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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Revenue Budget Consump...
Finance | Project Operations, Human Resources, ...
Suggested Answer

Revenue Budget Consumption and Commitment Cost

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Posted on by CU20091332-0 42
Hello Experts,
 
Can anyone help me with the query below in D365 F&O.
 
I have entered cost and revenue budget for fixed price projects, when I am making transactions, the cost budget is consumed and updated correctly in committed cost as well.
But revenue budget is not consuming while adding on-account transaction and creating invoice proposals and project invoicing.
 
Screenshots are attached.
2025-10-21_10h48_09.png
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Categories:
Dynamics 365 Finance
Microsoft Dynamics AX
Dynamics 365 Project Operations
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  • Suggested answer
    SajeedMullaji Profile Picture
    SajeedMullaji 840 on at

    @CU20091332-0 
    this is a fundamental architectural point in how D365 handles fixed price projects — revenue budget consumption is not tied to invoicing at all.

    On-account transactions are billing milestones that hit Balance Sheet WIP accounts, not P&L revenue. When you look at the Project Budget lines form, the transaction types available are Hour, Expense, Item, and Fee — there is no On-account type. The system has no native mechanism to map an on-account billing event to a budget line, which is why your revenue budget shows no consumption regardless of how many invoice proposals you post.

    The fix is to stop trying to link revenue budget to the invoicing process and link it to the Revenue Recognition Estimate process instead.

    Two steps: First, check your Project Group or Cost Template to identify which project category is defined for Sales value — this always runs as a Fee transaction type in the background. Second, go to your Project Budget and recreate the revenue budget line using Transaction type Fee, selecting that exact Sales value project category.

    Once that's done, revenue budget will consume — but only when you run and post the periodic Estimate. The accrued revenue generated by the estimate engine hits the Fee category and updates the budget actuals. It will not update from invoice proposals.

    The main thing to set expectations on with the business: project managers will see their revenue budget untouched all month even while sending out large milestone invoices. In D365, fixed price budget consumption is exclusively tied to the month-end finance Estimate run. Training the business on this distinction prevents a lot of recurring support tickets.

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

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