As I prepare for my Dynamics 365 certification in sales (MB2-717), I am creating blog posts based on my revision. I hope that collectively these posts may prove useful to anyone also preparing for the MB2-717 exam. This time I will cover invoices.
My last few posts have concentrated on sales order processing and related transactional entities looking at how an opportunity results in a quote and then how the quote can turn into an order. In this post I will finish this process by looking at the final step of invoicing. I will also cover a few topics common to all transactional entities, such as automatic reference number creation and links between the entities.
What is an invoice? Typically, you can simply think of an invoice as a request for payment. Often invoices will be created following fulfilled of orders. However, like all the transactional records in the sales process you can also generate an invoice directly without the need of an order.
In my experience it is quite common for companies to skip the invoice creation step in Dynamics 365. Why, when invoicing is obviously an important business process? Well, the reason is that “CRM” is not designed to be a full accounting system. In some circumstances it might be appropriate to generate the invoices in “Dynamics 365 Customer Engagement” but then integrate those records into a separate ERP / accounting package. (Such as Dynamics AX.)
Invoices, like quotes and orders have multiple states,
Active – all invoices will start off in an open (active) state. Active invoices initially have a status reason of “New”. Active invoices can be maintained. The status reason (out of the box) has several options at this stage. These can be used to reflect the current state of the active invoice. Obviously these can be customized as required.
- Partially Shipped
- Booked (Applies to services)
- Installed (Applies to services)
- Cancelled – active and paid invoices can be cancelled. Out of the box only one status reason of canceled is available at this point. Canceled invoices become read only and cannot be re-opened.
- Paid – paid invoices can have one of two status reasons. Paid, completed and paid partial. Once flagged as paid (partial or completed) the invoice becomes read only. To set the invoice to this status use the “CONFIRM INVOICE” button in the toolbar.
|Status (Statecode)||Status Reason (Statuscode)|
|Active||New, Partially shipped, Billed
Book and Installed (Applies to use of services with PSA and Field Service)
|Paid||Complete, Paid Partial|
As with the other transactional records invoices can be created manually. When this is done the full details would need to be entered. Including price list, currency, product lines, discounts and so on.
Or an invoice can be automatically created from a sales order. When an invoice is automatically created from an order the invoice value will be for the total order value. It is however worth knowing that each order could be related to multiple invoices. Maybe a staged payment is involved etc. However to implement this process either the invoice values would need to be adjusted manually or customizations created to reflect the processes specific to each business.
We can create an invoice manually by entering all the details. Or use the CREATE INVOICE button from an order.
As with orders you can use the USE CURRENT PRICING option to refresh the prices on the invoice. Setting them to the ones in the current price list. In many organisations we might expect this to be used infrequently as in most companies the price on the order will be the price invoiced.
Again like orders, it is possible to lock prices so no further changes will impact the invoice total.
The invoice total is updated when the invoice is saved or you can use the RECALCULATE button to force the totals to be refreshed.
Selecting the INVOICE PAID option will trigger the dialog shown below. Once OK is selected the invoice will become read only.
Even a paid invoice can be cancelled. You might do this very rarely but it could be useful if the invoice was created in error.
Selecting the CANCEL INVOICE option will give the following dialog. Out of the box the only status reasons is “canceled”. It might be that each organisation will want to customization this, maybe cancelled reasons might include “Company no longer trading”, “Created in Error”, etc.
Transactional Entity Numbering
Each invoice, quote or order is given a unique ID. This is automatically generated by the system when the quote, order or invoice is first created. The prefix used and length of the number can be controlled. You will find an auto-numbering configuration option in settings / administration.
Below you can see that the auto-numbering option gives me the ability to control the prefix and suffix length. (Suffice can be 4,5 or 6 characters long.)
Links Between Transactional Entities
If the full sales cycle is followed using Dynamics 365 one benefit is that the transaction records are linked. A good revision task will be to experiment with the out of the box navigation options between opportunity, quote, order and invoice. Some example include;
- On the opportunity we have a sub grid of quotes. As each opportunity can have multiple quotes.
- The quote has an associated view of orders. (Accessible from the ribbon bar.) As each quote can have multiple orders.
- Each order has a lookup to quotation in the SALES INFORMATION section of its form, as each quotation can relate to one order.
- The order has an associated view of invoices. (Accessible from the ribbon bar.) As each order can have multiple invoices.)
Commonly all of the entities contain a SALES INFORMATION section that will allow linking back to the originating opportunity.
I hope this post has built on my earlier posts regarding quotes and orders, and hopefully it has helped with your revision for the MB2-717 exam.