“The Value FeeRet in the Category field is not valid according to the Category setup” Error in AX 2012

“The Value FeeRet in the Category field is not valid according to the Category setup” Error in AX 2012

Friends,

I have been busy in work after my long vacation  and break from blogging.

Today, I just wanted to write a quick post about troubleshooting an error which you might face while submitting invoice proposals which has retention enabled in it in Microsoft Dynamics AX 2012.

If you come across the error with message“The value “ FeeRet“ in the Category field is not valid according to the Category setup” , where “FeeRet” is the customer payment retention category, then make sure that The “Active in journal” and “Customer payment retention” check boxes are marked in the Category setup under Project Management and Accounting > Setup > Categories > Project Categories.

Refer to screenshot below.

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Note : Please note that, if you select the ‘Customer payment retention’ check box prior to the ‘Active in journal’ check box, then you cannot mark the ‘Active in journal’ check box anymore, as it will be disabled.

Hope this will help. Lot of new exciting posts coming soon. Stay tuned.

Keep DAXING Smile

Sandeep

Taking advantage of the On hold funding sources in Project Contracts in Microsoft Dynamics AX 2012

Taking advantage of the On hold funding sources in Project Contracts in Microsoft Dynamics AX 2012

Hi,

Hope everyone is doing well and having great times in this festive season.

In today’s post I will discuss a very small and useful functionality which is introduced in the project management and accounting module of AX 2012. This is the new “On hold funding source type” for project contracts.                                                                       

When you use the funding limits on the project contracts, the “On hold” funding source can prove to be very useful in allocating any transaction amounts which exceeds the specified funding limits for the other funding sources present in the project contract. The on hold funding source is referred to one of the internal organizations of AX 2012, which are the business units setup in the company.

Let me now elaborate this with an example.

Let us say there is a project contract with one customer as funding source and one on hold funding source. Also there is a funding limit of $2000 for the customer which is the funding source for the project contract. Take a look at the screen below for such a project contract.

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Now, let us post few transactions on the project belonging to this project contract, such that the amount exceeds $ 2000 and see how the on hold funding works. The below screenshot shows an hour journal posted on this project such that the total sales amount exceeds $2000, the funding limit for the customer.

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If we go to the project posted transactions and take a look at the funding allocation, this will show how the exceeded amount of $100 is allocated to the On hold internal funding source and the allowable $2000 is allocated to the customer funding source.

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Now that the exceeded amounts are allocated to the On hold funding source, you can use adjustment function later to allocate these amounts back to the funding source when funding limit changes after agreement with the customer. The advantage of having the On hold funding source is that, it will allow posting of transactions even if the sales amount exceed the specified funding limits for the funding customers in the project contract.

Let us now change the funding limit to $3000 as the customer has agreed upon the same and then run adjustment for the transaction to see how the amount which was allocated to the On hold funding source, gets allocated back to the customer.

Funding limit change is shown in screen below.

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After you change the funding limit for the customer in the project contract, adjust the transaction to see the impact how the transaction gets allocated back to the funding source.

Select the adjusted transaction and verify the transaction to see that the amount $2100 is now allocated to the funding source which is Forest wholesale.

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Powerfully Simple. Microsoft Dynamics AX 2012.

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Feel free to ask any queries about this.

Thanks

Sandeep

Accelerated billing/invoicing for Projects in Microsoft Dynamics AX 2012–(Progress based billing)

Automated, accurate and faster billing in Projects is one aspect, which every professional service organization look as one of the winning factors, when they choose an ERP application for their organization.

Microsoft Dynamics AX 2012 ERP is equipped with a powerful project billing engine, which helps in faster invoice processing by providing the various capabilities.

  1. Transactions to be billed in a given time period are recommended automatically.
  2. Automated workflow for invoice and submission and approval.
  3. Automated and accurate progress based billing based on % of work complete in the project.
  4. Support for complex billing scenarios such as T&M based, Milestone based, unit based billing etc.
  5. Option to specify complex billing scenarios such as T&M based, Milestone based, Per unit billing etc.

