Back to P100: Project Implementation and Processing

Lesson 10: Billing Projects for Progress

Part 3: Project Billing

You run billing for the project to prepare an invoice for the customer. You can bill the customer based on the current progress of the project.

Progress Billing: General Information

With progress billing in Acumatica ERP, you run project billing to automatically generate project invoices based on
the progress recorded for the project.

Learning Objectives

In this lesson, you will learn how to do the following:

Configure a progress billing rule
Update the project progress to make it ready to be billed
Run project billing for a project
Process the documents that have been generated during the project billing
Review how the project’s actual amounts are updated with the billed amounts

Applicable Scenarios

You run project billing to prepare an invoice for the customer based on the current progress of the project. The
timing of project billing depends on the project billing period defined for the project.

Configuration of a Billing Rule Step

Each billing rule can include only one step of the Progress Billing type. For the billing rule step of this type, you can
define the following settings:

A formula to define the description of the invoice and another formula to define the description of each invoice line, to make the system compose these descriptions dynamically during the billing process.
The source of the sales account and the source of the destination branch for each invoice line. The billing process uses the originating branch from the project settings on the Projects (PM301000) form and the destination branches from the sources according to the billing rules. When an accounts receivable invoice is released, the accounts receivable account is updated under the originating branch of the invoice, while the revenue amounts are recorded to the destination branches of the invoice lines.
The invoice group of the steps of the billing rules to which the project tasks refer.

The Progress Billing Process

Progress billing is a simple billing workflow for the projects that are gradually billed at a fixed contract amount.
Progress billing does not involve project transactions. To bill a project task by its progress, you need to create a
billing rule on the Billing Rules (PM207000) form and configure a step of the Progress Billing type in this rule. Then
you assign the configured billing rule to project tasks on the Tasks tab of the Projects (PM301000) form.

           If a project is billed with a billing rule that includes only a Progress Billing billing step, during the
           billing process, the system ignores any unbilled project transactions.

The progress billing procedure could be initiated for a project if either of the following is true:

It has at least one revenue budget line with billable project revenue.
It has pending values of 0 if the progress billing step of the billing rule assigned to any project task has the Create Lines with Zero Amount and Quantity check box selected on the Billing Rules form. For more information, see Billing with a Direct AR Invoice: General Information. Each revenue budget line is billed based on amount or quantity, depending on the option selected in the Progress Billing Basis column on the Revenue Budget tab of the Projects form as follows:
For a line billed by amount, you need to specify a nonzero amount, which may be a negative amount, in the Pending Invoice Amount column. For these lines, the Pending Invoice Quantity, Dra Invoice Quantity, and Actual Quantity values are always 0.
For a line billed by quantity, you need to specify a nonzero quantity in the Pending Invoice Quantity column. In this case, the system will calculate the Pending Invoice Amount of the line as the pending invoice quantity multiplied by the unit rate specified in the line. The system will calculate the percentage of line completion (Completed (%)) based on the specified values. You can also specify the Completed (%) value on the Revenue Budget tab for the needed revenue budget lines to indicate that the project tasks are being performed. The system will calculate the pending invoice values by using the following formulas: Pending Invoice Amount = Revised Budgeted Amount * ( Completed (%) / 100 ) - Draft Invoice Amount - Actual Amount Pending Invoice Quantity = Revised Budgeted Quantity * ( Completed (%) / 100 )

Draft Invoice Quantity - Actual Quantity

     Project-related invoices, debit memos, and credit memos that have been created manually on the
     Invoices and Memos (AR301000) form are not included in pending invoice quantities and amounts.

You run billing for one project by clicking the Run Billing button on the form toolbar of the Projects form or process multiple projects on the Run Project Billing (PM503000) form. When you run the project billing, the system prepares a project invoice whose type depends on the state of the Create Pro Forma Invoice on Billing check box on the Summary tab of the Projects form as follows:

If the check box is selected, the system generates a pro forma invoice with a positive or negative amount.
If the check box is cleared, the system generates an accounts receivable invoice (if the billed amount is positive) or credit memo (if the billed amount is negative). For more information about credit memos, see Project Invoice Correction: Credit Memos for Projects. The system creates a project invoice with the unit prices, amounts, and quantities copied from the Unit Rate, Pending Invoice Amount and Pending Invoice Quantity columns of the Revenue Budget tab of the Projects form for the corresponding revenue budget lines. If the project billing is performed by using the pro forma invoice workflow, the pro forma invoice lines that are produced by the progress billing steps are shown in the prepared pro forma invoice on the Progress Billing tab of the Pro Forma Invoices (PM307000) form. During the billing process, the system groups the billable amounts into invoices based on the following:
The invoice group of the steps of the billing rules to which the project tasks refer
The customer
The customer location
The Bill Separately setting of each project task defined on the Project Tasks (PM302000) form For more information, see Grouping of Invoices: General Information. Once an invoice is prepared, the Dra Invoice Amount and Dra Invoice Quantity of the revenue budget lines are updated with the amount and quantity for which the invoice has been prepared. The Pending Invoice Amount and Pending Invoice Quantity values become 0. If you manually adjust the Amount to Invoice of a pro forma invoice line, the system automatically recalculates the Total Completed (%) in this line. This is the percentage of the revised budgeted amount of the revenue budget line of the project that has been invoiced by all the pro forma invoices of the project, including the current one. However, the system does not update the Completed (%) of the corresponding revenue budget line on the Revenue Budget tab of the Projects form accordingly. Also, the system does not update the Completed (%) of the revenue budget line if the related pro forma invoice with the corresponding progress billing line is deleted. When you release a pro forma invoice and the system creates the corresponding accounts receivable invoice, the system copies the values in the Amount to Invoice column from the Progress Billing tab of the Pro Forma Invoices form to the corresponding lines of the accounts receivable invoice on the Details tab of the Invoices and Memos (AR301000) form.

