In my last post, I showed you how to set up the new intercompany invoicing for projects feature in the upcoming AX 2012 R3 release. I’ll finish by show you how the transactions are actually processed. In my example, I’m an employee in Contoso Consulting USA (SUSB) working on a project in Contoso Consulting France (SFRA). Below is my weekly timesheet:
To keep things simple, I have only recorded my work on Monday for a project in SFRA. My timesheet could have a mix of SFRA and SUSB projects. After submitting my time to workflow and posting the approved timesheet, let’s take a look at the ledger voucher.
The first two lines of the voucher account for the payroll cost of the employee time and will look familiar to you if you have worked with AX projects. However, note that the last two lines (a 10% markup on the cost) are generated to handle the accrued revenue that will be recognized when SFRA will be billed for the time. Before AX 2012 R2 CU7, this amount would have been posted directly to the contracting legal entity ledger. The next step is to generate an invoice for SFRA. This is done by clicking the New button on the list page Project management and accounting > Common > Project invoices > Intercompany customer invoices.
In this example, I am selecting the single timesheet transaction that I previously posted. You can create an single invoice with multiple timesheets, employee expenses, and vendor expenses. You can also create them in batch via Project management and accounting > Periodic > Project invoices > Create intercompany customer invoices. When I click OK, I can see the resulting invoice.
Unlike a standard project invoice, this invoice is based on the free text invoice in the accounts receivable module. There is an additional tab on the line details where you can see details about the source transaction. The sales price defaults to the one established in the transfer pricing form but can be changed by the user (for example, you may need to negotiate a lower rate with the contracting legal entity). Let’s take a quick look at the voucher from posting this invoice.
Two of the lines in the voucher represent the reversal of the the revenue accruals done at time of timesheet posting. The other two lines are the intercompany revenue and receivable customer balance from the invoice posting. In this case, they are the same amount but you could also recognize more or less revenue than originally accrued. Also note that if there are tax requirements on the intercompany labor, they would be represented here.
The other thing that happens when the intercompany invoice is posted is that a corresponding vendor invoice is created in the contracting legal entity. I’ll switch over to the other company and find this invoice from Accounts payable > Common > Vendor invoices > Pending vendor invoices. Let’s take a look at the vendor invoice.
The first thing you will notice is that this is not an item-based invoice line. It uses the procurement category that we set up previously for the contracting legal entity. The other thing that you might notice is the value of the Project category field in the line details. The category is an hour category (PM), not an item category. We have extended the vendor invoice to support any project category (item, hour, or expense). Finally, notice that the cost price (in USD) is the same that we used on the intercompany customer invoice. The sales price (in EUR) is based on the sales price setup in the contracting company and represents what the project customer will pay.
To wrap up, let’s take a look at the project transaction created from posting the intercompany vendor invoice.
As you can see, the costs are recorded against the project in SFRA. The Transaction origin is “Vendor invoice” and the Worker field references an employee of SUSB. If this transaction is for a time and materials project, it is ready to be added to a project invoice proposal.