Understanding Purchase Return in Dynamics GP-

Understanding Purchase Return in Dynamics GP-

In Dynamics GP for Purchase Return available 4 options, which option should 
I select to make Purchase Return?

Let see
1) Return
2) Return with Credit
3) Inventory
4) Inventory With Credit

1) Return
Select “Return” type when you received the Item and it’s not Matched to Invoice. 
Vendor Credit is not applied with above type.

Distribution:
Inventory A/c Cr $ XXX
Accrued Purchase A/c Dr $ XXX

2) Return With Credit
Select “Return with Credit” option when Item is Received and Matched to Invoice.
 Vendor Credit is applied.

Distribution:
Inventory A/c Cr $ XXX
Accounts Payable A/c Dr $ XXX

Above Entry will applied to your GL as well as Vendor Balance

3) Inventory
When should user select the above option?
a) When there is No Receipt or Matched Invoiced that means
if user enter Inventory Adjustment from Inventory 
Transaction((Transaction-->Inventory-->Adjustment) 
and want to make Return Entry against those Adjustment
b) Variance Transaction (Transaction-->Inventory-->Variance)

Again Vendor Credit is not applicable; Inventory On Hand Qty will reduce.

Distribution:
Inventory A/c Cr $ XXX
Accrued Purchase/Wastage A/c Dr $ XXX

4) Inventory w/Credit
On Same “Inventory” scenario for “Inventory w/Credit” option but Vendor Credit are applicable.

Your Distribution will look like:
Inventory A/c Cr XXX
Accounts Payable Dr XXX

Above Entry will affect only your GL balance to get applied against your Vendor Balance
do not forget to apply your Return with Vendor Invoice 
(Transaction-->Purchasing-->Apply Payable Documents”)

Option 3 and 4 i.e. “Inventory” and Inventory w/Credit can be applied for
 your Opening Qty return.

Item Group in Dynamics AX-

Sale Order-

Packing Slip- Asset

Packing Slip Offset- Expenses

Issue- Asset

Revenue- Revenue

Consumption – Asset

Discount- Expenses

Commission – Liability

Commission Offset- Liability

Inventory-

Issue- Asset

Loss- Loss

Profit- Asset

Receipt- Asset

Scrap- P/L Account

P.O-

Product Receipt- Asset

Purchase Invoice- Exp.

Purchase Inventory Receipt- Asset

Purchase Exp. In product- Exp.

Prepayment- Liability

Purchase Expenditure for Exp- Exp

Purchase Accrual -  Liability

 Tips-

To start Workflow go to –

Ctrl+D ->  form ->  tutorial  workflow processor

Customer Prepayment in AX 2012

 we will see how to book the advance payment received from the Customer through Prepayment functionality and adjust it against a Sales Order Invoice.

 Note**** (All the Scrren Shorts are in Below)

Step 1: View the Customer balance

Navigation: Accounts Receivable > Common > Customers > All Customers

• Select the respective Customer Account
• Click on “Balance” button to view the Customer Balance

• You can view the balance for the Customer is Nil

Step 2: Create Posting Profile

Navigation: Accounts Receivable > Setup > Customer Posting Profile

• Create New
• Specify Posting profile Name and Description
• Under the Setup tab – provide the respective ledger accounts
• Save and close the form

Step 3: Setup Prepayment in Parameters

Navigation: Accounts Receivable > Setup > Accounts Receivable Parameters

• Under the Ledger and Sales Tax
• Expand the Payment tab
• Enable the “Sales tax on prepayment journal voucher” to apply sales tax for advance payments
• Select the Posting Profile as “PRE” from the drop down in the “Posting profile with prepayment journal voucher
• Save and close the form

Step 4: Create a Payment Journal

Navigation: Accounts Receivable > Journals > Payments > Payment Journal

• Click on New button
• Select the Name
• Then click on Lines button

• Enter the lines in the “Overview” tab
• The click on the “Payment” tab
• Select the “Prepayment journal voucher” check box
• Once you enable the check box, the Posting profile gets changed to “PRE”
• Validate and Post the Journal

Step 5: Check the Customer Balance

Navigation: Accounts Receivable > Common > Customers > All Customers

• Select the respective Customer Account
• Click on “Balance” button to view the Customer Balance
• You can view the balance as -2000 USD

Step 6: Create a Sales Order and apply the Payment to it

Navigation: Sales and Marketing > Common > Sales orders > All Sales orders

• Under the Sales order tab
• Click on Sales Order
• Select the Customer Account
• Click on OK

• Enter the Sales line details, the Net amount for this Sales Order is USD 10000
• Confirm the Sales order and also complete the remaining steps such Pick and Pack
• Then click on Invoice tab to apply the advance payment and complete the sales order

