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How to deal with Prepaid Service Contrat and Hours consumption

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Posted on by Community Member

Hi,

My user case :

.Each Month, a customer purchase a few amount of Hour of services :

Ex : 8 hours per month

Why ? Because it is a TMA contract , and to have a fixed price , the customer have sign this kind of contract. ( I thing it is The Prepaid Service Contrat notion )

So , the service companie who sell this hours, consume this hour when happend a case for this customer.

Even if during a month, the consumsion is 20 hours, I want to invoice the 8h ( the initial contrat ) and only If I want , invoice the 12 extra the same month, or later.

Or , if I only consume 5 hours for the month, I will invoice 8 hours as well, and it will be a credit for the customer of 3 hours, usable the next month or with not time limit.

The consumsion will be made with the Timesheet for each consultant.

So my question :

Can I use the Service contrat to follow this kind of contract or Job module ?

And How ?

thank you

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Bryan Tschosik on at

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Hi Julien,

Thank you for your post on this interesting topic. This is Bryan from NAV/BC Support team. I hope you are doing well and staying safe and healthy.

I've been researching and testing some different alternatives for you. I'm not sure if this gets you closer to where you want to be, hopefully it gives you some options...and perhaps someone else has some other idea, or idea to build off this. I don't have the most experience in the Service Management area I'll admit, so maybe someone that knows it real well can provide some further value.

To me you have 2 options. You'd really want to test both of these to iron out any wrinkles or/and confirm what may work best for your situation. I will list the 2 options below.

1. Use Service Contracts as they have a signed contract with the customer, as you pointed out, and you can post the initial prepaid Contract (worth $x hours) to the customer for a number of hours.
-I also setup a Resource Card called 'Prepaid Hours', and you can set your Cost and Price on that, and use it later.
-I setup a Service Item called "8 Prepaid Hours" for my customer.
-After I billed the Customer the 8 hour Service Contract Invoice, you can create a Service Order for when your customer uses those prepaid hours.
-On your new Service Order, assign your Customer, the Contract No., and the Service Item "8 Prepaid Hours"....
-Then just above the Service Line where you entered the Service Item, choose More Options > Order > "Service Lines".
-You can enter your Resource initially setup, and the Quantity.
...Say the Customer wants to use 8 of the hours they purchased and so you enter 8 Quantity.
...Now notice here you have some different columns.. 'Qty. to Ship', 'Qty. to Invoice' and 'Qty. to Consume'.
...Here you can choose to A. Ship and Invoice which will create an Invoice for the customer, or you can also Ship and Consume. Here you will want 'Qty. to Ship' = 8 and the 'Qty. to Consume' = 8. Then you can track on your Contract how many hours were consumed...it will show 8... you've already prebilled the customer for the Prepaid 8 hours.
-If they want to use more hours or/and you decide you want to bill, then you can run similar steps and Ship & Invoice...which will of course create the invoice for those hours.
--Please note, this is a rough draft, so you can play with it an work out any kinks. There is much to the Service Management area so additional details would need to be worked out in regards to pricing, discounts, etc....but these are many to cover here in a forum post.

2. The 2nd option is to not use Service Management, and just use Jobs.
-Here you can create a Job for your Customer with Job Task and under it, a Planning Line for your Resource.
-For this Resource Planning Line, you want to have the 'Line Type' set to "Both Budget and Billable"...or separate them into 2 lines, one for Budget and one for Billable.
-You can create an Sales Invoice for the Customer from one of the lines that includes Billable...in order to bill them for the 8 hours prepaid and then any further billable lines you can add as well and bill the same.
-You can post Job Journal for your Resource against your Job with a "Blank" 'Line Type'....or if using Time Sheets, update them.

Those are some ideas you can play around with. I hope it helps or/and invites others to comment with some value to help you out. Thanks for posting and have a nice weekend:)

Bryan

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Community Member on at

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Hi Bryan,

First of all, thank you to spend time trying to help me and the Community.

I have done all you suggested for the Service Contrat option, and I Don't thing it is very easy to use and to understand for a a Customer. But it will do the job.

I was investing the 2nd Option, The job.

And I thing it is easier for that purpose.

So , What I have done :

1 / Create a Job. ( link activated, Allow planning line Budget and Contract)

2 / Add a generic job line : TMA

3 / On this job planning line, I have Added..Nothing !!

Why ? Because I will use the Recurring Job Jnl. , and will add a line with :

- Fixed amount

-the periode 1M ( if y contract is monthly invoiced ),

-posting Date : last day of the month

-Line type "Contrat"

-Projet Number : My job which represent the contrat with my Customer

- Projet task : The generic job line I have create in the step 3

- Type : a general account , it is a revenu account , the service One.

