Project prebill/prepayment/advance in Microsoft Dynamics 365 Finance and Operations One version

Project prebill/prepayment/advance in Microsoft Dynamics 365 Finance and Operations One version

Many times we need to collect advances from customer for whom project work is being performed.

D365FO supports this prepayment/advance using a prebill feature in project management and accounting module.

Your project structure is important and we would use a time and material (T&M) project to accomplish taking an advance from a customer.

Assuming you have a project contract and a T&M project defined with supporting posting (specially WIP-invoiced on account) and category setup.

Sharing steps with visuals as below to cover prepayment in full or partial :

1. To setup a customer advance in D365FO in T&M, we need to create a prepayment line in on-account screen
   1. This would automatically create the deduction line amount matching the prepayment
   2. Prepayment amount is the one which we would use to bill the customer to collect the advance.

1. Generate an Invoice proposal, let us say for 1000 USD
   1. For receiving split advance use the option shown below which would be needed to be matched manually with invoice amount to relieve accruals/deferrals based on initial prebill invoice.

What happens if we split the advance and would like to receive only 33 USD, it would like below

1. Always match allowed deductions to reduce accounts receivable AR effect on regular project invoices which would ensure revenue is recognized and deferrals reversed.
2. Final invoice voucher for regular project invoice should not show AR and only revenue and WIP/deferrals

Behind the scenes, D365FO split the original on account deduction line and used the matching amount in a regular project invoice.

Happy D365FO