Purchase Order Accounting in AX 2012

The accounting impact of PO happens at two stages:

1. At PO product receipt(Or packing slip) posting.

2. On PO Invoice

PO Product Receipt

When receipt is posted, two sets of ledger entry is posted:

1.

Purchase expenditure, un-invoiced – Debit
Purchase, accrual – Credit

2.

Product receipt – Debit 
Purchase expenditure, un-invoiced – Credit 

Now, the important thing here to notice is the set of ledgers. The first set is liability booking for vendor while the second set represents open inventory. Here we notice that Purchase expenditure, un-invoiced is offsetting both accrual and receipt but they act differently. Things will be more clear after we discuss PO Invoice accounting

PO Invoice 

At the time of invoice, the accrual and product receipts are reversed and main account are hit. Following are the set of entries:

1.

Purchase expenditure, un-invoiced – Credit
Purchase, accrual – Debit

Purchase expenditure for product – Debit 

Vendor balance (Accounts payable) – Credit

2.

Product receipt – Credit 
Purchase expenditure, un-invoiced – Debit

Purchase, product receipt – Debit 
Purchase expenditure for product – Credit

So we see here that the one set of account is vendor and other is inventory. The very important to notice here is to look closely at purchase expenditure, un-invoiced account. Please note that it is not necessary that this account balance will always be 0 which it looks like. This ledger is running separately for vendor and inventory and in case of purchase return order where the inventory is issues at weighted average cost, there is a great chance that the vendor will hit by some amount and inventory will hit by some other amount unless you use marking feature.

BOM Journal Posting in AX 2012

BOM journals are being used in the Production Module.Bill of material journal is used in order to receive the finished good into inventory and issue the component items.Unlike any other journals, like Movement Journal Posting or Counting Journal posting, BOM journal posting is little bit different. Lets discuss on the same in details.

First of all, we need to create a product with Production type as BOM for the item on which BOM posting will be done under the Engineer fast tab.

Navigation: Product Information Management > Common > Products > Released Products

NOTE: Given the Name of the BOM item as Finished Good-BOM.

Now I am taking some general items (Item name- Test-1, Test-2 and Test-3) having the Production type as None and attaching these items into the BOM item (Finished Good-BOM) that we have created just before.

NOTE: The general items that will be attached with the BOM item (Finished Good-BOM)

Taking the BOM item > Engineer Ribbon > BOM pane > Lines > Create BOM

Enter a description under the BOM and enter the site and then click OK.

Attach the items into the BOM lines and then Approve and Activate the BOM by clicking the  Approve and Activate button.

Now Navigate to Inventory & Warehouse Management >Journals > Item Transaction > Bill of Materials. Click New Journal and go to lines.

Now click BOM > Reported as Finished

Now create a new entry (Cntrl + N) and select the item ( as we have used this item Finished Good-BOM). Select the BOM under the BOM field.

NOTE:  Make the Post Now field as unchecked. Explosion as always. And then click OK

Now once I click OK, the lines will come under the original journal lines form.

NOTE: the negative sign shows that this item is being consumed.

Click Validate to Validate the Journal

Click Post to Post the Journal

Create a Purchase requisition

The objective of this article is to describe how to create and submit a Purchase requisition in Dynamics AX 2012.

You can create a purchase requisitions for products that your organization uses. A purchase requisition is an internal document that authorizes the purchasing department to buy items or services. To be able to create a purchase requisition, a workflow has to be setup.

Create a Purchase Requisition

Access: Procurement and sourcing > Common > Purchase Requisitions > All purchase Requisitions

• Click New

• Enter a description
• Select the Requested date

The PR line form is opened

• Select a Reason (the reason can be setup as mandatory in the purchase policy)

Create the line with option “Add item”

• Click “Add Item”

• Select the Requester of the PR

The default value is the worker linked to the user, but it is possible to setup rules to allow one user to create purchase requisition on behalf of others workers

• If the worker is an employee of several companies, select the buying entity

Option A: Select a catalogue item

• Go to the Catalogue Items to select a product (the product need to be include in a Procurement category)

• Use the filter to find the item

• Select the item and click “Select”

• Enter the quantity
• Vendor and price are coming from the items setup
• Go to the detail tab to select the inventory dimensions
• And click “OK” to add the item to the purchase requisition

Option B: Non catalogue item

• Go to the Non catalogue Items to select request an item that is not available in the catalogue.

