Approval Process for Purchase Orders with
Microsoft Dynamics® AX 2012
Maintaining and controlling corporate spending is more critical than ever. With Microsoft Dynamics
AX 2012, it has never been simpler to ensure that an organization changes and evolves the business
processes and tasks that control the procure-to-pay processes.
The approval process for purchase orders adds automation and control to purchase order processes.
It also delivers a high level of flexibility in the modeling processes with policies and workflows,
including task and approval management. Purchase order history and versioning is built-in and is
easily accessible, providing deep insight and supporting analysis and conscious decision making.
The approval process for purchase orders ensures that the business processes have been followed
and that correct review and approval has been performed, which guarantees that the purchase orders
created and confirmed to the vendors have been appropriately reviewed and approved.
APPROVAL PROCESS CONFIGURATION
The approval process for purchase orders within Microsoft Dynamics AX 2012 provides
the flexibility to control and track changes within purchase order processes, and it enables
control of the approval process by using the standard workflow framework.
The key areas supported by the approval process for purchase orders are:
Activation – The purchase order approval process can be activated on different
levels:

For all purchase orders

For purchase orders for a specific vendors

For individual purchase orders
Activate the approval
process for purchase
orders
Workflow – The purchase order approval process uses the standard workflow
framework to define activities (such as tasks, decisions, and approvals) that need to be
carried out. It provides the ability to design business processes such as company
approval processes and change management policies.
Both the purchase order and purchase order line have been workflow-enabled,
making it possible to configure and execute different activities per purchase order line
based on line conditions and properties.
Versioning – The purchase order document is versioning-enabled with activation. A
new document version is created upon approval of the purchase order, and
versioning ensures a complete audit trail for the changes made to a confirmed
purchase order.
Examine a list of
purchase order
versions
THE PURCHASE ORDER APPROVAL PROCESS
After a purchase order has been entered into the system, its approval status controls the
actions that can be performed. 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.
Approval state model
Draft – The purchase order requester creates and makes changes to the purchase
order when in Draft state.
In review – The requester submits the purchase order or the request for change to an
approval workflow, which will change the state to In review. The policies and
processes configured within the workflow will assign and execute tasks, decisions, and
Maintain approval
workflows
approvals needed for the specific purchase order or change request. If budget control
is enabled, a budget check will be performed based on budget control policies,
providing real-time analytics related to budget funds available.
Rejected – A purchase order that has been rejected by a workflow reviewer has the
state of Rejected. The purchase order can be changed and resubmitted to workflow if
desired.
Approved – A purchase order that has completed the approval process is considered
Approval process
Draft
In review
Rejected
Approved, and can now be issued to the vendor. Expected receipt transactions may be
created when the order reaches Approved status.
Confirmed – Confirming the purchase order generates a purchase order confirmation
document, which is an external document that may be provided to the vendor to
notify them of the order. If budget control is enabled, the budget check is performed
based on the budget control policies and budget reservations are established
ensuring that planned expenditures do not exceed budget funds available. If
encumbrance processing has been enabled, subledger journal entries are created for
Approved
Confirmed
Finalized
Approval state model
for a purchase order
a purchase order when the purchase order is confirmed to reflect the consumption of
budget funds on the balance sheet.
Finalized – Finalizing the purchase order requires all lines to be either canceled or
invoiced. After a purchase order has been finalized, you can no longer change the
purchase order. Finalize the purchase order to liquidate budget reservations and any
encumbrance that is not yet relieved in general ledger.
The approval process for purchase orders features provided by Microsoft Dynamics AX
2012 explicitly requires the approval of any request to change the purchase order, and the
changes are not effective before approval. The feature also ensures that every change
request is captured within a purchase order version, which allows for version comparison
(header and lines) for analysis of changes between any two versions of the purchase
order.
Compare any two
purchase order
versions
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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CCAX2012BV060
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