The post is part of a series I’m creating connected with Project Service Automation (PSA) for Microsoft Dynamics 365. This time I will consider how we create a project contract from a quotation.
We have already seen how to create an opportunity then create a quotation with a high-level estimate. And how to create a project associated with the quotation to turn our high-level estimate into a detailed estimate.
The final piece in this process will be when the customer finally confirms that the project should start, it is now that we will create a project contract. (As a result of “winning” the quotation.)
It might be worth first knowing that a Project Contract is actually an order in Dynamics 365. Out of the box “standard CRM functionality” includes an order entity which is created when a quote is marked as won. Project Service Automation makes use of the order entity but also adds a number of extensions, including project contract line details, milestones and invoice schedules.
Below you can see that I have opened my completed quotation and will now create a contract by selecting the “CLOSE AS WON” option.
After a pause, the project contract (or order) will be created and loaded. Notice that at this point it is in a draft status. Meaning we can review and amend the information prior to using the CONFIRM option which will effectively activate the contract.
Hopefully you will notice that the details of your quotation will have been used to derive the contract. Meaning we will have contract lines that correspond to the lines that were previously on our quotation. (This will apply to project based lines and product based lines.)
By opening one of the project contract lines we can see that the project contract line detail mirrors what we previously created on the quotation.
And form the project contract line detail we can access a chargability view that is very similar to the quotation. And at this point we can also still amend prices. However, after the contract is confirmed the prices will be locked.
Before we confirm our contract, we will want to define project milestones, invoice schedule and billing start date.
Creating Invoice Schedules – Time and Material
On a time and materials contract line we will typically define a billing schedule.
Firstly, we define the invoice frequency and say when the billing should start. In my example I have opted for billing at the end of the month. And the billing start date to commence from the projected start date of my project. (1st Feb)
On the contract line, you will see an invoice schedule tab, initially this will be blank. Here you can create milestones when the billing will happen. These could be entered manually or these can be generated automatically based on the required billing frequency.
Tip: Initially PSA has two default billing frequencies, end of month and bi-monthly. But you can create others as required.
Having entered my billing frequency and billing start date, the CREATE INVOICE SCHEDULE option automatically created the details below. (FYI: Another field of project end date came into play, you will find that on the order header page!)
Notice the cut-off date, as when the invoice is created we will be counting all transactions from the last invoice to this date.
Creating Invoice Schedules – Fixed Price
The billing of fixed price items has a similar concept but is slightly different. Here we use the GENERATE PERIDIC MILESTONE option to dictate when billing should occur.
Aa with the time and materials line, I defined an invoice frequency and billing start date on the contract line.
Notice that the resulting invoice schedule for a fixed price job generated the same billing points but this time it added a value. So, that the total fixed amount is invoiced by the end of the project.
Tip: If you enter the milestones manually you will need to ensure the total sum of the milestones equals the total value of the contract line.
Confirming the Contract
Having “played” with the contract pricing and defined the billing schedule / milestones we are ready to confirm the contract. To do this simply open the order / project contract and select the CONFIRM button.
Notice that after the project contract is confirmed all of the key details become read-only and the contract status changes from Draft to Confirmed.
Creating / confirming the project contract effectively ends the sales cycle in Project Service. Meaning we can next look at how to resource our project and get started! J