Intercompany Setup in D365PO (non-stock)

Intercompany Configuration

•       Parameter setup in both the legal entities (Borrowing legal entity – Procurement category, Lending Legal entity – Default Hours and Expense category)

•       Intercompany customer vendor setup in both the legal entities

•       Intercompany setup in the General Ledger setup

•       Project category for expenses to be created in both the legal entities

•       Procurement categories in both the legal entities for IC Supplier Invoice Test

•       For IC Supplier Invoice test, vendor to be created in FinOps and then created in ProjOps

•       For IC Expenses test, employee vendor to be created in Lending entity and linked to the employee

•       Bookable resource created in Lending entity in ProjOps with correct resource role

•       Intercompany Cost and Intercompany Revenue Account in “Ledger posting setup” needs to be setup

•       Employee created in Lending entity in FinOps and associated with the User in System Admin module

•       Price List

•       Two costs price list

•       One for Lending entity – On Organisation Unit

•       One for Borrowing legal entity (Transfer price) – On organisation Unit

•       One sales price list

•       One for Borrowing legal entity – On Project Contract (Pay attention to the “Unit schedule” and “Unit” otherwise the sale price is 0)

•       Unit

•       For Expense (Transaction Category) the Unit should be – Primary Unit

•       For Purchase (Transaction Category) the Unit should be – ea

•       Hence the “Expense” type of Project Categories used for Out of pocket Expense and Pending supplier invoice (Purchase) should be different

•       Customer, Project Contract, Project Contract Line, Project and TASKS created in Borrowing Entity. Tasks are mandatory.

•       “Default offset account for expenses” needs to be setup in the Borrowing entity otherwise integration journal does not bring the offset account for the sales posting. System does not use this “Default offset account for expenses”  but it requires it for posting. This is weird but this is true. System still uses the project posting profile.

•       Check fiscal period is open in Lending and Borrowing Legal entity

•       Exchange rate should be same in ProjOps and FinOps

•       Make sure the Unit of Measure are set to – Fixed unit assignment = Yes (otherwise the Free Text Invoice fails)

     Intercompany Price List Configuration

•        Price Lists

•        UK Cost Price (Type = Cost) – Associated with the loaning entity organization unit

•        Role - Robotics Engineer

•        Cost price

•        US Cost Price (Type = Cost) – Associated with the borrowing entity organization unit

•        Role - Robotics Engineer

•        Resourcing Company – GBPM

•        Resourcing Unit – GBPM

•        Cost price

•        Demo Sale Price (Type = Sales) – Associated with the borrowing entity project contract

•        Role – Robotics Engineer

•        Resourcing Company – USPM

•        Resourcing Unit – USPM

•        Sale price

•        Sales price set “At Cost” for Expense and Purchase transaction categories

 

On-account on a T&M project and dimensions

Dimensions when the customer advance is posted comes from the Project.

Dr AR – Dimensions from Project - 1000

  Cr DeffRev – Dimension from Project - 1000

When the transaction is posted, dimensions come from the respective records like employee or manually selected.

Dr Cost – Dimensions different from project - 200

  Cr Payroll allocation – Dimensions different from project - 200

When the netting off happens at the time of generation of zero value invoice, then the entry is like this:

Dr Deffrev – Dimensions from the project – 200

  Cr Revenue – Dimensions different from the project – 200.

Example with screenshots:

Dimensions on AR invoice for On-account (Deferred revenue)

Dimensions on hours transactions

Dimensions on zero value invoice

Kind regards

Sarang

Customer advance and NTE

 Customer advance created for GBP 12,000 but the NTE value on the project contract header is GBP 10,000.

The customer advance invoice posted without any issues as NTE is not checked at advance level.

The NTE values on the project contract are also unaltered.

First project transaction of expense was posted for GBP 8,000, with a NTE check as "Success & Committed".

This transaction was successfully invoiced and it updated the NTE values on the project contract header. The sale value of expense is marked up by 1%.

Now the next expense was posted for GBP 3000. The transaction has NTE status of "Fail and Failed".

    

This has posted the cost and sale transaction on the FinOps side, which is actually not correct. Only cost should have been posted. The sale accrual should not have posted as this transaction has crossed the NTE limit.

The cost and sale voucher.

The transaction which has surpassed the NTE limit, system will not allow that transaction to be invoiced.

The only option in this case is to increase the NTE limit on the project contract header and then re-evaluate the transaction for NTE limit.

The transaction re-evaluation for the NTE limit is done using this button. (Re-evaluate Not-toExceed)

Once the transaction is re-evaluated, then the transaction status changes to "Committed".

This transaction can now be invoiced. After the invoice, the remaining NTE value is as below:

Also the remaining Advance value is as below:

If the project ends now, then question is how do we return the remaining GBP 890 back to the customer.

To do this, we need to navigate back to originally posted advance invoice for GBP 12000 and click "Correct this invoice". The system is smart enough to note that it has to create a negative invoice (credit note) for ONLY the remaining value. 

Once "Correct this invoice" button is clicked, the total amount is the remaining amount as seen in the screenshot.

And then the normal invoice procedure to continue.

Above step of "Correct this invoice" can also be done after the invoice is "Mark invoice as paid" is clicked.

After the confirm button is pressed, the invoice / credit note will be processed and will be posted in FinOps.

Thanks 

Sarang

Creation of Credit Note in ProjOps

 Once the invoice is "Confirmed" in ProjOps and project invoice proposal "Posted" in FinOps , user can create a credit note by clicking the "Correct invoice" button, which creates a negative invoice in ProjOps.