• Under the Invoice tab, Click on Open transactions settle

• A new form opens showing the Prepayment amount which was raised for USD 2000
• Select the Mark check
• Click Yes in the dialog box to apply the prepayment
• Close the form

• Click on Invoice button to Post the Invoice

• Select “All” in the Quantity under the head Parameter
• Click on OK

Step 7: Now verify the Customer Net Balance

Navigation: Accounts Receivable > Common > Customers > All Customers

• Select the respective Customer Account
• Click on “Balance” button to view the Customer Balance
• So it’s showing as USD 8000
• Click on Transactions button to view the entries posted

• Transactions posted for the Customer Account

AX Inventory Dimension- 

AX Licence Plate-

License plates in AX are a unique ID that can be barcoded and assigned to a pallet, location, forklift, etc. They are useful in warehouses where inventory needs to be tracked at a more granular level than just a location. In a dock location, for example, license plating your pallets of incoming goods allows your forklift operators to know what inventory came from which shipment, as well as what they should be putting away first. License plates allow you to track back items reviewed in QC to a specific vendor, and offer an alternative to the higher-overhead lot tracking to handle FIFO in your warehouse. License plates are integrated with the AX 2012 R3 Warehouse Mobile Device and other functionality in the Warehouse Management module. This blog post will focus on the implications behind three required setups for the use of license plates; please note that depending on your requirements there may be more to do.

First key question: where in the warehouse should inventory be License-plate-tracked? Here are two scenarios:

1.    You have a warehouse where goods are manufactured or purchased. You want them license plated by pallet once they are received or become finished goods. Those goods are then put away in bulk locations, still being tracked by license plate. When your picking locations are replenished from bulk, you will take a whole pallet of inventory (a license plate) and put it to a picking location. You want to practice strict FIFO, so you continue to track inventory by License plate and have your picking team pick directly from a license plate; at this point a unit of inventory will no longer be associated with its initial license plate. Instead the Picker will have what is considered a “traveling pallet” with its own license plate (alternatively the Picker can have a license plate associated with themselves). Therefore the quantity of the item being picked will be reduced on the original license plate and increased on the traveling license plate. The picked quantities will then be delivered to a staging area where the shipment of goods has a license plate for tracking purposes until it is shipped to a customer.

2.    Alternatively, it might be too much to ask your picking team to distinguish inventory by license plate. If the picking location is replenished and license plate tracked, and the system directs the Picker to take a unit from a license plate that is not easily accessible, it can significantly slow down the picking process. In this case you would want to keep your bulk locations license plate tracked to respect FIFO, but leave your picking location non-license plate tracked; the rest would be the same. The end result would be that items that move into the picking location will lose their license plate and be indistinguishable from other pallets of goods in the system. When picked for shipment, those goods would follow the same process seen in #1.

These are two of many scenarios, designed to give a clear picture of why it might make sense to not license-plate-track your entire warehouse. The configuration for this is done in Location Profiles, which are assigned to Locations. The option in question is called “Use license plate tracking”. This can be found in Warehouse Management -> Setup -> Warehouse Setup -> Location Profiles.

The second key question to ask is: to what unit should inventory be grouped for license plates? If your warehouse receives many boxes of an item that is combined onto a pallet, it makes sense for that pallet to share one license plate instead of putting one on each box of inventory. License plating boxes of goods requires a great deal of overhead in scanning for your warehouse team. This configuration is found in Unit Sequence Groups that are assigned to your released products; find this at Warehouse Management -> Setup -> Warehouse Setup -> Unit sequence groups. In the below screenshot this unit sequence group is configured to use Pieces, Boxes, and Pallets. Pieces and Boxes are meant to be grouped onto Pallets for license plating, but two pallets are not designed to be grouped together. A unit conversion from Pieces to Boxes to Pallets may be set up in the background.

The third setup to consider is your reservation hierarchy. The system is designed to not reserve goods down to a License Plate level; instead, it is designed to reserve goods at a location and automatically dictate a license plate to pick from if appropriate. This can be found at Warehouse Management -> Setup -> Inventory -> Reservation hierarchy. See my previous blog post on Reservation Hierarchies for more detail behind this functionality.

License plate functionality in Microsoft Dynamics AX 2012 R3 is a powerful way of tracking goods in your warehouse, improving the effectivity of your warehouse mobile device, and efficiently managing staging areas. It is not to be confused with lot tracking, which requires a considerable amount of overhead but is also possible in AX 2012 R3. Warehouses wishing to use this for item receipt will need to have the advanced warehousing functionality enabled along with a number of other configurations in order to work properly. Stay tuned for future blog posts on AX 2012 R3 WMS systems and other functionality.

