Intercompany Customer Invoicing for Project resources sharing in CU7 and AX 2012 R3

Intercompany Customer Invoicing for Project resources sharing in CU7 and AX 2012 R3

Hello,

Multinational Professional Services firms often share workers between their legal entities to staff the projects with the right skill sets. When the workers of one entity works on the projects of another entity of the same organization, they bill their time and expenses to those legal entities for which they work on the projects.

Microsoft Dynamics AX has introduced several enhancements to this area over the last few releases to facilitate how these business scenarios can be easily accomplished in the ERP solution.

In one of my earlier posts, I explained how the intercompany timesheets and expenses works in AX 2012 R2 CU6. With the release of CU7 and the R3, AX has taken a step forward by enhancing this feature and adding the capability for the legal entities to be able to invoice each other for the resources they share for projects and also allow them to stay true to the compliance and the legal requirements of tax liabilities etc. Until the CU6 release, the intercompany transaction was directly handled in the ledger transactions only and the ledger accounts were updated as soon as the timesheets were posted. In the R3 release with the introduction of this new functionality, the companies can adjust the amount which are charged between them.

In today’s post let us take a look at this new enhancement which has been introduced in the CU7 and the R3 release.

Throughout the demonstration in this post we will consider “USMF” as the Resourcing entity(Lending company) and “USSI” as the Contracting entity(Borrowing entity). Sandeep Chaudhury is a full time employee of USMF, and works on the project of USSI as he has the desired skill set required for the project.

Setup and Configurations:

  • The first thing to notice is the necessary setups which are needed for this new functionality to work. Go to PMA > Setup > Project Management and Accounting Parameters form.
  • Notice the new “Intercompany” tab link which contains the required setup parameters for this new functionality.
  • You can setup the option of ‘Accruing the revenue’ in the resourcing entity for each of the entities to which the resources are lend. When the ‘Accrue revenue’ check box is marked, the revenues in the resourcing company will be accrued immediately when the intercompany timesheet is posted and these revenues will reverse automatically when the intercompany project invoice is posted.

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  • The next setup is to establish the trading relationship between the resourcing and contracting company. This means that the Contracting company needs to be a Customer in the resourcing entity and the resourcing entity needs to be setup as a Vendor in the Contracting company.

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  • The other miscellaneous setup are to setup the Transfer prices and the necessary ledger posting profile for the Intercompany accounts in the resourcing company. You will notice here that there are several sales price models which you can now specify for the transfer pricing between the entities.

Timesheet Submissions and Ledger Posting:

  • Sandeep Chaudhry submits the intercompany timesheet as shown in screenshot below.

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  • Below screenshot shows the voucher transactions and ledger account postings when the above timesheet is approved and posted. Notice that system has updated the “Intercompany cost” and the “Payroll allocation” amounts for each of the timesheets lines and also notice that the “revenue is accrued in the designated ledger account” (marked in screen below) and intercompany revenue is not yet updated. This will get updated when the intercompany invoice is posted.

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  • At this point you will also  notice that there are no transaction created in the “Contracting legal entity” for the Project and the general ledger. The timesheet transactions will appear as Pending Transactions and are not yet posted.

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Intercompany Project Invoicing and End Customer Invoicing:

  • When it is time to bill the end customer, the resourcing company will generate the intercompany invoice to the contracting legal entity and this will automatically create a Vendor Invoice in the Contracting entity. Let us now see how the Intercompany project invoice is initiated.
  • In the ‘Resourcing Company”, go to Project Management and Accounting > Common > Project Invoices > Intercompany Customer invoices.

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  • Click New > Intercompany Customer Invoice to launch the “Create Invoice Proposal” form. Note that this is not the typical project invoice proposal form of the standard Project invoicing process. This is specifically designed for the Intercompany customer invoicing. (This works like a Free Text Invoice)
  • Select the Legal entity and other applicable filters such as Project Contact, Project, Start and End dates and also Select the transaction types which you want to include in this invoice (Hour/Expense/Vendor Invoices) and click the Search button. The below screenshot shows the transactions which for the timesheet for Sandeep Chaudhury which was posted above.

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  • Select the transactions which you want to include in the invoice and click OK button. The system will generate the “Intercompany Customer Invoice” open the invoice details screen. Notice that Customer details are auto populated from the trading relationship which we have setup above.