Progress Billing: To Configure a Progress Billing Rule

The following implementation activity will walk you through the process of configuring a progress billing rule.

Story

Suppose that you, as the project accountant of the SweetLife Fruits & Jams company, need to configure a billing
rule to be used for billing a customer based on the progress of a project that your company completes for the
customer.

Configuration Overview

For the purposes of this activity, on the Enable/Disable Features (CS100000) form, the Project Accounting feature has
been enabled to support the project accounting functionality.

Process Overview

You will configure a billing rule for progress billing on the Billing Rules (PM207000) form.

Step 1: Configuring a Billing Rule To configure a billing rule to be used for progress billing, perform the following instructions:

On the Billing Rules (PM207000) form, add a new record.
In the Summary area of the le pane, specify the following settings:

Billing Rule ID: PRGRULE
Description: Billing projects by progress

In the le pane, add a row for the billing rule step, and specify the following settings in the row:

Active: Selected
Step ID: 10
Description: Billing by progress

In the right pane, specify the following settings for the step (which is selected in the le pane):

Billing Type: Progress Billing
Invoice Description Formula: ='Invoice for '+PMProject.ContractCD The system uses this formula to define the description of the invoice created based on the billing rule. The PMProject.ContractCD data field stores the project identifier.
Line Description Formula: =PMBudget.Description The system uses this formula to define the description of the invoice line created based on the billing step. The PMBudget.Description data field stores the description of a project budget line.
Use Sales Account From: Account Group The system uses as the sales account the default account of the account group of a revenue budget line of a project.
Create Lines with Zero Amount and Quantity: Cleared You clear this check box to add to the created invoice only the lines with nonzero amounts.

Save the billing rule you have created.
You have configured the billing rule that can be used for billing a fixed-price project based on its progress. To bill a project by using this rule, you need to assign the rule to the project tasks.

Progress Billing: To Bill a Project by Progress

This activity will walk you through the process of billing a project by its progress.

Story

Suppose that the HM's Bakery and Cafe customer has ordered 20 hours of new-employee training on operating juicers from the SweetLife Fruits & Jams company. SweetLife's project accountant has created a project to handle the tracking and billing of the provided services; the project should be billed on demand as the services are provided. Before each invoice is sent to the customer for payment, the customer has requested that a pro forma invoice be submitted for acceptance. Then suppose that on 1/30/2025, SweetLife's consultant has provided five hours of the training. As the project accountant, you need to update the progress of the project and bill the customer for the provided training.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

On the Enable/Disable Features (CS100000) form, the Project Accounting feature has been enabled to support the project accounting functionality.
On the Billing Rules (PM207000) form, the PROGRESS billing rule has been configured.
On the Customers (AR303000) form, the HMBAKERY customer has been created.
On the Projects (PM301000) form, the HMBAKERY3 project has been created. On the Tasks tab, the TRAINING project task has been added, and the PROGRESS billing rule is specified for this task. Also, on the Summary tab, the Create Pro Forma Invoice on Billing check box is selected, indicating that a pro forma invoice is created when the project is billed, and the Billing Period is set to On Demand.

Process Overview

You will update the progress of the project on the Projects (PM301000) form to indicate that services have been provided partially. Then you will run project billing and review the prepared pro forma invoice on the Pro Forma Invoices (PM307000) form. Aer that, you will release the pro forma invoice, which causes the corresponding accounts receivable invoice to be created. Aer you review and release the AR invoice on the Invoices and Memos (AR301000) form, you will review the project and make sure that the project balances have been updated.

System Preparation

To prepare to perform the instructions of the activity, in the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, make sure that the business date in your system is set to 1/30/2025. If a diﬀerent date is displayed, click the Business Date menu button, and select 1/30/2025 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.

Step 1: To Run Project Billing To update the progress of project completion and bill the project in an amount corresponding to the progress, do the following:

On the Projects (PM301000) form, open the HMBAKERY3 project.
On the Revenue Budget tab, specify 25 as the Completed (%) in the only revenue budget line to indicate that 25 percent of the project task has been completed (5 hours of 20). The system calculates the Pending Invoice Amount as $250. Because the project has a nonzero Pending Invoice Amount in the revenue budget line, you can now bill the project.
Save your changes to the project.
On the form toolbar, click Run Billing. The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form.

Step 2: To Process a Pro Forma Invoice and the Corresponding AR Invoice To process the pro forma invoice, while you are still viewing the prepared pro forma invoice on the Pro Forma Invoices (PM307000) form, do the following:

On the Progress Billing tab, review the only line. The system has added this line based on the corresponding revenue budget line of the project on the Projects form (PM301000) that has been billed by its progress. The Amount to Invoice in the only progress billing line and the Progress Billing Total on the Summary area of the invoice is $250.
On the form toolbar, click Remove Hold to assign the pro forma invoice the Open status, and then click Release. The system closes the pro forma invoice (and assigns it the Closed status), and creates a corresponding accounts receivable invoice based on the pro forma invoice.
On the Financial tab, click the AR Ref. Nbr. link to open the accounts receivable invoice that has been created on the Invoices and Memos (AR301000) form.
On the form toolbar, click Remove Hold to assign the accounts receivable invoice the Balanced status, and then click Release.

Step 3: To Review the Updated Project Details To review how the project billing has aﬀected the project budget, do the following:

On the Projects form, open the HMBAKERY3 project.
On the Revenue Budget tab, review the only revenue budget line. Notice that the Pending Invoice Amount is now 0, and the Actual Amount is $250, as shown in the following screenshot. Also notice that Actual Income in the Summary area has been updated and is now $250. Figure: The revenue budget of the project
You have billed the project by its progress.