Sunday, 18 October 2015

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:

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

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:

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

Purchase expenditure for product – Debit

Vendor balance (Accounts payable) – Credit

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.

Monday, 12 October 2015

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