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Unbilled Revenue Workflow

The unbilled revenue feature allows companies to include the amounts for whole billing schedules on the balance sheet. These amounts are included in an unbilled revenue account and the contract are billed through installments.

For example, a billing schedule is for 3 years with the invoices billed annually over a 3-year period. The whole contract amount is recorded in the unbilled revenue account from which annual invoices are created. The offset account is the revenue or the deferred revenue account.

Setup

Ensure a system administrator completes the setup tasks:

  1. In standard Microsoft Dynamics 365 Business Central, ensure that items have been created.
  2. On the SBS Unbilled Revenue Items Setup page, select the items to use the unbilled revenue feature and the default accounts.
  3. On the SBS Unbilled Revenue Resource Setup page, select the resources to use the unbilled revenue feature and the default accounts.
  4. On the SBS ARCB Billing Schedule Setup page, set up the Unbilled Revenue FastTab.
    Select whether the journal entries for the unbilled functionality are automatically posted.
  5. On the SBS ARCB Billing Schedule Group page, set up the Unbilled Revenue FastTab.
    Select the default journal template and batch and the revenue and discount accounts to use.

Basic Workflow

To use the unbilled revenue feature, follow this general workflow:

  1. On the SBS ARCB Billing Schedule Card, create the billing schedule as usual. For the billing schedule line item, ensure the Unbilled Revenue check box is selected.

    For items that are already set up to use the unbilled revenue feature, the Unbilled Revenue check box is automatically selected. If the item is not already set up to use the unbilled revenue feature, select the Unbilled Revenue check box for the line.

  2. For the line, select Unbilled Revenue > Unbilled Revenue Defaults to open the Unbilled Revenue Defaults page. Check the values for the journal template and batch and the unbilled revenue and discount accounts. Change the values as needed.
  3. Back on the SBS ARCB Billing Schedule Card page, create the initial journal entry for all lines or a single line.
    1. For all lines, select the header action: Actions > Unbilled Revenue > Create Unbilled Revenue Initial Journal Entry.
    2. For a single line, select the line action: Unbilled Revenue > Create Initial Journal Entry.
    3. For a single line, select the line action: Unbilled Revenue > Stub Initial Journal entry (Entry will be created in audit trial but no journal no will be created).
    4. d. For a single line, select the line action: Unbilled Revenue > Reverse Stub Initial Journal entry (We will delete the stubbed entry from the audit trial).
    5. On the Unbilled Revenue Parameters page, specify he Transaction Date and any Comments, and if needed, change any of the values for creating the initial journal entry for the line, and select OK.
  4. If needed, select Unbilled Revenue > Journal Entry Audit to review the initial journal entry created.
  5. To create sales orders and post the invoices for the billing schedules, use the SBS ARCB Billing Schedule Order/Invoice Creatorpage.
  6. After the invoices are posted, you can review the audit information on the SBS ARCB Billing Schedule Card page and selecting Unbilled Revenue > Journal Entry Audit for a line.

If you edit or terminate the line item for the billing schedule, the Unbilled Revenue Parameters dialog appears and you can specify the recalculation date and a comment. The original initial unbilled journal entry is reversed and an updated initial journal entry is created.

Milestone billing: When working with the milestone billing functionality together with the unbilled revenue feature, note the following information:

  • When the milestone parent item is unbilled (the Unbilled Revenue check box is selected), at least one milestone child item must also be unbilled (the Unbilled revenue check box is selected for one or more milestone child items).

    When you select the Unbilled Revenue revenue check box for the milestone parent item, the Unbilled Revenue check boxes for all child items are automatically selected. You can clear the Unbilled Revenue check box for each child item as needed.

    If the Unbilled Revenue is cleared for the milestone parent item, selecting the Unbilled Revenue check box for one milestone child item automatically selects the Unbilled Revenue check box for the milestone parent item

  • When the initial journal entry is created, the Create Unbilled Revenue Initial Journal Entry action can be run from the milestone parent item or the milestone child items.
    • When run from the milestone parent item, the initial journal entries are created only for the child items using the transaction date specified on the Unbilled Revenue Parameters dialog. No initial journal entry is created for the milestone parent item.
    • When run from the individual milestone child items, the Unbilled Revenue Parameters allows you to update the transaction date and other parameters used for the unbilled revenue feature. Each milestone child item can be processed separately with individual parameter values.
  • When using the milestone functionality with the unbilled feature for a deferred item but no deferral template, the deferral end date is required. To ensure the deferral end date is known, use a deferral template when setting the advanced deferral options for the deferral item.