• Enter the Product name
• Select the category of the product
• Enter a description of the product
• Select a vendor or suggest a vendor
• Complete the information with quantity, unit and price

• Click “Select”
• Go to the Details tab to select the inventory dimensions (Site, Warehouse)
• And click “OK”

Lines are added to purchase requisitions

Create the line with option “Add Line”

If you know what the item you need, use this option

• Click “Add Line”
• Select the requester and the buying entity
• Select the item

• Enter the quantity
• Unit price and vendor are coming from the item setup

Complete and Submit the PR

You can click “Details” to Edit the line and complete the information (Financial dimensions for example)

To go back to the Purchase requisition form, click “Close line details”

Once the purchase is ready, click “Submit” to submit the PR to the workflow for approval.

ONE INVOICE FOR MULTIPLE PURCHASE ORDERS IN AX 2012

Post single invoice for multiple Purchase orders

There might be a case where the vendor sends a single invoice for multiple purchase orders, in this scenario we will see how to post one invoice for multiple purchase orders of the same vendor.

We are having two PO’s for the same vendor “US- 104 Fabrikam Supplier”

PO Number        Qty         Unit Price            Net Price

000134                  10           27.25                     272.50

000135                  15           78.99                     1184.85

Consolidated Net Price for Two PO’s is 1457.35

Step 1: Select the Two Purchase Order

Navigation: Procurement and sourcing> Common> Purchase orders> All purchase orders

• Select the Two PO’s
• Click on the Invoice tab
• Then click on Invoice button

Step 2: Consolidate the Two Purchase orders

• Enter the same invoice number for the two purchase orders
• Then click on the Consolidate invoices button
• Under the Summary update select “Invoice account”
• Then click on the Consolidate to merge the two PO’s into one

Step 3: Total amount of the two Purchase Orders

• The Two Purchase orders are now consolidated
• To check the Invoice amount – click on Summary – Totals or can view on the right side of the form
• Click “Post” to complete the Purchase Order

• We can get the Print of the Invoice as shown below:

Step 4: Verify the status of the Purchase Orders, its showing as “Invoiced”

Navigation: Accounts Payable > Common Forms > All Purchase Orders

Step 5: Check the Vendor Invoiced entries

Navigation: Accounts Payable > Common Forms > All Vendors

• Select the vendor “US-104”
• Click on Invoice button to view to posted invoices

Purchase requisition workflow

This article describes how to set up in the purchase requisition workflow the approval element done by the project manager.

1/ Create a workflow Participant

Access: Procurement and sourcing > Setup > Policies > Purchase requisitions expenditure reviewers

• Click “New” to create a new expenditure reviewer
• Select the company
• Select “Project Manager”

2/ Setup the workflow

Access: Procurement and sourcing > Setup > Procurement and sourcing workflow

In the workflow, line or header level, add a condition element to check if there is a project populated in the purchase requisition:

• Click “Properties”
• Enter a new title
• Select the condition:

Add a new approval element

Click “Properties” and enter all the information:

• Title
• Notifications
• Actions allowed

Go to the level down, to complete the approval step

• Populate all the text required in the Basics settings
• Click “Assignment”
• Select “Participant”

In the Role base tab:

• Select Type of participant =  Expenditure participants
• Select participant = Project manager

• Complete the time limit and the completion policy

Check that the error panel is empty and save the new version of the workflow

The workflow is going to refer to the project setup, to assign the approval to the project manager:

Warehouse Management System- Outbound Process

Outbound process is nothing but the normal Sales Order process which we will achieve now through the WMS.

Like Inbound process, we have few more set ups in Outbound Process also like Location Directives, Work Template, Wave Template and Mobile Device Menu Items which we will learn to configure in this post.

Location Directives

Location Directives are used to direct work transactions to the appropriate location in the warehouse. For example, in a Sales order transaction, a location directive determines where the items will be picked from and where the picked items will be put.

User can use location directives to do the following:

• Put away incoming items.
• Pick and stage items for outbound transactions.
• Pick and put raw materials for production.
• Replenish locations.

For setting up a Location Directive for a Sales Order, follow the below steps:

For PICK

1. Navigate to: Warehouse Management > Set Up > Location Directives
2. Select the Work Order type of the Location Directive form as Sales Order. Click New to create a record and select the Work type as Pick.
3. Enter the Site and Warehouse for the Pick.
4. Under the Lines fast tab enter the From and To quantity that will be valid for.
5. Create a record in the Location Directive Actions fast tab and click Edit query. Under Edit query, enter the Location Profile ID from where the items will be Picked from. So the items in this case will be picked from the PICK Location.

