Product documentation
Invoicing & Financial Integration in HSO Service Management connects service operations with Project Management and Accounting in Microsoft Dynamics 365 for Finance and Operations. Service transactions are recorded against projects, while the applicable Service Level Definition and Project Integration determine how costs and revenue are processed. This chapter explains the financial relationship between Service Objects, Service Calls, Service Tasks and Service Contracts, including chargeability, invoice proposals and the supported billing methods.
Introduction
HSO Service Management uses the Project Management and Accounting framework to process service-related costs and revenue. Service Objects are associated with projects, while Service Calls use sub-projects to collect the transactions generated by their Service Tasks. This structure provides a financial history for each Service Object and allows service activities to be invoiced through standard project invoicing functionality.
Financial process
When a Service Call is created, the applicable Service Level Definition determines the Project Integration used for the call. Service Tasks generate forecasted transactions, which become actual project transactions when work is registered and realized. Once the Service Tasks are completed and the Service Call is closed, eligible transactions can be included in a project invoice proposal.
Billing models
The financial treatment depends on the service scenario. HSO Service Management supports time-and-material invoicing, contract coverage, periodic contract invoicing, prepayments, revenue accrual, usage-based invoicing and alternative methods for charging labor.
Introduction
The relationship between Service Management and Project Management and Accounting is established through the project structure. This allows service transactions to be recorded and analyzed using the financial functionality of Microsoft Dynamics 365 for Finance and Operations.
Service Object projects
Each Service Object is associated with a project that provides the financial context for its service history. When a Service Call is created, a sub-project is generated according to the configured sub-project numbering mask. Transactions belonging to the Service Call are processed through this project structure.
Service Task transactions
Service Tasks contain the expected and actual work associated with a Service Call. Supported transaction types include Hours, Items, Costs, Travel, Revenue and Depreciation. The selected Event Code can generate forecasted transactions, while the Project Integration determines the financial defaults and permitted category and line-property combinations.
Project contracts
The project contract provides the invoicing relationship with the customer. Service Calls for the same customer can share a project contract, allowing eligible transactions from multiple completed calls to be combined into a single invoice proposal.
Introduction
Project Integration determines how Service Management transactions are processed in Project Management and Accounting. The applicable Service Level Definition selects the Project Integration for a Service Call, taking account of the Service Object, Call Type and relevant contract conditions.
Service Level Definition
An SLD defines the applicable service conditions, including allowed Call Types, default Call Type, Coverage Type and Project Integration. For contracted Service Objects, the active contract provides the relevant SLD. For service outside a contract, the default SLD establishes the corresponding rules.
Project Integration
A Project Integration ID contains the financial settings used for service transactions. These include default Project Categories, permitted category selections, Line Properties, Invoice Status and the applicable posting behavior for each transaction type. Different Project Integration IDs can be used for time-and-material work, warranty, covered contract services, prepayments and fixed-fee arrangements.
Financial defaults
The Project Integration assigned to a Service Call provides the default financial treatment for its transactions. When the Call Type or other relevant service context changes, the applicable Project Integration may also be reevaluated according to the configured SLD rules.
Introduction
Project Categories, Line Properties and Invoice Status determine how service transactions are classified, posted and invoiced. Together, they provide the financial distinction between chargeable work, covered services and other transaction treatments.
Project Categories
Project Categories classify transactions by type and purpose, such as labor, materials, travel, costs or service fees. They are defined in Project Management and Accounting and used by Project Integration to establish the appropriate defaults for Service Tasks.
Line Properties
Line Properties influence the financial treatment of project transactions, including whether the transaction is chargeable. Project Integration can define the default Line Property for each transaction type and restrict the combinations that users can select.
Invoice Status
Invoice Status indicates how a transaction is handled in the invoicing process. Transactions may be chargeable or non-chargeable depending on the applicable coverage and Project Integration. Users should verify these values when reviewing unexpected invoice amounts or transactions that are missing from an invoice proposal.
Transaction validation
Project Integration selection rules can restrict the available Project Categories and Line Properties or determine how non-default transactions are evaluated. This supports consistent financial processing while allowing different service scenarios to use different billing rules.
Introduction
Service Task registration converts planned work into actual transactions. These transactions are processed through the project associated with the Service Call and form the basis for cost accounting and customer invoicing.
Forecasted transactions
When a Service Task is created, its Event Code and work package can generate forecasted Hours, Items, Travel, Revenue and other transaction lines. These forecasts represent the expected work and can be reviewed before the task is confirmed.
Actual registration
During execution, technicians or back-office users register the actual labor, consumed materials, costs, travel and other relevant transactions. The Project Category, Line Property and Invoice Status determine how these registrations are subsequently processed.
Task realization
When the Service Task is realized, its registered transactions are posted as actuals through Project Management and Accounting. The task reaches Ready status and its eligible transactions become available for subsequent invoicing according to the Service Call and project conditions.
Introduction
The Service Call is the primary unit for invoicing operational service work. It combines the financial transactions from its Service Tasks and provides the context for determining which charges can be invoiced to the customer.
Invoicing prerequisites
Before invoicing, all Service Tasks associated with the Service Call must be completed and realized. The Service Call should be closed, and the actual transactions should be reviewed for completeness, correct chargeability and the expected customer amounts.