Item Arrival and Registration

Today our Purchase manager calls a Vendor to agree such order details as quantity, delivery date, price, and other purchase order information. He or she then adjusts order information in Microsoft Dynamics AX confirms the order details, and then prints the Confirmation document. The Purchase manager expects to receive the items on the order into the warehouse today.

Open the Purchase order form and find the purchase order created in the previous lesson. 

The Purchase manager calls the vendor and agrees on the following order details: item quantity, delivery date, item price, etc.). In this very case the Purchase manager doesn’t change any details as they are correct.

The Purchase manager prints the Purchase order document. This document confirms that our company and the Vendor agree on the purchase order details.

In the Purchase order upper pane, click Posting -> Purchase order. The Posting purchase order form appears.

Select the Print purchase order check box on the Parameters tab. All other fields remain unchanged since all information in the form is automatically filled in from the purchase order.

Click OK. The purchase order posting process starts. The result of this process is a Purchase order document.

The Purchase manager sends the Purchase order document to the vendor via a fax or an e-mail.

The Purchase order document is also saved in Microsoft Dynamics AX. To view this document, clicks Inquiries > Purchase order button.

As the Purchase manager assumes that the Vendor delivers items today, he or she should check the purchase order delivery date.

Go to the Purchase order form. In the lower pane of the form, you can find the Delivery datefield. Change the delivery date to the today’s date.

Delivery date field

The Purchase manager will typically receive phone calls from a Truck driver asking for a delivery. The Truck driver can deliver multiple purchase orders at a time. But Microsoft Dynamics AX doesn’t have the ability to group multiple purchase orders delivered by one truck. So the Purchase manager must work with each purchase order separately.

In the Purchase business process lesson, we have learned (we will learn) that the warehouse management system (WMS) evaluates all items on the purchase order and determines what receiving door (inbound dock) will result in the least travel time for a put away. Axapta doesn’t provide the functionality for warehouse doors, but for locations (inbound docks). Also, Microsoft Dynamics AX doesn’t calculate the best inbound dock.

The inbound dock that will be used as a receipt location is set up on the Warehouse management tab of the Warehouses form (Inventory management > Setup > Inventory breakdown > Warehouses).

Return to the Purchase order form. In the lower pane, click Inventory > Dimension display. The Inventory dimensions form opens. Select the Location check box and click OK. As a result, the purchase order line has the Location field populated.

Why Microsoft Dynamics AX does populates the Location field with location In_01? Because, as I have earlier said, Microsoft Dynamics AX doesn’t calculate the best inbound dock. An inbound dock is set up for the entire Warehouse. Let’s check what default receipt location belongs to warehouse 22. Go to Inventory management > Setup > Inventory breakdown >Warehouses. In the Warehouse form that opens, find warehouse 22. Click the Warehouse management tab and assure the Default receipt location field displays

The Truck driver delivers the ordered items to warehouse location In_01.

The Purchase manager physically collects the receiving paperwork from the Truck driver. If the Truck driver’s paperwork and the purchase order have any discrepancy in receiving quantity, volume, or weight, the Purchase manager can’t adjust these. Any discrepancy will be adjusted by the Receiving manager.

The Receiving manager needs a receiving document, pallet tags, and a lumper’s TI-HI report). Pallet tags contain information about store locations. To find a store location, WMS must go through putaway routines to determine where to store each pallet. Microsoft Dynamics AX doesn’t have the functionality to support this process. The receiving document, pallet tags, and the lumper’s TI-HI reports are not printed in this step.

In Microsoft Dynamics AX, the receiving manager works in the Arrival overview form. Go toInventory management > Periodic > Arrival overview. The Arrival overview form opens.

The form displays all purchase orders that are to be delivered. To view the purchase order that must be delivered today, under the Display options field group select Today in theSetup name field.

The Receiving manager finds the purchase order under the Receipts field group.

The Receiving manager selects the Select for arrival check box and clicks the Start arrivalbutton when he or she starts receiving the items. After this an arrival journal is created and an information message appears. The Receiving manager can select the information message and click the Show button in the Infolog form to view the arrival journal (or manually open it from the main menu: Inventory management > Journals > Item arrival >Item arrival).

Axapta changes the receipt status of the item from Arrived to Registered. This status means that the item is already in the warehouse.

If we inquire on the on-hand information, we will sew the following results (Inventory > On-hand menu button):

Training Lesson Summary

In this training lesson, we have understood how the Purchase manager, Receiving manager, and the Forklift truck driver work with Axapta. The following areas have been covered:

• Post purchase order document
• Arrival overview form
• Arrival journal
• Pallet transport

Purchase Order Accounting in AX 2012

Top of Form

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:

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

2. 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:

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

Purchase expenditure for product – Debit 

Vendor balance (Accounts payable) – Credit

2.    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.