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  • Notice here that you can Add or remove the lines from the invoice. You can also adjust the amounts (Prices) which are charged between the companies. After verifying all the details of the invoice, Click Post and print the invoice and send it to the Contracting company.

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  • After the invoice is posted, notice that the revenue which was accrued in the resourcing company has now been reversed and the Actual intercompany revenue is updated.

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  • The next step is to verify that system has now automatically created. Navigate to the USSI legal entity > Accounts Payable >  Vendor Invoices > Pending Vendor Invoices.
  • Notice that the vendor invoice for the Resourcing company is automatically created and ready for validation and posting.

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  • Once you validate and post the vendor invoice, the system will also post the Project transactions updating the Project Cost in the Contracting entity and also creating the transactions which can be ultimately billed to the end customers.

Well, this is it for today. Stay tuned and keep learning…Till next time..

-Sandeep

Missing Timesheets Report – Microsoft Dynamics AX 2012

Missing Timesheets Report – Microsoft Dynamics AX 2012

Hello Everyone,

First of all, I would like to wish you all very happy and prosperous holidays and hope you all are enjoying with your families and relatives.

And, So do I ! I took a long vacation from blog writing and work and had wonderful time with family and I am back again here.

In today’s post, we will discuss a very small report/functionality of Microsoft Dynamics AX, which is the “Missing Timesheets Report”” under the Project Management and Accounting Module.

Timesheets are critical for any service industry to be able to invoice their customers effectively on time, as they are the source for the invoices. Making sure that all the employees submit their timesheets on time is very important for the service industries in terms of project management, accountability, invoicing customer and getting paid.

AX 2012 provides a a report called “Missing Timesheets” which tells which employees have not submitted their timesheets for a given period, so that you can communicate with them to make sure the timesheets are in.

Let us take a look at how this is configured in AX and how does it look like.

  1. To begin with, I will need to ensure that all my configurations and setup for worker and timesheets are correct.
  2. Navigate to Workers > Project Management Tab and make sure there is a timesheet period attached to the worker.

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   3. The next step is to make sure that the “Worker timesheet periods are updated along with billable and efficiency hours data.

   4. Go to PMA > Setup > Timesheet > Periods, Select “EmplWeek” and Click Update worker periods.

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    5. Now, the worker “Alan Brewer” has not submitted his timesheets for the week 12/23 to 12/29. Let us generate the Missing Timesheets report and see how it looks like.

    6. Go to PMA > Reports > Timesheets > Missing Timesheets. Let me explain the options on this report.

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    Period Code: Select the timesheet period code for which you want to generate the missing timesheets.

   Start date: Select the start date of the Week/Bi-Week(Depending on what is your timesheet period).

    All Employees: Mark this check box if you want the report to list all the employee who have already registered their hours.

    Send e-mail: This check box misleads by its name. It does not really send email to the employees for whom the timesheets are     missing in the given period. For me, this is limitation and you could write custom code (Will not be complex) to send emails.      When you mark this check box, the “E-mail sent” column will show “YES” if the an email id is setup for the worker in the worker     master and will show “NO”, if there is not email ID.

   7. Finally, let us see how the final report looks like.

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   See that, Alan Brewer is listed in the report, as he has not submitted his timesheet for the week 12/23-12/29. Also, there is no email ID specified for Alan, so the “Email   Sent” column shows “No”.

When you write the custom code to send emails, you could also set this report to run automatically at end of every timesheet period, so that the report can be automatically sent to the accounts receivable team for their action for follow ups and also an automatic email can be sent to the employees directly asking to submit timesheets.

NOTE: Please see the conversation below between myself and KK, where he says the CU 7 now has the functionality of sending emails. This means that you will no more require to write custom code for this. Thank you KK for providing this information.

Thats it for today’s post. Till next time !!!

Aston Martin selects Micrososft Dynamics AX 2012

Aston Martin selects Micrososft Dynamics AX 2012

Aston Martin, the renowned automaker, switches gears with Microsoft Dynamics AX 2012.

Another success story with Microsoft Dynamics AX.

The flexible and seamless integration of all ledgers including General, purchase, fixed assets and sales, made Aston Martin’s operations and information flow more easily and efficiently than before.

Read the success story in the link below.

http://www.microsoft.com/en-us/news/press/2012/jun12/06-19AstonMartinPR.aspx

Way to go !

Thanks

Sandeep