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From signed engagement letter to paid invoice
- 1
Set up the project
Each engagement becomes a project with tasks that match how you quote: phases, deliverables or retainer months. The budget lines hold planned hours by resource and any fixed fees.
- 2
Record time and expenses
Staff enter time sheets weekly against project tasks. A manager approves them, and approved hours post to the project at cost and at the billing rate for that resource or role.
- 3
Bill the client
Billable planning lines are pulled onto a sales invoice. Time and materials work bills what was used; fixed-fee work bills scheduled amounts or milestones regardless of hours.
- 4
Recognize revenue correctly
At month end the WIP calculation compares cost and billing to date and posts accruals or deferrals, so the income statement reflects work done rather than invoices raised.
- 5
Collect and review
Cash receipts close the invoices, and project statistics show budget against actual so partners see which engagements ran over while there is still time to talk to the client.
Choosing a WIP method for each kind of engagement
Utilization, rates and the numbers partners argue about
Every resource in Business Central carries a unit cost and one or more prices. Prices can vary by project, by customer or by work type, so an overtime hour or a senior-rate hour bills correctly without anyone overriding the line. Resource capacity and time sheets together show how many available hours each person spent on billable work.
The limitation is presentation. Standard pages answer the question for one project or one resource at a time. Firm-wide utilization, realization and write-off trends are better built in Power BI on top of posted project ledger entries. That combination gives partners a monthly view without an analyst rebuilding a spreadsheet every week.
Business Central or Dynamics 365 Project Operations?
Business Central with Projects
Project accounting, time sheets, billing and WIP inside the same system as the ledger, payables and payroll journal imports. It fits firms where project managers also handle finance tasks.
- ✓One system and one data model
- ✓Essentials licence covers projects
- ✓Simpler setup and training
- ✓Resource planning by capacity
Dynamics 365 Project Operations
A full professional services automation product with quoting, a resource scheduling board, skills matching and a more detailed approvals process. It carries more licensing and more setup.
- ✓Quote to project to invoice flow
- ✓Schedule board with skills and roles
- ✓Richer expense management
- ✓Links to a separate finance back end
Gaps to plan for in a services firm
- ✓Expense reports with receipt capture from a phone are basic in standard Business Central. Most firms add an expense management app from AppSource.
- ✓Scheduling people by skill and availability across dozens of consultants is limited to capacity figures. Staffing boards need Project Operations or an add-on.
- ✓Retainers that draw down against prepaid balances need careful setup with prepayments or deferrals and a clear rule for unused hours.
- ✓Payroll is not part of Business Central in the US. Time data feeds your payroll provider through an export or an integration.
Questions from services firm owners and controllers
Can we bill some clients hourly and others on fixed fees?
Yes. Billing method is set per project line, so one project can bill time and materials while another bills milestones. A single project can also mix them, for example a fixed design fee plus hourly change requests. The WIP method is chosen per project to match.
Do our consultants need full Business Central licences to enter time?
Microsoft offers a Team Member licence that can read data and perform light tasks, and time sheet entry is among the uses Microsoft lists for it. Licence rules change from time to time, so we confirm the current terms with you before any purchase. Managers who approve and project managers who invoice usually need full users.
How do we see unbilled time at month end?
Project planning lines show what has been used but not invoiced, and the WIP calculation totals it by project. A saved report or Power BI view lists unbilled amounts by client and partner. That list tends to become the most-used page in the first month.
Can Business Central handle revenue recognition for multi-year contracts?
It can with a combination of project WIP methods and deferral templates for subscription-style fees. For complex contracts with multiple performance obligations, your auditors may want a documented policy and a dedicated revenue schedule. We design the setup with your accountant rather than guessing at the policy.
We use a separate CRM. Does that matter?
Not necessarily. Business Central integrates with Dynamics 365 Sales out of the box, and other CRMs connect through APIs or connectors. The key decision is which system owns the customer record, so names and billing addresses are not maintained twice.
Talk to us about your project.
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