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In today’s post I will highlight one of the billing/invoicing features of AX 2012 which is the billing based on the progress of work in the project. This feature of AX 2012 allows professional services firms to automate the billing process without having the need of their project accounting staff spending days and weeks to determine the accurate completion stage of the project.

In Microsoft dynamics AX 2012, the project managers can set up the project in the system and define a budget for the project and then, the system can calculate the progress based periodic billable amounts automatically.

This can just be accomplished by executing the below simple steps.

1. Setup the Project and required basic details for it.

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2. Setup the appropriate billing rule in the Project Contract.

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3. Estimate the Project and establish a project level budget.

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With the above minimal setup done, when project transactions are posted, AX 2012 system can calculate the current completion stage/percentage of the project automatically without having you the need of the project accounting staff doing to manually which will take a considerably longer time.

Based on the % complete for the project, system will automatically calculate the amount to be billed at the current state of the project.

This was just one method in the billing engine of AX 2012 and there are several others, which supports more complex billing scenarios.

Simple, Powerful !! This is it for today. Please contact me if you need further detailed and expert advise on billing capabilities of Microsoft dynamics AX 2012.

Keep DAXING Smile

Sandeep

Intercompany Timesheets Management in Microsoft Dynamics AX 2012

Hi All,

I had been very busy with several things on my plate at work. Work keeps all of us busy.

It feels bad for not being able to spend time on my blog and finally decided to take out some time and write here.

In today’s post, we will explore and discuss about one of the important functionality in the Project Management area which is “Intercompany timesheets functionality”.

Intercompany Timesheets

In every mid sized to a large-sized professional service industry, it is a common practice that employees/workers of the organization keep working on the projects of different legal entities where as they will be employed in only one legal entity.

The loaning and borrowing activity of employees between the legal entities is essential to make efficient utilization and putting right people if the right job possible. When working on the projects of legal entities other than their employing legal entity, Microsoft Dynamics AX 2012 make it simple for the employees to register their times/hours directly on the projects of the contracting company/resource borrowing company, without having the need for the employee to enter times at multiple places and multiple times.

NOTE : Intercompany Timesheets Management functionality will be available only if the AX 2012 feature pack is installed.

In the subsequent steps and paragraphs of this post, we will explore the various setups and the overall intercompany timesheets operation in AX2012.

Let us refer the two legal entities which exchange the employees as the Loaning entity/Resourcing and the Borrowing/Contracting entity.

The following setups needs to be completed in AX 2012 in the Loaning legal entity.

1. Enable the intercompany timesheets management in the project parameters screen.

Project Parameters

2. Setup pricing details for the employees who are to be loaned. This includes setting up the cost price and the transfer price. The cost price however is ideally setup for all employees weather they will be loaned or not. The transfer price represents the price which the loaning legal entity charges to the borrowing legal entity.

Transfer price setup:

Price setup

Cost price setup:

Price setup

3. Setup the ledger accounts for the inter company cost and revenue.

Intercompany Ledger Accounts setup

4. Make sure that the debit and credit accounts for the intercompany transactions are setup.

Intercompany accounts mapping

This completes the setup required in the loaning/resourcing company.

Now, let us complete the setup needed to be done in AX 2012 in the borrowing legal entity.

1. Setup sales prices for the borrowed resources which the the actual selling price in the project.

Sales price setup

2. Setup the debit and the credit accounts for the legal entity the worker will be borrowed from.

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3. Further additional setups can be done, like assigning projects and categories to the borrowed worker if the validation functionality is implemented.

Now that we are done with the minimum setups required for the intercompany timesheet functionality to be operational, let us take a look at the steps/process by which the borrowed employee can submit this timesheets in the borrowing/contracting company.

  • Employee logs into AX 2012 enterprise portal and navigates to the new timesheets screen.
  • Notice the new Legal entity field in the timesheet line which gets enabled when we enable the intercompany timesheets in AX2012.

New Timesheet

  • Also notice that the loaning and the borrowing/contracting companies are displayed in the look up of the legal entity field. The worker will select CEE as the legal entity and enter their times in.

New Timesheet - Legal entities

So the employee will be able to submit his/her times in the project of the other legal entity without having to be an employee of that legal entity.

The back end accounting is then done automatically based on the setups done.

