Pay when paid vendor payments

Applies To: Project Operations for resource/non-stocked based scenarios

This topic explains how to use the pay when paid (PWP) scenario.

Create a purchase order that has PWP terms

When you post an invoice from a vendor, if the vendor is subject to PWP terms, those terms are shown on the purchase order (PO) lines. To create a PO that has PWP terms, follow these steps.

1. In Microsoft Dynamics 365 Finance, follow one of these steps:

   • Go to Procurement and sourcing > Purchase orders > All purchase orders. On the Action Pane, select New. In the Create purchase order dialog box, select the vendor for which PWP terms are set up on the project, enter other required information, and then select OK.
   • Go to Project management and accounting > Projects > All projects. On the Action Pane, on the Manage tab, select Item task. Select the purchase order. Select the vendor for which PWP terms are set up on the project, and then select OK.

2. On the Purchase order page, on the Purchase order lines Fast Tab, select Add line to create a purchase order line.

3. Select the item number or procurement category, and enter the other required details. Review the details of the PO line for the vendor.

   The Pay when paid option is automatically selected, and the value in the PWP threshold percentage field is automatically copied from the PWP threshold percentage field on the Projects page.

4. If you don't want to apply PWP terms to the vendor for a PO line, clear the Pay when paid option. In this case, the PWP threshold percentage field for the PO line will be reset to 0 (zero).

5. On the Purchase order page, on the Action Pane, on the Purchase tab, select Confirm to confirm the purchase order.

6. On the Action Pane, on the Invoice tab, select Invoice to generate the invoice for the purchase order.

Create a project invoice proposal

Project invoice proposals are used to create project invoices for the customer. In the PWP scenario, vendor payments are dependent on customer payments according to the PWP settings. However, there are options that let you release the payments without customer payments as you require. To create a project invoice for the customer, follow these steps.

1. In customer engagement apps, go to Project > Projects, and select the project.
2. On the Actuals tab, select the actual line that is generated by the PO that has the Unbilled sales transaction type. Then select Ready for invoice.
3. Go to Sales > Sales > Project contract, and select the project contract.
4. On the Action Pane, select Invoice to generate the customer invoice.
5. In Finance, go to Project management and accounting > Periodic > Import from staging table, and select OK to generate the Project operations integration journal.
6. Go to Project management and accounting > Project invoices > Project invoice proposal, and select Post to post the invoice proposal that was generated for the project.

Update a customer payment and pay the vendor

When a vendor completes its work on a project and sends you an invoice, you must review the project status and customer invoices to determine whether the PWP terms were met for the project. If the PWP terms for the vendor were met, you can determine which lines on the vendor invoice to pay, based on the customer payments for the project. If you decide to pay the vendor even though the PWP terms weren't met, you can override the PWP terms on the Vendor invoice with pay when paid page.

1. In Finance, go to Project management and accounting > Projects > All projects, and select the project.
2. On the Action Pane, select Control, and then select Vendor invoices to show all vendor invoices that have been generated for the project.
3. On the Vendor invoices with pay when paid page, in the search field, enter values to find the vendor invoice that you want to review, and then select Search.
4. Select the Pay when paid option to view only PWP invoices.
5. On the Vendor invoice lines Fast Tab, select the lines that you want to release for payment.
6. Select Release vendor payment. The Pay when paid option is cleared, and the value of the Ready for payment field is changed to Yes.