Back to P100: Project Implementation and Processing

Lesson 9: Billing Projects with Pro Forma Invoices

Part 3: Project Billing

By default, Acumatica ERP provides pro forma invoice capabilities for each newly created project. That gives you the ability to edit and correct pro forma invoices before creating AR documents without aﬀecting the accounts receivable subledger. Pro Forma Invoices: General Information

Acumatica ERP provides pro forma (dra) invoice capabilities for project billing. A pro forma invoice, which you can view on the Pro Forma Invoices (PM307000) form, is a dra document that you can edit and correct without aﬀecting the accounts receivable subledger. A pro forma invoice can be printed and sent to a customer as many times as is necessary until an agreement is reached. With this process, you minimize corrections that directly aﬀect the accounts receivable subledger.

Learning Objectives

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

Configure the pro forma invoice workflow for a project
Create a pro forma invoice during project billing
Print the pro forma invoice
Send the pro forma invoice as an email
Create an accounts receivable invoice based on a pro forma invoice

Applicable Scenarios

You create a pro forma invoice for a project if you need to reach agreement with the customer about the invoice. During negotiations, you modify the pro forma invoice as many times as is necessary until an agreement is reached, and then you prepare the accounts receivable invoice based on this pro forma invoice.

Enabling of the Pro Forma Invoice Workflow for a Project

A pro forma invoice is a document that can be created through the process of billing a particular project. The system creates pro forma invoices during billing for the projects for which the pro forma invoice workflow is turned on—that is, the projects that have the Create Pro Forma Invoice on Billing check box selected on the Summary tab of the Projects (PM301000) form. By selecting or clearing this check box, you can turn on or turn oﬀ the pro forma invoice workflow for a project at any stage of the project execution.

          You can also manually enter new pro forma invoices on the Pro Forma Invoices (PM307000) form. For
          more information, see Pro Forma Invoices: Manual Creation of Pro Forma Invoices.

Creation of Pro Forma Invoices

The system creates a pro forma invoice when you run project billing by clicking Run Billing on the form toolbar of the Projects (PM301000) form. For a pro forma invoice created for a project, the system creates billable lines on the following tabs of the Pro Forma Invoices (PM307000) form:

Progress Billing: The system creates these lines by using the Progress Billing steps of billing rules. The lines originate from the revenue budget lines of the project with a nonzero pending invoice amount or quantity.
Time and Material: The system creates these lines by using the Time and Material steps of billing rules; the lines originate from the project transactions. The Time and Material steps of billing rules support the aggregation of project transactions by date, employee, vendor, and inventory item. On the Time and Material tab of the Pro Forma Invoices form, you can select a line and then click View Transaction Details on the table toolbar to drill down to the list of project transactions based on which the Billed Quantity and Billed Amount of the line have been calculated by using the formula of the billing rule. If the Construction feature is in use, you may need to prepare the American Institute of Architects (AIA) report that includes time and material amounts from the prepared pro forma invoice. For more information, see Construction Reports: Time and Material Amounts in AIA Reports.
As a result of the creation of the pro forma invoice, the system updates the revenue budget of the project on the Revenue Budget tab of the Projects form as follows:
In the lines billed by amount, the system clears the amounts in the Pending Invoice Amount column, which the system has used to create progress billing lines of the pro forma invoice.
In the lines billed by quantity, the system clears the quantities in the Pending Invoice Quantity column and the amounts in the Pending Invoice Amount column, which the system has used to create progress billing lines of the pro forma invoice.
The amounts in the Dra Invoice Amount column are increased with the amount to invoice of the corresponding progress billing lines and time and material lines of the pro forma invoice.
The quantities in the Dra Invoice Quantity column are increased with the quantity to invoice of the corresponding progress billing lines of the pro forma invoice that have been billed based on quantity. A pro forma invoice with any status can be printed and emailed to the customer. To print the pro forma invoice, you click Print on the More menu of the Pro Forma Invoices form. To email the pro forma invoice, you click Email on the More menu of the form.