For any queries regarding the inter company timesheets functionality, please do not hesitate to contact me.

Till next time !!!

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Ledger Postings Management of Fixed Price projects in Microsoft Dynamics Ax 2012 – Scenario I

Friends,

Hope all is well your way. I Did not get chance to spend time on my blog this month.

We keep hearing a lot of questions on the ledger posting scenarios, revenue recognition etc in case of fixed price projects in Microsoft dynamics AX. Well,I thought, I will explain the various ledger posting scenarios in the life cycle a fixed price project in few of my subsequent posts.

The ledger postings in case of a fixed price project is controlled through the setup done in the Project groups. Based on the these setups, the ledger posting in a FP project can happen in 8 different ways.

We will analyze each one of the setup options one by one and verify the ledger postings. I will name these 8 ways of ledger posting as Scenario 1 to 8. We will analyze the scenario 1 in today’s post.

The 3 parameters in the project groups form which controls these ledger posting are as follows.

  • On-account invoicing.
  • Revenue recognition accounting rule.
  • Matching principle.

Scenario 1 :

On-account invoicing Balance
Revenue recognition rule Completed percentage
Matching principle Sales value

Refer to screenshot below for the new project group which I have created.

Project Group Setup

I have created a new cost template and a fixed price project and attached this to the a new project group with above setup.

Take an example where a company owns a fixed bid contract of $500000 and agreed upon with the customer for a milestone based invoicing plan as depicted below screenshot.

On-account invoice schedule

Costs are incurred in the project during its progress as indicated in the table below. We will post Estimates for the project at the end of every month and eliminate it in the month of SEP.

Month Cost in project
APR $20,000
MAY $25,000
JUN $40,000
JUL $30,000
AUG $55,000
Total Cost $170,000

Take a look at the tables below which shows the P&L and WIP statistics in the Project at each month before and after the estimates are posted.

I am not able to provide the AX screenshots here as I have some issues in my AX environment.

Project Profit & Loss Statement before posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
Accrued revenue – sales value Credit 0 0 0 0 0 0 0
Revenue 0 0 0 0 0 0 0
Cost Debit $20,000 $25,000 $40,000 $30,000 $55,000 0 $170,000
Gross Margin -20,000 -25,000 -40,000 -30,000 -55,000 0 -170000

Project WIP Statement before posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
WIP– sales value Debit 0 0 0 0 0 0 0
Gross WIP 0 0 0 0 0 0 0
WIP invoiced on account Credit $250,000 0 $200,000 $50,000 0 $500,000
Net WIP -250000 -200000 -50000 0 -500000

Note : The project on account invoices appear in the WIP-invoiced On account ledger.

Project Profit & Loss Statement after posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
Accrued revenue – sales value Credit $58,800 $73,500 $117647 $88,236 $161765 0 ~500000
Revenue $58,800 $73,500 $117647 $88,236 $161765 0 ~500000
Cost Debit $20,000 $25,000 $40,000 $30,000 $55,000 0 $170,000
Gross Margin $38,800 $48,500 $77,647 $58,236 $106765 $1,70,052

The values for the accrued revenue are calculated based on the % complete/ Degree of completion in the project as the setup is done to be “Completed Percentage” rule.

You may notice rounding issues in the values above as I have taken random examples.

Project WIP Statement after posting estimates:

Account Dr/Cr APR MAY JUN JUL AUG SEP TOTAL
WIP – sales value Debit $58,800 $73,500 $117647 $88,236 $161765 -500000 0
Gross WIP $58,800 $73,500 $117647 $88,236 $161765 0 ~500000
WIP invoiced on account Credit $250,000 0 $200,000 $50,000 -500000
Net WIP -191200 -73,500 -82,353 -88,236 -111765 0 0

I hope my explanation of this scenario of posting in the fixed price project was clear. Please post your queries if any pertaining to this.

Till next time !!!!

Thanks

Keep DAXING Smile

Customer payment retention functionality in Microsoft Dynamics AX 2012

Customers always want to make sure that they get the best work/service done from their vendors successfully, in time with 100% quality ensured. In the professional services industries, most customers wants to retain/hold back certain amount/percentage of the payments, when they pay their vendors for a project work until the project completes.