Remember to discuss this point with client during discussion. The second point is always maintain separate account for Purchase expenditure, un-invoiced and Purchase, product receipt as i have seen many clients preferring same account for both.

Transfer order with misc charges-

Transfer order with misc charges-

In  AX 2009 to process transfer order between sites WITH MISC CHARGES such as freight. The standard transfer order function in AX doesn't provide the ability to record misc charges on transfer. But for some businesses, intracompany transfer freight could be very expensive and it must be captured for inventory cost. So, we tweaked the intercompany order function in AX a bit to serve for this intracompany transfer purpose, and it worked for us! Here is what we did.

There are frequent transfers of some heavy items between Site A and B, and freight cost must be entered into the inventory. Assume all regular parameters (e.g. site, warehouse, dimensions, etc.) are properly configured.

1. Create two special customers A and B

• Assign a special customer group where you'll set up postings for intracompany transfers.
• Check checkboxes for intercompany customer (Setup tab - Autocreate intercompany order, Direct delivery), if you want a sales order auto created when a PO is created or direct delivery to a real customer. 
• Make sure you enter a default site and warehouse under the Sales Order tab. 
• Click Setup button - External code and create an external code. Because customers and vendors are in two different tables, you have to link them through an external code. 

2. Create two special vendors A and B, as the previous step. 

3. Go to Basic > Setup > AIF > End points, create and configure an intracompany transfer end point. Make sure Company under General tab is set to the current company. Put your special customers and vendors as the Constraints. 

 
4. Still on the end point form, Click Action Policies. Out of the box, you should have two policies, PurchaseRequisition and SalesOrder. 

  
5. Click Setup tab for each policy and configure the parameters as you wanted. Note, if you want the price editable from the derived order, you want to make sure the "Allow price edit" checkbox is checked. 

6. On each policy, click Configure button. Since this is for transfers within a company, I recommend to select Our for all mappings except Vendor, Customer and Misc Charges which should be External. Same as vendors and customers, an external code should be entered for misc charges (AR/AP - Setup - Misc charges code).

That's it for intracompany transfer order settings. Now, you can create your transfer order with misc charges from either sales or purchase order, and verify if misc charges are allocated to your inventory.

Wrong   customer payment and invoice reversal in AX 2012-

Hi All,

Sometimes, due to a clerical error, an invoice has been created and a payment applied to the wrong customer account.

The following are the steps that should be followed in Microsoft Dynamics AX 2012 for the scenario where an invoice was posted to one customer account and you want to move that invoice to a different customer account.

1.    Reverse the settlement through Closed transactions editing

• Navigation: Accounts receivable > Common > Customers > Collect > Closed Transaction Editing

• Change “Settlement reversal posting date” to Todays date (this ensures that the reversal isn’t put in a closed period)

• Mark payment and then select reverse

• This transaction can now be seen in settle open transactions editing

• Note: this transaction will also be in the current period

2. Create a customer payment with opposite amount of original payment journal

• Accounts Receivable > Common > Payments > Payment Journal > New Payment Journal

• Create a Journal with an opposite amount. IE, if original was credit make a debit journal

• Post Journal

3. Settle original payment with new payment through Open transaction editing

• Accounts Receivable > Common > Customers > Collect > Settle open Transactions

• Mark original payment and the payment that was just created

• Select update

4. Reverse your invoice

• Accounts receivable > Common > Customers > Customer > Transactions

• Select original transaction

• Click “Reverse Transaction” at the top

• Change “Reverse posting date” to today’s date, add a reason code and hit ok

5. Post Invoice on correct account

6. Post Payment Journal on correct account

                                       Thank you- Subrat Kumar

Process of Create BOM and Define Rote and Cost Price and Sell Price to BOM items-

Step by step procedure to define BOM-

Step:- 1

1.     creation of  item

2.     create sub item

3.     create bill of material

4.     assign cost of production to each product

5.     create route

5.1                        . create resources

5.2                        . create operation and operation sequence

6.     Assign route to finished goods cost price

7.     Define calculation group

8.     Define cost group

9.     Assign cost sheet to cost group

All the above activities are performed in product information management module.

All these activities should be in released products.

1.  Calculate cost price and sale price of finished goods.

Step:-  2

Creation of production order.

Select an item.

Route number

Bill of material

Estimate the cost price (Estimation)

Scheduling.

Start production ( start and release the production order)

Report as finish     

End                           job card and route card should be defined for this.

                                  Thank You- Subrat Kumar