Subscription and contract invoicing solutions in Microsoft Dynamics AX

By - September 5, 2014

In the world of products and services, for the consumer and business, the concept of invoice and payment is simple: One determines a product to buy, picks-up the product or has it delivered, and pays a price for the good or service. This is the model we use in trips to the grocery store, on-line orders for merchandise and to pay for a hair-cut.

Transfer over to the world of contracts, business that operate on a model of subscriptions and repeating services, and the concept of invoice and payment becomes quite different. This is the world where invoices are generated on a pre-determined schedule and the line items on the invoice are classified into three general categories: one-time, recurring and usage. These billing methods are no stranger to the average person, after all we have all had a phone bill or cable bill at some point which billed us a one-time fee for installation and continues to bill a fixed fee each month for service, and a variable fee based on certain features we may or may not use.

However, business software solutions generally does not transfer between the two models as successfully. I have been fortunate to work lately with Microsoft Dynamics AX 2012 and Red Maple’s contracts module. I have found that for a organization with thousands of contracts, each with dozens of line items with different billing behaviors every month, I am easily able to set-up, maintain, and generate my monthly invoices without having to create.

The solution works well because it fits the model in which these businesses operate. Contracts are created and tied to a customer. The contract has start and end dates, renewal terms, billing information, and lines. Those lines have a billing method (one-time, recurring, usage), pricing (flat, use based, or tiered), effective and expiration dates, products or services associated with them, and frequency (monthly, quarterly, annually).

Once the set-up of the contracts is complete, all the organization needs to do is load in the usage or transaction data each month for applicable items (think: your cell phone minutes), run a job to create invoices, and an invoice proposal for each contract with at least one valid billing line that month is generated. As a matter of testing, I have repeated the process month-after-month in a matter of minutes, and have been able to simulate the contracts that would be generated based on the dates of the contracts and the dates and terms applied to the line items. It is interesting to see the changes from month-to-month automatically take effect as line item agreements end, new ones become effective, and price changes take effect.

Contact invoicing is complicated to understand, but if you do not have the right software for the job it can be extremely difficult to process for a business. Lucky for me, Microsoft Dynamics AX2012 and Red Maple’s contract module get the job done.  If you are interested in learning more about this solutions, contact our professionals at  Let me know what you think of this post through a comment below or tweet us @RSMUStech or tweet this post.

By:  John Hannan – New Jersey Microsoft Dynamics AX partner

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