An Out of the Box Approach to Bill Backs

A creative approach to billing purchases back to your customer without using Project Accounting

For some people, the thought of implementing Project Accounting to handle ‘bill backs’ seems like major overkill, and I would agree for certain instances.  With a little creative thinking and the right tools, this process can be easily managed within Dynamics GP.  I will walk you through an example of one way to accomplish this by simply using Accounts Payable, Sales Order Processing, and SmartLists.

As an overview:

  • You will be identifying our Accounts Payable invoices with some sort of an identifier to indicate it is to be billed back to a customer. In my example, I will be using the Bill Back Clearing account. (Hint, if you have more than 1 Bill Back Clearing Account, you may want to consider adding an account category to restrict on later.)
  • Once that data is in your system, you will need to report on all Payables that have been marked ‘Bill Back’. For this, I used Smartlist because I can export and utilize this data to integrate or as a data entry template and hand key the data onto an existing Sales Invoice. I used a SQL view to show me all of the AP transactions and include their distributions. I then restricted the Smartlist to only include lines charged to the Bill Back Clearing Account.
  • Our next step will be to identify which of the AP Invoices have been billed back to the customer. For this we will need to find a link between the AP side and the SOP side.  I found the solution to this by adding the AP Document number to the SOP line item description field. I can now match the AP invoice to the SOP line item in SmartList.  By restricting the list by items with and without a matching SOP line, I am able to determine what has been billed and what still needs to be billed.
    • If the Line Description does not work for you, you could use the SOP line item number and give the description a more meaningful entry to print on the invoice to your customer.
    • Additionally, instead of using the AP Document Number, you may choose to use the AP Voucher Number.

In the below example, I have entered two AP invoices that require billing back to a customer.  I have billed one of the items back to a customer and I can see the SOP invoice matched to the AP invoices.  I can also see that I have one item remaining to invoice back to a customer.  With a little more creativity, I could include the customer I would need to bill back to in the AP document comment and have that show up on this report, making data entry a bit easier and also giving me a way to cross compare who was invoiced for that document number.

Additionally, I could restrict this list to only include lines with no matching SOP invoices, sum the Debit Amount, and reconcile that list to my Bill Back clearing GL account.


In conclusion, with a little outside of the box thinking, I was able to develop a process to manage AP documents that require billing back to a customer without taking on a potentially large implementation like Project Accounting.  This method will allow you to manage ‘Bill Backs’ with precision and detail that gives you a reconciliation from AP to SOP and back to the GL making it easy to identify any issues you may have with reconciliation.

If you would like more information or assistance in deploying this solution, please reach out to us at Encore Care.

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