=>I thing as well as a Type Item, with an Item with Type =Service ( NOT a service ITEM in the Service Module )

Will try this solution as well.

-Description : Monthy fees for TMA - 8hours

- Quantity : 8

- If the Type is Item and not GL account, can use Unit = hours

- And if you have'nt configure the price of this GL account , or item, on the Job Price policies( Job Card Itself ) , set it manually on the line.

but I like to set the price per Ressource, Item, and GL account on the Job iteself, it is really what we are doing in the contrat itself :) ,

So , for each contrat , I add A line in the reccuring Job Jnl

What Happen in the month ?

All consultant Will use TimeSheet to say :

I have worked on this Job , X hours, and some days.

They only will have to select the job , and the generic line, and the Work Type ( Consulting, Support, Dev,etc….)

The question is , have I to check Billable or not ? => for now, I Don't know…. I will investigate more about that.

So what the task I have to do each Month for invoicing the previous month ?

-1 / I have to Post the Recurring Job Jnl.

=> This Step will ensure that all Job ( so contract ) , will be able to be invoiced for the Initale Amount ( the 8 hours in my example)

- 2 / Create Job journal from the time Sheet

=> This step will post the activities for all consultant during the month, using the create from TimeSheet line batch.

The question is : What Type of line have I to set : Budget , Contract, or both ?

My first idea is to set it as Budget. And later calculate if we have work more than 8 hours this month, and when we agreed with the Customer on the extra hour to invoice, add it in a Job journal with the type Contract.

3 / Then, when My usage are all posted, and the Job journal and recurring Job journal are posted as well, I can use the Batch , create invoice for Job.

And I will set the flowfilter : planning date, for the last day of Month I want to invoice.

And , all the Invoice are created.

It is a draft process I am trying to use , but Don't know if there is a better way to answer to that purpose.

Some Reason why I prefer the Job module than the Service Contract for that purpose :

- Job invoice, are sales Invoice, and can have Incoming Document, and can be send by mail with all file in attachement automatically, whereas the service invoice Don't have this functionnality.

- Job Recurring Journal make the same thing as Service Contract , Registering Each month the activities, but the service contract is more straight to create a invoice each month. You can delete the invoice, correct the job activity, and invoice again.

- When Using TimeSheet for Service, the Activities are automatically Posted for the Service ( if the option is checked in the Service Setup ) , And for the Job, you have to do it manually ( see Task 2 of my Monthy task explained previously ). But some customization, can achieve the same functionnality for Job.

- Job invoice are more flexible, to cancel, make credit memo, etc... Service Invoice cannot be deleted , you have to post it, and then create a credit memo.

- With the job Activities, I would be able to create a "Hours Spend Follow Up By Consultant Report", and make the negociation with my Customer for the billable Hours.

This is only my experience as " it is" for now, and still will work on it to see if it can be done like that, or not….

I am open to talk about that , thank you for sharing.

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Rehan Satti 634 on at

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I think the Job module, because you can use Time-sheet and Job Journal, You can setup tasks in different ranges against a job to identify them as billable budgeted. for example tasks 1000 to 5999 are for project execution and costs and tasks 9000-9999 are for billing. You can setup a billing schedule in the planning lines.

Hope the following walk through will help.

https://docs.microsoft.com/en-us/dynamics365/business-central/walkthrough-managing-projects-with-jobs

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Community Member on at

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Insurance is an excellent example of a prepaid expense, as it is customarily paid for in advance. If a company pays $12,000 for an insurance policy that covers the next 12 months, then it would record a current asset of $12,000 at the time of payment to represent this prepaid amount. In each month of the 12-month policy, the company would recognize an expense of $1,000 and draw down the prepaid asset by this same amount.

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Community Member on at

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Hi lewis,for that , I use the standard functionality : referal expense or revenu.

docs.microsoft.com/.../finance-how-defer-revenue-expenses

For BC is the same....

Don't need Job module at all neither service.

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Community Member on at

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Hi , thank you for you comment.

But have you some advise regarding my initial purpose ?

It not really about how job module work , but how to deal with the initial purpose with the standard job module ,and to verify if the requirement can be covered.

Thank you

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Ola Darwish 915 on at

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Hi Brian,

I m trying to use the first solution that you proposed because my client is in fact using service management module. only thing that I cant figure out, if I create a resource called 35 hour billing, assuming that the number of service hours that they bought is 35, and they will consume them via service orders. The solution looks good until i get to how will that work with the resources using timesheets. if a service order is issued against that contract, I will get the hours from the employees timesheets, so the resource 8 hours wont be really used. how can I make the suggested solution work with resources timesheets?

Thanks

Ola

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