Release of Pro Forma Invoices

The pro forma invoices of a project can be released according to the following rules:

The pro forma invoices can be released only one by one, starting from the earliest one, on the Invoices tab of the Projects (PM301000) form. The only exception is when multiple pro forma invoices segregated by invoice group have been generated during a single iteration of the billing process; in this case, these pro forma invoices can be released in any order.
A pro forma invoice can be released only aer the accounts receivable invoice of the preceding pro forma invoice has been released. The release of a pro forma invoice does not produce project transactions or general ledger transactions directly. When you release the pro forma invoice on the Pro Forma Invoices (PM307000) form, the system creates a corresponding accounts receivable invoice or credit memo with all information copied from the pro forma invoice. The system copies the Amount to Invoice values from the pro forma invoice lines on the Progress Billing and Time and Material tabs of the Pro Forma Invoices form to the Amount column in the invoice lines on the Details tab on the Invoices and Memos (AR301000) form.
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        The system creates a credit memo on release of the pro forma invoice if the total amount of the pro
        forma invoice is negative. For more information, see Project Invoice Correction: Credit Memos for
        Projects.
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The document lines of an unreleased accounts receivable invoice that originates from a pro forma invoice are displayed in read-only mode on the Details tab of the Invoices and Memos form. You can edit only a salesperson in the Salesperson ID column. If you need to correct any other details, you can delete the accounts receivable invoice, adjust the pro forma invoice on the Pro Forma Invoices form, and release the pro forma invoice to make the system generate the adjusted accounts receivable invoice.
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        To open a pro forma invoice that corresponds to an accounts receivable invoice you are viewing
        on the Invoices and Memos form, click Pro Forma Invoice on the More menu (under Related
        Documents).
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Aer you have reviewed the invoice details, you click Release on the form toolbar of the Invoices and Memos form to release the accounts receivable invoice. On release of the accounts receivable invoice, the system generates a general ledger transaction and the corresponding project transaction. On release of the project transaction, the system updates the revenue budget of the corresponding project on the Revenue Budget tab of the Projects form as follows:
The Actual Quantity and Actual Amount of the corresponding revenue budget line are increased by the line quantity and line amount of the released accounts receivable invoice.
The Dra Invoice Amount and Dra Invoice Quantity of the corresponding revenue budget line is decreased by the line amount and line quantity of the released accounts receivable invoice, respectively.

Workflow of Pro Forma Invoices

The following diagram illustrates the workflow of processing a pro forma invoice.

Pro Forma Invoices: To Process a Pro Forma Invoice for a Project

In this activity, you will learn about the workflow of a pro forma invoice that has been prepared for a project.

Story

Suppose that the HM's Bakery and Cafe customer has ordered juicers from the SweetLife Fruits & Jams company, along with the following services: site review, installation, and employee training on operating the juicers. SweetLife's project accountant has created a project that should be billed on demand as the juicers are installed and all the services are provided. Before the invoice is sent to the customer for payment, the customer has requested a pro forma invoice to be submitted for acceptance. The site review has taken place, the juicers have been delivered and installed, and SweetLife's consultant has provided the training. Aer that, the project accountant has entered project transactions and updated the progress of the project. Acting as the project accountant, you will bill the customer, print the pro forma invoice, and email the invoice to the customer for approval on 1/30/2025. Then you will release the pro forma invoice and the associated accounts receivable invoice.

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 Projects (PM301000) form, the HMBAKERY5 project has been created and the PHASE1, PHASE2, PHASE3, PHASE4, and PHASE5 project tasks have been created for the project. The revenue budget level of the project is Task and Item. On the Summary tab (Billing and Allocation Settings section), the Create Pro Forma Invoice on Billing check box has been selected for the project. With this setting, the system creates a pro forma invoice for the project when you run project billing.
On the Project Transactions (PM304000) form, the PM00000008 batch of project transactions related to the project has been created and released.

Process Overview

On the Projects (PM301000) form, you will initiate the creation of a pro forma invoice for the project. Then you will review the created pro forma invoice on the Pro Forma Invoices (PM307000) form. You will then print the pro forma invoice, email the invoice, and release it on the same form. On the Invoices and Memos (AR301000) form, you will release the accounts receivable invoice created based on the pro forma invoice.

System Preparation

To prepare to perform the instructions of the activity, do the following:

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.
On the Projects Preferences (PM101000) form, on the General tab (General Settings section), make sure Detailed is selected in the Revenue Budget Update box.

Step 1: Creating and Processing a Pro Forma Invoice To prepare and process a pro forma invoice for the project, do the following:

On the Projects (PM301000) form, open the HMBAKERY5 project. On the Cost Budget tab, review the cost budget of the project. Notice that the Actual Amount of each line equals the original budgeted amount, which means the corresponding project transaction has been created and released.

              You can review the transactions that correspond to each cost budget line on the Project
              Transaction Details (PM401000) form, which opens if you click the line and then click View
              Transactions on the table toolbar. The transactions have the Billable check box selected and
              the Billed check box cleared, which means the transactions are ready for billing and have not
              been billed yet.

