Purchase order management in Microsoft Dynamics AX

Purchase order management in Microsoft Dynamics AX

Appart from entering the order manually, there are the following options to generate the order automatically:

• Master planning
• Purchase requisition
• Request for quotation
• Purchase agreement
• Direct delivery etc.

Receipts list – If the warehouse requires a list of purchased items for information purposes and for preparing the item arrival you can print a receipts list.

Inventory registration – Unlike the receipts list, inventory registration updates the on hand inventory. Is an optional step before product receipt (if Registration requirements checkbox is selected in the item model group). Three ways for inventory registration:

• Registration form – In purchase order lines
• Item arrival journal – A journal in inventory
• Mobile device transactions – In advanced warehouse management

Inventory transactions include two different types (steps):

1. Physical transactions (packing slips, product receipts)
2. Financial transactions (invoices)

It is important to distinguish these transactions with regard to inventory valuation and ledger posting.

Three following options for the purchase type of the purchase order:

1. Purchase order – regular
2. Journal – draft or template, with no impact  on inventory or finance. It is not possible to post a document (confirmation or product receipt). You can convert it to normal PO by changing the type
3. Return order – credit note

When you enter a purchase order line, a corresponding inventory transaction is created, but with physical and financial date empty and receipt status Odered (+) on On order (-). This can be viewed Inventory/Transaction. In the course of PO processing, the product receipt (physical) and vendor invoice (financial) update this inventory transaction.

You can specify the delivery address of the PO on the tab Address in the PO header view. The default delivery address is the delivery address of the current company specified in the legal entities form.

If a delivery address is specified for the site or warehouse in this PO header, it takes priority. You can select an existing delivery address in the Global Address Book or create a new one.

In a purchase order with only one item but with multiple delivery, you have to enter multiple lines with the same item but different delivery dates. We can use delivery schedule (Purchase order line/delivery schedule) functionality, creating only one line with the total quantity of the lines that have different delivery dates.

Depending on the approval workflow a purchase order has the following approval status:

• Draft – Initial approval status, before submitting the approval
• In review – While submitting the order is waiting for an approval
• Rejected – After the reviewer rejects approval (resubmit or recall)
• Approved – After approval (next step is confirmaiton)
• In external review – After posting the purchase inquiry (optional step)
• Confirmed  – After posting PO confirmation

There is another approval status called finalized after posting the invoice which you can do in purchase/actions/finalize. It is only neccesare when working with budget control, to block the order.

There is a difference in canceling and deleting a purchase order. Whereas canceling removes the open quantity (the expected quantity for future product receipts), deleting eliminates the order line or the entire order.

You should cancel an PO line if you don’t expect any more delivery for the line. For this select the line, Update line/ delivery remainder. The below dialog is shown

Cancel to set the remainder to zero. Ok to adjust the remainder.

To delete, select the line and ALT+Del.

Purchase inquiry is an optional document that you can send to vendor for validating purposes. It does not create physical or financial transactions.

PO confirmation does not create physical or financial transactions either.

In the Confirm purchase order dialog (which is also the posting) you can place the slider Posting to No. In this case a pro forma document is generated which is not a posted document and can be required for custom declarations. You can also use Posting/Generate/Pro forma  confirmation where the slider is always no