Create customer advance for projects in microsoft dynamics AX 2012


In today’s post, I will discuss a small but important functionality called the customer advance also referred as pre-bill for projects in Microsoft dynamics AX 2012.

Sometimes projects require a significant financial investment and may need some amount to be requested from the customer.The  Customer advance is an option using which customer advance payments can be requested on account of the projects. This can be done for both fixed price and time and material projects in dynamics AX 2012.

The advance payment can be requested to the customer as a percentage of the total project original budget at any time during the project. It can also be requested as a flat amount. The project category and the activity also can be specified during raising the customer advance.

When user creates a pre-bill transaction, system automatically creates an invoice proposal, which is then submitted for necessary approval. Once approved, this becomes an On account amount with transaction origin as a Prepayment.
With a prepayment existing in a project, say $10,000.00 in Sep, 2011, when you process an invoice of $20,000.00 later in Oct, 2011, you will notice an additional invoice proposal line showing up the prepayment amount causing the total invoice header
amount to be $10,000.00(20,000-10,000).

Let us now go through the steps to see how it works is dynamics AX 2012.

  • Let us say we have a project 90001 in CONTOSO data set.
  • Select the project and click Manage > Bill > Customer advance on the action pane.

  • Click New.
  • Enter category and activity if you have/want any. I will just go with requesting the advance for the project as a whole.
  • Enter Description = Advance towards project 90001.
  • Now, as I depicted above, the amount can be requested as a flat amount or even as a % of the total project budget. If you have set up a project original budget, you can just specify a % value and system will calculate the total advances amount which is to be requested.
  • In this scenario, I will just proceed by specifying a flat amount, say $20,000.00.
  • Verify that Total customer advance invoice amount = $20,000.
  • Click OK button.

  • Notice that, an infolog shows up  and Invoice proposals screen opens up as shown in screen below.

  • Verify the details of the invoice proposal and then submit it for approval.
  • Now the approver will verify the customer advance request and once it is approved, on account transaction will be created for the project 90001 by the system.
  • Let us verify this by going to projects  and selecting 90001.
  • Click Manage > Bill > On Account Transactions and verify that the on account record is created.

  • Let us now post and simple hour journal of total amount of $25000 and try to process the invoice for the project and analyze the impact of the customer advance.
  • In my scenario, I posted an hour journal with total amount = $25,000.00.
  • Now select the project and click Manage > Bill > Invoice processing.
  • Verify that the total amount available to invoice is (25,000-20,000) = $5,000. This indicates that, the invoice processing automatically takes the advance amount into consideration and deduct it from the current invoice amount to present the total amount that will be invoiced.

That is it about pre-billing functionality for projects in Microsoft dynamics AX 2012. Do let me know questions and clarifications on this.



Categories Dynamics 365, Dynamics AX 2012, Project management accounting

4 thoughts on “Create customer advance for projects in microsoft dynamics AX 2012

  1. What about when the prepayment is greater than the 1st invoice posted? When the 2nd invoice is posted, it does not deduct from the prepayment.

    Your blog is great by the way

    1. Hi,

      In such a case, you would ideally split the customer advance amount and reconcile the required amount with the corresponding invoices.

  2. how we cna update the bank acount in this case.

    1. Lalit,

      The update of bank will be a manual task.


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