Using Microsoft Dynamics AX 2012

mabenito@parcisa.com
Andreas Luszczak

Using Microsoft
Dynamics AX 2012
Updated for Version R3

4th Edition

mabenito@parcisa.com
Andreas Luszczak
Wien, Austria

ISBN 978-3-658-08294-9 ISBN 978-3-658-08295-6 (eBook)

DOI 10.1007/978-3-658-08295-6

Library of Congress Control Number: 2015930218

Springer Vieweg
© Springer Fachmedien Wiesbaden 2009, 2012, 2013, 2015
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the mate-
rial is concerned, speci¿cally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting,
reproduction on micro¿lms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter
developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does
not imply, even in the absence of a speci¿c statement, that such names are exempt from the relevant protective
laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in this book are
believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors
give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions
that may have been made.

Printed on acid-free paper

Springer Vieweg is a brand of Springer Fachmedien Wiesbaden

Springer Fachmedien Wiesbaden is part of Springer Science+Business Media
(www.springer.com)

mabenito@parcisa.com
Preface

When looking for a business management solution supporting business processes

in mid-sized and large companies, Microsoft Dynamics AX is likely to be your
favorite. Because of its deep functional and technological integration, it is also a
good choice for universities teaching ERP systems.

Reading this Book

The primary purpose of this book is to provide you with a good knowledge of the
standard application concept and functionality, enabling you to run business
processes in Microsoft Dynamics AX 2012. This book applies to you, if you are an
end user, student, or consultant interested in learning how to use Dynamics AX.
Going beyond the operations on the user interface, you will also learn how the
different parts of the application work together. As a result, you will also take
advantage from learning the end-to-end application concept, if you are a system
administrator, developer, IT executive or experienced consultant not knowing the
complete application already.
Actually working in an application is the best way to learn it. This book therefore
includes exercises building up on each other in a comprehensive case study. If you
need support for the exercises, a free download of sample solutions is available.
The current edition of this book is based on Microsoft Dynamics AX 2012 R3 and
includes the core changes of Dynamics AX 2012 in the initial version and in R2. It is
an update of previous editions of the book “Using Microsoft Dynamics AX 2012”
published in 2012 and 2013.
Since Dynamics AX is a very comprehensive business solution, it is not possible to
cover all parts of the application in a single book. In order to provide a profound
understanding of the core application, this book addresses the primary
functionality in supply chain (including trade, logistics and production control)
and finance management. It shows the application, but does not cover tasks in
system administration and development. If you want to learn more about the
concepts and options for implementing Dynamics AX, the book “Implementing
Microsoft Dynamics AX 2012 with Sure Step 2012” by Keith Dunkinson and
Andrew Birch might be interesting for you.

Applicable Settings
In Dynamics AX, you can individually choose the language of your user interface.
Descriptions and illustrations in this book refer to the language “EN-US”. Whereas

mabenito@parcisa.com
VI Preface

it is obvious that the Dynamics AX client displays different labels when choosing
languages like Spanish or Russian, there are also differences when selecting British
English. For example, the label for the field “Sales tax” is “VAT” in British English.
Other differences between your application and the descriptions in the book are
possibly caused by your permissions, by applicable local features, or by specific
modifications and features implemented in your Dynamics AX system.
In order to benefit from the explanations, it is recommended to access a
Dynamics AX application. A separate test application for executing the exercises
minimizes the risk of affecting actual company data.
The exercises and illustrations refer to a sample company “Anso Technologies
Ltd.”, which shows a simple setup limited to the described functionality. In order
to grant flexibility for selecting the training environment, the tasks in the exercises
are specified in a way that you can also use the Microsoft standard demo
environment (“Contoso”) or any other test environment.
This book has been updated for Microsoft Dynamics AX 2012 R3. If you are using
Dynamics AX 2012 R2 or the initial version of Dynamics AX 2012, a limited
number of features and settings work different. Notes in the book show the
differences of the initial version and R2, enabling you to use this book in all
versions of Dynamics AX 2012. If you want to know in which version you are
working, click the button Help / About Microsoft Dynamics AX in the command
bar of the Dynamics AX client – the dialog then shows if you use R2 or R3.

Available Support
In order to download solutions to the exercises in this book and other applicable
resources, please access the online service of the publisher or following web site:
http://axbook.addyn.com
If you have comments or questions regarding the book or the exercises, please
contact me through the web site mentioned above or via e-mail to lua@addyn.com.

Acknowledgements
Many people have been involved in finalizing this book, directly and indirectly,
from the first edition in German to the current English edition. I want to thank all
of them. In particular, I would like to mention:
¾ Matthias Gimbel (Senior Consultant at STZ IT-Business Consulting)
¾ Ingo Maresch (Solution Architect at Semantax Business Consulting)
¾ Keith Dunkinson (Owner at ERP advisers)
Thank you also to the editor Sybille Thelen. Finally, my special thanks go to my
family – Sonja, Felix and Caroline.
Andreas Luszczak

mabenito@parcisa.com
Table of Contents

1 What is Microsoft Dynamics AX? ............................................................................ 1

1.1 Axapta and the History of Dynamics AX ..................................................... 1
1.2 Dynamics AX 2012 Product Overview ......................................................... 2
1.2.1 Functional Capabilities ........................................................................ 3
1.2.2 Business Intelligence ............................................................................ 4
1.2.3 Collaboration Features ......................................................................... 4
1.2.4 Implementation ..................................................................................... 4
1.3 Technology and System Architecture ........................................................... 5
1.3.1 Development Environments ............................................................... 5
1.3.2 Layer Technology ................................................................................. 6
1.3.3 Three-Tier Architecture........................................................................ 7
1.3.4 Data Structure ....................................................................................... 8
1.3.5 Voucher Principle ................................................................................. 8

2 Getting Started: Navigation and General Options .............................................. 11

2.1 User Interface and Common Tasks ............................................................. 11
2.1.1 Logon and Authentication................................................................. 11
2.1.2 User Interface ...................................................................................... 12
2.1.3 Navigation ........................................................................................... 20
2.1.4 Home Menu ......................................................................................... 24
2.1.5 Working with Records ....................................................................... 26
2.1.6 Filter, Find and Sort ............................................................................ 33
2.1.7 Help System......................................................................................... 39
2.1.8 Case Study Exercises .......................................................................... 41
2.2 Printing and Reporting.................................................................................. 42
2.2.1 Printing Reports .................................................................................. 42
2.2.2 Copy/Paste and Microsoft Office Add-Ins ...................................... 47
2.2.3 Case Study Exercise ............................................................................ 49
2.3 Advanced Options ......................................................................................... 49
2.3.1 User Options and Personalization .................................................... 50
2.3.2 Record Information and Templates ................................................. 52
2.3.3 Case Study Exercises .......................................................................... 56
2.4 Global Address Book ..................................................................................... 57
2.4.1 Parties and Addresses ........................................................................ 57
2.4.2 Address books ..................................................................................... 58

mabenito@parcisa.com
VIII Table of Contents

2.4.3 Case Study Exercise ........................................................................... 60

3 Purchasing ................................................................................................................ 61
3.1 Business Processes in Purchasing ............................................................... 61
3.1.1 Basic Approach................................................................................... 61
3.1.2 At a Glance: Purchase Order Processing ........................................ 64
3.2 Vendor Management .................................................................................... 66
3.2.1 Vendor Records .................................................................................. 66
3.2.2 Payment Terms and Cash Discount ................................................ 71
3.2.3 Ledger Integration ............................................................................. 73
3.2.4 Case Study Exercises ......................................................................... 75
3.3 Product Management for Purchasing......................................................... 75
3.3.1 Procurement Category Management .............................................. 76
3.3.2 Product Master Data for Purchasing ............................................... 78
3.3.3 Purchase Price and Discount ............................................................ 82
3.3.4 Case Study Exercises ......................................................................... 86
3.4 Purchase Orders ............................................................................................ 87
3.4.1 Basics of Purchase Order Processing ............................................... 87
3.4.2 Planned Purchase Orders.................................................................. 89
3.4.3 Purchase Requisitions ....................................................................... 92
3.4.4 Requests for Quotation...................................................................... 94
3.4.5 Purchase Order Registration ............................................................ 96
3.4.6 Change Management and Purchase Order Approval ................ 103
3.4.7 Canceling and Deleting Purchase Orders ..................................... 105
3.4.8 Purchase Order Confirmation and Printing ................................. 106
3.4.9 Purchase Agreements ...................................................................... 109
3.4.10 Case Study Exercises ....................................................................... 110
3.5 Item Receipt ................................................................................................. 111
3.5.1 Basic Steps for Item Receipt ............................................................ 112
3.5.2 Receipts List ...................................................................................... 112
3.5.3 Inventory Registration..................................................................... 113
3.5.4 Product Receipt ................................................................................ 116
3.5.5 Receiving a Deviating Quantity ..................................................... 118
3.5.6 Order Status and Inquiries.............................................................. 120
3.5.7 Case Study Exercises ....................................................................... 123
3.6 Invoice Receipt............................................................................................. 124
3.6.1 Different Ways for Processing Vendor Invoices .......................... 124
3.6.2 Posting Vendor Invoices ................................................................. 126
3.6.3 Order Status and Inquiries.............................................................. 130
3.6.4 Case Study Exercises ....................................................................... 132

mabenito@parcisa.com
Table of Contents IX

3.7 Credit Notes and Item Returns .................................................................. 133

3.7.1 Crediting Purchase Orders .............................................................. 134
3.7.2 Inventory Valuation for Separate Credit Notes ............................ 136
3.7.3 Case Study Exercise .......................................................................... 136

