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Microsoft Dynamics AX Technical ConferenceFebruary 3–5, 2014Bellevue, WA
Managing intercompany billings with AX 2012Gabriel Pedro de CastroSoftware Engineer
Adel ShrufiProgram Manager
IntroductionWe are excited to share Microsoft Dynamics AX 2012 R3 with you…• This presentation contains Microsoft confidential information• Dynamics AX 2012 R3 is pre-release software and subject to change• Microsoft provides no license, express or implied, in this presentation• Please review and respect the disclaimer included in all printed
and electronically distributed materials
Session Agenda• Background• Intercompany Billing Concepts• Evolution of IC Billing Capabilities in AX• IC Set-up and Rules• Demo• Extending IC Billing Solution• Demo• Q&A
Microsoft Confidential
• A legal entity that provides the service or product is called the lending legal entity (lending LE).
• A legal entity that receives the service or product is called the borrowing legal entity
• The invoice document that is generated by the lending legal entity for services rendered on behalf the lending LE, is called Intercompany Invoice (IC invoice)
• The borrowing LE is configured as an intercompany customer in the lending LE and vice versa the lending LE is configured as an intercompany vendor in the borrowing LE
Overview of IC Concepts
Typical intercompany resourcing scenarios
Microsoft Confidential 6
CLE (US)
Customer (US)
Contract
Offshoring Scenario
RLE 1 (India) RLE 2 (Brasil)
Resources Resources
Invoice
IC Invoice IC Invoice
Localized Resources Scenario
CLE (US)
Customer (US)
Contract
RLE 1 (India) RLE 2 (Brasil)Resources Resources
Customer (India) Customer (Brasil)
Invoice
IC Invoice IC Invoice
Intercompany Invoicing
CLE
Cust
om
erRLE
EndCLE Posts
Cost
CLE-V001
Yes
4
Billing Time EndCLE Invoices Customer
Accept?
CLE Posts Revenue
(Optional: ¬and reverses WIP)
Yes
No
56 CLE-V002
RLE Posts Cost and Revenue
Timesheet/Expense Report
1
RLE-V0013A
ppr
ove
d
Timesheet Approval Workflow
Rej
ecte
d
2
Current solution (AX2012 R2)
Microsoft Confidential 7
Costs are transferred
automatically to the CLE
No taxes are calculated on
transfer
No auditable documents
are generated
Limited transfer pricing model
(only fixed supported)
RLE recognizes revenue before CLE accepts the
costs
Key Capabilities
Microsoft Confidential
• Provide the ability to adjust what the RLE charges the CLE
• Defer revenue recognition in the RLE to when CLE recognizes the cost
• Provide the ability to accrue (WIP) revenue in the RLE side
• More options for defining transfer costs (cost + amount, cost + percentage, indirect costs)
What Customers Asked For
• Support tax calculations and indirect costs
Key Capabilities
Microsoft Confidential
• A flexible invoice creation for a variety of project transaction types that can be fully automated and routed among key stakeholders for review and approval: Timesheet, Expense Reports, Vendor Invoices
• Support for a comprehensive set of transfer pricing models that can be based on fixed amounts, cost price or a percentage of final sales price among others
• Accounting for taxes and indirect costs /overhead as part of the overall cost that is transferred between companies
• Invoice documents that capture the full audit of the costs and revenue that are generated on both sides
Enhancements in AX2012 R3
Intercompany Invoicing
CLE
Cust
om
erRLE
SettlementTimesheet/Expenses Approval Intercompany Invoicing Customer Billing
RLE Posts Cost (Optional: ..and WIPs Revenue)
Timesheet/Expense Report
1
RLE-V0013
Billing Time EndCLE Invoices Customer
Accept?
CLE Posts Costs (Optional: ¬and WIPs Revenue)
CLE-V001
RLE Posts Revenue
(Optional: .. and reverses WIP)
CLE Posts Revenue
(Optional: ¬and reverses WIP)
Yes
Appr
ove
d
Intercompany Invoice
Timesheet Approval Workflow
Rej
ecte
d
2
End
Create Intercompany
Invoices
Intercompany Invoice Review
Workflow
Intercompany InvoiceIntercompany
Invoice
Rej
ecte
d IC
Invo
ices
Accepted IC Invoices
No
7
9
10 11
User-Configurable
Batch or Manual?
