Back to P200: Project Accounting Extended Scenarios

Lesson 5: Billing for Remainder and Writing Oﬀ Amounts

Part 3: Corrections and Adjustments

Acumatica ERP provides pro forma 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. Once all the necessary changes have been applied to the pro forma invoice, you release it and the system creates an accounts receivable invoice with all the information copied from the pro forma invoice. With this process, you minimize corrections that directly aﬀect the accounts receivable subledger.

Learning Objectives

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

Add to the pro forma invoice an extra adjustment line that does not originate from project transactions
Postpone the billing of a pro forma invoice line
Write oﬀ a pro forma invoice line partially or fully

Applicable Scenarios

You modify a pro forma invoice if the customer has requested any adjustments. When you reach an agreement with the customer, you release the pro forma invoice to prepare the accounts receivable invoice.

Time and Material Billing: Adjustments, Remainders, and Write-Oﬀs

You may need to modify a pro forma invoice if you send this invoice to the customer for acceptance and if the customer requests some adjustments. On the Pro Forma Invoices (PM307000) form, you can edit the lines of a pro forma invoice if it is assigned the On Hold status. If a pro forma invoice has the Closed status but you have not released the created accounts receivable document yet, you can delete the AR document to be able to edit the pro forma invoice.

          You can also rearrange the time and material lines of the pro forma invoice by dragging them to the
          appropriate positions.

Increasing the Billed Amounts

On the Time and Material tab of the Pro Forma Invoices (PM307000) form, you can increase the billed amounts by doing any of the following:

Increasing the Amount to Invoice of the pro forma invoice line to bill the customer in a greater amount.
Adding a new line to the pro forma invoice based on an unbilled transaction. To do this, you click Upload Unbilled Transactions on the table toolbar. In the Upload Unbilled Transactions dialog box, which opens, you select the lines with the project transactions that have not been billed yet, and click Upload & Close. The system creates new lines for these project transactions.
Manually adding to a pro forma invoice an adjustment line that does not originate from the project transactions.

Postponing the Billed Amounts

To postpone the full amount of any pro forma invoice line, delete this line from the pro forma invoice on the Time and Material tab of the Pro Forma Invoices (PM307000) form. This line will appear in the next pro forma invoice prepared for the project. To postpone a partial amount of the pro forma invoice line, decrease the Amount to Invoice and select Hold Remainder in the Status column. The unbilled remainder (that is, the diﬀerence between the original amount and the edited amount) will be postponed until the next billing for the project. For an unbilled remainder to be billed, the corresponding AR invoice that contains the line from which this remainder originates must be released. You cannot postpone the partial amount of the pro forma invoice lines that have no link to a project transaction.

          A pro forma invoice line with no link to a project transaction may be added manually by the user or
          generated by a billing rule that includes multiple time and material steps that have been configured
          for the same account group.

Writing Oﬀ the Billed Amounts To write oﬀ the full amount of the pro forma invoice line, you select Write Oﬀ in the Status column for the line on the Time and Material tab of the Pro Forma Invoices (PM307000) form. This line will no longer appear in pro forma invoices prepared for the project. To write oﬀ a partial amount of the pro forma invoice line, decrease the Amount to Invoice and select Write Oﬀ Remainder in the Status column. The unbilled remainder (that is, the diﬀerence between the original amount and edited amount) will be written oﬀ and will no longer appear in pro forma invoices prepared for the project. You cannot fully or partially write oﬀ the amount of the pro forma invoice lines that have no link to a project transaction.

Decreasing the Billed Amounts

On the Time and Material tab of the Pro Forma Invoices (PM307000) form, you can click a pro forma invoice line and click View Transaction Details on the table toolbar. The system opens the Transaction Details dialog box, which shows the list of project transactions that correspond to this line. The Billed Quantity and Billed Amount values for each project transaction in the list were calculated by using the formula of the billing rule. These values are totaled to populate the Billed Quantity and Billed Amount of the pro forma invoice line. To reduce the billed quantity and amount of the pro forma invoice lines, you delete the particular transaction from the list. The deleted project transaction is unlinked from the pro forma invoice line and will appear in the next pro forma invoice prepared for the project.

Workflow of Changing Pro Forma Invoices

The following diagram illustrates the workflow of making changes to a pro forma invoice. Time and Material Billing: To Postpone and Write Oﬀ Amounts

This activity will walk you through the process of postponing and writing oﬀ amounts in a pro forma invoice.

