First, you will need follow the instructions on PartnerSource at https://mbs2.microsoft.com/Knowledgebase/KBDisplay.aspx?scid=kb;EN-US;2984369 to download and install the Exchange Web Services Managed API on each user’s workstation.

The administrator will need to enter the Exchange Server parameters for the AX company, which can be found under Organization Administration > Setup > Microsoft Outlook or Exchange Server Integration > Microsoft Outlook or Exchange Server Parameters. From there, the administrator can select Exchange Server as the synchronization method as well as the default Exchange Server URL.

Once the administrator has configured the integration, the only setup difference between Microsoft Outlook and Exchange Server is that users will have to enter their Exchange Server credentials during the setup process at Home > Setup > Microsoft Outlook or Exchange Server setup wizard.

Once the setup is done, you are able to synchronize your appointments, contacts, and tasks in the same manner as with the Microsoft Outlook integration feature.

Additional information on how to configure integration with Exchange Server can be found on TechNet: https://technet.microsoft.com/en-us/library/gg230659.aspx.

While this was a seamless experience for the end user, it turned out to be fairly complex to configure and a challenge to troubleshoot when something went wrong. So when we looked at updating the integration for Project Server 2013, we talked to customers and partners and found that many of them simply wanted to be able to modify their project work breakdown structure in the Project client application. Looking ahead, we also determined that the architecture of the existing integration service would be incompatible with Project Online in Office 365.

With Dynamics AX 2012 R3, we provided a simpler, out-of-box integration with the Microsoft Project application through a client add-in (white paper here). With this solution, Microsoft Project files can be linked directly with projects in Microsoft Dynamics AX. Customers can still get rich PPM functionality by additionally publishing their MPP files to Project Server (2010 or 2013) or Project Online in Office 365. The main differences are that the integration will be through the client rather than with the two servers and the field mapping is fixed.

While direct Project Server integration is still available in AX 2012 R3 it will be removed in future releases. For out-of-box capabilities, customers and partners are encouraged to use the new add-in instead. We realize that some customers would prefer a server-based integration or have customized information that they would like to map between the systems. We have partnered with TPG The Project Group to ensure that their PSLink product works well with Dynamics AX 2012. You can read about their solution here.

For CU8, we have added the ability to specify values for the each of the new transactions that will be created during the splitting process. To illustrate, I have posted 2 hour transactions against Project 0000023 and selected both of them for adjustment.

When I select the two transactions in the top grid and click the Adjust button, you will see that there is a new grid control in the Adjust transactions form used for creating the new transactions.

For each row you add in the grid, a new transaction will be created per transaction initially selected in the Adjustments form. For example, if you select 3 transactions and add 3 lines to the grid, you will get 3 x 3 = 9 new transactions to replace the original 3. Any values not specified in the grid will retain their original values.

In the above example, I would like to split each of the original two transactions into two new ones, one for project 000022-01 (NoCharge) and one for project 000023 (Charge). Since I didn't specify a value for project category in the grid, the new transactions will retain their original category values. When I click the OK button (after checking I have 100% allocated across the rows), I see the results:

As you can see, the original transaction for 10.00 hours was split into two transactions of 5.00 hours each. When I select the second transaction for 12.00 hours in the top grid, I see that it is similarly split into 2 transactions of 6.00 hours each. In both cases, the original category was retained.

On a final note, you will notice that the Adjust transactions form has a new check box labeled Funding source. This will force the system to re-apply the project contract funding rules, including any splits and limits. Previously, the funding rules were only applied if you made a change to the sales price in the newly created transactions. 

As always, feel free to leave any comments or suggestions.

The formula used is:

Accrued Revenue = Contract Value / (Project End Date - Project Start Date) * Number of Days in the Period

To use this new method, you will need to create a new cost (estimate) template by navigating to Project management and accounting > Setup > Estimates > Cost template. Create a new template and specify names for the 3 mandatory cost lines. These cost lines will actually not be used in the revenue calculation but still need to be specified for recording the costs. Choose "Straight line" in the Completion based on field.

Next, you can create a new fixed-price project group that uses this cost template by navigating to Project management and accounting > Setup > Posting > Project groups. If you like to manually create the estimate project (I know some of you are out there), you can select it on the Estimate project details form.

Once you create a project and assign it to this project group, you will notice that the Actual start date and the Actual end date field are required. These will be used to determine the time frame used to compute the revenue amounts for the project. If you forget to enter data into these fields, then no revenue will be recognized for the project.

As an example, let's say I have a 2 month subscription for which the customer will be charged 1,000.00 USD on October 1st. The subscription term runs from 15 October through 15 December. I specify the start and end dates on the project and set up the billing (on-account).

I set the project stage to "In process" and invoice the subscription amount. I can also record some labor or expenses against the project. Although they will not be considered in the revenue recognition calculation, they will impact the project profitability.

At the end of the month, I look at the amount of revenue to be recognized through the estimate system. Here's what I see in the Estimate form for the project.

As you can see, I have invoiced the full 1,000.00 of contract value. However, I am only 27.42% complete with the contract. This is because there are 17 days from October 15th through 31st (including the start date) out of the total contract duration of 62 days. This results in accrued revenue of 274.19. Here is what it looks like when I have completed the contract at the end of December.

