quick Create The milestone amount or value that is invoiced to the customer. This field is carried over to the project contract line milestone and the invoice.
    Tax Quick Create The tax amount that is applied on the milestone. This field is carried over to the project contract line milestone and the invoice.

  8. Select Save and Close.

To monitor the milestone header and related milestones in Finance, follow these steps.

  1. In Finance, go to Project management and accounting.
  2. Go to Projects > Project contracts.
  3. On the Action Pane, on the Maintain tab, select Progress billing details. The page that appears shows the milestone headers together with their associated milestone status.