Milestone Based Vendor Payments on Purchase Orders in Dynamics AX 2012 R3

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Posted on by MAHADEV SHIRAGANVI

Dear All,

Our Company is purchasing services or goods that require milestone payments. Company signs an agreement with a vendor and generates a PO for amount of the agreement. Payment term are based on mile stones, for example 30% at start of project, 30% up on completion of a major milestone, 30% prior to delivery and 10% close of project.

This scenario occur for both product purchases, such a specialized equipment, and services such as consulting or design services.

Requirement:-

- We need to setup AX to process such purchase scenarios.

- We have already considered the scenario of entering the milestones as line items in a PO.

- We would prefer to do this without customization.

Any one knows how to get this functionality or any suggestions.

Thanks and Regards,

MAHADEV S

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Matloob 781 on at

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Hi Mahadev,

Why not you guys are using project accounting module ? where you can record advance payment from customers, delivering partial goods to customer, charging and invoicing based on milestone ?

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André Arnaud de Cal... 301,109 Super User 2025 Season 2 on at

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HI Mahadev,

You said you already considered the scenario to create multiple lines. What is the outcome for you? Can you use it or not?

When the vendor will send separate invoices, you can consider creating a service item with the fixed unit price of $ 1. The quantity field will hold the total amount. You can then register every invoice where the amount will be filled in the quantity field as the unit price remains $ 1.

For services this works fine. I would not recommend this or creation of multiple lines when you buy physical products.

As you tagged this question with AX 2012, you can also use lines with categories to be used when you receive installments. On the last invoice you can have the product and negative category line to revert the pre payments.

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André Arnaud de Cal... 301,109 Super User 2025 Season 2 on at

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[quote user="Mohammad Matloob"]

Hi Mahadev,

Why not you guys are using project accounting module ? where you can record advance payment from customers, delivering partial goods to customer, charging and invoicing based on milestone ?

[/quote]

Hi Mohammad,

The question is related to purchasing, not related to customers. ;)

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Matloob 781 on at

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Thanks Andre :)

I misunderstood this line in original question,

"This scenario occur for both product purchases, such a specialized equipment, and services such as consulting or design services."

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Community Member on at

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Solution for above milestone

First we need to create a purchase agreement against the vendor to fix the price, quantity and quality with terms of payment, in this scenario quality will be the milestone if the quality is maintained then milestone is completed.

Based on that agreement release the purchase order and received the quantity as ordered if product quality is matched then book the Invoice against posted Product receipt and release the payment through ACH/EP.

Example-:

Ordered quantity -100, Unit Price- $10/-, Net Amount- $1000/-

First Invoiced quantity- 30, Invoiced amount -$300/-

Vendor Payment through ACH- $300/-

Second Invoiced quantity- 30, Invoiced amount -$300/-

Vendor Payment through ACH- $300/-

Third Invoiced quantity- 30, Invoiced amount -$300/-

Vendor Payment through ACH- $300/-

Fourth Invoiced quantity- 10, Invoiced amount -$100/-

Vendor Payment through ACH- $100/-

Now here we are making the payments in AX through ACH.

First create the payment journal (Type should be ‘Vendor disbursement’) If we are using ACH in method of payment then we need to configure some basic setup and configuration like…

Create a new Method of Payment > ACH/EP then select export format ‘NACHA (US)’ through ‘Setup’

After that you must configure Payment Specification with export format.

Before ACH setup and configuration bank will provide you some format with terms and conditions.

As above scenario there is no customization require.

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Community Member on at

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Hi!

Are we saying that we can manange the complete subcontract through this?

Thanks

Jalaja

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