BatchIntercompany
Invoice Creation Batch Process
Create Intercompany
Invoices
Manual
4
5
6
Settlement Time
Select Invoiced Items for Payment
RLE gets paid End
End
End
12
13
RLE-V002
CLE-V002
8
IC Billing in AX2012 R3
Microsoft Confidential 10
Costs are transferred to the
CLE only after accepting the IC
invoice
Taxes are correctly calculated
Auditable documents are
generated
More flexible pricing model (adding cost plus)
Can now WIP revenue in the RLE
RLE recognizes revenue only when CLE recognizes
the costs
Key Set-up Steps
• Configuring Intercompany set-up parameters such as default categories revenue accrual, currency, indirect costs and taxes
• Configuring the relationship between the lending LE and borrowing LE • Lender is setup as a vendor• Borrower is setup as a customer
• Setting up of transfer pricing agreement between the two companies depending for each type of services exchanged between them
Key Capabilities
Microsoft Confidential
• Quantity: The amount that you enter in the Pricing field is the actual cost per quantity or unit.
• Charges Amount: The sales price per transaction is the cost price per transaction multiplied by the charges percentage. You enter the charges percentage in the Pricing field.
• Charges Percentage: The sales price per transaction the cost price plus is the cost price per transaction plus the charges amount. You enter the charges amount in the Pricing field
• Percentage of Sales Price: Percentage of the sales price that is transferred to the lending company
Supported Transfer Pricing Models
• Amount below sales price: The amount that is held back by the borrowing company from the sales prices before transfer to lending company
• Contribution Ratio: The number that you enter in the Pricing field is the contribution ratio expressed as a percentage of the sales price
Lender BorrowerTransfer
Prices
Demo Scenario
Microsoft Confidential
Demo Scenario
Demo
AX 2012 IC Billing
Extending IC Solution
Process Flow for Invoicing
Transaction
ProjIntercompanyTransQuery
2. Query
Transaction mapper
<<Interface>>
ProjIntercompanyInvoiceOrigTrans3. Instantiates listof mappers
ProjIntercompanyCustomerInvoiceCreator
+createInvoice
Customer intercompany
invoice
Matching vendorinvoice
Project transactions
Selection form / batch job1. Sets parameters
5. Sends the listof mappers
to be invoiced
4. List of mappersis returned 6. Creates the invoice
ProjIntercompanyVendorInvoiceCreator
7. RLE poststhe invoice
8. Project subledgerjournalizer
Final Customer
9. Regular invoicingprocess
Lending
Borrowing
Key Capabilities
Microsoft Confidential
• Create a class that implements ProjIntercompanyInvoiceOrigTrans and maps the values from the transaction to those needed by intercompany
Extending for other transactions
• Modify class ProjIntercompanyTransQuery to lookup entries in the new table and instantiate objects from the new type for each record
• Optional- Modify the form ProjIntercompanyTransactionSelection to handle the new type, as well as class ProjIntercompanyInvoicePeriodic
• Optional- Add a new type to ProjTransferPrice table for the new transaction and change the find method to handle it
Demo
Extending IC Billing
Key Capabilities
Microsoft Confidential
• Dynamics AX provides effective billing solutions to the global enterprise
• Dynamics AX IC billing solution offers a rich solution that captures an audit trail of intercompany activity, provides comprehensive pricing model and can be configured to meet your organization needs
• Dynamics AX IC billing solution is flexible and can be easily extended to support new transaction types
Key Takeaways
Q&A
THANK YOU for attending! Your feedback is extremely important, please complete an evaluation using one of the following options:
• On the fly from the mobile event app• Communications Kiosks located in the Evergreen Foyer, Grand
Ballroom Foyer and Regency Foyer
• Via the Dynamics AX Technical Conference website: www.microsoft.com/dynamics/axtechconference
DisclaimerThis presentation contains Microsoft Confidential Information. Microsoft may use any suggestions, comments, or other feedback that you provide for any purpose without obligation. This presentation is provided for informational and training purposes only. It represents Microsoft’s view as of the presentation date. Microsoft cannot guarantee the accuracy of any information after the presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted as a commitment on Microsoft’s part. This presentation is provided “as-is”.
Microsoft Dynamics AX 2012 R3 is pre-release software under development. All dates, features, and descriptions specified are preliminary, are based on current expectations, and are subject to change at any time without notice.
Sample code included in this presentation is made available AS IS. THE ENTIRE RISK OF THE USE OR THE RESULTS FROM THE USE OF ANY SAMPLE CODE REMAINS WITH THE USER.
MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. NO LICENSE (EXPRESS OR IMPLIED, BY ESTOPPEL OR OTHERWISE) TO ANY INTELLECTUAL PROPERTY RIGHTS IS GRANTED BY THIS PRESENTATION.
© 2014 Microsoft Corporation. All rights reserved.
© 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.
© 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.
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