Project BillingLesson 8

Billing Projects with the Direct Creation of AR Invoices

Back to P100: Project Implementation and Processing

Lesson 8: Billing Projects with the Direct Creation of AR Invoices

Part 3: Project Billing

You bill a project with the direct creation of accounts receivable invoices if you do not want to use pro forma invoice

capabilities because you expect that you will not need to modify the invoices.

Learning Objectives

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

  • Configure the direct creation of AR documents for the project
  • Bill the project with the direct creation of an AR invoice

Billing with a Direct AR Invoice: General Information

In Acumatica ERP, you run project billing to automatically generate customer invoices based on the accounting data related to the projects.

Learning Objectives

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

  • Select the type of the document to be prepared
  • Make sure that the project is ready to be billed
  • Configure the direct creation of AR documents for the project
  • Bill the project with the direct creation of an AR invoice

Applicable Scenarios

For each project, you decide which type of the project invoice is prepared during project billing. Once a project is ready to be billed, you run the project billing procedure.

Project Invoice Workflow

The type of the document that the system will generate during the project billing procedure depends on the state of the Create Pro Forma Invoice on Billing check box on the Summary tab of the Projects (PM301000) form:

  • If the check box is selected, the system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form. For more information, see Pro Forma Invoices: General Information.
  • If the check box is cleared, the system creates an accounts receivable invoice or credit memo and opens it on the Invoices and Memos (AR301000) form. For more information about billing projects with credit memos, see Project Invoice Correction: Credit Memos for Projects. The date of the created document is the Next Billing Date specified for the project on the Summary tab (Billing and Allocation Settings section). If On Demand is specified as the billing period of the project (in the same section of this tab), the date of the prepared invoice is the current business date.

Billing Process Preparation

The billing procedure in Acumatica ERP is straightforward and depends on the type of the step of the billing rule that is specified for each project task on the Tasks tab of the Projects (PM301000) form as follows:

  • For the Time and Material steps of the billing rules, the system selects all the project transactions and generates an invoice for the customer based on these transactions and the billing rule.
  • For the Progress Billing steps of the billing rules of project tasks, the system generates an invoice with the billable project revenue. For the billing process for a project to be run successfully, the project must meet the following criteria:
  • The project is an external project (that is, a project associated with a customer).
  • The project status should be Active, Completed, or Suspended.
  • The status of the project tasks should be Active or Completed, and a billing rule should be specified for these tasks.
  • The project should have a basis for billing, such as a billable line of the revenue budget associated with the task for progress billing, or an unbilled project transaction associated with the task within this billing period for time and material billing.
  • The steps of the billing rule should be applicable to the billing basis. For example, the billing rule of a task that is supposed to be billed by a revenue budget line should have a Progress Billing step.
  • The rate table must be specified for a project task if the related billing rule contains the @Rate parameter.
  • Sales prices must be configured for non-stock items if the related billing rule contains the @Price parameter.

Projects Pending Billing

You run the project billing procedure for a project that is pending billing by opening the project on the Projects (PM301000) form and clicking Run Billing on the form toolbar. The billing procedure can be run only for a project that is pending billing—that is, only if at least one of the following exists for the project:

  • A revenue budget line billed by amount with a nonzero Pending Invoice Amount on the Revenue Budget tab of the Projects form; the amount may be positive or negative.
  • A revenue budget line billed by quantity with a nonzero Pending Invoice Quantity on the Revenue Budget tab of the Projects form.
  • A revenue budget line with a Pending Invoice Quantity of 0 on the Revenue Budget tab of the Projects form if the corresponding billing rule has the Create Lines with Zero Amount and Quantity check box selected in the progress billing step on the Billing Rules (PM207000) form. (With this check box selected, the system performs billing for all revenue budget lines, including those that have pending values of 0).
  • An amount postponed to the next billing from a pro forma invoice on the Pro Forma Invoices (PM307000) form for which the corresponding accounts receivable invoice is released.
  • A project task for which a recurring billing item is defined on the Recurring Billing tab of the Project Tasks (PM302000) form. For more information, see Project Billing Preparation: Recurring Billing.
  • An unbilled project transaction that is ready to be billed on the invoice date—that is, the date of the transaction is not later than the invoice date. Transactions with a date the same as the invoice date are billed if Include Transactions with Billing Date is selected in the Billing Cutoff box on the Projects Preferences (PM101000) form; if Include Only Transactions Before Billing Date is selected, the system skips the transactions with a date on the billing date. The invoice date is for all the projects except those that are billed on demand is the Next Billing Date on the Projects form (in the Billing and Allocation Settings section of the Summary tab); for the projects that are billed on demand (that is, for which the Billing Period, which is specified in the same section of the form, is On Demand), the invoice date is the business date. You can also run billing for multiple projects on the Run Project Billing (PM503000) form. For more information, see Project Billing Preparation: Mass Processing.

