Create a project contract to invoice for services plus management fees
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
Use these procedures to create a project and project contract, so that you can invoice a customer for your services plus a management fee. The timing of the invoices is negotiated with the customer.
Example
Your organization is a management consulting firm that agrees to provide services to a retail company. The retail customer wants your organization to conduct market research to evaluate the viability of a new product. Your organization enters into an agreement with the customer to provide management consultants to conduct the research for the cost of time and materials. The customer agrees to pay 100.00 per hour for the consultants. The customer also agrees to pay an additional management fee of 10 percent for the consulting hours that are charged to the project.
Use these procedures to set up a contract, an associated project, and the billing rules. The billing rules are used to calculate the invoice amounts for the time and materials that are posted to the project, plus a management fee that equals 10 percent of the costs.
After you have created the contract and the project, you can set up the details of the project. For example, you can define the activities of the project and assign workers to the project.
Prerequisites
Before you create a project that has billing rules, you must set up the following project information in the Project management and accounting parameters form:
Set up the number sequence that is used when you create a billing rule.
Set up a fee journal that is used by default to post invoices for projects.
Create a contract for services plus a management fee
Use this procedure to create a project contract for services plus a management fee.
Click Project management and accounting > Common > Projects > Project contracts. Open a project contract from the list.
In the Project contracts form, on the Action Pane, on the Project contract tab, click Project contract.
In the New project contract form, complete the following fields:
Project contract ID
Name
Funding type
Funding source
Sales currency – By default, this currency is used for customer invoices that are associated with the project contract. However, you can modify the sales currency for a specific customer invoice.
Click OK. This information is copied to the header of the Project contracts form.
In the Project contracts form, complete the rest of the required information for the project. To change default values in the form, on the Action Pane, on the Project contract tab, click Edit.
Create a project for services plus a management fee
Use this procedure to create a project and any subprojects that are associated with a contract.
Click Project management and accounting > Common > Projects > Project contracts. Select a project contract.
In the Project contracts form, on the Action Pane, on the Project contract tab, in the New group, click Project.
In the New project form, enter a project type of Time and material.
Select a project group. A project group defines posting information for projects that are assigned to the group.
Enter additional information about the project. For example, complete the following fields:
Project ID
Project name
Project group
Project contract ID – This field associates a project contract with the project.
Note
The Project contract ID field is automatically filled with the number of the project contract from the Project contracts form. However, you can change the project contract number.
Customer
Enter any additional information that is required, and then click OK to create the project.
After you have created the project, set the project stage to In process. For more information about how to set a project stage, see Modify a project stage.
Create billing rules for a project that includes management fees
After you have created the contract and the associated project, use this procedure to create the billing rules for the project.
Click Project management and accounting > Common > Projects > Project contracts. Select a project contract.
In the Project contracts form, on the Project contract tab, in the Set up group, click Billing rule.
In the Billing rules form, click New.
In the Line type field, select Time and material.
You can assign the billing rule to additional projects. On the Project FastTab, in the Available projects section, select a project, and then click Add. The project is displayed in the Selected projects section.
You can select categories to designate the transactions that are billed to the customer. On the Project FastTab, in the Selected projects section, select a project, and then click Chargeable categories.
In the Billing rules setup for project / category form, select the categories to assign to the project. These categories are added to customer invoices.
Set up the management fee. In the Billing rules form, click New to create another billing rule.
In the Line type field, select Fee.
On the Billing rule line details FastTab, select a project and a category for the billing rule.
In the Fee percentage field, enter the management fee percentage that is specified in the contract.
On the Fee calculation rule FastTab, in the Available items section, select the billing rule to which the management fee applies, and then click Add to move the item to the Selected items section.
If you want to enter a payment retention percentage for the billing rule, on the Payment retention terms FastTab, select a funding source. Then, in the Retention percentage field, enter a retention percentage.