Story

Suppose that the Thai Food Restaurant customer has ordered a juicer, along with the services of installation and employee training on operating the juicer from the SweetLife Fruits & Jams company. SweetLife's project accountant has created a project. The juicer has been delivered and installed, and a consultant has provided the training. The project accountant has billed the customer and sent the created pro forma invoice for approval. SweetLife and the customer have agreed on the following adjustments to the pro forma invoice:

The customer will pay $2,000 of the cost of the juicer with the first invoice (the accounts receivable invoice corresponding to this pro forma invoice) and the rest of the juicer's cost with the second invoice next month.
The cost of the site review should be written oﬀ of the invoice, because the project manager agreed to provide the customer a free site review.
A 50% discount will be applied to the cost of the training.
The customer will pay $100 for an additional training session in Phase 1 of the project. Acting as the project accountant, you will make the needed corrections to the pro forma invoice and bill the customer. You will then bill the customer for the second time with the amount postponed in the first 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 provide support for the project accounting functionality.
On the Projects (PM301000) form, the TOMYUM4 project has been created and the PHASE1 and PHASE2 project tasks have been created for the project.
On the Project Transactions (PM304000) form, the PM00000001 batch of project transactions related to the project has been created and released.
On the Pro Forma Invoices (PM307000) form, the 000003 pro forma invoice has been created for the TOMYUM4 project and saved with the On Hold status.
On the Stock Items (IN202500) form, the JUICER15 stock item has been created.
On the Non-Stock Items (IN202000) form, the SITEREVIEW, INSTALL, and TRAINING non-stock items have been created.

Process Overview

In this activity, you will make corrections to the pro forma invoice and release the invoice on the Pro Forma Invoices (PM307000) form. On the Invoices and Memos (AR301000) form, you will review the accounts receivable invoice that was created based on the pro forma invoice; you will then release the accounts receivable invoice. You will then create one more pro forma invoice for the customer with the amount postponed in the first pro forma invoice.

Step 1: Adjusting the Pro Forma Invoice To adjust the pro forma invoice according to the agreements that have been reached with the customer, do the following:

On the Projects (PM301000) form, open the TOMYUM4 project.
On the Invoices tab, click the link in the Pro Forma Reference Nbr. column of the only row to open the pro forma invoice that you need to adjust.
On the Time and Material tab of the Pro Forma Invoices (PM307000) form, which opens, adjust the invoice lines as follows (see the adjustments in the screenshot below): a. In the line with the PHASE1 project task and the JUICER15 inventory item, change Amount to Invoice to
When you enter an Amount to Invoice that is less than the Billed Amount, the system specifies Hold Remainder as the Status in this line; the diﬀerence between the Billed Amount and the Amount to Invoice will be billed later. b. In the line with the PHASE1 project task and the SITEREVIEW inventory item, select Write Oﬀ as the Status to write oﬀ the full amount of the line and exclude it from billing. The system specifies 0 in the Amount to Invoice column for this line. c. In the line with the PHASE2 project task and the TRAINING inventory item, do the following: a. Change Amount to Invoice to 200.00. b. Select Write Oﬀ Remainder as the Status to write oﬀ the diﬀerence between the Billed Amount and the Amount to Invoice and exclude this diﬀerence from billing.
Add a new line with the following settings (also shown in the following screenshot):

Project Task: PHASE1
Inventory ID: TRAINING
Cost Code: 00-000
Description: An additional training session within phase 1
Amount to Invoice: 100.00 Aer all the adjustments you have made, the invoice total in the Summary area should be $2,700.
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     Figure: The adjustments to the pro forma invoice
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Save your changes to the pro forma invoice.
On the form toolbar, click Remove Hold to assign the pro forma invoice the Open status, and then click Release to release the pro forma invoice. The system creates the accounts receivable invoice based on the pro forma invoice and assigns the Closed status to 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 form toolbar of the Invoices and Memos (AR301000) form, which opens, click Remove Hold to assign the invoice the Balanced status, and then click Release to release the accounts receivable invoice.

Step 2: Billing the Project for the Remainder To bill the customer the postponed amount (which is $500 of the juicer cost), do the following:

On the Projects (PM301000) form, open the TOMYUM4 project, and on the Cost Budget tab, review the updated cost budget of the project. Click the cost budget line with the PHASE1 project task and the JUICER15 inventory item, and on the table toolbar, click View Transactions.
On the Project Transaction Details (PM401000) form, which opens, review the list of project transactions that correspond to the selected line. The transaction with an original document type of Unbilled Remainder has been created on release of the AR invoice that corresponds to the pro forma invoice from which the unbilled remainder originates. The identifier of the AR invoice is shown in the Orig. Doc. Nbr. column of the line. The transaction has the Billable check box selected and the Billed check box cleared, which means the transaction can be billed.
Close the form to return to the Projects form with the TOMYUM4 project selected, and on the form toolbar, click Run Billing to bill the project for remainder. The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form.

On the Time and Material tab, review the pro forma invoice line that the system has created based on the unbilled remainder transaction. Only one line with the PHASE1 project task and JUICER15 inventory item has been added to the pro forma invoice. The amount of the line is $500.

              The line with the PHASE1 project task and the SITEREVIEW inventory item has not been added
              because you have written it oﬀ in the full amount. The line with the PHASE2 project task and
              the TRAINING inventory item has been written oﬀ partially, and thus also has not been added
              to the pro forma invoice.

You have corrected the pro forma invoice and billed the project for the unbilled remainder.