Manage discounts and fees overview

Applies To: Project Operations Core, and Project Operation integrated with ERP

This article provides an overview of the setup of the Discount and Fee feature in Microsoft Dynamics 365 Project Operations. In some cases, discounts might apply to the contracts that organizations enter into with customers. Alternatively, organizations might choose to charge extra fees, such as administrative fees. Project Operations lets you define discount percentages and fee percentages at the level of the project quotation or the contract line. When a transaction is generated and approved, the system applies the appropriate discount or fee, based on the contract line setup. It then updates the actuals accordingly. This feature is applicable to Time and Material business processes.

Prerequisites

To use discounts and fees in Project Operations, enable the Discount and Fee feature in the system.

Project quotations

Project quotations can be created and shared with customers, and they can include one or more quotation lines that are tailored to business needs. For project quotation lines of the Time and Material type, Discount percentage and Fee percentage fields are available for editing. The discounts and fees are applied to all quotation line details of the selected quotation line. The extended amount on the project quotation line reflects the discounts and fees, based on the percentages that are entered. The discount amount is deducted from the total on the quotation line, whereas the fee amount is added to it.

To apply discounts and fees for project quotations, follow these steps.

1. Go to Sales > Sales > Quotes.

2. Select New to create a project quotation.

3. Set the Name, Prospect or Customer, and Organization unit fields, and provide other mandatory details.

4. On the Quote lines tab, select Add New Quote line to create a project quotation line.

5. Set the Name field.

6. In the Billing method field, select Time and Material.

   Discount percentage and Fee percentage fields appear on the page.

7. In the Quoted amount field, you can manually enter a value. Alternatively, create quotation line details on the Quote Line Details tab.

8. Set the Discount percentage field and/or the Fee percentage field.

   Discount amount, Fee amount, and Extended amount values are calculated based on the specified discount percentage and fee percentage.

9. Select Save and Close to close the quotation line page.

   The Profitability Analysis and Total Revenue fields are updated to reflect the discount and fee amounts.

Learn more about project quotations in Manage project quotes.

Project contracts

Project contracts can be created manually or by using project quotations, based on the agreements with customers. They can include one or more contract lines that are tailored to business needs. For project contract lines of the Time and Material type, Discount percentage and Fee percentage fields are available for editing. The discounts and fees are applied to all contract line details of the selected contract line. The extended amount on the project contract line reflects the discounts and fees, based on the percentages that are entered. The discount amount is deducted from the total on the contract line, whereas the fee amount is added to it.

When a project contract is created through the project quotation process, the discount and fee percentage values from the project quotation lines are automatically applied to the project contract lines, if any are available.

To apply discounts and fees to project contracts, follow these steps.

1. Go to Sales > Sales > Project Contracts.

2. Select New to create a project contract.

3. Set the Name, Customer, and Organization unit fields, and provide other mandatory details.

4. On the Contract lines tab, select Add New Contract line to create a project contract line.

5. Set the Name and Project fields.

6. In the Billing method field, select Time and Material.

   Discount percentage and Fee percentage fields appear on the page.

7. In the Contract amount field, you can manually enter a value. Alternatively, create contract line details on the Project Contract Line Details tab.

8. Set the Discount percentage field and/or the Fee percentage field.

   Discount amount, Fee amount, and Extended amount values are calculated based on the specified discount percentage and fee percentage.

9. Select Save and Close to close the contract line page.

   The Contract performance and Total Amount fields are updated to reflect the discount and fee amounts.

Learn more about project contracts in Manage project contracts.

Actuals

Actuals capture the results of all transactions that are performed or generated in Project Operations. They can be created or updated through timesheets, expenses, material usage, journals, or project invoice processes. When timesheets, expenses, or material usage is approved, or when journals are confirmed for a contract that has applicable discounts and/or fees associated with it, the system generates actuals of the Unbilled Sales type. It also updates the discount and fee amounts as appropriate. In addition, the extended amount is adjusted to account for the discounts and fees. The discount amount is deducted from the extended amount, whereas the fee amount is added to it.

Learn more about actuals in Actuals impact in a time and materials engagement.

Project invoices

Project invoices are used to bill customers, and they can include one or more invoice lines. When you create an invoice for Time and Material transactions, if Unbilled Sales transactions that have discounts and fees are selected, the system generates an invoice where the lines reflect the discount and fee amounts. The invoice lines include separate fields for the discount and fee amounts. If the Invoice line details option is used to change the quantity, the discount and fee amounts are adjusted accordingly. After the project manager confirms the invoice, the Unbilled Sales actuals are reversed with negative discount and fee amounts. New Billed Sales actuals are then generated that reflect the updated discount and fee.

Integrate Discount and Fee with ERP (preview)

[This article is prerelease documentation and is subject to change.]

Discount and fee posting in Dynamics 365 Finance requires updates to the Project integration journal and Project invoices. Fees and discounts impact work in progress (WIP) and accrual transactions generated through the project integration journal and reverse during the project invoice posting process.

Activate Features

To integrate Discount and Fee with ERP, activate the following features:

• Enable line discounts and additional fee for non-stocked/resource based scenarios in Dynamics 365 Finance
• Enable Discount and Fee in Dynamics 365 Project Operations

Minimum version requirement

To use the feature for Project Operations integrated deployments, you must have the following versions:

• Project Operations Dataverse version 4.145.0.x or later
• Dynamics 365 Finance version 10.0.45 (10.0.2345.41) or later

Run dual-write maps

This section provides information about the specific maps that are required for this feature.

Fee

For fee, the system creates a new integration journal line of the Fee type, linked to the source record—such as time, expense, or material actuals. During posting, the system uses the default fee category configured in the Project management and accounting parameters.

During the Project integration journal posting process, WIP and accrual transactions are generated based on the configured cost and revenue profiles.

Once the project invoice is generated, fee transactions linked to the source documents—such as time, expense, or material actuals automatically become part of the main invoice proposal lines. Tax amounts are also posted financially, based on the sales tax group and item sales tax group configurations.

Discount

For discounts, depending on the organization’s policy, the discount either reduces the revenue during financial posting or is posted separately, allowing the full revenue to be recognized for the project.

Project management and accounting parameters

According to the organization’s policy, if discounts must be posted separately and aren't deducted from project revenue accounts/ The Discount category field is available in the Project management and accounting parameters. This field helps identify the appropriate ledger account for posting discount amounts independently.

1. Go to Project management and accounting > Setup > Project management and accounting parameters.
2. Go to Project Operations on Dynamics 365 customer engagement tab.
3. In the Project category defaults group, select fee type category in the Line discount field.

Project integration journal

During the project integration journal posting process, if the Line discount field is enabled in the Project management and accounting parameters, the system posts the sales amount without considering the discount. WIP and accrual financial transactions are then generated accordingly.

If the Line discount field isn't enabled in the Project management and accounting parameters, the system posts the sales amount after deducting the discount amount. WIP and accrual financial transactions are then generated accordingly.

Project invoice

On the project invoice proposal lines, a new field Line discount displays the applicable discount amount. Based on the configuration for discount posting, the system generates project invoice financials accordingly. If the discount is to be posted separately without impacting project revenue, the discount ledger account is derived from the Invoice revenue type account defined in the project ledger posting setup.

The sales tax amount is calculated after deducting the discount from the sales amount.

Learn more about project invoices in Proforma project invoices.