Vendors can then discuss and validate with the customer about the quality and completion of the project work and request all the retained amounts upon agreement.

This functionality being fully automated in a simplified manner within the Project Management and Accounting module, empowers the list of several other capabilities of Microsoft Dynamics AX 2012 for services industries.

Powerful, Simple, Agile

Let us now understand, how this functionality works in dynamics AX 2012. The following are the setups required for the retention functionality to be working.

Setups required:

  1. Define a new Main account in the “Chart of accounts” for the Customer payment retainage receivables. Ensure that the posting type for this account is “Customer Payment Retention Receivables”.
  2. Setup the Customer Payment Retention Receivables account in the “Accounts for automatic transactions” form under GL module.
  3. Ensure that a number sequence is setup for the Customer payment retention term in Projects parameters form.

Number Sequence

4. Create and setup the new Fee project category for posting the customer payment retention amounts. Ensure that the Customer payment retention checkbox ins marked for this category.

Let us define the customer payment retention terms under the project management and accounting module. The payment retention term specifies the schedule for the payment retention. The customer may want the payment to be retained in one of the following ways.

– A certain percentage/amount on every invoice until the project completes.

– A certain percentage/amount on the invoices until a certain percentage of the project work is completed.

– Once you setup the retention terms, assign them to the Project Contracts, projects or the Billing rules(If you have implemented)

Now, when you process the invoicing for a project/project contract with payment retention term attached to it, you will notice the retention details, i.e the % of retention and amount in the invoice proposal screen and validate before you submit for approval.

The following shows the accounting entry when you post this invoice (Say $1000 with 10 % retention.

Customer payment retention receivable $1000 (Debit)
Project Invoiced revenue             $10000 (Credit)
Customer Balance $9000 (Debit)

When you request the retained amount after agreement with the customer, system will reverse the Customer payment retention receivable entry and debit the customer balance automatically.

Customer payment retention receivable                   $1000 (Credit)
Customer Balance $1000 ( Debit)

Dynamics Ax 2012 also provides you options to perform several inquiries on the customer payment retention detail,s under the “Inquiries” and “Reports” sections as shown in few screen-shots below. These will help users in analyzing the customer payment retention data in projects being in a central location/screen.

Inquiries

Inquiries

Inquiries

Feel free to contact me if you need more information in terms of setup and processing the customer payment retention.

Thanks

Keep DAXING Smile

An insight to the new and improved Timesheets Management Functionality in Microsoft Dynamics AX 2012

Microsoft Dynamics AX 2012 - Powerful, Simple, Agile

Hi Friends,

I thought of writing about one of the most talked about enhancements in Microsoft Dynamics AX 2012 which is the employee timesheets functionality in Project Management and Accounting module.

Recording the employee’s times(hours) and expenses is one of the key processes in any services industry today, especially the IT consulting and Management services firms. These firms always look for a timesheet management system in the ERP system which they evaluate for their organization which can make it efficient and easy for their employees to enter their timesheets and expenses.

Microsoft Dynamics AX 2012 empowers the professional services industries with a powerfully simple employee services portal refered to as the Enterprise portal which is based on the Microsoft SharePoint 2010 foundation server, one of the most successful products that MS has released ever.

Now let us discuss about the various capabilities and improvements of the Timesheet system in AX 2012.

Few of the pre requisites for the timesheet functionality to be working are as below.

  • Setup timesheet periods. ( Ax 2012 supports Daily, Weekly, Bi-weekly, Semi-monthly and Monthly etc. periods for registering hours/times).
  • Setup the project management setup for the workers. ( Employees and Contractors).
  • Create required user relations.
  • The project management and accounting module setup. (Projects, activities, categories, line properties etc.).

Assuming that all of the above required setups are done, employees of the organization can log into the employee services portal and start entering timesheets.

The Home page of the employee services portal displays role tailored information depending on the user profile/role which is assigned to the employee.

When an employee/contractor who has system administrator role logs into the enterprise portal, the screen looks as shown below. This shows all the various capabilities and functionalities present on the enterprise portal of AX 2012.

