Understanding Basics of Payroll Management and Processing in Microsoft Dynamics AX 2012 R3 – Part I

Understanding Basics of Payroll Management and Processing in Microsoft Dynamics AX 2012 R3 – Part I

With the release of AX 2012 R2 CU6 and R3, The Payroll Management and Processing functionality has been introduced in AX supporting the payroll for United States.

In one of my earlier posts I mentioned to come up with a post to explain how the Time & Attendance Module integrates with the Payroll module. We will initiate that discussion starting with this post and I will break the overall payroll management and process into multiple posts and try to have the full functionality covered in a few posts.

In today’s post, let us start with understanding the basic building blocks of payroll processing and go through the high level process from setups through generating a pay statement. In the few subsequent posts we will discuss the individual components of the configurations and processes in greater details.

The following are the key components of a typical Paycheck of a regular salaried employee.

  • Pay cycle /Pay period – How frequently the employee is paid
  • Earning Codes – Components of the pay such as Regular salary, double time, overtime etc.
  • Benefits and Tax Deductions – Such as 401k plan, Medical Insurance, Vision insurance etc.
  • Employer’s contribution for the benefits – How much employer contributes on the benefit deductions
  • Benefit Accruals – Paid Time Off, Sick Time Off etc..

For this demonstration, I have configured a worker “Sandeep Chaudhury” in the CONTOSO demo company USMF.

The Job and Position to which the worker will be assigned:

The Position to which the employee is assigned holds key component of the payroll, which is the Earning code, worker’s work schedule, pay cycle, the entity which pays etc. The screenshot below shows a position which the “Dynamics AX Solutions Architect”. This position is ultimately linked to a Job which holds the data such as the grade and ranges for classifying the compensation range for this position.

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The worker, worker’s benefits and deductions, benefit accruals and the fixed and variable compensation components:

Payroll information such as worker’s fixed and variable compensations, benefit deductions, worker’s tax region(where the worker resides) and hence the corresponding tax codes for deductions, benefit accruals etc..

Worker’s Fixed Compensation Setup:

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Worker’s Payroll TAX region and code setup:

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Worker’s benefits and benefit deduction setup:

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Worker’s Benefit Accruals Setup:

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Generate earning statement and validate:

Once you have setup all the configurations and ready to pay the worker, the payroll is run in two processes. The first step is to generate the earnings for the worker. The earning statement lines can be automatically generated by the system based on the schedule and earning code associated with the worker or it can also be added manually on the earning statement while generating the earnings. Once the earnings are generated and reviewed, it is released for generating the pay statements and calculating benefits, deductions and net payments. The earning statement for the worker can be generated from both Payroll module and Human Resources Module.

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Once you have reviewed the earning statement, you can Release the earning statement for payment or you can also hold earning statements for further review and actions. You can also see the Accounting distributions and verify the details of the ledger posting prior to releasing the statement for payment.

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Notice that the Payment status changes to Processed after releasing the earning statement.

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The next step is to generate the Pay statement and and Pay the worker.

Release Earning statement for generating Pay statements and Process the Payment:

Navigate to Payroll Module > Common > Pay Statements > Calculated Pay Statements and notice that the calculated pay statement appears automatically from the earning statement that we released in the previous step.

The benefits and deductions and contributions are automatically calculated as soon as system creates the Pay Statement.

Pay Statement Overview:

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Pay Statement Details page:

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Review Benefit calculations:

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Tax Calculation Details:

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After you have reviewed the Pay statement, you can Submit it for Payment. At this point , system checks the GL budgets and then automatically creates the financial journal(Payroll Disbursement Journal/Payment Journal). I will discuss the technical details of the financial journal (Payment Journal) creation such as ledger accounts, journal names, financial dimensions, accounting of the benefits and tax deductions, payment invoice etc., in the next posts on this topic. This post will get pretty long if explained here.

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Payment journal auto-created by system:

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The next step is to generate the Payment by clicking Functions > Generate Payment and, print and send the check and then post the payment journal.

Check Printed from Payment Journal:

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After the Payment is processed and posted, you can navigate to Payroll > Common > Issued Pay Statements and see the details of it.

