Dynamics 365/AX ERP and everything related

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81205-06 Vendor creations, groups, posting and item profile — April 24, 2018

81205-06 Vendor creations, groups, posting and item profile

Vendor Creation

Vendors are the organization or person who provides goods or services and are part of Accounts payable module and use the process of procurement module.

The important options can be set during vendor creations:

  • Organization or person type
  • Vendor group read more below
  • Address
  • Contact details
  • Misc details: buyer group, credit rating, vendor on hold option, inter-company
  • Vendor profile for reporting: Bid only, woman owner, locally owned, etc.
  • Purchasing demographic: Currency, line of business, segment
  • Invoice and delivery: Invoice account if different entity is required for billing,  delivery terms, inclusive tax option
  • Purchase Order Defaults: Charges group read in different course, site, warehouse, specific change management for workflows, discounts.
  • Payment: Terms, method, specification, cash discount, bank account.

Vendor Groups

The grouping of similar business or requirements of multiple vendors. Example: grouping all vendors related to vendors to see vendors transaction reports.

Default setup options:

  • Terms of payment
  • Time between invoice due
  • default tax group
  • exclude from search

Posting Profile

Vendor group is used to segregate ledger posting accordingly. Example: Vendor group all must must post to A/P general trade and subcontractors to different ledger account.

Note: This is not used for linking account for Prepayment option

Item posting profile

Vendors when used in purchase on any other module rather than direct billing we can control where data is posted to which ledger account at different stages like:

  • Cost of purchased received
  • Purchase expenditure, uninvoiced
  • Cost of purchase material invoiced
  • Purchase expenditure for product
  • Discount
  • Charge and many more.

See Purchase item posting profile in details


81205-05 Supplementary Items —

81205-05 Supplementary Items

When shopping online looking for Iphone X back case so many irresistible items gets suggested to buy which we often shop these are supplementary items which can be free sometimes too.


In AX we can define sales supplementary items with 3 options, path: released product->sell action pane->supplementary sales item:

  • Table: Specific item only
  • Group: Group of item
  • All: All items

Note: in this setup we can have supplementary item as complimentary item as free of charge, once only, with multiple qty, offer date range, optional and minimum qty to avail offer

With this option we can define like if a customer is ordering a wireless headset with free charger with limited time period only.


While creating sales order go to lines select item which has been setup as above then select sales order line -> supplementary items -> include

81205-04 Generic Currency and Smart rounding — April 23, 2018

81205-04 Generic Currency and Smart rounding

Generic Currency

Applying trade agreements with multiple currencies for discounts, read here about customer trade agreements. And system will apply exchange rate based on customers/vendor currency however to have discount a psychological effect we will see about smart rounding in below post

Smart rounding

This is the marketing trick to have a discount no so appealing. You must have seen a super market is running flash sales with all the discounted item ending with 9.9% or amount. So after creating trade agreement adjustments in bulk with effect of generic currency smart rounding is applied to end all the discounted price ending with 9.9.


  • Activate: A/R->setup->Parameters->Prices->Generic currency and smart rounding
  • Configurations: Sales and marketing->Setup->Price/Discount->Smart rounding
    • Unit price from
    • Unit price to
    • Syntax
    • Lower limit
    • Upper limit
    • Test by running simulation
    • Currencies


while creating discount journal after applying adjustment then under same adjustment menu apply smart rounding all the values get adjusted in more appealing format.



81205-03 Customer Trade Agreements —

81205-03 Customer Trade Agreements

Customer Trade Agreements

Are the centralized control and configuration to setup complex discounting options by using the concept of discount journals in AX. example in large organization over 20 person are creating sales order then in bulk we can create offers like:

  • Date range: Year end 10% discount on all electronic items
  • Product range: Discount on iphone 10% if purchased minimum 2 qty
  • Total Invoice: Buy minimum for $100 and get 10% discount, and many more..