Billing with the Direct AR Invoice: To Create a Cost-Plus Project

This activity will walk you through the process of configuring a simple cost-plus project from its initial creation.

Story

Suppose that the Lake Cafe customer has contacted the SweetLife Fruits & Jams company and ordered training of
its employees on operating the juicer it purchased from SweetLife. The training sessions will start on 1/1/2025 and
must be completed by 1/30/2025. The project accountant has analyzed the requirements and decided to create a
small cost-plus project (with only a single task for the training of employees); the expected project profitability is
20%. Because the number of training sessions may be changed during the project completion by the customer's
request, the project will be billed when all training sessions have been provided. The project accountant has
decided to skip the creation of pro forma invoices, because the price of the provided services has already been
agreed upon with the customer.
Acting as the project accountant, you will create the new project and specify the needed settings.

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 Non-Stock Items (IN202000) form, the TRAINING non-stock item has been defined.
  • On the Billing Rules (PM207000) form, the TM billing rule has been defined to calculate the line amount as the project transaction line amount multiplied by 1.25.
  • On the Account Groups (PM201000) form, the LABOR account group has been defined.

Process Overview

On the Projects (PM301000) form, you will create a new project and specify its general settings on the Summary
tab. Then on the Tasks tab, you will add the project task that will be performed during the completion of the
project. On the Cost Budget tab, you will define the budget for the project.

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 1/1/2025. If a different date is
displayed, click the Business Date menu button, and select 1/1/2025 on the calendar.

Step 1: Creating a Project and Specifying Its General Settings To create a new project and specify basic settings for it, do the following:

  1. On the Projects (PM301000) form, add a new record.
  2. In the Summary area, specify the following settings:
  • Project ID: INSTLAKE02
  • Customer: LAKECAFE (Lake Cafe)
  • Project Manager: EP00000001 (Pam Brawner)
  • Description: Training project for Lake Cafe
  1. On the Summary tab, specify the following settings:
  • Revenue Budget Level: Task and Item You select this option to include more detail in the revenue budget structure. With this setting, you will be able to select an inventory item in a revenue budget line.
  • Cost Budget Level: Task and Item You select this option to include more detail in the cost budget structure. With this setting, you will be able to select an inventory item in a cost budget line.
  • Start Date: 1/1/2025
  • End Date: 1/30/2025
  • Change Order Workflow: Cleared You clear this check box because for this simple cost-plus project, no changes will be required.
  • Billing Currency: USD (selected automatically)
  • Billing Period: On Demand You select the On Demand billing period to indicate that the billing can be performed at any time.
  • Billing Rule: TM This predefined rule will be specified by default in all project tasks added to the project.
                      For details on configuring a billing rule for billing by time and material, see Billing Rules:
                  Time and Material Billing and Time and Material Billing: To Configure a Time and Material Rule.
  • Create Pro Forma Invoice on Billing: Cleared You are clearing this check box because you want to create accounts receivable invoices when you bill the project without preliminary creation of pro forma invoices.
  1. Save your changes to the project (which currently has the In Planning status in the Status box of the Summary area).

Step 2: Adding Project Tasks To add project tasks to the project, do the following:

  1. On the Tasks tab, click Add Row on the table toolbar, and add the project task with the following settings:
  • Task ID: TRAINING
  • Type: Cost and Revenue Task
  • Description: Training on juicer usage
  • Status: Active Notice that the TM billing rule has been automatically specified for the task.
  1. Save your changes to the project.

Step 3: Specifying the Project’s Cost Budget To configure the project’s cost budget, do the following:

  1. On the Cost Budget tab, click Add Row, and specify the following settings in the added row:
  • Project Task: TRAINING
  • Inventory ID: TRAINING
  • Account Group: LABOR (selected automatically)
  • Original Budgeted Quantity: 16
  • UOM: HOUR
  • Unit Rate: 40 The system automatically calculates the Original Budgeted Amount for the cost budget line ($640) as the Original Budgeted Quantity multiplied by the Unit Rate.
  1. Save your changes to the project. You have not configured the revenue budget for the project because you have not agreed with the customer on the number of training sessions and this number may be changed during the project completion at the customer's request. When you bill the project based on the incurred expenses, the system automatically populates the revenue budget with the actual values.
    You have finished configuring the project.

