Purchase Order Process in
Microsoft Dynamics® AX 2012
A smooth and integrated purchasing process is the prerequisite for all organizations to be able to
deliver upon their promises.
Microsoft Dynamics AX 2012 enables organizations across different industries to streamline business
process by enabling them to take full control of their purchasing process. It can help your
organization improve accuracy, reduce operational cost, and improve employee productivity by
automating routine purchasing tasks and minimizing repetitive data entry.
Complete purchasing history is maintained to ensure rapid access to mission-critical information and
to fulfill auditors’ requirements.
Built-in configuration capabilities and integration with out-of-the box flexible security profiles and
workflow and budget control ensures that every organization can design its internal process controls
to fit its needs.
External agreed-upon terms and conditions are seamlessly integrated into the purchasing process
while multi-language and multi-currency support enables your organization to efficiently operate in a
global environment.
Purchase is fully integrated with the purchase requisition process, request for quote process, vendor
agreements, vendor self-service portal, master planning, and sales order drop-shipment requests and
plays a central role in intercompany trade.
CREATING A PURCHASE ORDER
Microsoft Dynamics AX 2012 supports a number of ways to create purchase orders. From
the buying agent’s completely manual process to automated creation from master
planning, linking between sales orders and purchase orders ensures full support for drop
shipment scenarios.
Independent of the method used to create the purchase order, full internal process
control is applied.
Microsoft Dynamics AX 2012 supports the creation of purchase orders in the following
ways:
Purchase orders are automatically created when purchase requisitions, purchase
Purchase order details
request for quote replies, planned purchase orders, sales order drop shipment, project
item requirements, and purchase agreements call off orders are approved.
Comprehensive copy functionality supports the creation of repetitive purchase orders
or simply ensures commercial information is correct when creating return orders.
Negotiated terms and conditions from purchase agreements are applied at the time
of order entry if long term purchase agreements are negotiated with the vendor.
A single purchase order entry is permitted for all line items ordered for different sites,
including items carried in inventory, services, and unique user-described items that
are not on the master product list.
The system can automatically search for current price and discount agreements for
the vendor and item independently of the source of creation.
Vendor-specific line level information, such as item numbering and description, is
applied.
Line numbering supports efficient communication with vendor.
Delivery schedules can be applied to line items, ensuring commercial information for
the purchase order line is separated from the actual delivery schedule.
Up front line level budget reservation can be configured.
Direct access to up-front distribution pattern for posting in the general ledger.
Return orders where a credit note is not yet matched can place a reservation on an
unpaid invoice and hence ensure this invoice is not paid by mistake.
Prepayment is matched to purchase order.
PROCESSING THE PURCHASE ORDER
After a purchase order has been entered into the system, its approval status controls the
actions that can be performed for this purchase order. An unapproved purchase order
must be approved before the purchase order can be issued to the vendor and the
purchase order status is confirmed. A purchase order must be confirmed before product
receipt and invoices can be matched against the purchase order. Dedicated list pages
track the progress of a purchase order through the system and ensure easy and efficient
order processing.
Copy and create credit
note cockpit
Microsoft Dynamics AX 2012 supports the purchase order process with a number of key
features:
Seamless integration with product receipt, inventory, costing, and billing
provides the user with a comprehensive view of order state—down to the line item
level—when a purchase order is processed.
Dedicated list pages such as the “All purchase orders,” “Open purchase orders,”
“Delayed receipts,” and “Purchase order received but not invoiced” enable users to
easily follow up on the purchase order.
Versioning ensures a complete audit trail for all changes made to a confirmed
purchase order.
Internal approval process can be applied for all purchase orders or for just specific
vendors or for purchase orders utilizing the built-in workflow capabilities.
The synchronized chain used in drop shipments and intercompany trade scenarios
ensures the entire chain of order is always updated and no repetitive data entry is
required.
Landed cost is supported via automatic or manual addition of charges such as freight
or handling fees to the purchase order and purchase order lines or goods received or
during the invoice process.
A letter of guarantee can be requested for any purchase order and is fully integrated
with the bank module.
Lean manufacturing. The new module of activity-based subcontracting is fully
integrated to support the purchase process for the subcontracted services based on
purchase agreements. Changes to purchase orders for subcontracted services are
validated against the planned or completed kanban jobs. The posted receipts and
invoices impact backflush costing of the lean production flow directly.
Acceptance parameters are automatically applied for over-delivery or underdelivery.
Public sector fund accounting is automatically posted in the general ledger when
purchase order is confirmed and relieved when matched by invoice.
Accrued liability can be posted in the general ledger during product receipt and is
automatically reversed when an invoice is matched against the product receipt.
Three-way invoice matching of purchase order commercial data and quantity
received.
Print management ensures that the preferred way of exchanging order documents,
such as sending a purchase order to the vendor, is always applied. System-to-system
integration is supported via XML documents and the built-in Application Integration
Framework (AIF).
Event-based notifications can be configured and automatically sent to users—by
leveraging alerts—to follow up on orders and order line items.
Track changes
between versions of
purchase order
PURCHASING GLOBALLY
With its multi-currency, multi-language, multi-site capabilities, Microsoft Dynamics AX
2012 has intrinsic support for selling in a global environment. The key areas that support
global purchasing are:
Comprehensive support for sales tax calculation. The Microsoft Dynamics AX 2012
tax engine supports region-specific and country-specific sales taxes calculation. The
tax engine also provides multiple options for defining sales tax per product, sales tax
exclusions for specific industries, and reporting of individual sales taxes to separate
tax authorities. Complex calculations such as “sales tax on sales tax” and “purchase
prices inclusive of sales tax” are also supported.
Multi-currency support. Enables organizations to purchase from a single vendor
using multiple currencies, and to maintain a balance in each currency.
Multi-language support. Allows users to format external, vendor-facing documents
and document content according to the language specified for the recipient of the
document.
Multi address support. Ensures the separation of billing, remit-to, and delivery
addresses on purchase order lines.
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence.
Microsoft Dynamics works like and with familiar Microsoft software, automating and streamlining financial, customer relationship and supply chain processes in a way that
helps you drive business success.
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CCAX2012BV062
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