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ReportI need every milestone invoice to record cost with fixed proportion equals to the ration of total cost to total revenue.
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I need every milestone invoice to record cost with fixed proportion equals to the ration of total cost to total revenue.
Hi Bmarzouk,
That solution will give you the end result you are after but it is quite complex. Also be aware you will not be able to report against the project within the projects module as you are eliminating it to a fixed asset that doesn't actually exist. This means overall reporting will be in the GL only so make sure your customer is happy with that.
Also solution will currently not work with Project Operations as you cannot eliminate to ta fixed asset.
Have you also looked at this functionality, the new revenue recognition within Sales Ledger allows you to defer costs for Projects - (Also not in Project Operations).
https://docs.microsoft.com/en-us/dynamics365/finance/accounts-receivable/revenue-recognition-setup
Thanks
Mark
I use Project management and accounting module in Microsoft Dynamics 365 Finance and Operation. The requirement is to let the system recognizes the cost of milestone invoices of fixed price project as fixed percentage of milestone invoices. This percentage equals to the ratio of total estimated cost to total estimated revenue of the fixed price project.
I found an ideas in this link, Recognize Revenue and Costs Over Straight line over project life | D365 Finance & Operations and Dynamics AX Forum (axug.com) which is to create one project and two sub projects of type (investment and T&L) and use fixed asset depreciation (manual depreciation profile in my case).
If one have other best practices for this or customized solution please let me know.
Hi Bmarzouk,
Cost recognition is not a functionality D365 Proj Ops or Std Finance PMA offers in relation to a revenue amount. The principle works the other way around. The cost base is used to calculate how much revenue to recognise based on a completed percentage or quantity value of the original and revised forecasts.
If your requirement is to smooth out costs over the lifespan of a project then you need to accrue/prepay the costs in that manner, though in Proj Ops you would need to implement a solution for this as currently you cannot post GL journals to Projects.
Hope that help
Mark
Hi Bmarzouk,
I have a customer with a similar request. If your requirement is to post cost in line with revenue this cannot be achieved through revenue recognition. Revenue recognition works in the opposite manner, it works out the revenue to release based on the cost base. So cost is the driver for revenue recognition.
If you need to smooth costs out over a project then you would need to set up accruals/prepayments to facilitate this.
Hope this helps
Mark
Hi bmarzouk,
Do you have a fixed-price project where you need to post estimates according to a percentage of completion? Or is your project invoicing based on time and material? Please provide some more clarity and additional information.
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