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Post Payroll to General Ledger and create vendor invoices for Benefits and Taxes:

The last step in the payroll process is to post the payroll to GL and then generate the required vendor invoices for the payables which were created from the pay statement to pay the benefits vendors and tax authorities.

We will discuss the mechanism and the technical details of this in the subsequent posts on this topic, in greater details.

Employees can View and download their pay statements on the Employee Self-Services portal:

Navigate to Enterprise Portal > Employee Self Services to see all your Pay Statements. You can then print the Pay statement and export it to PDF.

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Pay Statements Overview:

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Print Pay Statement:

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Well, long enough post. That’s it for today.

In the next couple of posts on this topic(Part II and Part III, Hopefully I will find some time soon Smile), we will discuss the individual setups and components in greater details and also explore additional functionalities in this area. Stay tuned !!

AX Tip: Independent Budgeting for Sub-Projects in the Project Hierarchy in Microsoft Dynamics AX 2012 R3

AX Tip: Independent Budgeting for Sub-Projects in the Project Hierarchy in Microsoft Dynamics AX 2012 R3

Here is small enhancement to the project budgeting feature in AX 2012 R3 release, which most of us are probably aware by now. I still wanted to publish it here for awareness in case you have not explored this yet.

Till the AX 2012 CU7 release, it was not possible to have an original budget to be tracked for sub-projects which is created after the original budget for a parent project is committed. The only way to enable budgeting for the newly added sub-project, was to create a revision for the original budget of the parent project which was committed earlier which allowed to track the budget as a revised budget on the new sub-project.

In the R3 release of Dynamics AX 2012, it is now possible to create and manage budgets for sub-projects independently.

Let us try to understand how this functionality works in AX 2012 R3. For this demonstration, let us create a Parent project and create two sub-projects under it and call them as Phase I and Phase II.

  • Create the parent project and create two sub-projects under it and enable the  “Independent budgeting for sub-projects” check box on the parent project.

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  • Select the parent project, click Plan Tab > Budget > Project Budget action button.
  • Under the Costs fast tab, create a new budget line and open the dropdown for the project field. Notice that, system shows only the Parent project as a selectable option and you will not see the project hierarchy tree on the left hand side of the project budget screen.

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  • This allows to create and manage Original budgets for each project in the hierarchy. So, whenever new projects are added to the hierarchy in the future, original budgets can be created for those without the need of revising the original budget for the whole hierarchy.
  • This new functionality will also let you allocate the budgets across periods as you want for each sub-projects in the project hierarchy. Before this functionality, you will always need to allocate the budgets of a new sub-project using the same period which you would have done for the original budget.

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  • You can still view the project budget balances and system still rolls up the values in the hierarchy and shows the remaining budget balances and you can also view the breakdown by each category.

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Till next time !!

-Sandeep

Business Intelligence and Reporting using Power View in Microsoft Dynamics AX 2012 R2/R3

Business Intelligence and Reporting using Power View in Microsoft Dynamics AX 2012 R2/R3

Most of us must be already aware of the new Power View reporting capabilities which is now fully integrated with Microsoft Dynamic AX 2012 R2, starting with the CU6 release.

Getting real time access to your key business data anywhere, anytime, in any device is the real key to success and can help manage your business more efficiently by allowing the staff and executives to take more informed business decisions on time.

Furthermore, the capability of being able to create, modify and view key business reports online anywhere in any device, can prove to be a real differentiator, in how your staff react to business situations, by getting most recent data from their Dynamics AX ERP system with few clicks.

With Microsoft Dynamics AX 2012 R2(CU6 Onwards) and R3, Microsoft SQL Server Analysis Services Cube and the Power View tool, your organizations BI reporting capabilities just got much easier.

In today’s discussion, we will take a look at the three key scenarios of the Power view reporting.

View a Pre-built Report in Power View online:

Once a Power View report has been designed, it can displayed on the employee role centers. Additionally, employees can add quick links to the Power View reports on their role center pages.