On the Revenue Budget tab, review the revenue budget lines of the project, and make sure that the Pending Invoice Amount of the revenue budget lines is nonzero. In the table selection area, notice that the Pending Invoice Amount Total is equal to 2,700.00. You can bill the project for this amount.
On the form toolbar, click Run Billing. The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form.
On the Progress Billing tab, make sure that the pro forma invoice includes five progress lines. Review the invoice lines that have been created based on the revenue budget lines of the project. The Progress Billing Total in the Summary area is 2,700.00.
In the Summary area, right of the Project box, click the Edit button to review how the creation of the pro forma invoice has aﬀected the revenue budget of the project. The system opens the Projects form with the HMBAKERY5 project selected. On the Revenue Budget tab, notice that amounts from the Pending Invoice Amount column have been moved to the Dra Invoice Amount column, and now the Pending Invoice Amount of all the revenue budget lines is zero. In the table selection area, notice that the Pending Invoice Amount Total is also equal to zero.
Return to the Pro Forma Invoices form with the pro forma invoice that you have prepared earlier.

On the Time and Material tab, make sure that the pro forma invoice includes three time and material lines that have been created based on the transactions prepared for billing. The Time and Material Total in the Summary area must be 7,750.00.

              You can review the transactions that correspond to each line in the Transaction Details dialog
              box, which opens if you click the line and then click View Transaction Details on the table
              toolbar.

On the More menu, click Print to generate the printable version of the pro forma invoice. The system navigates to the Pro Forma Invoice (PM642000) report and opens the printable version of the pro forma invoice.
Click Back in the browser window to go back to the pro forma invoice on the Pro Forma Invoices form, and on the More menu, click Email to send the invoice as an email to the customer. The system creates an email by using the notification template defined for the project on the Mailing & Printing tab of the Projects form, attaches the printed report, and sends the email to the customer by using the email address specified in the Bill-To Contact section on the Addresses tab of the Pro Forma Invoices form, which is copied from the project from the Bill-To section on the Addresses tab of the Projects form. 10.On the form toolbar, click Remove Hold to assign the pro forma invoice the Open status. 11.On the form toolbar, click Release. The system creates the accounts receivable invoice based on the pro forma invoice and assigns the Closed status to the pro forma invoice.

Step 2: Processing an AR Invoice To process the accounts receivable invoice that was generated based on the pro forma invoice, do the following:

While you are viewing the pro forma invoice on the Pro Forma Invoices (PM307000) form, on the Financial tab, click the AR Ref. Nbr. link to open the accounts receivable invoice that was created.
On the Invoices and Memos (AR301000) form, which opens, notice that all progress billing and time and material lines of the pro forma invoice have been copied to the Details tab of the accounts receivable invoice, as the following screenshot illustrates. The settings in these lines cannot be edited, except in the Salesperson ID column. Figure: The AR invoice prepared based on the pro forma invoice
On the form toolbar, click Remove Hold to assign the accounts receivable invoice the Balanced status, and then click Release.
On the Financial tab, click the link in the Batch Nbr. box. On the Journal Transactions (GL301000) form, which opens, review the created general ledger transactions. Notice that eight transaction lines have the project and project task specified. For these GL transactions, the system created the corresponding project transactions. For the transactions with the X project specified (the non-project code), the system created no project transactions.
Return to the accounts receivable invoice that you have prepared on the Invoices and Memos form.
On the More menu (under Inquiries), click Project Transactions to review the corresponding project transactions.
On the Project Transaction Details (PM401000) form, which opens, review the project transactions related to the AR invoice. Notice that eight transactions have AR Invoice in the Orig. Doc. Type column and the reference number of the accounts receivable invoice you have released in the Orig. Doc. Nbr. column. These transactions also have the reference number of the general ledger batch you have just reviewed in the GL Batch Nbr. column.
On the Projects form, open the HMBAKERY5 project, and review the Invoices tab. Notice that in the only line, the reference numbers of the prepared pro forma invoice and the corresponding accounts receivable invoice are shown in the Pro Forma Reference Nbr. and AR Reference Nbr. columns, respectively. The total billed amount in the AR Doc. Orig. Amount column is $10,450.
On the Revenue Budget tab, make sure the Actual Amount of revenue budget lines was updated on release of the AR invoice. Also, make sure that the following new revenue budget lines have been created based on the billed project transactions:

The line with the PHASE2 project task and the JUICER10 inventory item
The line with the PHASE3 project task and the JUICER15 inventory item
The line with the PHASE4 project task and the JUICER20C inventory item Notice that the lines now have actual values and that the original budgeted values in these lines are 0.

You have finished processing the pro forma invoice and the AR invoice for the project. Part 3: Project Billing | 61