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Project deferrals

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Subscription billing enables organizations to manage revenue and expense deferrals through deferral schedules. Projects help you plan, create, manage, control, and complete customer-focused work for your organization.

On some time and material projects, the revenue or cost might have to be deferred and recognized over a period. For example, for one project, the customer agrees to pay for a yearly subscription for a service, such as cloud storage or a support contract. A deferral schedule can be created to enable project revenue for the service to be recognized monthly. This approach helps manage revenue for the project, because it can be recognized when it's earned.

Note

Billing schedules with projects are available only in Microsoft Dynamics 365 Project Operations – Stocked/Production-based deployments.

Enable billing schedules with projects

In the Feature management workspace, you must enable the Billing schedules and deferrals with projects feature in the Subscription billing module. After it's enabled, refresh the browser window. This integration works with the Project management and accounting module in Dynamics 365 Finance.

Project group setup

A project group option for Deferred has been added to the Post costs options for the Post costs - hour, Post costs - expense, and Post costs - item fields. In addition, Deferred revenue - hour, Deferred revenue - expense, Deferred revenue - item, and Deferred revenue - fee fields are added to the project group.

Note

The deferred option for post costs and the deferred revenue options are available for only time and material projects.

Create project transactions with deferrals

To create a deferral schedule from a time and material project, follow these steps.

If you're using billing rules:

  1. On the All projects page, select a project.

  2. Select the project contract.

  3. Select Add to create a billing rule where the Line type field is set to Time and material.

  4. Move the ProjectID project to the Selected projects list.

  5. Select Chargeable categories, and then move the desired categories for deferrals to the Selected categories list.

  6. Enter project hour, expense, fee, or sales order transactions.

    Note

    A deferred option will appear and will be marked on the line for transactions that are correctly configured for deferrals.

  7. Create and post the invoice proposal. Deferral schedules will be created when the invoice proposal is posted.

If you're not using billing rules:

  1. On the All projects page, select a project.

  2. Enter project hour, expense, fee, or sales order transactions. Select Chargeable for the line property.

    Note

    A deferred option will appear and will be marked on the line for transactions that are correctly configured for deferrals.

  3. Create and post the invoice proposal. Deferral schedules will be created when the invoice proposal is posted.

The All deferral schedules page displays the newly created deferral schedule. By default, the Transaction type field will reflect the originating project transaction type for the deferral.

View a deferral schedule from a project or a project contract

To view a deferral for a project transaction, follow these steps.

  1. In the project or project contract, select Posted transactions.
  2. Select the project transaction.
  3. Select Subscription billing and then Deferral schedules.