Subscription and Recurring Billing in Dynamics 365 Business Central
In this Dynamics 365 Business Central training blog post, I aim to shed light on some recently added functionality that has lacked significant blog posts or videos highlighting its benefits or use cases: subscription and recurring billing. Recognizing the need for users to understand its potential, I created an abridged guide showcasing its key features and a practical application. My goal was to facilitate greater user adoption by promoting understanding of the functionalities.
Purpose and Overview
The purpose of this blog post is to provide a concise explanation of the key features within this module, facilitating a smoother adoption process for users. By offering a clear and detailed overview, I hope to make the learning curve easier for new users and help them quickly realize its full potential.
Service Commitment Packages
Understanding Service Commitment Packages as they Relate to Subscription and Recurring Billing
The first step is to navigate to the service commitment packages page. Understanding the purpose and structure of service commitment packages is key to effectively utilizing this functionality.
According to Microsoft, service commitment packages correspond to the unit that's offered and sold to the customer. They store both the service liabilities to the customer and the service receivables towards the own suppliers. Service commitment packages can be assigned to items with a specific service commitment option. They are required for recurring billing and describe the monetary content of agreements with customers and suppliers. This comprehensive approach ensures that all aspects of the service transaction are covered, providing a clear and structured method for managing service commitments.
Setting Up a Service Commitment Package
Creating the Package
Following that definition, we set up a service commitment package with two lines: one for customer and one for vendor. This setup ensures that all parties involved have a clear understanding of the financial obligations and services provided, helping maintain transparency and accountability.
The "BUSINESSCENTRAL" package demonstrates a service commitment package for reselling Dynamics 365 Business Central where 89% of the selling price is paid to the vendor, and 100% of the selling price is charged to the customer, leaving an 11% margin.
The created package must be assigned to an Item designated as a "Service Commitment Item," indicating monthly subscription sales. Note that only Non-Inventory Items can be marked as "Service Commitment Item."
Assigning the Package
To assign the created Service Commitment Package to an Item, select the "Service Commitments" action on the Item Card. Once assigned, the item will be linked to the service commitment package, ensuring that all related transactions are correctly tracked and managed.
Creating a Service Object
We can now create a Service Object. A Service Object can be generated automatically through selling the Item on a sales document or manually from the Service Object list. The Service Object represents the actual service being provided and serves as the foundation for all subsequent processes, including contract management and invoicing.
Associating the Service Object with a Contract
The Service Object should then be associated with a Contract, serving as a placeholder for Service Objects and the basis for invoicing. This step is crucial for maintaining financial integrity and ensuring that all parties are held accountable for their commitments.
Posting the Invoice
Before posting the invoice, the contract-related accounts must be filled in in the General Posting Setup. Ensuring that all accounts are correctly configured is essential for accurate financial reporting and compliance.
Once the sales invoice is posted, we can review it. Reviewing the sales invoice ensures that all financial transactions are recorded and managed effectively. This review process helps identify any discrepancies or errors, allowing for timely corrections and adjustments. It also provides an opportunity to verify that all contractual obligations have been met and that the invoicing reflects the agreed terms.
Generating Subsequent Invoices
The next month, we can generate the subsequent invoice and print the contract details. This recurring process is crucial for maintaining a consistent and accurate billing cycle, helping to establish trust and reliability with customers. By adhering to a regular invoicing schedule, businesses can improve cash flow management and reduce the likelihood of payment delays or disputes.
Final Thoughts on Subscription and Recurring Billing in Dynamics 365 Business Central
These steps should be enough to get you started with processing subscription sales invoices in Dynamics 365 Business Central while we wait on more detailed documentation from Microsoft as well as the greater Business Central community. By following this guide, users can gain a solid understanding of the core functionalities and begin to leverage the module's capabilities to streamline their subscription and recurring billing processes.
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