For this demonstration, I will use one of the Region Wise Sales Performance Report, which was already built and is displayed on my role center as well as I have added a quick link to the report on my role center page. Follow the steps below.

  1. Launch Enterprise Portal and navigate to the My Links area of the home page.
  2. Click Sales Performance report.

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3. Notice that system launches the Region Wise Sales Performance report online in Power View. The report shows the different regions of sales in Bing Maps and the details of the sales are displayed on the right hand side, by customer group, sales category etc.

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4. The screenshots below shows another layout of the Sales Performance report in different layouts which the Power View tool allows to configure.

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Create or Modify a Report in Power View online:

  1. If you are provided with the required access and security permissions, you can create your own reports using the existing cubes or by adding additional data source as you need. Additionally, you can click the Analyze date button most of the list pages in AX rich client, which will launch the Power Viewer report designer and you can design your own reports by selecting the fields, design layouts, and several other options.
  2. In this case, I will select the Project Accounting cube and design a simple report of comparison of Project actuals vs budgeted by project category.
  3. Select the Project Accounting Cube and Launch Power View tool. You can create the design layout of your report by simply selecting and arranging the data fields you want. Refer to screenshot below, in which I have prepared the simple actual Vs. budgeted amounts by project category for each of the Projects.

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4. From AX client, you can navigate to any list page such as HRM > Workers and click Analyze Data button on the action pane, to launch the Power View Report designer tool. In the screenshot below I have designed a very basic report of the worker skill/education details by launching the Power View from Workers list page.

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Short and simple for today’s post. Till next time !!

-Sandeep

Track Revisions on a Project Quotation during the negotiation with Prospects/Customer in AX 2012 R3

Track Revisions on a Project Quotation during the negotiation with Prospects/Customer in AX 2012 R3

Hello Everyone,

Here is a quick tip for the day about one of the “Small, yet very Useful” functionality which is introduced in Microsoft Dynamics AX 2012 R3 release.

Until the CU6 release of AX 2012, there was no efficient option track various revisions of project quotation once it was approved internally for the first time, and sent to Customers or Prospects. It was not possible to submit the “Quotation revisions” to a workflow for internal approvals.

Now, in the R3 release, AX allows to revise and track details of the revisions effectively on project quotations, by allowing to submit the revisions to the internal approval workflow.

1. Navigate to PMA > Common > Project Quotations, create, submit and approve a new project quotation

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2. Now, Generate and send the Project quotation.

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3. After sending the quotation to the prospect/customer, you can revise based on the feedback received from the customers and maintain revisions of the quote throughout the negotiation cycle.

4. Click Quote > Revise button on the action pane to revise the quote. With this, you add, modify or review lines from the quote and change any other details as needed. See the screenshot below where I have added 2 additional lines to the original quote.

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5. After revising the quote details, you can submit the revised quotation for internal approval. After internal approval is complete, you can send the Revised Quote.

6. After sending revised quote, click the Quotation journal button to see how system maintains the audit trial of the revisions.

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Quick and easy..:) Keep DAXING till next time.

Regards, Sandeep

Managing After-Sales Services of your organization as a Profitable business in Microsoft Dynamics AX 2012

Managing After-Sales Services of your organization as a Profitable business in Microsoft Dynamics AX 2012

Manufacturing and Services Industries (Especially the Architecture, Engineering and Construction, and Large scale AV Integrators) often perform after-sales services, to retain maximum Customer satisfaction on the products and services they manufacture and sale. These after-sales services are basically classified as “Business to Business services”, rather than business to consumer servicers. It is very important that the Service Managers of these organization keep track of the exact costs and revenues on the hours, expenses and items consumed in a service function, to make sure the Service operations of the organization can run as profitable business.

Are you a Customer already implementing Microsoft Dynamics AX  ERP or actively looking for an all  inclusive ERP application to manage  the various aspects of after-sales services ? Look no further and explore how the Service Management Module of Microsoft Dynamics AX ERP can add value proposition to your business.

In today’s post, I will initiate an introduction to the overall architecture of the Service Management Module and then will discuss all the important functionalities  and the “How-To” to manage those in few of the subsequent posts.

