Sales Order and Purchase Order cycle

purchase order process

sales order process

Detailed purchase order accounting entries in ax 2012

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Vendor Prepayment Functionality in Microsoft Dynamics AX 2012

Prepayments are a common business practice, with organizations issuing prepayments to vendors for goods or services before those goods or services are fulfilled. To minimize risk, you can track prepayments by defining the prepayment on a purchase order. Vendors can also create a prepayment invoice that is associated with a purchase order.

New prepayment functionality is available in Microsoft Dynamics AX 2012, making it easier for organizations to complete, manage and track prepayments to vendors. There are five steps involved with processing a prepayment for a purchase order, which include the following:

1. Create the purchase order.

1. Set up the prepayment.

1. Post the prepayment.

1. Make a payment.

1. Settle the payment against the final invoice.

Create the Purchase Order

The first step toward simplifying the prepayment process is by creating a purchase order. Take a look at Figure 1 to see an example of a created purchase order.

Figure 1: Here is an example of a purchase order (so for example, PO 0000511 of $146,200 USD is set up for Vendor 3003).

Set up the prepayment

After a purchase order is created, you must then set up the prepayment that will be associated with it. To do that, click on the Purchase tab in the top ribbon, and then click Prepayment (see Figure 2).

Figure 2: To set up prepayment in a purchase order, simply click on the Purchase tab, and then click Prepayment.

After clicking Prepayment, a window will pop up, asking for you to enter details regarding the prepayment (see Figure 3). In the Description field, enter the description of the prepayment that you’re creating, and then click the prepayment basis that you wish to apply.

With the prepayment basis, you have two options: Fixed or Percent. With the fixed option, you can apply a fixed dollar amount that you wish to apply to the purchase order amount. In Figure 3, we have entered a fixed amount with the value of $100,000 – so if we choose this prepayment option, $100,000 will be applied to the purchase amount.

With the percent option, you can choose to apply a certain percentage of the purchase order amount (see Figure 4). In Figure 4, we have entered 10% as the percent value, so 10% of the purchase order will be applied as prepayment. As you can see, the system calculates the 10%, showing the prepayment as $14,620, which is of course 10% of the total $146,200 purchase order amount.

Figure 3: One of the two prepayment options available in Dynamics AX 2012 is Fixed Amount. With a fixed amount, you can specify the dollar amount you wish to apply to your purchase order with your prepayment.

Figure 4: The other prepayment option that’s available is Percent Amount. With a percent amount, you can specify the percentage of the purchase order that you wish to apply to the whole purchase order with your prepayment.

For the purposes of this demonstration, we’ll keep the prepayment as 10% of the purchase order amount. After you define your prepayment values, enter a Prepayment Category ID from the dropdown, and then click Save (see Figure 5).

Figure 5: After you define the values that you wish to apply to your purchase order, save the prepayment record.

If after creating a prepayment you decide you don’t want to apply it to the purchase order, you can remove it by simply selecting the Remove Prepayment option in the top ribbon (see Figure 6).

Figure 6: Remove a prepayment on a purchase order by simply selecting the Remove Prepayment option in the top ribbon.

After you have configured the prepayment you wish to apply to the purchase order, confirm the order by clicking the Confirm option.

Post the prepayment

After you set up the prepayment basis toward a particular purchase order, you can then post the prepayment. To do that, go to the Purchase Order header, then to the Invoice option, and click Prepayment Invoice (see Figure 7).

Figure 7: To post a prepayment, go to the Purchase Order header, then to the Invoice option, and then click Prepayment Invoice.

After clicking the Prepayment Invoice, enter the invoice description and post the prepayment invoice.

Once the prepayment invoice is posted, check to make sure that the vendor transaction and vendor balance reflect the prepayment invoice transaction (see Figure 9).

Figure 9: Check to make sure that the vendor transaction and vendor balance correctly reflects the prepayment invoice transaction once a prepayment is posted.

Make a payment

After creating the prepayment and posting the prepayment invoice, it’s now time to make a payment. To do so, first create a Payment Journal, mark the prepayment amount, and then post the journal.

Figure 10: When making a payment on a prepayment, you first create a Payment Journal, mark the prepayment amount, and then post the journal.

At this stage, it is important to also check the vendor transactions and vendor balance (to ensure that everything continues to match up correctly).

Figure 11: Make sure that when you make a payment on your prepayment, that the vendor transactions and vendor balance match up to ensure correct payment.

Settle the payment against the final invoice

The final step of the prepayment process is to settle the payment against the final invoice. To accomplish this, first go to Purchase Order and Receive the Products, and then go to the Invoice section and click Invoice. When you’re on the opened form, click Apply Prepayment (see Figure 12).

Figure 12: To apply a prepayment, first go to Purchase Order and Receive the Products, and then go to the Invoice section and click Invoice. Click the Apply Prepayment option.

After clicking Apply Prepayment, a screen will open to show the prepayment amount that can be applied to the Invoice Amount (of the purchase order). The “Available application amount” field indicates the prepayment amount (see Figure 13).

Figure 13: After you click Apply Prepayment, a screen will pop up displaying the prepayment amount (in the “Available application amount” field) that you can apply to the Invoice Amount of the purchase order.

Then select the prepayment to be applied (or if you’ve set up multiple prepayments, you can select those as well), and then click Apply Prepayment (see Figure 14).

Figure 14: If you’ve set up multiple prepayment amounts, you are allowed to apply them to the purchase order (if you select them). Once the prepayment(s) are applied, click on Apply Prepayment.

