Advanced Invoicing

Use Advanced Invoicing with Sales Orders

This section explains the process of using advanced invoicing when you use either a BOM item or non-BOM item.

Advanced Invoicing with BOM Products and BOM Line Items

You can invoice a BOM product by itself with or without exploding its component BOM line items. To use advanced invoicing with BOM items, you must set up BOM versions of the items you want to use. For more information about setting up BOM items, see Product information overview and BOM designer functionality.

To use advanced invoicing with a BOM item, do the following:

1. Go to the Accounts receivable module. Open Orders > All Sales Orders.
2. Create a new sales order or open an existing one.
3. If you are creating a new sales order, enter any values for the required fields, such as the Customer account.
4. On the sales order page, under the Lines tab, go to the Sales order lines FastTab.
5. Add a new line.
6. Under Item number, select the BOM product you want to use.
   1. In this example, we are using a BOM product with at least one BOM line item.
7. Make any adjustments to the sales line as needed. For example, you can change the quantity of the item or you can add a discount.
8. Then, go to the Line details FastTab, and select the Advanced invoicing tab.
9. Turn on Advanced invoicing and Explode BOM on invoicing, if they are not already turned on by default.

Once you are done setting up the sales order, you can invoice it. You can use the batch invoicing process or you can invoice the sales order manually. For more information about invoicing, see Create sales order invoices. After the sales order is invoiced, you can see the BOM line items displayed under the BOM product in the Sales order lines FastTab. The BOM product will be displayed on the invoice while the BOM line items will be displayed on any shipping documents. To ship the BOM line items or create packing slips, the Advanced invoicing status must be Invoiced.

If you have turned on Invoice confirmed orders in your Subscription Billing Parameters, then you must do the following before you can invoice the sales order:

1. Go to the sales order Header tab.
2. The Document status must be Confirmation.
3. To change the document status to Confirmation, go to the Action tab and select Sell > Actions > Confirm now.

Note: If you have turned on Inventory status in your Subscription Billing Parameters, then the Inventory status of each BOM line item, which you can see under the sales order Lines tab > Sales order lines FastTab > Advanced invoicing tab, must be set to Reserved.

Advanced Invoicing with Non-BOM Items

The processes for using advanced invoicing with non-BOM items are virtually identical to the processes for using BOM items. Note that the Explode BOM on invoicing switch is turned off when you are using advanced invoicing with non-BOM items.

Rules of Using Advanced Invoicing

Note the following rules when you use advanced invoicing.

• Inventory items are not reserved when you process an advanced invoice and the inventory quantity is not updated until the BOM product or BOM line items are shipped.
• There are no COGS voucher lines created when you invoice an advanced invoice sales order. COGS voucher lines are created when you ship the items.
• After invoicing the following changes are not allowed:
  • You cannot change the item quantity on the sales line.
  • You cannot change any values in the Price and discount FastTab.
  • You cannot turn off Advanced invoice for the sales order.
  • You cannot make any adjustments to the charges of the sales order.

Invoice Details of Advanced Invoices

After you create an advanced invoice, you can see the following updates for the invoice: 

• A deferral schedule is automatically created if you have turned on Recognize revenue on shipment. If you do not turn on Recognize revenue on shipment then a deferral schedule might be created if the sales line is set up as deferred. For more information about setting up deferral settings, see Deferral defaults.
  • The deferral schedule is event based with variable amounts.
  • Deferral schedule lines are not created.
  • Separate schedules are created for the revenue and discount, if you use discounts in the sales order, and for each charge, for each BOM product. In other words, for each BOM product in your sales order, separate schedules are created for each of the revenue, discount, and charges.
• You can view the relevant accounts and revenue information in the Voucher transactions page. To open the Voucher transactions page, go to the invoice and open the invoice journal. In the invoice journal page, select Voucher on the Action pane.
• The Advanced invoicing status changes from Open order to Invoiced.

Ship Advanced Invoice Items

After you have invoiced the advanced invoice item, a BOM product, for example, you can ship it as needed. For BOM line items, you can ship each BOM line separately.

Note: When you ship an advanced invoice item, the Line status in the Line details FastTab will display Invoiced and the Advanced invoicing status will display Shipped. Both these statuses mean that the item is both invoiced and shipped.

Inventory records are also updated after the advanced invoicing items are shipped, including the financial date and cost amounts of the items, for example. If you use only non-BOM line items for a sales order then the financial dates will be the invoice dates of the lines. If you use BOM items, then the financial date will be the invoice date of the BOM product.

If you turn on Recognize revenue on shipment, deferral schedule lines will be created and automatically recognized when the items are shipped.

When you use advanced invoicing you can use deferral schedules with the sales orders.