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Let us now understand the various building blocks and important functionalities of the Service Management Module in AX 2012 R3.

A. SERVICE AGREEMENTS: Service agreements acts as the central element in the architecture of the service management module and holds the contractual details with the customer.

    • Defines what objects will be serviced(Service Objects), the tasks(Service Tasks) that will be performed and how these will be charged to the customers.
    • Defines when the services will be performed(Service Interval), Service Level Agreement(SLA), who will perform the service, how the costs and revenues will be managed.
    • Defines how service orders will be created (Automatically, Planned Service Orders/Manually).
    • The Service Management module in AX is integrated with the Project Management and Accounting module for posting the service orders back to Projects, to track the costs, revenues and also invoice the customer for the services performed.
    • This integration also takes advantage of the validations, ledger posting, pricing and other functionalities of the PMA module.

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B. SERVICE ORDERS: A Service Order in AX represents one instance of a scheduled/unscheduled service activity performed by service technician, at a customer site on the day of the visit.

  • Service orders can be automatically created based on the Tenure, Service interval, Time window and the “Line Combining options” specified on the Service agreement and service agreement lines. For example if the tenure of a service agreement is from 01/01/2014 to 12/31/2014 and Service Interval is “Monthly”, then, 12 planned Service orders, one for each month, can be automatically created directly from the Agreement.
  • AX also provides the option to create the planned service orders more efficiently by combining the orders “By Technician”, “By Service task and By service objects (What is being serviced) so that they can better planned and scheduled.
  • You can also utilize the “Time Window” functionality on the service agreement to optimize the scheduling of service orders.
  • Service orders can be created without a service agreement as well, and these can be used to perform One time , unscheduled service visits which might be requested by the customer on demand basis.
  • Service Orders typically consists of service order lines, which represents the details such as the “Hours of work performed by a service technician, related expenses, item consumptions, replacements, or repairs and any service fees, for the tasks performed on the various service objects.
  • Service orders can be created by the Services team of the organization or it can also be initiated by the Customer using the Customer Self service portal.
  • Once the Service orders are created and setup, they are processed through various service stages and the progress, performance, costs and revenues are tracked till the completion of the service.

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C. SERVICE LEVEL AGREEMENTS (SLA): Service Level Agreement allows the service organizations to record time to identify WHEN the service must be performed at the latest, from the time when the Service order was initiated by a Customer and it also allows the organizations to track the timing of the services given to the customers through out the Service Delivery process.

    • You can create as many SLAs you want based on your business needs. If you have grouped your service agreements by
    • When a SLA is attached to a Service Order and the service order is initiated, the TIME RECORDING starts automatically which can be Stopped, Restarted or even Cancelled at any time depending on the situation through out the duration of the service activity.
    • SLA can be associated with a Calendar in AX, which allows to control the automatic time recording to start. If the Service order was initiated on a non working day, then the Time recording will not start until the next working day.
    • You can link the SLA with Service Agreement groups, which allows to assign the SLA to the Service Orders automatically when you create a new Service Order belonging to that Service Agreement.

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D: SERVICE DISPATCH BOARD FOR DISPATCHERS: The Service dispatch board functionality enables the Service companies and their Service Customers to stay on top of their priories with regards to the on-going services. It Helps the Service dispatcher to schedule the work for the Service engineers and the service tasks/activities they will perform at the customer’s site.

  • Service Dispatcher gets to see an overview of the Service Operations using the Dispatch Board can make efficient and informed decisions about the actions needed at the right time to ensure high customer satisfaction.
  • Graphical display support for the Service Dispatch board.
  • Service dispatchers can view and manage on going service tasks by seeing COLOR coded overview details about the service orders.
  • The dispatcher can see daily activity logs on each Service orders which are entered by the service engineers/technicians.
  • Can create service dispatch teams and manage the service resources more effectively.

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The screenshot above does not show any data, as I have not created the data in the system. We will discuss more about the details of the Service dispatcher and other daily processes of the Service orders in the few subsequent posts and will learn how to use this module in greater detail and see the Dispatch board in action.