After applying the prepayment, enter the invoice description and post the invoice (see Figure 15).

Figure 15: After you apply the prepayment, enter the invoice description and post the invoice.

After the prepayment has been applied and posted, check the open transaction that still needs to be paid to the vendor, and confirm the amount (see Figure 16). In our case, since we applied a prepayment that is 10% of our $146,200 purchase order (which equals $14,620), we see that we still owe $131,580 on the purchase order after our prepayment ($146,200 – $14,620 = $131,580).

Figure 16: After applying your prepayment, confirm that the remaining amount you owe on the purchase order is correct.

By using the Microsoft Dynamics AX 2012 prepayment functionality, you’re able to gain greater financial visibility and more cohesive organization of your financial processes. Also, with this enhanced insight, you support and sustain your financial relationships with vendors – crucial for boosting and maintaining business success.

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.

Export Purchase Order Data to MS Excel template with Dynamics AX 2012 ( Document Management )

Often, the customer asked to modify the layout of the standard reports to meet existing templates or tastes. and as we all know that changing the layout in the SSRS reports will take long time. Instead we can use one of the Dynamics AX functionality to export the customer data to MS Excel Template in simple way and short time.  

The Document management functionality in Microsoft Dynamics AX give you the ability to attach files to records. For example, you can attach PDF, Microsoft Word, or Microsoft Excel files to a purchase order or a sales order. You can also fill data to MS Excel and MS Word templates from Microsoft Dynamics AX data. 

 
This Article will discuss how to use MS Excel template rather than customize the standard SSRS reports in Dynamics AX 2012. 

In the following sections we will discuss how to export data from Microsoft Dynamics AX Purchase order to MS Excel templates.

This article divided into three parts.

• Prerequisites (Step by step with screenshots )
• Setup (Step by step with screenshots )
• Implementation (Step by step with screenshots )

Prerequisites:                                                            

Create purchase Order Template by following these steps:

1. Open new Microsoft Excel document ( I use Office 2010)
   
2. design the Purchase Order layout (Add company logo, Report header,report label).To simplify the subject I will add a few labels as follow:
• Purchase Order No.
• Vendor Name
• Item Code
• Description
• Qty
• Unit Price
  
  
  
3. Add Hyperlink to each Label ( Hyperlink will be used to map the Purchase order fields to the MS Excel template )
1. The Following Screenshot illustrate how to add the Hyperlink to the template field. for example in the following screenshot I added a new hyperlink which referee to cell B9 where the purchase order number will be placed
   
   
   
2. Repeat step 3 to create new hyperlink for each field. in my case I am going to add 6 hyperlinks for (Purchase Order No.,Vendor Name, Item Code, Description, Qty, Unit Price)
   
3. Save the Excel file as Excel 97-2003 Template
   
   
   

Setup:                                                                           

1. Go to Organization Administration > Setup > Document Management > Document Management Parameter
   
2. Click the number sequence Tab > Assign  number sequence to the Document file counter
   
3. Click the File types Tab > Click Add Button > Add the Microsoft word template file type if not exist and close the screen
   
   
   
4. Go to Organization Administration > Setup > Document types
   
5. Click new and follow the steps in the following screenshot to add new document type
   
   
   
6. Click the Option Button
   
   
   
   
   
7. from the Table drop down list select the "PurchTable"
   
   
   
8. in the template file field click the folder icon and select the Sales order template that we create before
   
    
9. Go to the Field Tab
   
   
   
10. in the data field select the "PurchaseId" (this field contain the Purchase Order Number/Code)
    
    
    
11. in the bookmark field write the Hyperlink name Which corresponds to "PurchaseId" in this case write "Sheet1!B9"
    
    
    
12. repeat steps from 10 to 11 with all fields that you want to export and link it to the  corresponds Hyperlink ( make sure to select the "PurchLine" table in the Data Table Filed before mapping the Purchase Order line fileds to the  corresponds  hyperlink see the orange rectangle)
    

Implementation:                                                      

1. Go to > Account Payables > Common--> purchase Order > All purchase Orders
   
    
2. Select any purchase Order and Click the Attachment Button
   
   
   
3. Click the New Button and Select the Workbook
   
   
   
4. the System will start the export process
   
   
   
5. New document will be created and the Purchase Order Data will be populated  automatically.
   
   
   
6. that's all. Cool :)
   
7. 
   

Configure and use one-time supplier functionality in Dynamics AX 2012

One-time Supplies is common practice in trade business. one time supplier is a vendor who supply items or service for one time.
Dynamics AX help organization to separate the regular vendors accounts form the one time vendors.
in the following steps we will illustrate how to Configure and use one-time supplier functionality in Dynamics AX 2012.



1- Go to Accounts Payable --> Setup --> Accounts payable parameters.

2- in the Account Payable Parameters select the Number sequences tab then set the number sequence for one-time supplier. This sequence number will be used to generate automatic account number for the one time supplier during the purchase order creation.

3- Select the General Tab then select the "one-time vendor account" this account Information is automatically copied when you create a one-time vendor account.

4- Now we are ready to use the one-time suppliers. Go to Accounts payable --> Purchase Orders.

5- Create New Purchase Order.

6- Select One-time supplier checkbox, enter the supplier Name. Note that the system automatically generate the vendor account by using the number sequence that we assign in step 2. Complete the purchase  order as usual.

7- if we check the all vendors list we will notes that the one-time supplier have been created.

8- and all the vendor account information that we specified in step 3 has been copied to the new supplier except the account number and account name.