4 Sales and Distribution ............................................................................................ 137

4.1 Business Processes in Sales and Distribution ........................................... 137
4.1.1 Basic Approach ................................................................................. 137
4.1.2 At a Glance: Sales Order Processing .............................................. 140
4.2 Customer Management ............................................................................... 142
4.2.1 Basic Data and Comparison to Vendors Records ......................... 142
4.2.2 Case Study Exercises ........................................................................ 146
4.3 Product Management for Sales .................................................................. 146
4.3.1 Product Records and Categories in Sales ...................................... 146
4.3.2 Sales Price and Discount .................................................................. 148
4.3.3 Case Study Exercises ........................................................................ 153
4.4 Sales Orders and Quotations ...................................................................... 153
4.4.1 Basics of Sales Order Processing..................................................... 154
4.4.2 Sales Quotations ................................................................................ 155
4.4.3 Sales Order Registration .................................................................. 157
4.4.4 Sales Prices and Discounts............................................................... 163
4.4.5 Managing Charges............................................................................ 165
4.4.6 Sales Order Confirmation ................................................................ 167
4.4.7 Case Study Exercises ........................................................................ 168
4.5 Distribution ................................................................................................... 168
4.5.1 Basics and Setup for Picking and Shipping................................... 168
4.5.2 Pick Form and Picking List.............................................................. 171
4.5.3 Picking Workbench .......................................................................... 173
4.5.4 Output Order and Shipment ........................................................... 175
4.5.5 Packing Slip ....................................................................................... 177
4.5.6 Case Study Exercises ........................................................................ 179
4.6 Invoicing........................................................................................................ 180
4.6.1 Invoicing Sales Orders ..................................................................... 180
4.6.2 Collective Invoice.............................................................................. 182
4.6.3 Free Text Invoices ............................................................................. 184
4.6.4 Credit Notes and Item Returns ....................................................... 186
4.6.5 Case Study Exercises ........................................................................ 189
4.7 Direct Delivery ............................................................................................. 190
4.7.1 Processing Direct Deliveries ............................................................ 191

mabenito@parcisa.com
X Table of Contents

4.7.2 Case Study Exercise ......................................................................... 192

4.8 Trade Allowances and Incentive Management ....................................... 192
4.8.1 Trade Allowances ............................................................................ 193
4.8.2 Vendor Rebates ................................................................................ 200
4.8.3 Broker Contracts............................................................................... 200
4.8.4 Royalty Agreements ........................................................................ 201

5 Production Control ................................................................................................ 203

5.1 Business Processes in Manufacturing ....................................................... 203
5.1.1 Basic Approach................................................................................. 203
5.1.2 At a Glance: Production Order Processing ................................... 206
5.2 Product Data and Bills of Materials .......................................................... 208
5.2.1 Product Master Data for Manufacturing ...................................... 208
5.2.2 Bills of Materials (BOM) .................................................................. 210
5.2.3 Case Study Exercises ....................................................................... 215
5.3 Resources and Routes ................................................................................. 217
5.3.1 Production Units and Resource Groups ....................................... 217
5.3.2 Resources and Capabilities ............................................................. 220
5.3.3 Routes and Operations .................................................................... 223
5.3.4 Case Study Exercises ....................................................................... 231
5.4 Production Orders....................................................................................... 232
5.4.1 Basics of Production Order Processing ......................................... 232
5.4.2 Production Order Registration ....................................................... 236
5.4.3 Processing Production Orders........................................................ 238
5.4.4 Case Study Exercises ....................................................................... 242
5.5 Production Journal Transactions ............................................................... 242
5.5.1 Journal Transactions and Ledger Integration .............................. 242
5.5.2 Picking List........................................................................................ 243
5.5.3 Working Time Registration ............................................................ 245
5.5.4 Case Study Exercises ....................................................................... 246
5.6 Reporting as Finished and Ending Production ....................................... 247
5.6.1 Reporting as Finished ...................................................................... 247
5.6.2 Ending and Costing ......................................................................... 248
5.6.3 Case Study Exercise ......................................................................... 250
5.7 Subcontracting ............................................................................................. 250
5.7.1 Outsourced Operation ..................................................................... 250
5.7.2 Purchased Service ............................................................................ 251

6 Operations Planning ............................................................................................. 253

mabenito@parcisa.com
Table of Contents XI

6.1 Business Processes in Operations Planning ............................................. 253

6.1.1 Basic Approach ................................................................................. 253
6.1.2 At a Glance: Master Planning.......................................................... 254
6.2 Forecasting .................................................................................................... 255
6.2.1 Basics of Forecasting......................................................................... 255
6.2.2 Forecast Settings................................................................................ 256
6.2.3 Forecasts and Forecast Scheduling ................................................. 258
6.2.4 Case Study Exercises ........................................................................ 260
6.3 Master Planning ........................................................................................... 261
6.3.1 Basics of Master Planning ................................................................ 261
6.3.2 Master Planning Setup ..................................................................... 263
6.3.3 Item Coverage and Item Settings.................................................... 265
6.3.4 Master Scheduling and Planned Orders ........................................ 269
6.3.5 Case Study Exercises ........................................................................ 273

7 Inventory Management ......................................................................................... 275

7.1 Principles of Inventory Transactions ......................................................... 275
7.1.1 Basic Approach ................................................................................. 275
7.1.2 At a Glance: Inventory Journal Transactions ................................ 278
7.2 Product Information Management ............................................................ 280
7.2.1 Product Master Data ........................................................................ 280
7.2.2 Inventory Dimension Groups ......................................................... 288
7.2.3 Item Model Groups .......................................................................... 292
7.2.4 Cost Price Settings ............................................................................ 294
7.2.5 Transaction and Inventory Inquiry ................................................ 295
7.2.6 Case Study Exercises ........................................................................ 300
7.3 Inventory Valuation..................................................................................... 301
7.3.1 Valuation Method ............................................................................. 302
7.3.2 Inventory Closing and Adjustment ................................................ 305
7.3.3 Case Study Exercises ........................................................................ 307
7.4 Business Processes in Inventory ................................................................ 307
7.4.1 Inventory Structures and Parameters ............................................ 308
7.4.2 Journal Transactions ......................................................................... 310
7.4.3 Inventory Counting .......................................................................... 313
7.4.4 Quarantine and Inventory Blocking............................................... 315
7.4.5 Transfer Orders ................................................................................. 317
7.4.6 Case Study Exercises ........................................................................ 318

8 Advanced Warehousing and Transportation ..................................................... 321

mabenito@parcisa.com
XII Table of Contents

8.1 Advanced Warehouse Management ........................................................ 321

8.1.1 Core Setup for Warehouse Management Processes .................... 321
8.1.2 Inbound and Outbound Transactions ........................................... 332
8.1.3 Operations within the Warehouse ................................................. 341
8.1.4 Case Study Exercises ....................................................................... 347
8.2 Transportation Management ..................................................................... 350
8.2.1 Core Setup for Transportation Management ............................... 350
8.2.2 Managing Transportation Processes ............................................. 354

9 Finance Administration ........................................................................................ 361

9.3 Principles of Ledger Transactions ............................................................. 361
9.3.1 Basic Approach................................................................................. 361
9.3.2 At a glance: Ledger Journal Transactions ..................................... 362
9.4 Setting up Finance ....................................................................................... 363
9.4.1 Fiscal and Ledger Calendars .......................................................... 363
9.4.2 Currencies and Exchange Rates ..................................................... 365
9.4.3 Financial Dimensions ...................................................................... 368
9.4.4 Account Structures and Charts of Accounts ................................ 370
9.4.5 Customer, Vendor and Bank Accounts ......................................... 377
9.4.6 VAT / Sales Tax Settings ................................................................. 378
9.4.7 Case Study Exercises ....................................................................... 381
9.5 Business Processes in Finance ................................................................... 382
9.5.1 Basics Setup for Journal Transactions ........................................... 382
9.5.2 General Journals ............................................................................... 384
9.5.3 Invoice Journals ................................................................................ 389
9.5.4 Payments ........................................................................................... 393
9.5.5 Reversing Transactions ................................................................... 397
9.5.6 Case Study Exercises ....................................................................... 398
9.6 Ledger Integration....................................................................................... 399
9.6.1 Basics of Ledger Integration ........................................................... 400
9.6.2 Ledger Integration in Inventory..................................................... 401
9.6.3 Ledger Integration in Production .................................................. 405