E. REPAIR & RETURNS: Service Companies often get the items or equipment back at their location for repair. Dynamics AX supports a decent level of repair management capabilities within the Service Management Module which can be used by companies for better repair management and optimize their efficiency of handling equipment returns and repairs.

  • Manage repair from the time it is initiated from the Customer till the resolution using repair stages, which you can configure the way your business needs it.
  • Track the resource consumptions on various repair tasks such as hours spent by the technician, Item replaced etc. and tie those back to the Service order which can be then accounted and billed to the Customer.
  • Create and Manage Symptom areas, diagnosis areas, repair conditions, resolutions for better reuse to optimize the repair process.
  • Do necessary reporting such as which items (objects) are repaired most frequently and how efficiently your technicians are able to finish the repairs etc.

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F: Service BOMs: Dynamics AX provide the functionality of creating and managing Service BOMs, which enables the service companies to track and store the changes performed to an object during the service. This can be specifically helpful for service organization who engineers their products/services by combining a set of different items on it.

  • It allows you to continuously track the service objects which are serviced a customer’s site  and then it allows to generate the complete audit trial of the object changes over a period of time and also the replacement history of the object.
  • All the changes to the Service BOM during the course of Service, are stored as a separate version as a history for future tracking.
  • Helps service companies to identify required parts on the service visits, so that they can arrange the availability of the parts at inventory and reserve to be consumed in the Service order.
  • It can help you determine any potential changes you might have to do to your Service BOM (Service Product) to manage reduce the number of services required in the future.

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G. SERVICE SUBSCRIPTIONS: If you are a Service company and provide services to clients at a fixed rate for a period, then you can make use the Service Subscriptions functionality of AX 2012 to manage all the accounting and financials management needs of the service subscription process. We will discuss in detail about each of the above processes in the next few subsequent posts.

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H. SELF-SERVICES PORTAL: Dynamics AX supports various Service Management processes on the enterprise portal. The Service customers and the Service team can collaborate effectively using the enterprise portal and the Customer self-service portal.

  • Customers can initiate the Service Orders using the Self- Services portal on enterprise portal which then can be reviewed  and processed further.
  • Customers can access readily available LIVE information about their past and current and future service orders, agreements anytime using the Self-service portal.
  • Technicians can access details such as her necessary information  such as service objects, tasks, repair etc. about the service calls/orders and even update the service orders at anytime.

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Well, stopping here todaySmile. In the next few posts, we will explore the above mentioned processes and functions individually, in greater details.

Till next time..!!

-Sandeep

Intercompany Customer Invoicing for Project resources sharing in CU7 and AX 2012 R3

Intercompany Customer Invoicing for Project resources sharing in CU7 and AX 2012 R3

Hello,

Multinational Professional Services firms often share workers between their legal entities to staff the projects with the right skill sets. When the workers of one entity works on the projects of another entity of the same organization, they bill their time and expenses to those legal entities for which they work on the projects.

Microsoft Dynamics AX has introduced several enhancements to this area over the last few releases to facilitate how these business scenarios can be easily accomplished in the ERP solution.

In one of my earlier posts, I explained how the intercompany timesheets and expenses works in AX 2012 R2 CU6. With the release of CU7 and the R3, AX has taken a step forward by enhancing this feature and adding the capability for the legal entities to be able to invoice each other for the resources they share for projects and also allow them to stay true to the compliance and the legal requirements of tax liabilities etc. Until the CU6 release, the intercompany transaction was directly handled in the ledger transactions only and the ledger accounts were updated as soon as the timesheets were posted. In the R3 release with the introduction of this new functionality, the companies can adjust the amount which are charged between them.

In today’s post let us take a look at this new enhancement which has been introduced in the CU7 and the R3 release.

Throughout the demonstration in this post we will consider “USMF” as the Resourcing entity(Lending company) and “USSI” as the Contracting entity(Borrowing entity). Sandeep Chaudhury is a full time employee of USMF, and works on the project of USSI as he has the desired skill set required for the project.