Billing with the Direct AR Invoice: To Process a Cost-Plus Project

This activity will walk you through the life cycle of a cost-plus project.

Story

Suppose that the Lake Cafe customer has ordered training of employees from the SweetLife Fruits & Jams
company. SweetLife's project accountant has created a cost-plus project to account for the provided services.
Twenty hours of training sessions have been conducted in the period from 1/1/2025 through 1/30/2025.
Acting as the project accountant, you need to support the project during the entire project life cycle.

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 activate the project to indicate that it has been started. Then you will create project-related transactions
on the Project Transactions (PM304000) form to record the provided services. You will run project billing for the
project on the Projects (PM301000) form and review the prepared AR invoice. Then you will complete the project,
and review the profitability report on the Project Profitability (PM624000) report form.

System Preparation

To prepare to perform the instructions of the activity, do the following:
  1. Download the INSTLAKE02_Project_Transactions file provided with the course to your computer.
  2. 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: Activating the Project To indicate that the INSTLAKE02 project has been started, do the following:

  1. On the Projects (PM301000) form, open the INSTLAKE02 project, which you have created in Billing with the Direct AR Invoice: To Create a Cost-Plus Project.
  2. On the form toolbar, click Activate. The system assigns the project the Active status.

Step 2: Uploading Project Transactions To upload and process the transactions of this project, do the following:

  1. On the Project Transactions (PM304000) form, add a new record.
  2. In the Summary area, make sure that PM is selected as the Module.
  3. In the Description box, type The conducted training for the INSTLAKE02 project.
  4. On the table toolbar of the Details tab, click Load Records from File.
  5. In the File Upload dialog box, which opens, click Choose File, select the file path to the INSTLAKE02_Project_Transactions file, and click Upload.
  6. In the Common Settings dialog box, which opens, leave the default settings, and click OK.
  7. In the Columns dialog box, which opens, leave the current column mapping, and click OK. The system uploads the transaction row.
  8. Make sure that the Total Quantity and Total Amount in the Summary area are 20 and 800.00, respectively.
  9. On the form toolbar, click Save, and then click Release. 10.On the Projects (PM301000) form, open the INSTLAKE02 project, and make sure that the Actual Expenses box in the Summary area now shows 800.00. On the Cost Budget tab, review the cost budget line that has been updated on release of the project transaction. The quantity and amount that were initially planned (16 and 640.00) are shown as the Original Budgeted Quantity and Original Budgeted Amount, while the Actual Quantity and Actual Amount columns have been populated with the amounts from the released project transactions (20 and 800, respectively).

Step 3: Billing a Project To create an accounts receivable invoice for the project, do the following:

  1. While you are still reviewing the INSTLAKE02 project on the Projects (PM301000) form, on the form toolbar, click Run Billing. The system creates an AR invoice, which should look like the one shown in the following screenshot, and opens it on the Invoices and Memos (AR301000) form. Because the TM billing rule specified for the project task defines the line amount as the project transaction amount multiplied by 1.25, the customer is billed in the amount of $1,000. Figure: The AR invoice created during the billing
  2. On the form toolbar, click Remove Hold to assign the accounts receivable invoice the Balanced status, and then click Release.
  3. Return to the Projects form with the INSTLAKE02 project opened, and press Esc to refresh the form. Notice that the Actual Income box in the Summary area now shows 1,000.00, which is the amount the customer has been billed. The calculated margin for the project is 20%, as has been planned. On the Revenue Budget tab, the revenue line with the TRAINING task and the Actual Amount of $1,000 has been added.

Step 4: Completing the Project To complete the project, do the following:

  1. While you are still reviewing the INSTLAKE02 project on the Projects (PM301000) form, on the Tasks tab, specify the following settings in the only table row:
  • Status: Completed
  • Completed (%): 100 (the system specifies this percentage automatically when you change the task’s status to Completed)
  • End Date: 1/30/2025 (the system specifies the current business date automatically when you change the task’s status to Completed)
  1. Save your changes to the project.
  2. On the form toolbar, click Complete. The system assigns the project the Completed status.
    You have finished working with the project.