10 Core Setup and Essential Features ...................................................................... 407

10.1 Organizational Structures .......................................................................... 407
10.1.1 Data Partitions .................................................................................. 408
10.1.2 Organization Model Architecture.................................................. 409
10.1.3 Organization Units .......................................................................... 409
10.1.4 Organization Hierarchy Structures ............................................... 412

mabenito@parcisa.com
Table of Contents XIII

10.1.5 Legal Entities (Company Accounts) ............................................... 413

10.1.6 Virtual Company Accounts ............................................................. 415
10.1.7 Sites ..................................................................................................... 416
10.2 Security and Information Access ............................................................... 418
10.2.1 Access Control ................................................................................... 418
10.2.2 User Management ............................................................................. 418
10.2.3 Role-based Security .......................................................................... 422
10.2.4 Securing the Global Address Book ................................................. 426
10.3 General Settings ........................................................................................... 427
10.3.1 Number Sequences ........................................................................... 428
10.3.2 Calendars ........................................................................................... 430
10.3.3 Address Setup ................................................................................... 430
10.3.4 Parameters ......................................................................................... 431
10.4 Alerts and Workflow Management ........................................................... 432
10.4.1 Alert Rules and Notifications .......................................................... 432
10.4.2 Configuring Workflows ................................................................... 434
10.4.3 Working with Workflows ................................................................ 437
10.5 Other Features .............................................................................................. 439
10.5.1 Document Management .................................................................. 439
10.5.2 Case Management ............................................................................ 441
10.5.3 Task Recorder .................................................................................... 444

Appendix .......................................................................................................................... 445

Setup Checklist ....................................................................................................... 445
Basic Setup.................................................................................................... 445
Other Key Settings and Master Data ........................................................ 448
Commands and Shortcut Keys ............................................................................. 450

Bibliography .................................................................................................................... 451

Literature ................................................................................................................. 451
Other Sources .......................................................................................................... 451

Index ................................................................................................................................. 453

mabenito@parcisa.com
1 What is Microsoft Dynamics AX?

Dynamics AX is Microsoft’s core business management solution, designed to meet

the requirements of mid-sized companies and multinational organizations. Based
on state-of-the-art architecture and deep integration, Dynamics AX shows compre-
hensive functionality while ensuring high usability at the same time.
In version Dynamics AX 2012, it shows a vast number of innovations including a
new user interface consequently applying the role tailored user experience across
the application, increased capabilities in administration, finance and product data
management, and an enhanced industry foundation. The R2 version enhances
Microsoft Dynamics AX 2012 with data partitions, country-specific features for
additional key countries like Brazil, China, India, Japan and Russia – included in a
single layer for all country localizations – and several functional enhancements.
Microsoft Dynamics AX 2012 R3 contains functional enhancements in multiple
areas of the application, including but not limited to:
¾ Warehouse and transportation management
¾ Trade allowances and incentive management
¾ Other enhancements in sales and distribution
¾ Product change management – Use case management for releasing products
and approving or activating BOMs and routes
¾ Master data management – Synchronize master data like customers, vendors
and products across Dynamics AX databases through SQL MDS (Microsoft SQL
Server Master Data Service)
¾ Demand forecasting – Export transaction data from Dynamics AX, create
forecasts through the advanced forecasting features available in Microsoft SQL
Server Analysis Services, and import the forecasts to Dynamics AX
¾ e-Procurement – Enhancements for obtaining and comparing RFQs
¾ Project accounting – Improved resource scheduling and Microsoft Project Client
integration
¾ Retail – Various enhancements, including the new channel “Call Center”

1.1 Axapta and the History of Dynamics AX

Dynamics AX in its origin has been developed under the name Axapta by
Damgaard A/S, a Danish software company. The first version released to market
has been published in March 1998. At that time, the founders of Damgaard – Erik
and Preben Damgaard – have already had more than ten years of experience
designing ERP systems. Among others, they have been co-founders of PC&C,
where they joined the development of Navision (now Dynamics NAV).

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_1, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
2 1 What is Microsoft Dynamics AX?

Version 1.0 of Axapta has been available in Denmark and the USA only. Version
1.5, published in October 1998, included support for several European countries.
Releasing version 2.0 in July 1999 and version 3.0 in October 2002, Axapta
provided continuously increasing application functionality and support of
additional countries. Until releasing Axapta under the new brand Dynamics AX in
version 4.0, improvements have been deployed in a number of service packs.
After signing a merger agreement in November 2000, Damgaard A/S united with
the local rival Navision A/S, a successor of PC&C. Finally, Microsoft acquired
Navision-Damgaard in May 2002 and accepted their main products, Navision and
Axapta, as the core business solutions of Microsoft. Whereas Dynamics NAV
(Navision) in functional and technological aspect applies to small companies,
Dynamics AX (Axapta) is the product for mid-sized and large companies.
When releasing version 4.0 in June 2006, Microsoft rebranded Axapta to Dynamics
AX. Microsoft Dynamics AX 4.0 differs from previous versions not only by
functional enhancements but also by a new user interface, showing a complete
redesign with a Microsoft Office-like look and feel.
In June 2008, Dynamics AX 2009 has been published including role centers,
workflow functionality and an improved user interface. Dynamics AX 2009 also
provided enhanced functionality, including the multisite foundation and
additional modules ensuring an end-to-end support for the supply chain
requirements of global organizations.
Dynamics AX 2012 has been published in August 2011, showing an updated user
interface with an action pane in all forms and applying list pages for replacing the
Overview tab on forms. Role-based security, the new accounting framework with
segmented account structures, the enhanced use of shared data structures and
other features facilitate collaboration across legal entities and operating units
within the application, also suitable to large multinational enterprises.
Updated versions of Dynamics AX 2012 have been released later:
¾ Dynamics AX 2012 Feature Pack, adding industry features for retail and process
manufacturing, in February 2012
¾ Dynamics AX 2012 R2, adding data partitions, additional country features and
support for the latest Microsoft platform with Windows 8, in December 2012
¾ Dynamics AX 2012 R3, adding the advanced warehouse and transportation
management solution, in May 2014

1.2 Dynamics AX 2012 Product Overview

Microsoft Dynamics AX is an adaptable business management solution, which is
easy to use and nevertheless supports the complex requirements of multinational
companies. Another characteristic is the deep integration to Microsoft technologies

mabenito@parcisa.com
1.2 Dynamics AX 2012 Product Overview 3

and applications like Microsoft SQL Server, SharePoint Services and BizTalk
Server.
When accessing Dynamics AX for the first time, most people feel comfortable from
the very beginning because the user interface is already known from Microsoft
Windows and Microsoft Office. The intuitive user experience helps to start
working in Dynamics AX easily and efficiently, supported by a tight integration to
other Microsoft software. Role centers grant an easy and fast overview of
information required by individuals.

1.2.1 Functional Capabilities

The end-to-end support of business processes across the whole organization allows
integrating external business partners like customers and vendors on the one hand
and internal organization units on the other hand.
Multi-language, multi-country and multi-currency support, the organization
model for managing multiple hierarchies of operating units and legal entities, and
the option to manage several sites within one legal entity enable managing
complex global organizations in a common database.
The basic ERP capabilities of Dynamics AX include following main areas:
¾ Sales and marketing
¾ Supply chain management
¾ Production
¾ Procurement and sourcing
¾ Service management
¾ Financial management
¾ Project management and accounting
¾ Human capital management
¾ Business intelligence and reporting
Supplementing the basic ERP solution, industry specific capabilities for
manufacturing, distribution, retail, services and the public sector included in the
core standard application provide a broad industry foundation.
The workflow system in Dynamics AX (see section 10.4) provides configurable
workflows to support routine procedures like the approval process for a purchase
requisition. The workflow infrastructure in Dynamics AX is based on the Windows
Workflow Foundation enabling workflow messages in Microsoft Outlook, the
Enterprise Portal or the regular Dynamics AX Windows client.
High scalability and adaptability make it easy to manage changes in the
organization and in business processes. If applicable for example, only deploy
finance at the beginning and simply add new functional areas like production or
warehouse management later. Enhancing Dynamics AX with additional users or
legal entities is also possible at any time.

mabenito@parcisa.com
4 1 What is Microsoft Dynamics AX?

Local features are available in order to comply with country-specific requirements.

In Dynamics AX 2012, they are controlled by the country/region of the primary
address of your company (legal entity).

1.2.2 Business Intelligence

In order to access data for analysis, integrated functionality for reporting and
business intelligence grants a fast and reliable presentation of business data.
Business intelligence features are not only available for analysis in finance, but also
for users in all other areas of Dynamics AX who need to analyze their data.
Depending on the requirements, different types of reporting tools including
structured and ad-hoc reports are required.
In Dynamics AX, business intelligence is based on the platform of the Microsoft
SQL Server. The basis for structured Dynamics AX standard reports is provided by
SQL Server Reporting Services (SSRS). Business intelligence components like Key
Performance Indicators apply OLAP cubes, which are provided by SQL Server
Analysis Services (SSAS).

1.2.3 Collaboration Features

Collaboration functionality for connecting external partners is available in two
ways:
¾ Enterprise Portal
¾ Application Integration Framework
The Enterprise Portal as the first option provides direct access to Dynamics AX
through a regular Internet browser like the Microsoft Internet Explorer. Limiting
access to role-specific data, the Enterprise Portal is not only applicable to internal
employees but also to external customers and vendors.
The Application Integration Framework (AIF) as the second option supports
automatic data exchange with other business applications inside and outside your
company. It enables receiving and sending documents like invoices, packing slips
or price lists in XML format. An external converter then may convert the
documents to any other format like EDIFACT if necessary.
For legal entities within a common Dynamics AX database and partition, the
intercompany functionality enables automatic purchase and sales processes
between companies.

