Contact Tridea Partners for more information on Microsoft Dynamics AX Year-End Close.
1099 REPORTING IS JUST AROUND THE CORNER!
Tridea recommends that you start testing your 1099 reports to allow plenty of time for report refinements.
We recommend that you:
- Start reviewing your vendors for potential 1099 recipients
- Begin identifying amounts to be reported as 1099
- Print test reports to verify form alignment
In Microsoft Dynamics AX 2012, by setting up some item coverage settings and default order settings, you’ll easily be able to have Microsoft Dynamics AX recommend inventory replenishment when running master scheduling. Below are the steps to set this up.
Navigate to Product Information Management > Common > Released Products and select the item in edit mode.
- On the Plan FastTab, select the appropriate coverage group for your company and item.
- On the Plan tab of the action pane at the top, select item coverage and use the wizard to create the item coverage settings based on the coverage group selected (i.e. site, warehouse, minimum inventory, maximum inventory, lead times, etc), then click close. (See screen shot below)
- On the Plan tab, select default order settings then set your purchase site, inventory site, minimum order quantity and purchase lead time, then click close. (See screen shot below)
- On the Plan tab, add the site specific order settings such as site, purchase warehouse and inventory warehouse, then click close. (See screen shot below)
Next you’ll need to know which planning strategy to use with Master Scheduling. There are three types of plans to choose from to support your company’s operations. Dynamic plan is for short term planning and can be updated every time the master data changes. Forecast plan is for plans involving forecast and demand. Static plan is for long term planning, which remains unchanged until the next time you run master scheduling. These plans can be configured in the Master Plans form in the Master Planning module under setup then under plans. For example, if you have an item in which you want to maintain a minimum inventory level for the long term, then you would choose static plan.
On the Plan tab of the released product, click on Net Requirements. Select the plan type from the drop down menu at the top. Then in the middle section on the overview tab, select update > master scheduling and click ok. This runs the master scheduling to determine if inventory of this item needs to be replenished.
You can also run master scheduling from Master Planning > Periodic > Master scheduling. By running master scheduling from the Master Planning module, you can select multiple items to run at the same time.
Once the master scheduling job has completed, if AX determines that inventory should be replenished, it will automatically create a planned order for the item(s) that were included in the master scheduling run. The next step is to convert any planned orders (purchase, production, transfer) to actual orders.
Once you’ve converted your order, you can return to the released product form to view the status of your item under Net requirements. If you run master scheduling again from this screen while there are existing orders (planned or firmed), and/or on-hand inventory, and the quantities are at or above the minimum inventory quantity as set in the item coverage settings, then AX will not generate a planned order. If there are no planned orders, no open purchase orders and on-hand inventory is below the minimum, then AX will generate a planned order when you run master scheduling.
Join Tridea for our annual Dynamics AX year-end close webinar! We will share best practices related to year-end processes for your Microsoft Dynamics AX system. We will go through the general steps of the year end close process and discuss key items that will be required to setup the next fiscal year.
Event Details: Wednesday: December 14, 2016 at 9:30 AM – 10:30 AM (PST)
Presenters: Matthew Caffrey & Robin Ellsworth – Tridea Partners
Revenue recognition for short term projects is best setup by utilizing a straight line methodology within the Project Management and Account module within Microsoft Dynamics AX. Projects with recurring charges such as subscription services or short term membership services would be the ideal scenario for this setup.
Let’s setup a project for a customer where in 6 months of services are provided from 03/01/2015 through 08/31/2015. The total amount for the contract will be $3,000.00 USD and billing will be handled upfront upon initiation of the contract. Revenue will therefore be recognized over the period of the contract:
Setup Estimate/Revenue Recognition Template:
The first step on this process will be to setup the Cost Template for the Straight Line Revenue recognition functionality.
- Navigate to Project Management and Accounting > Setup > Estimates > Cost templates.
- Create new record.
- Select Completion based on = Straight Line.
- Save the record. Refer to screenshot below.
Setup Contract, Project:
Let us now create and setup the Project Contract and Fixed Price Project for our scenario.
- Navigate to Project Management and Accounting > Common > Projects > Project Contracts.
- Create the new project contract.
- Create the New fixed price project and link to a project group that is associated with the newly created Cost Template.
- At this point, note that the Actual Start Date and Actual End Date fields on the Project details form becomes Mandatory. This is because, system will depend on the Actual start date and Actual end dates, to determine the percentage completion automatically when you run the Periodic Revenue Recognition function(Estimates) for this project.
- Refer to screenshots below.
In this scenario, I will setup Actual start date = 03/01/2015 and Actual End date = 08/31/2015.
Bill the Customer Upfront:
The next step is to the create and setup the On-account transaction for this project, which we can bill to the Customer Up-front on 03/01/2015.
- Select the project created above and click Manage > Bill > On-account transactions.
- Create a new record.
- Setup the on-account transaction for USD 3000.00
- To bill the customer, click Manage > Bill > Project Invoice Proposal.
- Create and complete the invoice processing and post the invoice.
- At this point, note that the Invoiced revenue is actually posted to a Balance sheet account based on the configuration we did in the project group setup and no revenue is recognized for the project at this point.
Recognize revenue for the project periodically:
- Since the contract started on 03/01/2015 and we will recognize the revenue on a Monthly basis, start by running the first revenue recognition on 03/31/2015.
- To do this, navigate to the Project and click Manage > Process > Estimates.
- Create new Estimate and select Estimate date = 03/31/2015
- Note: For this demo scenario we are running the revenue recognition manually. Ideally you can setup the estimates to run for all your fixed price projects to run and post automatically in a Batch.
- See that Estimates(Revenue Recognition) form has got some improvements in CU8 release. It has several additional data fields to present clear details of the revenue recognition history for the project such as Invoiced Revenue(WIP), Contract value, Percent complete etc.
- After we have run the first Revenue Recognition process on 03/31/2015, notice that System automatically calculated the Percentage Completion based on a Straight Line basis. The total number of days in the tenure of the subscription is 184 Days(March to August) and we ran the first revenue recognition at the end of 31 days for the project. So system automatically calculated the Percentage complete as 85 %.
- Notice that system shows Contract Value = 3000.00, Invoiced Revenue = 3000.00, Percentage Completion = 16.85 %, Revenue recognized now (Accrued revenue for March) = 16.85% of Total contract value.
- Now, let us review and post the Estimate to recognize revenue. Once the estimate is posted, revenue is recognized and the amount is posted to GL (P&L Account setup in project posting profile).
If you see the above Voucher, notice that system posted the accrued revenues as well as moved the Costs to P&L accounts from WIP. Since I had setup the Costs to be posted to Balance sheet accounts in my configuration. It depends on what you configure the cost to be posted to.
You can follow the same process and post the estimates/revenues for each of the periods until the end date.
Below screenshot shows a summary that I have created and posted the revenues for each period till the 100% completion on 08/31/2015.
Finally, once the subscription contract is over, you can follow the standard AX elimination of the estimates to reverse the WIP sales values.
This post was written by Thomas Nguyen, AX Application Consultant at Tridea Partners. Tridea is a leading Microsoft Dynamics provider.