Setup and Configurations:

  • The first thing to notice is the necessary setups which are needed for this new functionality to work. Go to PMA > Setup > Project Management and Accounting Parameters form.
  • Notice the new “Intercompany” tab link which contains the required setup parameters for this new functionality.
  • You can setup the option of ‘Accruing the revenue’ in the resourcing entity for each of the entities to which the resources are lend. When the ‘Accrue revenue’ check box is marked, the revenues in the resourcing company will be accrued immediately when the intercompany timesheet is posted and these revenues will reverse automatically when the intercompany project invoice is posted.

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  • The next setup is to establish the trading relationship between the resourcing and contracting company. This means that the Contracting company needs to be a Customer in the resourcing entity and the resourcing entity needs to be setup as a Vendor in the Contracting company.

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  • The other miscellaneous setup are to setup the Transfer prices and the necessary ledger posting profile for the Intercompany accounts in the resourcing company. You will notice here that there are several sales price models which you can now specify for the transfer pricing between the entities.

Timesheet Submissions and Ledger Posting:

  • Sandeep Chaudhry submits the intercompany timesheet as shown in screenshot below.

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  • Below screenshot shows the voucher transactions and ledger account postings when the above timesheet is approved and posted. Notice that system has updated the “Intercompany cost” and the “Payroll allocation” amounts for each of the timesheets lines and also notice that the “revenue is accrued in the designated ledger account” (marked in screen below) and intercompany revenue is not yet updated. This will get updated when the intercompany invoice is posted.

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  • At this point you will also  notice that there are no transaction created in the “Contracting legal entity” for the Project and the general ledger. The timesheet transactions will appear as Pending Transactions and are not yet posted.

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Intercompany Project Invoicing and End Customer Invoicing:

  • When it is time to bill the end customer, the resourcing company will generate the intercompany invoice to the contracting legal entity and this will automatically create a Vendor Invoice in the Contracting entity. Let us now see how the Intercompany project invoice is initiated.
  • In the ‘Resourcing Company”, go to Project Management and Accounting > Common > Project Invoices > Intercompany Customer invoices.

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  • Click New > Intercompany Customer Invoice to launch the “Create Invoice Proposal” form. Note that this is not the typical project invoice proposal form of the standard Project invoicing process. This is specifically designed for the Intercompany customer invoicing. (This works like a Free Text Invoice)
  • Select the Legal entity and other applicable filters such as Project Contact, Project, Start and End dates and also Select the transaction types which you want to include in this invoice (Hour/Expense/Vendor Invoices) and click the Search button. The below screenshot shows the transactions which for the timesheet for Sandeep Chaudhury which was posted above.

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  • Select the transactions which you want to include in the invoice and click OK button. The system will generate the “Intercompany Customer Invoice” open the invoice details screen. Notice that Customer details are auto populated from the trading relationship which we have setup above.

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  • Notice here that you can Add or remove the lines from the invoice. You can also adjust the amounts (Prices) which are charged between the companies. After verifying all the details of the invoice, Click Post and print the invoice and send it to the Contracting company.

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  • After the invoice is posted, notice that the revenue which was accrued in the resourcing company has now been reversed and the Actual intercompany revenue is updated.

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  • The next step is to verify that system has now automatically created. Navigate to the USSI legal entity > Accounts Payable >  Vendor Invoices > Pending Vendor Invoices.
  • Notice that the vendor invoice for the Resourcing company is automatically created and ready for validation and posting.

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  • Once you validate and post the vendor invoice, the system will also post the Project transactions updating the Project Cost in the Contracting entity and also creating the transactions which can be ultimately billed to the end customers.

Well, this is it for today. Stay tuned and keep learning…Till next time..

-Sandeep

Microsoft Dynamics AX 2012 R3 Launched – A Step Forward for Cloud First, Mobile First Strategy

Microsoft Dynamics AX 2012 R3 Launched – A Step Forward for Cloud First, Mobile First Strategy

Unlock the world of new possibilities with AX 2012 R3.

Microsoft Dynamics AX 2012 R3 is now Launched. Click here to learn how you can deliver amazing Customer Experiences.