1.2.4 Implementation
Microsoft does not directly sell Dynamics AX to customers, but offers an indirect
sales channel. Customers may purchase licenses from certified partners, which also
offer their services to support the implementation of Dynamics AX. This support
includes application training and consulting as well as system installation and the
development of enhancements to the core functionality.

mabenito@parcisa.com
1.3 Technology and System Architecture 5

In order to assist the implementation of Dynamics applications, Microsoft provides

a standardized implementation methodology for partners – Microsoft Dynamics
Sure Step. The Microsoft Dynamics Sure Step Methodology is a comprehensive
approach to implement Microsoft Dynamics solutions including project
management principles and solution-specific guidelines and tools.
Additional resources including product information, customer stories and online
demos are available in a global version on the Microsoft Dynamics AX web page
http://www.microsoft.com/en-us/dynamics/erp-ax-overview.aspx or in a local version
accessible through the Microsoft homepage of your country.
The Microsoft web pages also provide support for finding an implementation
partner or accessing the Microsoft Dynamics Marketplace with an overview of
partner add-on solutions.

1.3 Technology and System Architecture

The development of Dynamics AX (formerly Axapta) from the very start aimed to
support international implementations and to provide a deep integration of
components. Integration is not limited to components within Dynamics AX – it
also includes the Microsoft software stack with Windows operating systems, SQL
Server, SharePoint, Internet Information Server and other applications.
Three core technological characteristics are essential in Dynamics AX:
¾ Development environments
¾ Model driven layered technology
¾ Three-tier architecture

1.3.1 Development Environments

Dynamics AX 2012 stores the application objects (like tables and forms) within a
SQL database. The Application Object Tree (AOT) shows a tree structure of these
application objects.
For modifying application objects, choose between different development
environments:
¾ Microsoft Visual Studio
¾ MorphX IDE – Integrated development environment in Dynamics AX
The MorphX IDE in the developer workspace directly within the Dynamics AX
Windows client provides access to the AOT for designing, editing, compiling and
debugging code.
The Visual Studio development environment, which is closely integrated with
MorphX, supports managed code and is required for some tasks like creating
reports. Reports in Dynamics AX 2012 are only delivered by SQL Server Reporting
Services (SSRS).

mabenito@parcisa.com
6 1 What is Microsoft Dynamics AX?

Figure 1-1: The Application Object Tree (AOT) containing programmable objects

The programming language in the MorphX development environment is X++, an

object-oriented, proprietary language similar to C# and Java. Since application
objects in MorphX show an open source code, you can adjust and enhance
Dynamics AX functionality in the development environment.

1.3.2 Layer Technology

Applying a layer structure, Dynamics AX provides a hierarchy of levels in the
application source code separating the standard application from modifications.
Different application object layers make sure that customer-specific modifications
do not interfere with standard objects stored in other layers. The layering system
therefore facilitates release upgrades on the one hand and the implementation of
industry or generic solutions on the other hand.

Figure 1-2: Hierarchy of application object layers in Dynamics AX 2012

The lowest object level in Dynamics AX is the SYS layer, which together with the
GLS layer contains the core Dynamics AX standard objects. The FPK layer

mabenito@parcisa.com
1.3 Technology and System Architecture 7

containing industry solutions and features is the third layer of the base solution
reserved for Microsoft. The layers SLN, ISV and VAR are available for partners and
independent software vendors (ISV) to provide industry, vertical or multi-
customer solutions. The highest object level is the USR layer, which contains
installation specific modifications.
In addition, each layer refers to a patch layer with a name ending with “P” (e.g.
“USP” for the USR layer). The patch layers are reserved for application updates to
the related regular layer.
When accessing the Dynamics AX application, the kernel looks for a version of
every object required. The version search starts from the highest layer, the USR
layer. If no object version is available in the USR layer, the kernel will go through
the lower layers until finding the object – locating it in the SYS layer if no
modifications apply.
If you have modified the vendor list page for example, Dynamics AX applies the
form VendTableListPage which you have modified in the USR layer – and not the
standard object with the same name in the SYS layer.

1.3.3 Three-Tier Architecture

In order to support large implementations with a high number of users,
Dynamics AX consequently applies a three-tier architecture. The three-tier
architecture is characterized by separating database, application and client.
Data managed in Dynamics AX 2012 are stored in a relational Microsoft SQL
Server database. A database cluster may be used in large installations.

Figure 1-3: The three-tier architecture in Dynamics AX

The application tier contains the business logic of Dynamics AX, executing the
code designed in the development environment. It may run on a single
Application Object Server (AOS) or on a server cluster.
The client tier contains the graphical user interface, which is required for
processing data input and output. Apart from the regular Dynamics AX Windows

mabenito@parcisa.com
8 1 What is Microsoft Dynamics AX?

client, web browsers (applying the Enterprise Portal), Microsoft Office (applying
the Office add-ins) and other applications (e.g. for mobile devices) are further
options for accessing restricted areas of Dynamics AX.
Database, application (AOS) and client usually run on different computers. In case
of small implementations, optionally install database and application together on a
single server. For testing purposes, all three tiers may run on a common device.

1.3.4 Data Structure

When working in Dynamics AX (or any other business software), you are accessing
and creating data describing processes (e.g. item transactions). As a prerequisite
for transactions, you need to manage data describing objects (e.g. customers).
Three data types group the different kinds of data:
¾ Setup data
¾ Master data
¾ Transaction data
Setup data determine the way business processes work in Dynamics AX. For
example, choose in the setup whether to apply warehouse locations, pallets or
serial numbers. Apart from modifying programmable objects, setup is the second
way to adapt the application according to the requirements of an enterprise. Setup
data are entered when initially setting up the system. Later modifications of core
setup data need to be checked carefully.
Master data describe objects like customers, main accounts or products. They do
not change periodically, but only at the time related objects change – for example
when a customer gets a new address. Master data are entered or imported initially
before a company starts working in the application. Later on, you need to insert or
edit master data occasionally depending on your business.
Transaction data are continuously created when processing business activities.
Examples for transaction data are sales orders, invoices or item transactions. In
Dynamics AX, the application generates transaction data for every business
activity. Registration and posting of transaction data complies with the voucher
principle.

1.3.5 Voucher Principle

If you want to post a transaction, you have to register a voucher containing a
header and one or more lines first. Every voucher is processed in two steps then:
¾ Registration – Registering the voucher (creating a non-posted document)
¾ Posting – Posting the voucher (creating a posted document)
Vouchers are based on master data like main accounts, customers or products. It is
not possible to post a voucher as long as it does not comply with the rules defined

mabenito@parcisa.com
1.3 Technology and System Architecture 9

by setup data and the Dynamics AX-internal business logic. Once a voucher is
posted, it is not possible to change it any more.
Examples for vouchers in Dynamics AX are orders in sales or purchasing as well as
journals in finance or inventory management. After posting, the posted documents
are available as packing slips, invoices, ledger transactions or inventory
transactions.
Note: Some minor vouchers like quarantine orders show an exception regarding
the voucher structure – they do not contain a separate header and lines part.

mabenito@parcisa.com
2 Getting Started: Navigation and General Options

One of the core principles of Microsoft Dynamics AX is to grant a familiar look and
feel to people, who are used to Microsoft software. However, business software
has to adapt to business processes, which may be quite complex.

2.1 User Interface and Common Tasks

Before we start to go through business processes and case studies, we want to take
a look at the general functionality in this chapter.

2.1.1 Logon and Authentication

Microsoft Dynamics AX logon is Active Directory based, applying Windows
authentication. You do not need to log on to Dynamics AX with separate
credentials as a result. After selecting the Dynamics AX icon on the Windows
desktop or in the Start menu, you are automatically connecting to the Dynamics
application using your Windows account.
The Dynamics AX user-ID, company (legal entity) and language derive from your
user options, which you can change within the client. In Dynamics AX 2012 R2/R3,
data partitions (see section 10.1.1) apply additionally – the appropriate default
partition is specified in the user management or in the client configuration.

Figure 2-1: Icon for Microsoft Dynamics AX on the Windows desktop

Sometimes you want to use different user accounts within Dynamics AX – e.g. if
you have to check user permissions. In this case, you have to make sure that the
user you want to apply is set up in Active Directory administration. In order to
start Dynamics AX with a user which is different from your current Windows
account, choose the option “Run as different user” in the pop-up menu (available if
pressing the Shift key while doing a right-hand click) of the Dynamics AX- icon.
If you want to close your session and to logoff from Dynamics AX, proceed the
same way as you do in any other Windows program: Push the shortcut key Alt+F4,
choose the command File/Exit or click the button on the top right-hand corner
of the Dynamics AX workspace. If you have opened several workspace windows,
you are logging off when closing the last workspace.

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_2, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
12 2 Getting Started: Navigation and General Options

2.1.2 User Interface

The Dynamics AX workspace is the first page visible when accessing Microsoft
Dynamics AX. The content of the workspace is depending both on the system
configuration and on your permissions and individual settings.