Once the negative invoice is "Confirmed", then system does NOT automatically create a negative project invoice proposal in FinOps. System gives this error:

The user has to then import the data from staging table (if not automatic, like the way this step is followed for any other project transaction) and then post the project operations integration journal. After this step, the negative transaction starts appearing in the "Posted project transaction" screen and the negative project invoice proposal starts appearing in "Project invoice proposal" screen in FinOps, which can then be posted.

Project Contract - Before and after confirmation

Scenario 1 - Change of cost and sales price before confirmation of project contract 

Before project contract confirmation, the time transaction has following actuals transactions:

The cost and sales price are updated and the project contract is "Confirmed". This is the message which system gives. Highlighted part is important.

After project contract confirmation, the time transaction has following actuals transactions:

Now if the contract is lost, then the system reverses the "Unbilled sales" as seen below:

Scenario 2 - No change of cost and sales price before confirmation of project contract 

Before project contract confirmation, the time transaction has following actuals transactions:

If there is no change made to the cost and sales prices and if the contract is confirmed after the posting of transaction, this is what happens to the actuals - nothing.

After the contract is lost.

Scenario 3 - Change of cost and sales price after invoicing but before confirmation of project contract 

Before project contract confirmation, the time transaction has following actuals transactions:

The time transactions will now be billed by changing the status to "Ready for invoicing"

Once invoiced, the "Unbilled sales" are reversed and the " Billed sales" is generated.

Now if the cost (is changed from 270 to 290) and sales (is changed from 350 to 380) prices are changed and the contract is confirmed, this is what happens. The transactions that are billed remains unchanged, refer to the transactions in RED. The transactions that are yet to be billed, are updated with new prices as described above, refer to the transactions in BLUE.

But the system is smart enough to understand that the new "Unbilled sales" should appear in the back log transactions area:

Straight Line Rev Rec - Observation with respect to dimensions on individual milestones (On-account)

If there are two on-account (milestones) lines on the Straight Line Rev Rec project, with different dimensions, other than the one on the project, for example as below, then rev-rec line ignores the dimensions on the lines and inherits the dimensions from the project.

If the project has no dimensions, then the rev-rec line also will inherit no dimensions, even if there are dimensions on the on-account lines and even if the dimensions on the on-account lines are same.

So effectively what system is doing is, ignoring the dimensions on the individual on-account lines and ONLY inheriting them from the project.

Dimensions on the project

On-account (milestones) lines on the project

Dimensions on the first milestone line

Dimensions on the second milestone line

Dimensions on the rev-rec line

Invoice, Invoice in Advance and Invoice in Arrears - T&M

 

Scenario 1 - Rev rec at Invoicing

Fee Journal

DR Project WIP Sale Value (B/S) – 1000

                             CR Project Accrued Revenue - Sale value (P&L) – 1000

              Expense Journal – Consumption

              Dr Cost – 500

                             Cr – B/S – 500

Dr Project WIP Sale Value (B/S) – 500

                             CR Project Accrued Revenue - Sale value (P&L) – 500

Invoice

Dr Project Accrued Revenue - Sale value (P&L) - 1000

              Cr Project WIP Sale Value (B/S) – 1000

Dr Project Accrued Revenue - Sale value (P&L) - 500

              Cr Project WIP Sale Value (B/S) – 500

DR Accounts Receivable (B/S) – 1500

              Cr Project Invoiced revenue (P&L) - 1500

 

Scenario 2 - Advance Invoice

Invoice in advance

DR Accounts Receivable (B/S) – 12000 – Accounts receivable

                             CR WIP Invoiced – On account (B/S) – 12000 – Deferred Income

Fee Journal

DR Project WIP- Sale Value (B/S) – 1000

                             CR Project Accrued Revenue - Sale value (P&L) – 1000

              Expense Journal – Consumption

              Dr Cost – 500

                             Cr – B/S – 500

Dr Project WIP - Sale Value (B/S) – 500

                             CR Project Accrued Revenue - Sale value (P&L) – 500

 

Invoice month end – month one – Invoice value - 500

                            Dr Project Accrued Revenue - Sale value (P&L) - 1000

              Cr Project WIP - Sale Value (B/S) – 1000

Dr Project Accrued Revenue - Sale value (P&L) - 500

              Cr Project WIP - Sale Value (B/S) – 500

DR WIP Invoiced – On account (B/S) – 1000

Dr AR - 500

CR Project Invoiced revenue (P&L) - 1500

On-account Advance invoice voucher

Fee posting voucher

Matching the fee with advance (rev rec) – Zero value Invoice

Zero value invoice document

 

Scenario 3 – Invoice in arrears

Fee Journal – to recognise the revenue

DR Project WIP Sale Value (B/S) – 1000

                             CR Project Accrued Revenue - Sale value (P&L) – 1000

Expense Journal – Consumption

              Dr Cost – 500

                             Cr – B/S – 500

Dr Project WIP Sale Value (B/S) – 500

                             CR Project Accrued Revenue - Sale value (P&L) – 500

Invoicing quarterly (Invoice Value – 3,500)

Dr Project Accrued Revenue - Sale value (P&L) – 3,000

              Cr Project WIP Sale Value (B/S) – 3,000

Dr Project Accrued Revenue - Sale value (P&L) - 500

              Cr Project WIP Sale Value (B/S) – 500

DR Accounts Receivable (B/S) – 3,500

              Cr Project Invoiced revenue (P&L) – 3,500