  • When the Stub initial journal entry action can be run from the milestone parent item or the milestone child items.

    • When run from the milestone parent item, No initial journal entry is created for the milestone parent item. Child item stub entry will be created in audit trial without any journal no created.

Note icon. Note: If the initial journal entry for the milestone parent or child items has already been created or an invoice has been created, the start and end dates cannot be edited.

Straight Line Deferrals

To use the unbilled revenue feature with straight line deferral schedules, use the steps from the basic workflow and incorporate the following: 

  1. On the SBS ARCB Billing Schedule Card page, create a billing schedule as usual.
  2. Add an item or resource to the Billing schedule lines.
  3. If the item is not already a deferral item or you want to change the default values, select Manage > Advanced Deferral Options for the line. On the SBS ARED Transaction - Billing Schedule (Advanced Deferrals) page, do the following: 
    1. Set Deferred to Yes.
    2. Change the Accounts as needed.
    3. In the Schedule section, select the Straight Line schedule type, and edit values in the Straight Line FastTab as needed.
  4. If the item or resource is not already set up to use the unbilled revenue feature, or if you want to change the default settings: 
    1. Select the Unbilled Revenue check box.
    2. Select Unbilled Revenue > Unbilled Revenue Defaults.
    3. On the Unbilled Revenue Defaults page, review the values and change as needed.
  5. Back on the SBS ARCB Billing Schedule Card page, create the initial journal entry for all lines or a single line.
    The deferral schedule is created at the same time the initial journal entry is created.
  6. Back on the SBS ARCB Billing Schedule Card page, stub initial journal entry for all lines or a single line. The deferral schedule will not be created if the initial journal entry is stubbed.
  7. If needed, select Unbilled Revenue > Journal Entry Audit to review the initial journal entry created.
  8. To review the deferral schedule, select Manage > Advanced Deferral Options to open the SBS ARED Deferral Schedules page.

A billing schedule line can be edited even after the initial has been created. If you edit or terminate the line for the billing schedule, the Unbilled Revenue Parameters dialog appears and you can specify the recalculation date and a comment. The original initial unbilled journal entry is reversed and an updated initial journal entry is created. Also, the deferral schedule is updated with the new values.

Event Based Deferrals

To use the unbilled revenue feature with event based deferral schedules, use the steps from the basic workflow and incorporate the following: 

  1. On the SBS ARCB Billing Schedule Card page, create a billing schedule as usual.
  2. Add an item to the Billing schedule lines.
  3. If the item is not already a deferral item or you want to change the default values, select Manage > Advanced Deferral Options for the line. On the SBS ARED Transaction - Billing Schedule (Advanced Deferrals) page, do the following: 
    1. Set Deferred to Yes.
    2. Change the Accounts as needed.
    3. In the Schedule section, select the Event Based schedule type, and edit values in the Event Header and Event Lines FastTabs as needed.
  4. If the item is not already set up to use the unbilled revenue feature, or if you want to change the default settings: 
    1. Select the Unbilled Revenue check box.
    2. Select Unbilled Revenue > Unbilled Revenue Defaults.
    3. On the Unbilled Revenue Defaults page, review the values and change as needed.
  5. Back on the SBS ARCB Billing Schedule Card page, create the initial journal entry for all lines or a single line.
    The deferral schedule is created at the same time the initial journal entry is created.
  6. Back on the SBS ARCB Billing Schedule Card page, stub initial journal entry for all lines or a single line. The deferral schedule will not be created if initial journal entry is stubbed.
  7. If needed, select Unbilled Revenue > Journal Entry Audit to review the initial journal entry created.
  8. To review the deferral schedule, select Manage > Advanced Deferral Options to open the SBS ARED Deferral Schedules page.

If you edit or terminate the line item for the billing schedule, the Unbilled Revenue Parameters dialog appears and you can specify the recalculation date and a comment. The original initial unbilled journal entry is reversed and an updated initial journal entry is created. Also, the deferral schedule is updated with the new values.

The distributions are recalculated based on the allocation type selected (Percentage , Percentage Completion, Equal Amounts). For the Variable amounts allocation type, the distribution is recalculated based on the percent equivalent of the initial value for the event. For example, the original unit price is 100.00, the percent of the initial value is 55.00, which is 55%. When the unit price is changed to 200.00, the variable amount of the event becomes 110.00, which is 55%.

Note icon. Note: If deferral schedule lines have been recognized or stubbed, the billing schedule line item cannot be edited. If needed, the recognized lines must be reversed first, and then the billing schedule line can be updated.