Figure 2-2: Dynamics AX workspace, showing an area page in the content pane

The workspace of Microsoft Dynamics AX 2012 consists of following areas as

shown in Figure 2-2:
¾ Title bar [1]
¾ Address bar [2]
¾ Command bar and jewel menu [3]
¾ Status bar [4]
¾ Favorites [5]
¾ Navigation pane [6]
¾ Content pane [7]

2.1.2.1 Title Bar

The title bar shows the name of the application (“Microsoft Dynamics AX”), the
name of the organization holding the Dynamics AX license, the server name, the
session ID, and the current company.
In Dynamics AX 2012 R2/R3, the title bar additionally shows the current data
partition if the Dynamics AX database contains multiple partitions.

mabenito@parcisa.com
2.1 User Interface and Common Tasks 13

2.1.2.2 Address Bar

The address bar (breadcrumb bar) provides navigation options known from the
Windows Explorer and present-day Internet browsers. It shows a “breadcrumb”
trail of the pages which you have opened in the content pane, enabling you to go
back and forward by clicking the travel buttons Forward and Back.
The address field shows the path of the current page and allows navigation to
other companies, modules and pages.

Figure 2-3: Navigating Dynamics AX in the address bar

If the Enterprise search (see section 2.1.6) is enabled in Dynamics AX, a search box
shows on the right-hand side of the address bar. This search box provides access
not only to Dynamics AX data but also to the Dynamics AX help content.

2.1.2.3 Command Bar and Jewel Menu

The jewel menu contains commands, which are available globally within
Dynamics AX. This includes common Windows commands like Copy and Paste as
well as specific Dynamics AX commands like Filter and Document handling.
Depending on the content page, some commands are not active. If a particular
command is also accessible through a shortcut key, it shows on the right-hand side
of the applicable option.

Figure 2-4: The jewel menu in Dynamics AX

mabenito@parcisa.com
14 2 Getting Started: Navigation and General Options

In the command bar, there are following buttons on the right:

¾ Windows – For switching between forms.
¾ View – For changing workspace settings.
¾ Help – For showing the online help.
The options for changing workspace settings are not only available in the View
button, but also in the jewel menu (choosing the command File/View there).

2.1.2.4 Status Bar

The status bar at the bottom of the Dynamics AX workspace contains the
document handling button, a short help text on the active element (field or menu
item) and several other fields. If you want to change the elements included in the
status bar, choose appropriate settings in your user options (see section 2.3.1). If all
elements are displayed in the status bar of the workspace window, it shows
following fields:
¾ Document handling [1] – See section 10.5.1
¾ Help text [2]
¾ Notifications [3] – Alerts and workflow status
¾ Currency [4] – Controls currency of displayed amounts
¾ Application object model [5]
¾ Application object layer [6]
¾ Current company [7]
¾ Current partition [8] – Data partition in Dynamics AX 2012 R2/R3
¾ Caps Lock status [9]
¾ Num Lock status [10]
¾ Current user [11]
¾ Session date [12]
¾ Session time [13]
¾ AOS name [14] – Server name
¾ Operation progress indicator [15] – Shows database activity

Figure 2-5: The status bar in the Dynamics AX workspace (all elements displayed)

The status bar does not only display information, it also offers additional
functionality started by clicking following status bar fields:
¾ Notifications – Opens the notifications form.
¾ Currency – Opens the currency converter, which gives you the possibility to
show currency amounts in different currencies.
¾ Current company – Switch between companies (legal entities).
¾ Session date – Default for the posting date in the current session.

mabenito@parcisa.com
2.1 User Interface and Common Tasks 15

In detail forms, the status bar looks a little different from the way it looks in the
Dynamics AX workspace by additionally providing the option to scroll between
records and to switch between the view mode and the edit mode. More details are
available in the section on master detail forms below.

2.1.2.5 Navigation Pane

The navigation pane on the left hand side of the workspace provides access to all
list pages and forms. List pages and detail forms are the place for working in the
modules of Dynamics AX as described in section 2.1.3 and 2.1.5 of this book.
If you want to hide the navigation pane, click the button View/Navigation Pane in
the command bar. If you just want to prevent the navigation pane to show
completely all the time, activate automatic collapsing to a left-hand sidebar by
pushing the shortcut key Alt+Shift+F1 (or by clicking the button View / Auto-Hide
Navigation or the arrow [<] in the top right corner of the navigation pane). If the
Auto-Hide feature is enabled, the navigation pane shows completely whenever
moving the mouse pointer to the navigation sidebar.

2.1.2.6 Favorites
Whereas the module buttons with the related menu items in the navigation pane
show a uniform structure, the favorites pane (see section 2.1.3) allows arranging
menu items the way preferred for personal use. Therefore, the favorites pane is
used for easily accessing list pages, forms, inquiries and reports needed frequently.
The functionality of favorites in Dynamics AX is similar to the favorites in
Microsoft Outlook or in the Internet Explorer.

2.1.2.7 Content Pane

The content pane shown in the center of the Dynamics AX workspace contains
following types of pages:
¾ List pages – See description below
¾ Area pages – See section 2.1.3
¾ Role centers – See section 2.1.4

2.1.2.8 Workspace
If requiring a second Dynamics AX workspace, open a new workspace within the
current session by pushing the shortcut key Ctrl+W or clicking the button Windows/
New workspace in the command bar. Clicking the button New Workspace in the
dialog box displayed when changing the company account is another way for
opening a new workspace.

2.1.2.9 List Page

A list page like the customer page shown in Figure 2-6 provides a list of records of
a particular table. List pages are available for viewing records, in addition

mabenito@parcisa.com
16 2 Getting Started: Navigation and General Options

providing the option to complete daily tasks on these records by clicking the
appropriate button in the action pane.

Figure 2-6: List page Customers (Auto-Hide Navigation enabled)

List pages show a common structure, but some elements and functions depend on
the table displayed. This structure includes following basic elements:
¾ Action pane [1] – Contains the action buttons (similar to the Microsoft Office
ribbon). You may distinguish buttons for executing activities related to the
selected record (like placing an order) on the one hand and buttons for opening
related detail forms (displaying more information) on the other hand. The
number and functionality of buttons is depending on the particular page.
Depending on available actions, buttons show on several tabs (e.g. the action
pane tabs Customer or Sell in Figure 2-6).
¾ Filter pane [2] – Allows entering filter criteria (see section 2.1.6).
¾ Grid [3] – Displays the list of records.
¾ Grid check boxes [4] – Enable selecting multiple or – if selecting the checkbox
in the header line – all records.
¾ Scroll bar [5] – Available to scroll through the records. A pop-up menu
accessed by right-hand clicking on the scroll bar supports scrolling.
Alternatively, push the shortcut keys PgUp, PgDn, Ctrl+Home and Ctrl+End.

mabenito@parcisa.com
2.1 User Interface and Common Tasks 17

¾ FactBoxes [6] – Show a summary of additional information referring to the

selected record (e.g. the primary address of a selected customer).
¾ Preview pane [7] – Below the grid, showing more detailed information on the
selected record (e.g. additional fields of the customer record).
If you do not want to show all elements, hide the FactBoxes and the preview pane
through the appropriate option in the button View of the command bar. A
general setting for activating or deactivating the FactBox pane and the preview
pane is available in the system administration menu (System administration> Setup>
System> Client performance options).
List pages do not automatically refresh, if data displayed on the screen change in
the database (e.g. if somebody is working on the records concerned). After editing
a record in a detail form, refresh the related list page by pushing the F5 key (or by
clicking the button Refresh on the right-hand side of the breadcrumb bar).

2.1.2.10 Detail Form for Master Data

Unlike list pages, which are there for viewing a list of records, detail forms are
there for inserting and modifying individual records. By double-clicking a record
in a list page, Dynamics AX opens the related detail form.

Figure 2-7: Elements of a detail form on the example of the customer detail form

Alternatively, access a detail form by clicking the button Edit on the first tab of the
action pane in a list page.

mabenito@parcisa.com
18 2 Getting Started: Navigation and General Options

Whereas list pages display within the Dynamics AX workspace, detail forms open
separate windows which you may move or resize on your Windows desktop.
Detail forms got a common structure similar to list pages, with some elements and
functions depending on the particular form. Figure 2-7 shows the customer detail
form (accessible through the list page Accounts receivable> Common> Customers> All
customers) as an example for the structure of detail forms.
The common structure of detail forms includes the following basic elements:
¾ Title bar [1] – Showing the form name, the current company (if selected in the
users options) and the identification of the record. For illustration, the example
in Figure 2-7 shows the number and name of customer “20002” in the company
account “AGB”.
¾ Command bar [2] – Including jewel menu, View and Help button.
¾ Action pane [3]
¾ FactBoxes [4]
¾ Action pane strips [5] – Providing access to actions in case there are only a few
options available. On the one hand, there are action pane strips related to fast
tabs as shown in Figure 2-7. On the other hand, there are action pane strips
replacing the full action pane on the top of forms, which only contain a few
actions – e.g. in the customer groups form (Accounts receivable> Setup>
Customers> Customer groups).
¾ Fast tabs [6] – Grouping fields according to their functional area. In comparison
to regular tabs, fast tabs additionally show summary fields displaying core data
directly on the tab. In Figure 2-7, the fast tab Invoice and delivery for example
shows the delivery terms “EXW”. You may expand fast tabs by clicking the
particular tab. A right-hand click on a tab provides the option to expand or
collapse all tabs at the same time.
¾ Status bar [7] – Containing options to move between records (in addition to the
options in the status bar of the workspace). Apart from the button Ctrl+Home ,
Ctrl+PgUp , Ctrl+PgDn , Ctrl+End for switching the selected record (e.g.
moving to another customer in Figure 2-7), there is the button Grid View for
viewing a list of records.
Another option available in the status bar is to switch between the view mode and
the edit mode clicking the button Edit .
Section 2.1.5 later in this book contains more information on editing records,
working with fast tabs and other options available in list pages and detail forms.