  • Price Discount groups: Attached to customer card under sales order fast tab, to group similar customer in one discount group, Path: Sales & Marketing->setup->Price/discount->Customer price/discount group, again this has various types of discount groups:
    • Price group
    • Line discount group
    • Multi line discount group
    • Total discount group
  • Item Discount Group: Attached to item card under sell fast tab, to group similar items to group, again the various types of item groups are:
    • Line discount group
    • Multi line discount group
    • Postage group
  • Activate Price/discount: Activate what ever combinations of possibilities for customer, customer group all customers with:
    • Price
      • Item
    • Line Discount
      • Item
      • Item Group
      • All Items
    • Multi line discount
      • Item Groups
      • All Items
    • Total Discount
      • All Items

Price/Discount Agreement Journal

After above setup its time to make discount active by posting in Journals by picking up the relation example price.

  • Set Customer or customer group
  • Item or item group
  • Warehouse
  • From to item range discount amount
  • Date range of discount being active

Creating Trade agreement

There are 2 ways to create trade agreements like

  • For Sales price by using selecting journal lines: For bulk creations, while discount journal use select button and filter relation type, discount type, customer/item to populate grid then use adjustment to mass update amount by various options
  • In Customer Card directly: For individual update, under sell action pane tab -> Trade agreements -> lists all the data selection combination which in turns generates a new journal.


81205-02 Customer Credit limits — April 21, 2018

81205-02 Customer Credit limits

Customer Credit limits

It is like a loan given to customer with payment terms to limit the risk with client. Also it doesn’t mean limiting orders instead like negotiating advance terms or bank guarantee when reaching max credit limit.

Example standard is set in organization to provide as 15 days credit limit to generic users then some customer may request 60 day credit limit which requires negotiations by higher ups like increasing the rate etc as system gives warning extending limit to generic users.

A/R->Setup->parameters->Credit rating

Credit limit type:

  • None: No credit rating to all customers however manually apply to each individual customer
  • Balance: Check limit on existing balances
  • Balance+Packing slip or Product receipt: Checking balances plus in process transactions
  • Balance+All: All transaction in process and sales orders or any.


81205-01 Customer Groups & posting profile —

81205-01 Customer Groups & posting profile

Customer Groups & posting profile

This is compulsory to be used when creating customer groups. This group is then further used in posting profiles to have a separate control account.

Example: If required to maintain Main stream customers and scrap customers as separated ledger account during revenue process then this can be done.

Create a customer groups as Main stream and scrap in Accounts receivable->setup->Customer->Customer groups also you can see other options which can be defaulted during customer creation.

Then create a vendor posting profile under setup add further filter for scrap as consider main stream customers are already there. Also can be used for inter-company customers

Note: Through the course of year the ledger account and customer transaction must tally properly

Customer creation

Go to customers via sales and marketing or A/R modules, create new and the pop form opens where you can see the customer is generated automatically or will be manual based on number sequence setup in parameters. Notice that customer group is mandatory and once created can be changed however if group is linked to different account the posting to ledger will change and other defaults like payment terms or tax codes can be changed. You can save and close the form or do other actions directly at same time like

Save and open-> 1. Sales Quotation, 2. Project Quotation, 3. Sales order



81205-00 Customers and Vendors —

81205-00 Customers and Vendors


An organization or person from which revenue can be generated for service provided to then or goods sold and are part of Accounts Receivable in AX or any ERP.

Course Content 81205

Manage customer and vendor relationships (20 – 25%)

  • Manage customer relationships
    • This objective may include but is not limited to: create and maintain customer records in Microsoft Dynamics 365; configure and manage customer trade agreements including agreements with supplementary items; set up customer groups and posting profiles; configure credit limits; configure additional customer parameters including delivery and payment terms; create a customer using default data and financial dimensions
  • Manage vendor relationships
    • This objective may include but is not limited to: create and maintain vendor records; configure and manage vendor trade agreements; set up vendor groups and posting profiles; configure vendor collaboration workspaces


Customer Creations

In AX customer can be created via various options, they are:

  • Contact in global address book can be converted to customer
  • Prospects via sales and marketing process
  • Directly in customers table/masters/card
  • Via data import export framework in bulk

Customer known Transaction types

  • Sales Orders
  • Free text invoices
  • Payment Journal
  • Project billing rules based invoices
  • GL


An Organization or person to which bills are paid for their provided service or goods and are part of Accounts Payable in AX or any ERP.

