Create billing rules
Important
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Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
This topic explains how to set up billing rules that are used to automatically calculate the timing and amount of customer invoices for a project. Billing rules are based on the project terms that are specified in the project contract. The billing rules that you can create depend on the terms of the project contract and the project type, such as Time and material or Fixed-price, that you associate with the billing rule.
You can create more than one billing rule for a project contract. You can also assign a billing rule to multiple projects that are associated with the same project contract and have similar billing terms.
You can create the following types of billing rules for customer invoices:
Milestone – Create an invoice for a specified amount when a milestone date is reached.
Progress – Create an invoice when a predetermined percentage of work is completed.
Time and material – Create an invoice for the value of hours and materials that were posted to a project.
Fee – Create a project invoice for administrative fees, such as a change order fee.
Unit of delivery – Create an invoice when a specified unit of delivery is completed for a project.
For Time and material and Progress billing rules, you can assign chargeable categories. Chargeable categories indicate the transactions that should be included in customer invoices.
For all types of billing rules, you can specify a retention percentage to deduct from a customer invoice until a project reaches an agreed-upon stage. The payment retention percentage is specified in the project contract. The amount is calculated on and subtracted from the total value of the lines in a customer invoice.
Prerequisites
A system administrator must set up a number sequence, so that a billing rule identification number is automatically generated when you create a billing rule. For more information about how to set up number sequences, see Project management and accounting parameters (form).
Create a Milestone billing rule
Use the following procedure to create a billing rule for milestones. In the billing rule, select an amount to add to a customer invoice and the date on which the invoice is automatically created.
Click Project management and accounting > Common > Projects > Project contracts. In the Project contracts list, select a project contract, or create a new project contract.
Depending on the version that you’re using, follow one of these steps:
In Microsoft Dynamics AX 2012 R3: In the Project contracts form, on the Billing rules FastTab, click Add.
In Microsoft Dynamics AX 2012 R2: In the Project contracts form, on the Action Pane, on the Project contract tab, in the Set up group, click Billing rule.
In the Billing rules form, click New, and then, in the Line type field, select Milestone.
Depending on the version that you’re using, follow one of these steps:
In AX 2012 R3: On the Milestone FastTab, click New, and then, in the Project date field, enter a date on which to create an invoice. By default, the current date is automatically entered.
In AX 2012 R2: Create the milestones for the project by using the On-account transactions form. Then, in the Billing rules form, on the Milestone FastTab, select the milestones to apply the billing rule to.
In the Project ID field, select the Fixed-price project to apply the milestone to.
In the Sales currency field, select the currency to use in an invoice for the milestone. By default, the currency is copied from the project contract for the project that you selected in the Project ID field.
In the Sales price field, enter an amount to bill a customer when the milestone date is reached.
Optional: If an amount must be retained from payments that are paid by funding sources, you can specify the percentage to retain for each funding source. On the Payment retention terms FastTab, in the Retention percentage field, enter the percentage of the invoice amount that the funding source should retain from payments on project invoices until the retention terms are met.
Create a Progress billing rule
Use the following procedure to create a billing rule to invoice a customer when progress on a project reaches a certain completed percentage.
Click Project management and accounting > Common > Projects > Project contracts. In the Project contracts list, select a project contract, or create a new project contract.
Depending on the version that you’re using, follow one of these steps:
In AX 2012 R3: In the Project contracts form, on the Billing rules FastTab, click Add.
In AX 2012 R2: In the Project contracts form, on the Action Pane, on the Project contract tab, in the Set up group, click Billing rule.
In the Billing rules form, click New, and then, in the Line type field, select Progress.
On the Billing rule line details FastTab, in the Contract value field, enter the amount of the project contract that the billing rule applies to. For example, the total value of a project contract is 100,000, and 80,000 of this amount will be invoiced in increments of 25 percent. The remaining 20,000 is due when the project is concluded. The contract value for this progress billing rule is 80,000.
If there is a change order for a modification to the original project contract, in the Change order number field, enter the change order number.
In the Project field, select a project to apply the billing rule to. If a project contract is associated with multiple projects, you can select some or all of the projects to apply the billing rule to.
In the Category field, select a project category to use to post progress invoices that are created from the billing rule.
In the Sales tax group field, select the sales tax group to use to compute the tax amount on an invoice that is created from the billing rule. By default, the sales tax group from the project contract is displayed.
On the Project FastTab, in the Available projects pane, select a project to apply the billing rule to. If a project contract is associated with multiple projects, you can select one or more of the projects. Click Add to move a project to the Selected projects pane.
To select project categories for the billing rule, click Chargeable categories. In the Billing rules setup for project / category form, you can select one or more chargeable categories for the selected project. When you assign a chargeable category to a billing rule, the project transactions that use the chargeable category can be included in a customer invoice that is created from the billing rule.
Optional: If an amount must be retained from payments that are paid by funding sources, you can specify the percentage to retain for each funding source. On the Payment retention terms FastTab, in the Retention percentage field, enter a percentage of the invoice amount that the funding source will retain from payments on project invoices until the retention terms are met.