2.1.2.11 Grid View

The grid view in detail forms is an option for managing a list of records. Compared
to list pages, which are read-only, the grid view additionally enables editing
records.

mabenito@parcisa.com
2.1 User Interface and Common Tasks 19

In detail forms, switch to the grid view by clicking the button Grid View in the
status bar. In a list page, directly access the grid view of the detail form by clicking
the button Edit in grid on the first tab of the action pane.
After selecting a record in the grid view, you can view the details of this record in
the related details view by clicking the button Details View in the status bar.

2.1.2.12 Detail Form for Transaction Data

In addition to the detail forms for master data described above, Dynamics AX also
contains detail forms for transaction data like the sales order form (see Figure 2-8).
You can access a transaction detail form from the related list page (e.g. the sales
order list page Sales and marketing> Common> Sales orders> All sales orders) similar to
accessing a master data detail form in a master data list page. When accessing
transaction detail forms, the fast tab Lines expands providing the option to enter
lines immediately.

Figure 2-8: Sales order form as an example of a transaction detail form

In the action pane strip [3] of the Lines tab there are buttons for executing actions
on the selected line – for example deleting a line by clicking the button Remove. The
action pane [1] at the top of the form is there to perform actions at header level –
for example deleting a complete order by clicking the button Delete.
If you want to edit details not available in the line grid, expand the fast tab Line
details [4]. In order to structure the field display, the line details fast tab contains
several sub-tabs at the bottom.
If you want to view header data, expand the Header tab. In addition, clicking the
button Header view [2] in the action pane grants access to all fields of the header
record. In the header view, the button Line view in the action pane takes you back
to the lines.

mabenito@parcisa.com
20 2 Getting Started: Navigation and General Options

2.1.2.13 Setup Forms

In comparison to detail forms for master data and transactions, setup forms show a
simple layout. Dynamics AX 2012 contains the following kinds of setup forms:
¾ Simple list – Editable grid with an action pane strip, e.g. the customer groups
(Accounts receivable> Setup> Customers> Customer groups).
¾ Simple list & Details – Two pane form showing the list of records on the left
side and editable detail fields on the right side, e.g. the terms of payment
(Accounts receivable> Setup> Payment> Terms of payment).
¾ Parameter form – Showing a table of contents (similar to the tab structure) on
the left and related fields on the right, e.g. the accounts receivable parameters
(Accounts receivable> Setup> Accounts receivable parameters).

2.1.2.14 New in Dynamics AX 2012 and in AX 2012 R2

Based on the new design principles for the user interface (initially available in
Dynamics AX 2009 list pages), the Dynamics AX client has completely changed in
Dynamics AX 2012. List pages and detail forms with FactBoxes, fast tabs and action
panes now completely replace the forms available in Dynamics AX 2009.
Compared with the initial version of Dynamics AX 2012, the R2 version in addition
includes options for accessing and viewing data partitions.

2.1.3 Navigation
There are four ways for accessing pages and forms in Microsoft Dynamics AX:
¾ Navigation pane
¾ Area pages
¾ Address bar
¾ Favorites pane

2.1.3.1 Navigation Pane

Whereas the favorites pane usually contains a limited number of menu items
which you want to use frequently, the other options (navigation pane, area pages
and address bar) show all items for which you have appropriate permissions.
For adapting the navigation pane, click the button View in the command bar.
Apart from hiding or showing the favorites and the navigation pane, optionally
hide or move particular module buttons through the Navigation Pane Options.
If all areas of the workspace are available and shown, the Dynamics AX
application window consists of following navigation items as shown in Figure 2-9:
¾ Module buttons [1]
¾ Menu items [2]
¾ Common tasks [3]
¾ Journals [4]
¾ Inquiries [5]

mabenito@parcisa.com
2.1 User Interface and Common Tasks 21

¾ Reports [6]
¾ Periodic activities [7]
¾ Setup [8]

Figure 2-9: Navigation in Dynamics AX 2012 (Favorites pane not shown)

2.1.3.2 Modules
The structure of the navigation pane complies with functional areas like Accounts
payable, Budgeting or Production control referring to the different standard roles in
the industry.
By default, the first module button is the Home menu (see section 2.1.4), followed
by functional modules. The module buttons Organization administration and System
administration refer to basic settings and tasks in the system and its companies.
Depending on the available space, the first module buttons show with the module
name on the right, followed by modules only displaying module icons. If you want
to access further modules, click the button right next to the module icons.
After clicking a module button, the workspace shows the menu items of the
selected module in the navigation pane and in the area page. The name of the
module displays in the title bar of the navigation pane. Whereas the basic structure
for navigation is common to all modules as shown below, the subfolders and menu
items are different in every module.

mabenito@parcisa.com
22 2 Getting Started: Navigation and General Options

2.1.3.3 Menu Structure

The options in the folder Common (daily tasks) provide access to list pages for
frequent tasks in the particular module, e.g. sales order management in the Sales
and marketing module.
The folder Journals contains forms which are required for entering and posting
transactions.
The folder Inquiries contains forms for reporting and analysis, which show the
result directly on the screen.
The menu items in the folder Reports generate a printout on paper. If you do not
actually require a hard copy, alternatively display a print preview or save the
report to a file.
The folder Periodic contains items, which are not required frequently. In this
folder, there are menu items for tasks like month end closing or summary updates.
The folder Setup grants access to configuration data of the particular module.
Configuration data are entered when a company (legal entity) is set up initially.
Later you will usually change configuration only if an alteration in business
processes causes new functional requirements for Dynamics AX.
Some settings should not be changed without a deep knowledge of the
Dynamics AX functionality to ensure data integrity in line with correct data in
finance. In general, system administrators set the permissions for the Setup folder
in a way that regular users may not edit sensible configuration data.

2.1.3.4 Area Page

The first option in the navigation pane of each module is the area page. The
structure of the area page shown in the content pane of the Dynamics AX
workspace complies with the structure of related menu items in the navigation
pane. You may open folders and menu items in the area page like you do in the
navigation pane.

2.1.3.5 Address Bar

Navigating the address bar provides access to the list pages and folders, which are
also shown in the navigation pane. After selecting a menu folder or subfolder in
the address bar, the workspace shows related menu items.
In addition to the options available in the navigation pane and in the area page, the
address bar also provides the option to switch companies.

2.1.3.6 Favorites
The favorites pane provides the option of setting up personal folders and menu
items according to your individual requirements. If you want to add a form or a
list page to your favorites, select the particular menu item in the navigation pane

mabenito@parcisa.com
2.1 User Interface and Common Tasks 23

or in the area page and choose the option Add to favorites in the pop-up menu,
which opens by doing a right-hand click.
If you want to hide the favorites pane (or show it, if it is hidden), click the button
View/Show Favorites in Navigation Pane in the command bar of the workspace.
You may edit your favorites choosing the command File/Favorites/Organize favorites
in the jewel menu. As shown in Figure 2-10, favorites management displays a
dialog box known from other Microsoft applications. In order to establish a
structure for your favorites, optionally create folders and subfolders and move the
menu items as needed.

Figure 2-10: Favorites administration dialog box

In addition to folders, favorites groups are another option to structure favorites.

You may create groups by choosing the command File/Favorites/Create group in the
jewel menu or by right-clicking on the header Favorites in the navigation pane
A feature not available for regular menu items in the navigation pane is accessible
by clicking the button Edit query in the favorites administration. This button allows
assigning a filter to a form or a list page, which applies whenever opening the
particular favorites item. You may also choose the query feature if you want to
show two separate favorites for one menu item – e.g. one for domestic and one for
foreign customers. Section 2.1.6 explains how to enter and apply such filters.

2.1.3.7 Switching the Current Company

If you want to switch from one legal entity to another, open the dialog for
switching companies. You may access this dialog by choosing the command
File/Tools/Select company accounts or by clicking the company field of the status bar.
After selecting a company in the dialog box, open it by double-clicking or by
clicking the button OK. If clicking the button New workspace in the dialog, the
selected company opens in a second Dynamics AX workspace.

mabenito@parcisa.com
24 2 Getting Started: Navigation and General Options

Figure 2-11: Dialog box for switching the current company

Alternatively, switch companies through the address bar of the Dynamics AX

Windows client by selecting the new company in first node of the menu path.

2.1.3.8 New in Dynamics AX 2012

In Dynamics AX 2012, the module structure has changed to better comply with
role tailored navigation. Examples are the module Product information management
holding Products (former Items in Inventory management) and Product builder or the
modules System administration and Organization administration replacing Basic and
Administration.
Since detail forms are only accessible through the related list page, there is no
direct link to detail forms in the navigation pane or area pages.

