Intercompany project timesheet in Microsoft Dynamics 365 Finance and Operations

Intercompany project timesheet in Microsoft Dynamics 365 Finance and Operations One version

Intercompany transactions are needed when some professional work is performed by personnel from one company for project/contract in another company.

This requires tracking time for resources between companies across projects and ensuring accurate payables and receivables between the legal entities.

Such shared resources log their hours in timesheet in their company which is known as loaning entity for project work which belong to a end customer in another legal entity also known as borrowing entity.

Sharing knowledge on how to achieve this in D365FO in two blogs.

This blog focusses on core setup needed to enable intercompany timesheet tracking between loaning and borrowing entities.

For the purpose of example, using USMF as loaning entity and USSI as borrowing entity in demo data.

Ensure the employee/worker is employed in both companies as shown below.

We need this person to be setup as a project resource to be able to submit timesheet in loaning entity

Enable intercompany time entry in Project management and accounting > Setup > Project management and accounting parameters- Enable intercompany resource scheduling and timesheets flag.

Provide a project category using category hierarchy and having project category assigned to it

Ensure in projects module under ledger posting profiles, setup is complete for Intercompany cost and Intercompany revenue accounts.

In the loaning legal entity the hours worked for projects in another legal entity will not be associated to any project; therefore the cost and revenue in the loaning legal entity will be posted to the intercompany cost and Intercompany revenue accounts.

In the borrowing legal entity the cost and revenue are posted to the project for which the borrowed resource reports time.

Specify the accounts for the due-to and due-from charges between the loaning and the borrowing legal entities in General ledger > Setup > Posting > Intercompany accounting

1. • In the loaning legal entity, specify a receivables type account in Debit account.
   • In the borrowing legal entity specify a payables type account in Credit account

Next to setup is Transfer Price and cost price for resource usage between legal entities in loaning entity.

1. • Define Cost prices to specify intercompany cost.
   • Define transfer price which borrowing entity agrees to pay to loaning entity. Transfer prices are used to compute the intercompany revenue in the loaning legal entity and the project cost in the borrowing legal entity.

Last we need to ensure there is an intercompany customer defined in loaning entity and a corresponding intercompany vendor defined in borrowing entity using trading relationship as shown below

This should do it for our core setup and configuration for intercompany timesheets.