Billing Rules for Project Contracts in Dynamics 365 Finance and Operations

When you negotiate a project contract with a customer, you define how and when you can invoice the customer for work on a project. After setting up the project contract and the project, you can set up billing rules for the project. Billing rules are based on the project terms specified in the project contract.

The billing rules you can create depend on the terms of the project contract and the project type (such as Time and material or Fixed-price) associated with the billing rule. You can create more than one billing rule for a project contract, and you can also assign a billing rule to multiple projects that are associated with the same project contract and have similar billing terms.

Types of Billing Rules

Unit of delivery — Invoice a customer when you complete a unit of delivery. The units of delivery are defined in the contract.

Progress — Invoice a customer when you complete a specified percentage of the project. You can set up a billing rule to automatically calculate the percentage of work completed, or you can manually calculate the percentage of work completed and the amount to invoice the customer.

Milestone — Invoice a customer for the full amount of a project milestone when the milestone is reached.

Fee — Invoice a customer for your services plus a management fee, which is typically a percentage of the cost of services.

Time and material — Invoice a customer for the value of time and materials used on a project.

Source: Project contracts and billing rules – Microsoft Learn