Create a project contract to invoice for time and materials

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Important

This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Use these procedures to create a project and project contract, so that you can invoice a customer for the time and materials used for a project. The timing of the invoices is negotiated with the customer.

Example

Your organization offers software development services. Your organization agrees to provide five technical consultants to work on a software development project for a customer for the next six months. The customer agrees to pay $150 for each consulting hour posted to the project. Your organization agrees to send an invoice to the customer at the end of each month for the hours posted to the project for the month.

Use these procedures to set up a contract, an associated project, and the billing rules to use to calculate the customer invoice amount at the end of each month.

After you have created the contract and the project, you can set up the details of the project. For example, you can define the activities of the project and assign workers to the project.

Prerequisites

Before you create a project with billing rules, you must set up the following project information in the Project management and accounting parameters form:

  • Set up the number sequence to use when you create a billing rule.

  • Set up a fee journal to use by default for posting invoices on Time and material projects.

Create a contract for time and materials

Use this procedure to create a project contract for Time and material projects.

  1. Click Project management and accounting > Common > Projects > Project contracts.

  2. In the Project contracts form, on the Action Pane, on the Project contract tab, click Project contract.

  3. In the New project contract form, complete the following fields:

    • Project contract ID

    • Name

    • Funding type

    • Funding source

    • Sales currency – By default, this is the currency to use for customer invoices associated with the project contract. You can modify the sales currency in a specific customer invoice.

    Click OK. This information is copied to the header of the Project contracts form.

  4. In the Project contracts form, complete the rest of the necessary information for the project. To change default values in the form, on the Action Pane, on the Project contract tab, click Edit.

Create a project for time and materials

Use this procedure to create a project and any subprojects associated with a contract.

  1. In the Project contracts form, on the Action Pane, on the Project contract tab, in the New group, click Project.

  2. In the Create project form, enter a project type of Time and material.

  3. Select a project group.

  4. Enter additional project information. For example, complete the following fields:

    • Project ID

    • Project name

    • Project group – A project group defines posting information for projects assigned to the group.

    • Project contract ID – This associates the project contract with the project.

      Note

      The Project contract ID field is automatically filled with the number of the project contract from the Project contracts form. You can change the project contract to a different contract number.

    • Customer

  5. Enter any additional required information, and then click OK to create the project.

  6. After you have created the project, set the project stage to In process. For more information about how to set a project stage, see Modify a project stage.

Create billing rules for a time and materials contract

After you have created the contract and the associated project, use this procedure to create the billing rules for the contract.

  1. Click Project management and accounting > Common > Projects > Project contracts. Select a project contract.

  2. In the Project contracts form, on the Project contract tab, in the Set up group, click Billing rule.

  3. In the Billing rules form, click New.

  4. Select a line type of Time and material.

  5. If you want to include indirect costs in the billing rule, on the Billing rule line details FastTab, select the Include indirect costs check box.

  6. You can assign the billing rule to additional projects. On the Project FastTab, in the Available projects section, select a project, and then click Add. The project is displayed in the Selected projects section.

  7. You can select categories to designate the transactions to bill to the customer. On the Project FastTab, in the Selected projects section, select a project, and then click Chargeable categories.

    In the Billing rules setup for project / category form, select the categories to assign to the project and add to customer invoices.

  8. If you want to enter a payment retention percentage for the billing rule, on the Payment retention terms FastTab, select a funding source, and then, in the Retention percentage field, enter a retention percentage.

See also

Create billing rules

Project contracts (form)

Projects (form)

Billing rules (form)

Project management and accounting parameters (form)