Dynamics Community Forum Thread Details

Multiple revenue recognition in Fixed price project

Hello community,

I'm struggling to recognize revenue and eliminate multiple times in fixed price projects in D365 F&O:

Business process:

Sign the contract with the our customer to provide a consultancy service (fixed price project).
Invoice the first 50% of the contract value upon signature (posted to WIP invoicing account).
Post hours in the project.
Invoice the last 50% of the contract value after service delivery.

What has been done:

I could configure all the necessary parameters to allow invoicing to the WIP account, recognize the revenue and eliminate at the end of the project to transfer revenues from the WIP account to the revenue account.

Issue:

Now the revenue is fully transferred after the elimination which happens at the end of the project which may not comply with the audit principles as we are not recording the revenue of the first invoice in the right period (one month in my case).

The desired outcome:

We are looking to recognize and eliminate every month to transfer revenues to the revenue account and recognize it in the correct period, instead of waiting till the end of the project and transfer the total amount. I tried to do so with the current configuration, I could recognize revenue multiple times (every period) but I could eliminate only one time at the end of the project as you can see in the screenshot.

Please let me know if any other details are needed to answer my question and I will be happy to provide that.

Best regards,

Walid.

Categories:

Dynamics 365 Finance

Dynamics 365 Project Operations

@WA-14062325-0
walid, you don't need multiple eliminations — the ledger posting mapping is what's causing the issue.

In standard D365 F&O, Fixed Price projects can only be eliminated once at completion. The multiple elimination feature introduced in 10.0.49 applies to Investment projects only, not Fixed Price. But you don't actually need monthly eliminations to recognize revenue in the correct period — the monthly Estimate is the revenue recognition event. The problem is that the posting profiles are parking revenue on the balance sheet instead of hitting the P&L directly.

Fix the posting setup: Go to Project management and accounting → Setup → Posting → Ledger posting setup → Revenue tab. Map Accrued revenue - sales value directly to your actual P&L Project Revenue account. Map WIP - sales value to a Balance Sheet Asset account. Map WIP invoiced on account to a Balance Sheet Liability account.

Once remapped, the mechanics work correctly: when you run the monthly Estimate, the system debits WIP - sales value and credits Accrued revenue - sales value — revenue hits your P&L in the correct period immediately. When you invoice, Accounts Receivable is debited and WIP invoiced on account is credited on the balance sheet. At project end, the single elimination simply washes the two balance sheet WIP accounts against each other to clear them out.

The reason this causes confusion is the posting type name — Accrued revenue sounds like a balance sheet holding account, so functional consultants often map it there. When the P&L stays empty after invoicing, the assumption is that elimination is needed to release it. Changing that one mapping to your actual P&L account solves it completely.

Hope that helps — feel free to mark as verified if it resolves the issue.

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