background intercompany billing concepts evolution of ic billing capabilities in ax ic set-up and...

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)


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


• 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


• 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


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


• 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


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


• 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


• 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

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

http://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.

background intercompany billing concepts evolution of ic billing capabilities in ax ic set-up and...

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