As you can see, 75.81% was recognized in November and the remainder was recognized in December. When I include the costs, the gross margin on this contract was 241.94.

As part of this change, we have also moved the "Work progress percentage" method to the Estimate template form. This method uses the top level Percent complete field from the effort tracking view of the Work Breakdown Structure to compute the revenue. In the initial R3 release, we put this method on the cost lines but have decided that it makes more sense at the template level. If you install CU8, we recommend that you update your templates if you are using this method.

Although it was certainly possible to get revenue recognition working in previous versions of Dynamics AX, there were several limitations. First, the estimate process was very slow for projects with a large number of transactions. We addressed this issue in the R3 release by making some optimization in the estimate creation code. Here are some representative numbers from our improvements to the estimate creation process.  

As you can see, even estimates for projects with a large number (500K) of transactions can now be created or recalculated in a few minutes.

The second limitation was the difficulty in setting up a periodic batch process for the estimate system. You are only allowed to create a single estimate per project per period and any transactions that are posted after an estimate is created are not reflected in the estimate unless you use the Recalculate estimates periodic process or delete the estimate and recreate it. In the upcoming cumulative update 8 (CU8) release, we are making some changes in the periodic Create estimates form to support running the estimate system as an automated process for all fixed price projects.

First, we have made the Period code field optional. This means it will run for every project in the system, even if they are using different revenue recognition period codes (monthly, bi-monthly, etc.). Second, we have made the Estimate date field optional so you do not have to create a batch job each period. For example, if you are recognizing revenue on a monthly basis, you can set up a single batch job that runs all year long instead of different jobs for January, February, etc.

Finally, we have added the behavior that if the estimate for the period has already been created, then it will simply recalculate the percentage complete based on any new transactions (or an update on the WBS effort tracking form). This means you should never need to run the Calculate estimate process again. Note that the system will not create a new estimate for a period until the estimate for the project in the previous period has been posted.

In general, I would recommend that you set the batch job recurrence at most for once or twice per day. Recalculating the estimates for medium to large projects takes a reasonable amount of processing time (all of the transactions are copied into a temp table) so running the batch too often may impact your system performance.

These changes would not be useful if you couldn't see the results. Therefore we have enhanced the Estimate form in CU8 as well. You can now access it from Project management and accounting > Inquiries > Estimates > Estimates. Here is a picture of the form:

A couple of things to notice. First, you can see all active fixed-price projects in the same form. Previously, you would have to go to the project list page, select a single project and click the Estimates button to get values for the project.

Next, we promoted the following columns to the Overview grid:

• Percentage complete
• Contract value
• invoiced revenue (per-period or accumulated)
• Accrued revenue (per-period or accumulated)
• Total cost (per-period or accumulated)
• Gross margin (per-period or accumulated)

These columns make it easy to see whether you are over-billed (billings in excess of revenue) or under-billed (revenue in excess of billings) and spot any anomalies before the end of the month. 

We also added some filters to the form. For example, you can select the period for the estimates that are displayed in the form. It will default to the current period but you can select a different period to see previously posted values. We also have a Columns selector that lets you choose whether you are seeing the period to date (estimate) or project to date (accumulated) values in the grid.

Finally, you can multi-select projects on the form to post once you are satisfied with the numbers.

I hope that these changes will make it easier for you to manage your revenue in fixed-price projects.

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You will find these courses on the new Microsoft Dynamics learning platform. To access this site select "E-learning" from the "Readiness & Training" menu on CustomerSource / PartnerSource. This will take you to the following page:

From there, search for 80643 and select "Project Management and Accounting - Basic in Microsoft Dynamics AX 2012 R3". The player will then load and the course will begin.

In addition to videos with the course content and audio, you can also try out the concepts that you learned using a simulated environment (no VM required).

You can also test your knowledge with a quiz at the end of each module.

After you get through the basic course, you can try 80644, "Project Management and Accounting - Advanced in Microsoft Dynamics AX 2012 R3". I hope that these courses will help you better understand the capabilities of the latest release. If you have any feedback please let me know!

We built this library as an extension (111 new activities and tasks) to the standard APQC cross-industry library. This means that you can have a single process model that includes the cross-industry processes (e.g. Human Capital Management, Sales and Marketing, Financial Management) in addition to processes that are specific to a professional services organization.

The additional tasks and activities are under the following nodes:

• 3.2.1.1.1 Set up standard rate cards
• 3.2.1.1.2 Configure standard costs for labor and expenses
• 3.5.3.5  Process project quotations
• 4.6 Deliver projects
• 6.1.2.2.1 Define project roles and accountability
• 6.6.3.1 Manage project resources
• 8.1.5 Perform project accounting
• 8.5.1.1.1 Configure timesheets and timesheet periods
• 8.5.1.2.1 Enter project timesheets
• 8.5.1.2.2 Approve and post project timesheets
• 8.5.1.2.3 Manage timesheet delegation
• 8.5.1.2.4 Manage timesheet favorites
• 8.5.1.5.1 View project resource utilization
• 8.6.1.8.1 Process pay-when-paid transactions
• 8.6.1.8.2 Process vendor payment retention

You will also notice that we have provided videos and flowcharts for around 35 of these new activities. We will continue to add new videos in the future.

We want your feedback! Is this useful for you? Are there missing activities? Feel free to add your comments below.