Employee Services Portal

However, assuming the case of a typical service industry/IT consulting services industry, where employees (both salaried and hourly based) deal mostly with timesheets, expenses and their approvals, I have customized a role to prepare the employee services portal to look as below. Ax 2012 provides the flexibility of customizing the enterprise portal content the way you want it.

Role customized Employee services screen - AX 2012

Timesheet Management functionality Highlights in AX 2012:

  1. Provides flexibility for defining different timesheet periods depending on need.

Timesheet Periods

2. Timesheets overview screen displaying details of exiting timesheets.

Timesheets Overview Screen - AX 2012

3. Option to set timesheet favorites/favorite lines and functionality to load timesheet lines

these from favorites.

Timesheets Favorites Management

4. Option to create new timesheet by copying an existing timesheet (Previous).

Copy timesheets Function

5. Setup delegates for timesheet submission, who can enter timesheets on your behalf in

your absence and manage your timesheet delegates and timesheet favorites right on the

web enterprise portal.

Manage Timesheet Delegates

6. Record time on each individual task/activity or the project by entering suitable internal

and external comments for the description of the work. Week summary to date fact box

which displays the total number of hours entered in the week.

Timesheet Entry Screen AX 2012

7. Employees will have to spend less time in entering comments for each line with the consolidated comments entry screen.

Consolidated Timesheet Comments

8. Automatic workflow can be setup for timesheet approval/review. When timesheets are

submitted, they  get automatically assigned to the respective reporting manager’s queue

for review.

9. Print your timesheets right from the enterprise portal.

Print Employee Timesheets

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Apart from the timesheets management functionality, the enterprise portal  in AX 2012 provided several other powerful business process capabilities and this will definitely help every organization in a very great deal.

Till next time !! Keep exploring. 🙂

Project Quotations Management in Microsoft Dynamics AX 2012: Highlights of it’s Capabilities, Benefits and Usage

Microsoft Dynamics AX 2012 - Powerful, Simple, Agile

Bidding for attractive projects and winning them is a critical process for professional services firms today. As an initial phase of every project, project managers of the organizations use project quotations to approach customers for bidding projects easily and accurately. A typical project quotation will contain all possible details of item and services that are quoted for a project.

With MS Dynamics AX 2012, you can create quotations, create activities in quotations, schedule the activities, soft/hard commit resources, submit and approve quotations and finally convert the quotation to project. You can do all this all few setups and clicks without having the need to doing much of manual works.

In today’s post we will discuss the various capabilities of project quotations and the benefits that project managers can obtain using the project quotations functionality in dynamics AX. These are as described below.

1. You can create project quotations for exiting customers and potential prospects also. Also you can make use of quotation templates to spend less time when creating multiple new similar quotations which you have worked in the past.

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2. Create and setup the work break down structure of the project activities right at the project quotation stage. You can make use of the Copy functionality of WBS to make it easier to create and define the WBS or you can also define a all new WBS for the current quotation.

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3. You can generate the project quotation lines automatically from the work breakdown structure without having the need to create each line separately for the quotation. With AX 2012, you can also copy the lines of quotation from an existing quotation.

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4. Setup all the various required information on/about the quotation staying in one single screen.

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5. Review the estimated profitability of the quotation by just clicking one button.

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6. Match and schedule/soft or hard commit resources for activity requirements of the project.

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7. Submit detailed quotation for approval to the workflow and confirm quote after approval.

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8. Transfer the Confirmed project quotation into an actual project(New or existing) and then run a wizard to create project WBS, forecasts, project budgets etc. automatically right from the quotation.

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Above were few of the highlights of the various capabilities of project quotations in Microsoft Dynamics AX 2012. Please feel free to reach me if you need more information regarding quotations in dynamics AX.

Thanks

Keep DAXING Smile

The Work breakdown Structure(WBS) functionality for Projects in Microsoft Dynamics AX 2012:

Dear Readers,

In today’s post, let us explore the new work breakdown structure functionality for Projects in Microsoft dynamics AX 2012.