For PUT

1. In the same form, Click New to create a record and select the Work type as Put.
2. Enter the Site and Warehouse for the Put.
3. Under the Lines fast tab enter the From and To quantity that will be valid for.
4. Create a record in the Location Directive Actions fast tab and click Edit query. Under Edit query, enter the Location Profile ID where the items will be PUT. So the items in this case will be PUT to the CONVEYOR Location.

So in short, while the orders will be processed, this Location Directive will give a location from where the items will be Picked and the Location where to PUT.

Work Templates

A work template is used to create and process warehouse work at various stages in the warehouse management process. . For example, a sales order has been initiated, so a work item must be created for somebody to go and pick items from the defaulted receiving location and follow the location directive action to pick the item and to put the item away in a particular location.

User can use Work Templates to do the following:

• Outbound transactions.
• Picking of inventory items.
• Production tasks such as picking or putting of raw materials.
• Inventory transfers.
• Movement of inventory items between locations.
• Replenishment of locations.

For setting up a Work Template for a Purchase Order, follow the below steps:

1. Navigate to: Warehouse Management > Set Up > Work > Work templates.
2. Select the Work Order type of the Work Template form as Sales Order. Click New to create a new record.
3. In the Lines create two records having the work type one for PICK and another for PUT.
4. Click Edit Query at the header to specify the Warehouse.

Wave Template

Wave templates are being used as a wave processing to group picking work for multiple work orders into a single wave.

This process describes to create, process, and release a wave to create picking work for a load, shipment, production order, or Kanban order. You can create waves for sales orders

• Sales orders – Use shipping waves to include lines from sales orders. When a sales order is released to the warehouse, the sales order lines can be included in the wave.

For setting up a Wave Template for a Sales Order, follow the below steps:

1. Navigate to: Warehouse Management > Set Up > Wave > Wave templates.
2. Select the Wave Template type as Shipping. Click New to create a new record and enter a Wave name, Site and Warehouse.
3. Click the check boxes- ‘Automatic Wave Creation’, ‘Process Wave at Release to Warehouse’ and ‘Automate Wave Release’.

4. Make sure that you have selected All the Methods by selecting them from Right to             Left.

Mobile Device Menu Items

Mobile device needs to be set for the particular user so that the user can use his/her mobile device to perform the work For Outbound, only one set up needs to be done-

1. Sales Picking

Sales Picking

Follow the below steps to create a Sales Picking in Mobile Device-

1. Navigate to:Warehouse Management > Set Up > Mobile Device > Mobile Device Menu Items.
2. Click New to create a record.
3. Select type as Work under Mode.
4. In Directed by, select user directed.
5. Select the Pick & Pack,Generate License plate, Override target LP&  Allow Splitting of Work check box checked.

Mobile Device Menu 

Once the Mobile device menu items has been created, its time to attach these Menu items into the menu.

Navigate to: Warehouse Management > Set Up > Mobile Device > Mobile Device Menu.

Click New and enter the name as Outbound. Under Outbound,move these menu items from right to left (Sales Picking). So these items will be displayed at the time of log in.

And Later, select this Outbound into the Main Menu.

Now we are done up with all the set ups that are needed for the Outbound process. Now it’s time to process the Sales order by WMS.

Follow the below steps for the Inbound Process-

1. Create a Sales Order. Make sure that you have taken the Item as advanced warehouse item and warehouse as advanced warehouse.

2. Click Inventory > Reservation to reserve the items. Under Reservation form, click            Reserve lot to reserve the items.

3. Navigate to Warehouse Management tab of the sales order and then click ‘Release to Warehouse’ button.

4. Release to Warehouse leads to the creation of – Wave ID, Work ID and Shipment ID.

5. Navigating to the sales order to get the Work ID that has been created.

 

6. User will log into the Mobile device.

7. After Log in, user needs to click on the Outbound Button.

8. Click on Sales Picking to proceed.

9. Scan with the Work ID that has been generated.

10. System will automatically take the Location. At this time, system will ask for a License Plate to enter. Take the LP from the Item’s on-hand form.

11. System will take the Target LP automatically.

12. Click Done to Continue.

13. System will ask to scan a Location. Enter Conveyor01 (This is one of the location I made manually in the Locations form under the Location Profile ID as Conveyor) to it and Click OK.

14. Click OK to complete the Work.

15. Now navigate to the same work details. The status of the work gets closed.

16. Since the item is a serialized item, so need to enter the serial number. Go to the Lines tab of the Packing Slip form and click Register Serial number.

17. Enter the serial numbers manually by entering them and clicking Enter. By this way fill all the serial numbers.

Once the Serial numbers has been entered, user can do the Packing Slip.