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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Progress billing (Subs...
Finance | Project Operations, Human Resources, ...
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Progress billing (Subscription billing or Projects?)

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Posted on by Pedro-Rodriguez 251

Hi,

I have one customer that wants to use progress billing for some large orders. The order is basically a sales order with one 1 item valued in, for example, 1 million (comes from a production order) and other item for the installation services. 

For the stocked product they make a progress billing. Several invoices with their respective payments. Revenue should not be recognised until delivery of the product. 

This would be a candidate for a project or maybe a subscription billing together with some journals to settle the final invoice comming from the sales order with the payments done on the subscription billing like it were a prepayment.

Would that make sense? Any previous experience with progress billing would be welcome.

Thanks 

  • Kerry Evans Profile Picture
    Kerry Evans 165 on at
    RE: Progress billing (Subscription billing or Projects?)

    It sounds like your customer has a complex billing scenario where they want to use progress billing for large orders. Based on the information provided, it appears that the customer wants to bill the client for the installation services and the stocked product separately, with the stocked product being billed using progress billing.

    In terms of the appropriate billing solution, a project-based billing system or subscription billing system could both potentially work for this scenario, depending on the specifics of the customer's business and accounting requirements.

    With project-based billing, the customer could set up the large order as a project and bill the client using progress billing for the stocked product as it is delivered in stages. The installation services could be billed separately.

    Alternatively, with subscription billing, the customer could set up a subscription for the stocked product and bill the client in stages as it is delivered. Then, they could use journals to settle the final invoice from the sales order with the payments made on the subscription billing as if it were a prepayment.

    It is important to note that the appropriate billing solution will depend on a variety of factors unique to the customer's business and accounting requirements. Therefore, it may be beneficial to consult with an accounting or billing specialist to determine the best approach for the customer's specific situation.

  • Suggested answer
    nunomaia Profile Picture
    nunomaia 11 Moderator on at
    RE: Progress billing (Subscription billing or Projects?)

    In Manufacturing that is a common scenario.

    If you don't have pre-payments, you can manage it directly in the Sales Order.
    1. You can ship items from manufacturing when available, make the proper reservation, etc.
    2,. invoice shipped items from Sales Order.

    If you have pre-payments, I would set up that in projects. You can request payment in advance ( Pro-forma invoice for advance payment, create a Sales Order from a project and management directly status from project / Sales Order.

    I have set up a similar approach in projects and it fulfilled customer requirements.

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