Creating an invoice proposal
Service Call invoicing uses the project invoice proposal functionality in Microsoft Dynamics 365 for Finance and Operations. The user selects the eligible transactions, creates the proposal and reviews the resulting invoice lines before posting. The proposal should contain all expected chargeable transactions and exclude work that is covered or non-chargeable.
Combined invoicing
Multiple completed Service Calls can be invoiced together when they share the same project contract. This allows the service organization to consolidate customer charges rather than creating a separate invoice for every Service Call.
Introduction
Service Contract invoicing is driven by the Contract Type, Invoice Group, invoice schedule, Coverage Types and Project Integration. Unlike operational Service Call invoicing, contract invoicing can generate revenue independently of individual service visits.
Periodic contract invoicing
Periodic contracts use an invoice schedule to determine the amounts and periods eligible for invoicing. The Invoice Group controls the invoicing frequency and next invoice date. Users review the eligible schedule lines, create the project invoice proposal and verify the posted invoices. The Update next invoice dates function is used between invoicing runs.
Contract adjustments
When an addendum changes the contract's object content, coverage or pricing, the invoice schedule may contain adjustment, correction or settlement lines. These must be reviewed to ensure that previously invoiced periods and new contractual conditions are handled correctly.
Prepayments
Prepayment contracts allow the customer to pay an agreed amount in advance. The prepaid amount can subsequently be settled against eligible Service Call transactions or through the applicable periodic settlement process. Where automatic deductions are configured, the prepaid balance is reduced as covered service work is delivered.
Introduction
Some Service Contracts require revenue to be recognized over time or invoiced according to actual equipment usage. These billing methods use contract information together with the financial and operational data maintained in Microsoft Dynamics 365 for Finance and Operations.
Revenue accrual
Revenue accrual distributes contract revenue across defined accounting periods. For example, an annual contract invoice can result in twelve monthly accrual lines. This requires the appropriate project group and accrued revenue or work-in-progress ledger accounts.
Consumption-based invoicing
Consumption-based contract pricing uses equipment usage to determine the applicable charges. The calculation can use the Service Object's primary meter and contract-specific trade agreement prices.
Usage settlement
The usage balance process compares agreed consumption with actual recorded usage. Differences can result in additional charges or settlements for under-consumption or over-consumption, depending on the contractual arrangement.
Introduction
HSO Service Management supports alternative methods for converting labor registrations into invoiceable transactions. These methods are used when the commercial representation of labor differs from the underlying time registration.
Hours as Items
Hours as Items allows transactions representing working time to be converted between item-based registrations and Hour Categories according to configured conversion tables. This supports scenarios in which service time is represented through predefined products or items.
Hours via Revenue
Hours via Revenue converts registered working time into Revenue transactions for invoicing. The conversion uses configured relationships between Hour Categories and Revenue Categories and can apply rounding rules to determine the invoiceable quantity or amount. This is relevant when labor is charged as a service fee rather than invoiced directly from the original hour transaction.
Hour markups
Hour markups can distinguish between different rate periods, such as normal working hours and overtime. Depending on the configuration, the registered working period can be divided into separate revenue lines using the applicable rates.
Financial considerations
These methods require coordination between Service Management and Project Management and Accounting. The conversion rules, Project Categories, Line Properties and resulting invoice transactions should be validated together to avoid duplicate or incorrect charges.
Introduction
Posted Service Call invoices may require correction when the original invoice contains an incorrect quantity, amount or charge. HSO Service Management supports full and partial credit processing through the related project invoicing functionality.
Full credit notes
A fully invoiced Service Call can be credited through a full credit note. This reverses the original invoicing and reopens the Service Call, allowing the financial situation to be reviewed and corrected.
Partial credit notes
Partial credit notes can be created for specific quantities or amounts when only part of the original invoice requires correction. This allows individual invoice differences to be addressed without reversing the complete invoice.
Contract credits
Contract invoicing can also require credits when an agreement is terminated early or when previously invoiced coverage periods are changed. These adjustments should be reviewed against the contract invoice schedule and any related addenda.
Introduction
Financial monitoring helps users verify that service transactions have been registered, posted and invoiced according to the intended business rules. The Service Call, project transactions and invoice proposals provide complementary views of the same financial process.
Project transactions
Project transaction inquiries show the actual costs and revenue associated with service work. Users can review transaction types, Project Categories, Line Properties and Invoice Status to investigate unexpected amounts or missing invoice lines.
Service Management Cockpit
The Service Management Cockpit provides an overview of service-related financial information using configured category groupings. These can include labor, materials, travel, warranty, contract revenue and other costs or fees. The category configuration should correspond to the underlying Project Categories to maintain consistency with project accounting reports.
Common financial checks
When an expected transaction is missing or has an incorrect amount, first verify the Service Task registration and realization status. Next, review the associated project transaction, Project Category, Line Property and Invoice Status. If the financial defaults are incorrect, check the Service Call's SLD and Project Integration before changing individual transaction values.
Invoice verification
Before posting an invoice proposal, verify the customer, project contract, eligible transactions, covered or non-chargeable work and expected totals. For contract invoices, also review the invoice schedule, relevant addenda and settlement lines. These checks help identify financial discrepancies before they become posted invoices.