Cancel and Return Advanced Invoice Orders

Use this section to learn how to cancel and create return orders of advanced invoice sales orders.

Note: You can partially cancel or create partial return orders for specific BOM line items while also fulfilling other BOM line items.

Cancel Advanced Invoice Orders

You can cancel advanced invoice orders which are invoiced but not yet shipped. You can only cancel advanced invoice orders which use BOM line items or non-BOM items. When you cancel an advanced invoice sales order, a cancellation line is created on the sales order. The cancellation line corresponds to the quantity of the item that you canceled.

To process the cancellation of an advanced invoice sales order, do the following:

1. Open the sales order for which you want to process a cancellation. Go to the Sales order lines tab.
2. Select Update lines > Deliver remainder.
3. In the Update remaining quantity dialog, set the Sales quantity and Inventory quantity to zero.
4. Select Cancel quantity.

The sales order line is then canceled and a credit is automatically created. When you post the credit note, the deferral schedule is updated. The header amount of the deferral schedule is adjusted and there is no schedule line adjustment.

After the credit note is posted, you can no longer ship the items on the canceled sales line and you can generate the credit note for the customer.

Return Orders of Invoiced and Shipped Items

You can create return orders for advanced invoice items which have been both invoiced and shipped. Processing a return for an advanced invoice sales order uses the standard Return material authorization (RMA) functionality of Microsoft Dynamics 365 for Finance and Operations. For more information about RMAs, see Return material authorization.

To process a return order for advanced invoice sales order, review the information here: Return order process and then do the following:

1. Go to the Sales and marketing module > All return orders. Create a new return order.
2. In the Create return order dialog, select the customer associated with the sales order for which you want to process a return.
3. On the Action pane of the new return order, under the Return tab, select Find sales order.
4. Under the Invoices FastTab, find and select the sales order for which you want to process a return. The Lines tab will display the sales lines of the selected sales order.
5. On the Lines tab, under the Select columns, select the sales lines you want to return.

Note: If the sales order has BOM products and lines, you cannot select the BOM products on the Lines tab. You can only select BOM line items.

6. Under the Parameters FastTab, you can select Copy charges to process the charges of the sales order for the return order. This switch can automatically be turned on by selecting it in your Subscription Billing Parameters.
7. Select OK to close the Find sales order dialog.

You can then invoice the return order to complete the return order process. On the deferral schedule of the sales order, a credit line is added to the Schedule lines based on the return order.

Sales Line Details

The following field boxes are available: 

Fields	Description
Advanced invoicing Header
Advanced invoicing	Select to use advanced invoicing when processing sales orders. Advanced invoicing lets you invoice customers before the items are shipped. The default value of Advanced invoicing is based on the item in the sales order and its item setup. For example, if you have turned on Advanced invoicing for an item in Advanced Invoicing Items, then Advanced invoicing will automatically be turned on for the sales line if you are using that item. You can turn Advanced invoicing on or off on the sales line level if you want.
Explode BOM on invoicing	Select to explode the lines of a BOM item. When you turn on Explode BOM on invoicing, you can view and ship the component BOM line items of a BOM product. The default value of Explode BOM on invoicing is based on the item in the sales order and its item setup. For example, if you have turned on Explode BOM on invoicing for an item in Advanced Invoicing Items, then Explode BOM on invoicing will automatically be turned on for the sales line if you are using that item. You can turn Explode BOM on invoicing on or off on the sales line level if you want.
Recognize revenue on shipment	Select whether or not you want to automatically recognize the revenue of a sales order when it is shipped instead of when it is invoiced. Yes: Deferral schedules are automatically created when you use advanced invoicing with a sales order. No: Deferral schedules are not automatically created. You can choose how you want to recognize the revenue.
Inventory status	Inventory status is used for a specific customization and is not applicable for your general usage of Advanced Subscription Management. It is only used when you use advanced invoicing with a sales order. The status must display Reserved to be able to invoice or ship an advanced invoice sales order. We recommend you only use Inventory status if you are able to add customized code to your Microsoft Dynamics 365 for Finance and Operations environment. Yes: The Inventory status field is displayed on your sales orders. No: The Inventory status field is not displayed on your sales orders. You can use all other Subscription Billing features, including advanced invoicing, normally.
Advanced invoicing status	Displays the status of the invoice if you are using the Advanced invoicing feature. Open Invoiced Shipped Canceled Returned: This status will only be displayed if the full quantity has been returned.
Advanced invoicing Lines
Deferral schedule number	Displays the deferral schedule created when you invoice an advanced invoice sales order.
Recognition type	Displays the recognition type of the sales order.
Distribution type	Displays the distribution type of the deferral schedule.
Deferral amount	Displays the deferral amount.
Item number	Displays the item number.
Charges code	Displays the charge codes.