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AUGUST 29, 2020

Procure to Pay Process (Effective Way with New features and

In this blog, I am going to talk about very famous topic in any ERP including D365. This is also a basic question in any interview for
SCM profile.

Yes, you are right it is procured to pay. SO, what is new I am going to explain in this whole process, I will try put some “Quick Tips”
which we should consider implementing this effectively
Procure to pay process talks about how any purchase is initiated and executed completely to end of the life cycle by paying to the vendor.
To Explain this complete process, I have prepared the business process flow:
Now, after seeing this process flow, here are the major documents which gets created through out the life cycle depends on the process.

1. Purchase Request (PR)

So, as you can see in above process flow it really depends up on business process that how the purchase order should be created. You can
create Purchase order in following ways:

1. PR > RFQ > PO (This process is used when purchase team wants to finalize prices using RFQ process)
2. PR > PO (This process is used when purchase team has price agreement with vendor but want to take through PR process)
3. RFQ > PO (This process is used basically for big purchases which starts with RFQ process initiated by purchase team)
4. Direct PO (This process is used basically for big purchases when purchase team has all price and vendor information agreed before)

So, depends on business scenario, system can be configured, and process can be designed.

In this blog, we will take longest route From PR > RFQ > PO. So, let us start:

Pre-requisites: You need to have following setups completed:

◦ Product master
◦ Site/Warehouse Master
◦ Vendor master
◦ Purchase requisition permissions (requestor and preparer)
◦ Purchase requisition workflow (Mandatory)

Step-1: Create PR
Procurement and Sourcing > All Purchase requisition > Create Purchase requisition > enter all required details > Submit for approval

***Important Note: Please use Power Automate for defining PR workflow using business event, this will enable approvers to approve
PR directly through Email. No need to login to D365

https://docs.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/business-events/how-to/how-to-workflow
(https://docs.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/business-events/how-to/how-to-workflow)
Note: If Price exists than we can approve PR and create Po directly with step -6

Step-2: Create RFQ

Procurement and Sourcing > All Purchase requisition Select Purchase requisition > Create RFQ

Note: PR should be in “In review” status to create RFQ from PR

Procurement and Sourcing > request for quotation > Open request for quotation > Header View > Add vendors > Click Send
Step-4: Enter Vendor Reply

Procurement and Sourcing > request for quotation > Sent request for quotation > Manage replies > Select vendor> Edit RFQ > Enter
Details > Submit (repeat this for all vendors selected in RFQ)
Step-5: Compare replies and Finalize RFQ

Procurement and Sourcing > request for quotation > Received request for quotation > Compare replies > Select vendor with selected
line> Accept > Ok (System will automatically reject the other vendor reply)
Note: RFQ can also be directly created for creating > PO or purchase agreement
Step-6: Final PR Approval and Release approved PR

Procurement and Sourcing > All Purchase requisition > Release approve PR > Select PR line/lines for which PO need to be created >
Click on New PO > Select vendor if vendor is not selected in PR
Step-7: Confirm PO

Procurement and Sourcing > All Purchase orders > Open PO > Confirm
***Important Note: Please use Power Automate for defining email notification using business event on confirming PO and sending
PO copy to vendor.

https://docs.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/business-events/how-to/how-to-workflow
(https://docs.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/business-events/how-to/how-to-workflow)

Note: PO can be sort closed, selecting line > update reminder

Step-8: Product receipt

Navigate to: Purchase order Receipt and follow up workspace > Post product receipt > Select PO to be received > Enter receipt
Quantity > Number etc… > Ok

Note: Encourage users to use workspace for individual tasks, do not use all purchase order form for product receipt.

Note: There is one “feature in update 35” which enables the “Ordered and remaining Quantity” field on Product receipt form which
will help user to know what is ordered, received, and remaining.

Note: You can have over/under delivery , in case of over delivery system will pick up PO unit price for additional quantity.
Read my blog for accounting entries posted at the time of product receipt:

https://exploredynamics365.home.blog/2020/05/09/inventory-transactions-posting-profile-setup-part-1-in-dynamics-365-finance-and-
operations/ (https://exploredynamics365.home.blog/2020/05/09/inventory-transactions-posting-profile-setup-part-1-in-dynamics-365-
finance-and-operations/)

Step-9: Post Vendor Invoice

Navigate to: Vendor invoice entry workspace > product receipt > Select product Receipt > Invoice Now > Enter all the details and
validate all information on Invoice form > Post

Note: If you are using Vendor invoice workflow, there is new feature which can prohibit submission of workflow if the invoice
number is already exists in posted invoice.
Note: New feature, Prohibit submission to workflow when the invoice total and registered invoice total

Note: New feature, let invoice be submitted to workflow with incomplete or incorrect accounting distribution

Note: new feature, prohibit workflow submission if there are unallocated charges on invoice
Read my blog for accounting entries posted at the time of invoice:

https://exploredynamics365.home.blog/2020/05/09/inventory-transactions-posting-profile-setup-part-1-in-dynamics-365-finance-and-
operations/ (https://exploredynamics365.home.blog/2020/05/09/inventory-transactions-posting-profile-setup-part-1-in-dynamics-365-
finance-and-operations/)
That is, it for this blog, I know this is bit long one, but this covers most of the activities in “P2P” process. This will help you in your
implementation as well as in your interview.

Thank You!!! Keep reading and sharing with your network.

 ACCOUNT PAYABLE
 D365  D365FO  DYNAMICS  DYNAMICS365  DYNAMICSNEWFEATURE
 MICROSOFT DYNAMICS  MSADVOCATE  MSDYN365  P2P  PO  PR
 PROCURETOPAY  RFQ  WORKFLOW

Published by Saurabh Bharti

I am Microsoft certified professional and trainer for Microsoft Dynamics 365 finance and operations. I have been working on D365 for
10 years years now. After working so many years I thought to share my experience on Microsoft Dynamics with anyone who has some
interest in this ERP product.. So stay tune with me to explore best out of Microsoft Dynamics 365 Finance and Operations !!!
Disclaimer: Everything posted here by me is my responsibility, my company is not responsible or have any relation to these views/posts
View all posts by Saurabh Bharti
5 comments

8 Different Ways to Acquire Fixed asset in Microsoft Dynamics 365 Finance and Operations – Explore Microsoft Dynamics
1. 365 Finance and Operations Together
says:
SEPTEMBER 5, 2020 AT 1:47 PM
[…] https://exploredynamics365.home.blog/2020/08/29/procure-to-pay-process-effective-way-with-new-featur… […]

REPLY
Dynamics AX/Dynamics 365 F&O Functional Interview Questions – Raju's Dynamics AX / Dynamics 365 Finance and
2. Operations Blog
says:
JUNE 11, 2021 AT 8:38 AM
[…] Can you explain Procure to pay process? Ans: This link had the complete steps
https://community.dynamics.com/ax/b/microsoftoperationsscmguide/posts/d365f-amp-o-procure-to-pay-process. Basically you just
have to explain ” Purchase req process, Purchase order process till invoice and payment” This link will provide more details
“https://exploredynamics365.home.blog/2020/08/29/procure-to-pay-process-effective-way-with-new-featur…“ […]

REPLY
3. Vikas says:
SEPTEMBER 1, 2021 AT 4:03 PM
Very well explained

REPLY
◦ ASHOK KUMAR says:
SEPTEMBER 24, 2021 AT 4:53 PM
It is very useful

REPLY
◦ Ravi says:
JANUARY 31, 2023 AT 10:06 AM
Very Well articulated and in sequence

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