Looking for a better ERP for your organization ? Click here

Every professional services organization in today’s competitive world of business, wants to be more accurate in terms of managing each descending level of activities/tasks in the projects they carry out, to manage the costs and revenue efficiently and become more profitable. Breaking down the individual tasks and activities on projects and tracking costs, revenues, managing resources at each task level etc. helps in this.

The work breakdown structure of dynamics AX 2012 is a hierarchical representation of the activities  and child activities in a project and helps the project managers to do the following.

  • Define the overall work scope of the projects.
  • Each descending level of the hierarchy represents increasingly detailed information about the project work.
  • It helps identifying and creating milestones in the project.
  • It also helps managers to soft/hard commit resources to the activities/tasks.
  • Project managers can create WBS templates and use them any time they want to plan a new project. They can also create the WBS directly on a project.

Let us first learn how we can view and create the work breakdown structure template for our organization. The following steps will depict the steps to create new WBS template.

  1. Navigate to Project Management and Accounting > Common > Activities > Work breakdown structure template.
  2. Click New > New work breakdown structure template.

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3. On the Work breakdown structure details screen, click “New” button to create the hierarchy of activities/tasks in the project.

4. Create Planning as the new activity and click New button again by keeping the focus on this activity. Provide activity name, it’s priority and a brief description about it in the designated fields.

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5. On the right hand side, expand the various fast tabs to fill in information about this activity. Expand  the Schedule tab and key in the Duration in days, effort in hours, a default category etc. as shown as an example in the screen above.

6. Expand the Activity requirements tab and setup the resource requirements for this activity in terms of Education, skills, certification, experience etc. This information can be used if you want to make use of the resource scheduling functionality of AX 2012.

7. Setup the estimated costs and revenues for this activity by creating new records under this tab.

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8. Similarly, complete the end to end hierarchy for this WBS template and setup the above explained parameters for each of the activities/tasks.

9. Now that we have created and setup a template for a software development project, let us create a new project and try to use this template in the project to define the task hierarchy for this.

10. For this, create the new project and click Plan tab > Work breakdown structure. Click Copy from button. System will show all the available templates in the system. Select the template and click Ok button.

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11. System will then load the activity hierarchy structure for the project which you can modify as the current project needs. For example you may wish to assign different resources to the activities and the cost and revenue estimates may be different for this project.

The project manager can also carry out the resource assignment task from the WBS screen and by clicking the Assign resources button.

The project managers can also make use of the WBS right from the project quotations level which will help them in automating most of the project planning tasks such as WBS management, budgeting, resource assignments etc.

Please feel free to ask any queries you have regarding the WBS management for projects in AX 2012 and I will be happy to answer.

Thanks

Keep DAXING Smile

Track Project Revenues from Free Text Invoices in Microsoft Dynamics AX 2012

Readers,

In one of my earlier post, I mentioned that AX 2012 now makes it possible to track revenues in Projects that are billed through the free text invoices.

Let us take a look at this functionality today to understand, how it works in reality. This is a very simple functionality but was a much needed one as per me.

First thing we must check when we want ensure to track revenues in projects which are billed through free text invoices is the required parameter setup.

Parameter Setup:

  • Navigate to Accounts Receivables > Setup > AR Parameters.
  • Click Project link/tab.

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  • Check mark the “Display project-related fields on free text invoices” check box.
  • Check mark the “Allow ledger account number to be edited” check box if you want to be able to change the revenue ledger account, which gets defaulted when you choose the project and category in the free text invoice.
    Having done that required parameter setup, let us now go and post a free text invoice.

Create and Post a Free Text Invoice:

  • Navigate to Accounts Receivables > Common > Free Text Invoices > All free text invoices and create a new FTI.

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  • Enter Customer account = 1102. Rest all customer related data will get loaded automatically.
  • Click Line details fast tab and click the Project tab.
  • Enter the required project and category.

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  • Notice that, as soon as you enter the project and category, the main account field gets populated with the main account which is setup in the project posting profile.
  • If you want to change the account, you can do so, as we have marked the check box in AR parameters forms.
  • Now, fill in the invoice description, Quantity and the unit price and finally post the FTI.
  • You can then verify the project revenue and see that this gets recorded in the project.

We are done !

Thanks

Keep DAXING Smile