2.1.4 Home Menu

The home menu, which usually is the first menu in the navigation pane, contains
items referring to general tasks. Except for the role center, the home menu
therefore shows options and menu items not related to a specific functional role.

2.1.4.1 Items in the Home Menu

The first item in the home menu is the role center. The other items in the home
menu show the regular structure of a module, including area page, common tasks,
inquiries, reports, periodic activities and setup.
The options in the area page of the home menu compile menu items from all
functional areas, which are relevant for any kind of user. These items include:
¾ Global address book – See section 2.4
¾ Work items – Referring to workflow management, see section 10.4.3
¾ Cases – Referring to case management, see section 10.5.2
¾ Activities - Referring to sales and marketing
¾ Absences – Referring to human resources
¾ Time and attendance – Referring to human resources
¾ Timesheets – Referring to project management and accounting
¾ Questionnaires
¾ Document management – See section 10.5.1

mabenito@parcisa.com
2.1 User Interface and Common Tasks 25

2.1.4.2 Role Center

Role centers are customizable role-based homepages, showing an overview of data
frequently required. Elements available in role centers include task lists, reports,
alerts and analysis views. You may view your role center both in the Enterprise
Portal (web interface) and in the regular Dynamics AX Windows client, where it is
the homepage of your workspace.
The standard application of Dynamics AX 2012 contains multiple role centers
supporting different roles like purchasing agent, sales manager or controller. If you
have access to the development environment, optionally set up additional role
centers.
Role centers do not directly refer to the security roles in the role based security
model (see section 10.2.3). The applicable role center of a user is determined by the
assigned user profile – and not by assigned security roles.

Figure 2-12: Role center for a purchasing agent in the Dynamics AX Windows client

User profiles represent specific roles in the organization, grouping users with a
common role center. If you want to know which user profiles are assigned to a
specific user, view the FactBox Profiles for selected user in the user list page (System
administration> Common> Users> Users) after selecting the particular user.
In order to set up user profiles, choose the menu item System administration>
Common> Users> User profiles. If you want to add a user to a user profile, click the
button Add user after selecting the appropriate profile line. A user may be linked to
the same user profile for all companies, or to a different profile per company.

mabenito@parcisa.com
26 2 Getting Started: Navigation and General Options

Cues are a unique element in role centers. Their main purpose is to show
remaining work tasks graphically – in Figure 2-12 for example the number of
purchase orders not sent. In addition to a graphic sign, each cue also displays a
selected key figure representing the workload for the responsible person. A mouse
click on a cue opens the related form in Dynamics AX, where you can do your
work.
As a preparation for creating a cue, save a filter as a cue in a list page or detail form
(see section 2.1.6). If you have appropriate permissions in Microsoft SharePoint,
add the new cue to a Web part of your role center page then.
As a prerequisite for using role centers, Microsoft SharePoint and the Enterprise
Portal Framework have to be available.

2.1.4.3 New in Dynamics AX 2012

In Dynamics AX 2012, the home menu not only contains the role center but
compiles menu items relevant for all users.

2.1.5 Working with Records

When accessing a menu item for master data or transactions, Dynamics AX shows
the appropriate list page. List pages therefore are the starting point for working on
items, giving you the possibility to search and filter records you want to view.
Buttons in the action pane of the list page provide the option to edit, delete and
insert data according to your permissions. It is not possible to edit data in a list
page itself, however. Clicking the button Edit in the action pane after selecting a
line takes you to the related detail form.

2.1.5.1 Viewing Records

Whereas a list page only shows a limited number of fields, the detail form shows
all available fields of the record. For accessing the detail form after selecting a line
in the list page, double-click the line or by press the Enter key.
Fast tabs on detail forms expand by clicking them or by pushing the shortcut key
“Ctrl” + ”+”. If you want to collapse an individual fast tab, click on the fast tab
header again or push the shortcut key “Ctrl” + ”-”. Further options are available by
a right-hand click on tab headers. Selecting to expand all tabs enables scrolling
through the complete record information (e.g. using your mouse wheel).
Some tabs contain less important fields, which are not shown immediately when
expanding the tab. In this case, the expanded tab shows the button Show more
fields for displaying those fields.

2.1.5.2 Edit/View Mode

Depending on the settings of the form, a detail form usually opens in view mode,
which prevents data to be changed unintentionally. If you are in view mode and
want to edit a record, you have got several options to switch to the edit mode: The

mabenito@parcisa.com
2.1 User Interface and Common Tasks 27

button Edit in the status bar and in the action pane, the command File/Edit record
or the shortcut key Ctrl+Shift+E.
If you want to start a particular form always in edit mode, click the button
View/Default Form/View Edit Mode in the command bar of the form. If you want to
set your general default mode to Edit or View, choose the appropriate setting in the
section General of your user options.

2.1.5.3 Inserting Data

In order to insert a record, alternatively push the shortcut key Ctrl+N, click the
button New in the action pane, or choose the command File/New in the jewel menu.
In many list pages, a Quick create dialog (see Figure 2-13) displays then. The quick
create dialog contains the core fields of a record, making it possible to insert
records in a fast way. If you need to enter additional data, click the button Save and
open at the bottom of the dialog to switch to the related detail form. Depending on
the page, the Save and open button includes additional options – e.g. to switch to the
sales quotation form immediately when creating a customer.

Figure 2-13: Quick create dialog for entering new customer

If no quick create dialog is available in a particular list page, Dynamics AX takes

you to the related detail form showing an empty record (presuming no templates
apply, see section 2.3.2) for entering data. If you are already in a detail form and
decide to insert a record there, the detail form also starts an empty record.
If a mandatory field, which is left empty, is included on a collapsed fast tab, the
fast tab shows the required field indicator ( ).

mabenito@parcisa.com
28 2 Getting Started: Navigation and General Options

In the lines of a transaction form (e.g. the sales order lines), insert a new record by
simply pushing the key PgDn (or the Down Arrow) in the last line of the grid.

2.1.5.4 Editing Data

Before you may edit a record in a detail form (detail view or grid view), make sure
you are in the edit mode. In order to switch between the fields of the form then,
alternatively choose the mouse, the Enter key, the Tab or the Shift+Tab shortcut key.
Once you have finished entering or viewing record data in a detail form, close it by
clicking the button Close at the bottom (the command File/Close and Windows
standard options like the shortcut key Alt+F4 or the top right work as well).
If you are by mistake inserting a record which contains a mandatory field, you
might have to delete it as described below if you want to cancel registration – even
if you did not enter record data. Alternatively, close the form without saving by
pushing the Esc key. In a quick create dialog, click the button Cancel at the bottom.
There are options available for saving a record in detail forms manually – the
command File/Save or the shortcut key Ctrl+S. Usually you do not apply them,
because Dynamics AX saves every change of a record automatically when you
leave the record. If you close a form pushing the Esc key, Dynamics AX will ask if
you want to save the changes. The confirmation dialog for saving changes always
shows, if it is selected in your user options (see section 2.3.1).
The Undo-function, available by choosing the command File/Edit/Undo or pushing
the shortcut key Ctrl+Z, refers to the content of individual fields. It is only available
as long as you do not leave the input field to which the changes apply.
After leaving a field – if not selecting another record or manually saving – you can
restore the record from the database by pushing the shortcut key Ctrl+F5 or
through the command File/Command/Restore. Another option not to save changes is
to close the form pushing the Esc key or the shortcut key Ctrl+Q (as long as you did
not leave the particular record in the form).

2.1.5.5 Deleting Data

In order to delete the content of an input field, push the Delete key. If you want to
delete a complete record, alternatively choose the command File/Delete Record, or
push the shortcut key Alt+F9, or click the button Delete in the action pane after
selecting the particular record.
In some cases, Dynamics AX shows an error message preventing you from deleting
a record – e.g. if there are open transactions.

2.1.5.6 Elements in a Detail Form

When registering data in a form, you have to distinguish between following
elements as shown in Figure 2-14 on the example of the bank accounts detail form
(Cash and bank management> Common> Bank accounts):

mabenito@parcisa.com
2.1 User Interface and Common Tasks 29

¾ Field group [1]

¾ Checkbox [2]
¾ Mandatory field [3]
¾ Date field [4]
¾ Lookup field with a fixed list of values [5]
¾ Lookup field with a related main table [6]
Other field types are textboxes and number fields. If a field is locked for data input
in edit mode, it shows in gray.

Figure 2-14: Types of fields in a form (Bank accounts detail form in edit mode)

Field groups link fields to increase display clearness.

Mandatory fields show a wavy red line and require data input before you can
save the record. In case data input is missing, the particular fast tab shows the
required field indicator ( ) at the same time.
If you want to select a checkbox (e.g. Prenote required in Figure 2-14), click it with
the left mouse button or push the Space bar once the cursor is on the checkbox.
Settings for date fields and number fields come from your Windows settings. You
know date fields from the calendar icon ( ), which is available for selecting a
particular date. If entering a date manually, you don’t have to type date separators
like “.” or “/”. For a date in the current month, simply enter the day (e.g. “23”). In
order to insert the current date, enter “t” (or “d” for the session date).

mabenito@parcisa.com
30 2 Getting Started: Navigation and General Options

If you want to enter a number in a numeric field, optionally use basic arithmetical
operations. An amount of “GBP 55.00 plus 10 %” for example is easily entered by
typing “55 * 1.1” instead of “60.50”.