Vendor Creations

In AX vendors can be created via various options, they are:

  • Contact in global address book can be converted to vendor
  • Directly in vendor table/masters/card
  • Via data import export framework in bulk
  • released from different legal entity

Vendor known Transaction types

  • Purchase Orders
  • Invoice Journals
  • Payment Journals
  • Project Vendors billing rules
  • Production as sub contractor
  • GL
81204-23 Inventory Closing & Understanding open quantities —

81204-23 Inventory Closing & Understanding open quantities

Usually done every month to adjust all inventory transactions amount as per model group attached to each item like: FIFO, weighted average etc.

Before going to process please read for item model here. Example FIFO: An Iphone X is purchased $1,000 as original price in the month of JAN 2018 with 1 QTY. Again purchased in the month of JUNE 2018 with price $999 then in DEC $800. Assume no transactions of any issue in year 2018, Year 2019 first issuance is done then as per FIFO the transaction is adjusted as $1,000 first in first out when closing is run.

Note: Once closed that period and before this period the inventory transactions will be locked however it can be reversed also until year end close is done permanently.


Inventory Management->Periodic->Closing and adjustment

The generic way is re-calculation and closing. However additionally we can see open quantities, items which cannot be settled hence gets carry forwarded until receipt is matched with issue. The unmatched are hence open quantities items, read here.


Item Code C0001 is purchased with PO no PO/0006 with qty 6 -> receipt done->Invoice done->Later consumed all the 6 quantities (by Production Order, Adjustment, movement or project item journal)

Again Item Code C0001 is purchased with PO no PO/0006 with qty 3->receipt done->Invoice Not done->Later consumed all the quantities  (by Production Order, Adjustment, movement or project item journal)

This consumed -3 quantities will look for invoiced qty which is not done and pending hence system will show -3 quantities are open

Closing in detail see here.

81204-22 ABC classification & Reports —

81204-22 ABC classification & Reports

ABC Classification

All items in the inventory can be periodically or manually categorized based on: revenue, margin, value & carrying cost.

  • A Items are most expensive which requires regular cycle count and monitoring like 30% of total inventory
  • B are medium level
  • C are low level where tracking may not be required

Note: Classification is only for reporting and filtering purpose only

Inventory Reports

There are 2 main reports commonly used

  • Physical Inventory: Using inventory dimension which provides on hand stock bases on as on date provided. Reports->Physical Inventory
  • Inventory Aging: Shows how old the inventory across various days buckets: 30, 60,90 & 120.
81204-21 Transfer Orders using Transit —

81204-21 Transfer Orders using Transit

Transfer Orders

Are the transfer of items from one Warehouse to another. When the transfer Order is made stock of from warehouse is deducted and to warehouse is added even the transaction has not placed yet or it takes some time for actual transaction, isn’t it wrong?

The problem is the user is left with option either load the item and make transfer order which immediately increases stock from other side and consumption may happen due to wrong data or vice-versa. To control this warehouse of type Transit is used.

Transit Warehouse

The intermediate warehouse used during transfer order where from warehouse item is deducted and added to transit warehouse instead of to warehouse directly with control of no of day required to complete transit with various mode of transport to generate delivery date.


  • Warehouse: Create a warehouse type transit and attach to the To warehouse
  • Transport Days: Under Inventory Management setup under distribution, Transport.

Transfer dispatch

Create new transfer order select from warehouse and to warehouse of type transit linked, provide mode of transport and see auto delivery date.

Transfer received

Based on configuration we can receive directly or picking registration as discussed earlier here. If picking is used then we have to use release transfer order. Here we can receive partial qty also which is very important feature.