Create a Time and material billing rule
Use the following procedure to create a billing rule to invoice a customer for hours, items, and expenses that are posted to a project.
Click Project management and accounting > Common > Projects > Project contracts. In the Project contracts list, select a project contract, or create a new project contract.
Depending on the version that you’re using, follow one of these steps:
In AX 2012 R3: In the Project contracts form, on the Billing rules FastTab, click Add.
In AX 2012 R2: In the Project contracts form, on the Action Pane, on the Project contract tab, in the Set up group, click Billing rule.
In the Billing rules form, click New, and then, in the Line type field, select Time and material.
If there is a change order for a modification to the original project contract, on the Billing rule line details FastTab, in the Change order number field, enter the change order number.
To include indirect costs, such as allocated overhead costs, in the calculation of the amount to bill a customer, select the Include indirect costs check box. For more information, see About indirect costs for projects.
On the Project FastTab, in the Available projects pane, select a project to apply the billing rule to. If a project contract is associated with multiple projects, you can select one or more of the projects. Click Add to move a project to the Selected projects pane.
To select project categories for a billing rule, click Chargeable categories. In the Billing rules setup for project / category form, you can select one or more chargeable categories to assign to the project. When you assign a chargeable category to a billing rule, the project transactions that use the chargeable category can be included in a customer invoice that is created from the billing rule.
Optional: If an amount must be retained from payments that are paid by funding sources, you can specify the percentage to retain for each funding source. On the Payment retention terms FastTab, in the Retention percentage field, enter a percentage of the invoice amount that the funding source will retain from payments on project invoices until the retention terms are met.
Create a Fee billing rule
Use the following procedure to create a billing rule to invoice a customer for fees. For example, you can add a management fee to a project and then invoice the customer for the fees as work on the project is completed.
Click Project management and accounting > Common > Projects > Project contracts. In the Project contracts list, select a project contract, or create a new project contract.
Depending on the version that you’re using, follow one of these steps:
In AX 2012 R3: In the Project contracts form, on the Billing rules FastTab, click Add.
In AX 2012 R2: In the Project contracts form, on the Action Pane, on the Project contract tab, in the Set up group, click Billing rule.
In the Billing rules form, click New, and then, in the Line type field, select Fee.
If there is a change order for a modification to the original project contract, on the Billing rule line details FastTab, in the Change order number field, enter the change order number.
In the Project field, select a project to apply the billing rule to. If a project contract is associated with multiple projects, you can select some or all of the projects to apply the billing rule to.
In the Category field, select a project category to use to post progress invoices that are created from the billing rule.
In the Fee percentage field, enter a percentage of the total amount of a contract sales amount to add to an invoice that is created from the billing rule.
In the Sales tax group field, select the sales tax group to use to compute the tax amount on an invoice that is created from the billing rule. By default, the sales tax group from the project contract is displayed.
On the Fee calculation rule FastTab, select the billing rule types to apply the fee percentage to. Only billing rule types for the current project contract are displayed. In the Available items pane, select a billing rule type, and then click Add.
Optional: If an amount must be retained from payments that are paid by funding sources, you can specify the percentage to retain for each funding source. On the Payment retention terms FastTab, in the Retention percentage field, enter a percentage of the invoice amount that the funding source will retain from payments on project invoices until the retention terms are met.
Create a Unit of delivery billing rule
Use the following procedure to create a billing rule to invoice a customer for delivery of a predefined unit of a project. For example, a company agrees to deliver four training seminars to a customer’s employees. The customer agrees to pay the company when each seminar is concluded. A seminar is considered the unit of delivery.
Click Project management and accounting > Common > Projects > Project contracts. In the Project contracts list, select a project contract, or create a new project contract.
Depending on the version that you’re using, follow one of these steps:
In AX 2012 R3: In the Project contracts form, on the Billing rules FastTab, click Add.
In AX 2012 R2: In the Project contracts form, on the Action Pane, on the Project contract tab, in the Set up group, click Billing rule.
In the Billing rules form, click New, and then, in the Line type field, select Unit of delivery.
On the Billing rule line details FastTab, in the Unit field, select a unit of measure for the billing rule. A unit of measure can be a count, size, volume, or weight.
In the Quantity field, enter the number of units to deliver. In the seminar example, the quantity is 4.
In the Unit sales price, enter the sales value of each unit that is delivered.
If there is a change order for a modification to the original project contract, in the Change order number field, enter the change order number.
In the Project field, select a project to apply the billing rule to. If a project contract is associated with multiple projects, you can select some or all of the projects to apply the billing rule to.
In the Category field, select a project category to use to post progress invoices that are created from the billing rule.
In the Sales tax group field, select the sales tax group to use to compute the tax amount on an invoice that is created from the billing rule. By default, the sales tax group from the project contract is displayed.
Optional: If an amount must be retained from payments that are paid by funding sources, you can specify the percentage to retain for each funding source. On the Payment retention terms FastTab, in the Retention percentage field, enter a percentage of the invoice amount that the funding source will retain from payments on project invoices until the retention terms are met.