2.1.5.7 Lookup fields

Lookup fields are another important field type. They only allow entering of
predefined values and may be grouped in two different types:
¾ Lookup fields with a related main table, which contains permitted values –
e.g. Bank groups in Figure 2-14.
¾ Lookup fields with a fixed list of values, which is given by Dynamics AX
enumerable types (Enums) – e.g. Bank account status in Figure 2-14.
In Edit mode, lookup fields show the lookup button in the right part of the field.
In View mode, lookup fields show as a link (similar to Internet links).
When editing or inserting a record in a form, click the lookup button or push the
shortcut key Alt + Down Arrow for executing a value lookup in a lookup field.
Another option to start the value lookup is to enter the first characters of the field
content followed by an asterisk (*). If entering “E*” in a lookup field for example,
the lookup form automatically pops up showing all records starting with “E” in
the key field.
In the lookup form, select a record for inserting into the lookup field by clicking it.
If a value lookup contains multiple lines, limit the number of displayed lines by
applying the functions Filter, Find, and Sort as shown in section 2.1.6. But you
should not click the left mouse button for selecting a column (this would select a
record for the lookup field). In order to select a column, do a right-hand click or
push the Tab key (or Shift+Tab).
If required, sort by any column in the lookup form (for example clicking on the
column header Description).
A specific feature lookup forms is the option of accessing a line by typing the first
characters of the required value. As shown in Figure 2-15, you can select the first
statistics group starting with “03” by typing “03” in the statistics group lookup
form. This works in the Statistics group column as well as in the Description column.
If you want to select a record in the Description column, push the Tab key to
activate this column. While typing, the recorded characters appear in the status
line for some time.

2.1.5.8 Table reference

Apart from value lookup, the table reference also provides the possibility to open
the administration form referring to a lookup field. If you want to insert a new
statistics group in the form shown in Figure 2-15 for example, access the statistics
group form directly from the Statistics group field.

mabenito@parcisa.com
2.1 User Interface and Common Tasks 31

In edit mode, the administration form referring to a lookup field is accessible by

choosing the option View details in the pop-up menu (which opens by doing a
right-hand click) or the command File/Command/View details (or Ctrl+Alt+F4).

Figure 2-15: Value lookup for the statistics group field in the customer form

In view mode or in non-editable fields, the table reference displays as a link

providing the option to access the related administration form through a simple
mouse click.
After opening a referenced table form, edit records there the same way as if
accessed from the navigation pane. Therefore, you can use the table reference for
directly inserting and editing related master data. In addition, you can apply the
table reference for viewing details of related records. For example, choosing the
option View details in the column Sales order directly opens the related sales order
from the invoice inquiry (Accounts receivable> Inquiries> Journals> Invoice journal).

2.1.5.9 Segmented Entry Control

A special kind of lookup is available in ledger account fields, for example in the
lines of financial journals. Since the ledger account is one field with several
segments (the main account and applicable financial dimensions), a specific control
for the lookup and data entry applies – the segmented entry control (see section
9.5.2).

mabenito@parcisa.com
32 2 Getting Started: Navigation and General Options

2.1.5.10 Infolog
If there is a problem with the operation you are executing in Dynamics AX, a
warning or error message shows up in a separate window – the Infolog. It is
possible to disable warnings and error messages in the user options.

Figure 2-16: Infolog, displaying an error message in the customer form

You may copy or print the message displayed in the Infolog through a pop-up
menu, which displays when doing a right-hand click on the message text.

2.1.5.11 Transaction Progress

If a transaction – e.g. running a report – is taking a long time, Dynamics AX shows
a notification in the taskbar of your Windows desktop. If you do not want to wait
until the transaction is finished, cancel the operation by pushing the shortcut key
Ctrl+Break. After confirming a dialog box – which is sometimes displayed belatedly
– Dynamics AX cancels the transaction.

2.1.5.12 Basic Operations

As shown, Dynamics AX provides four different elements for executing basic
operations in a list page or detail form:
¾ Command bar and Jewel menu – Showing options for various commands
¾ Action pane
¾ Shortcut keys
¾ Pop-up menus – Display after doing a right-hand click
Whereas the command bar and the action pane contain all available functions, the
shortcut keys and the pop-up menus only provide access to frequently used
operations. An overview of shortcut keys for executing basic operations in
Dynamics AX is included in the appendix of this book.
Note: In some forms, there are no buttons for standard activities like filtering.
Therefore it is a good idea to memorize core shortcut keys (e.g. for filtering).

mabenito@parcisa.com
2.1 User Interface and Common Tasks 33

2.1.5.13 New in Dynamics AX 2012

Based on the design principles for the user interface in Dynamics AX 2012, new
elements like fast tabs, FactBoxes, the edit mode, the grid view or the quick create
dialogs are available in detail forms. In edit mode, the former option Go to the Main
Table Form is now called View details, in view mode it shows as a link.
Another new element is the segmented entry control, which refers to the new
financial dimension framework (see section 9.4.4).

2.1.6 Filter, Find and Sort

In order to work in a table with numerous records efficiently, it is crucial to quickly
find the records in demand. For this purpose, the functions Filter, Find and Sort are
available in list pages and forms. In Microsoft Dynamics AX, the Filter and the Find
features are similar.

2.1.6.1 Filter Pane

The filter pane in list pages provides the easiest way for filtering records. After
entering characters into the filter field as needed, apply the filter by pushing the
Enter key or by clicking the arrow button on the right next to the filter field.

Figure 2-17: Filter pane in a list page, selecting the column for the filter

In the right-hand part of the lookup field, select the column to which the filter
applies. In addition to the fields displayed in the grid, the option More at the
bottom of the lookup grants access to all fields available for the list page. Selecting
an additional field adds the appropriate column to the grid and to the fields
available for filtering.
Figure 2-17 shows an example for entering a filter in the filter pane. In the example,
the filter for customers containing the characters “003” in the customer account
field is not yet executed.

mabenito@parcisa.com
34 2 Getting Started: Navigation and General Options

If you need to enter more complex filter criteria, apply advanced filter options as
described below. Unlike the filter pane, advanced filter options are not only
available in list pages, but also in the grid view of detail forms.

2.1.6.2 Filter Criteria

When entering characters in the filter field of the filter pane, Dynamics AX shows
records containing those characters.
All other filter options – e.g. the filter by grid – allow selecting filter criteria in
order to apply more precise filtering definitions. The table below shows an
overview of the most important filter criteria:
Table 2-1: Important filter criteria
Meaning Sign Example Explanation
Equal = EU Field content to match “EU“
Not equal ! !GB Field content not to match “GB“
Interval .. 1..2 Field content from “1“ to “2“ (incl.)
Greater > >1 Field content more than “1“
Less < <2 Field content less than “2“
Connection , 1,2 Field content to match “1“ OR “2“;
criteria “Not equal” (e.g. ”!1,!2“) connect with AND
Wildcard * *E* Field content containing “E“
? ?B* First character unknown, followed by a “B“, other
characters unknown

2.1.6.3 Filter by Selection

If you want to display a list of records showing a common value in a particular
column, apply the Filter by selection. In order to make use of this filter in a list page,
first click a field which contains the value you want for filtering. After pushing the
shortcut key Alt+F3, or clicking the icon in the filter pane, or selecting the option
Filter by selection in the pop-up menu, the filter applies.

Figure 2-18: Filter by selection (chosen in the pop-up menu)

mabenito@parcisa.com
2.1 User Interface and Common Tasks 35

The example in Figure 2-18 shows how to apply a Filter by selection for the Customer
group “3C” in the customer list page (Accounts receivable> Common> Customers> All
customers).

2.1.6.4 Filter by Grid

Another option for setting a filter in list pages is the Filter By Grid. This filter
displays after pushing the shortcut key Ctrl+G or clicking the icon .

Figure 2-19: Filter by grid

In your user options (see section 2.3.1), optionally choose to display the filter by
grid whenever accessing a list page or value lookup.
After selecting the Filter By Grid, it shows a separate line for filter criteria at the top
of the grid. If you need support for entering a criterion in the filter line, click the
arrow on the right of a specific filter field. If you have already entered filter
criteria before showing the filter line (e.g. in a filter by selection), the filter by grid
displays them.

2.1.6.5 Advanced Filter

If you have to enter complex filter criteria, apply the advanced filter in list pages by
pushing the shortcut key Ctrl+F3 or by clicking the icon .
The advanced filter opens a separate form, which displays a different view of the
criteria entered in the filter by selection and the filter by grid. In addition, the
advanced filter provides the option to set a filter on fields, which do not show on
the list page.
If you need to enter an additional criterion in the advanced filter, insert a record in
the filter form by pushing the shortcut Ctrl+N or clicking the button Add. In the
new filter line, enter the criterion in the columns Table, Derived table, Field and
Criteria. The fields Table and Derived table of a new line by default contain the basic
table of the filtered list page. In case of simple criteria, you don’t have to change it.

mabenito@parcisa.com
36 2 Getting Started: Navigation and General Options

A lookup ( ) in the column Field helps to select the field name of the table field.
Next to the column Field, the column Criteria is available for entering the filter
criterion. If the field for the filter is a lookup field, optionally open a value lookup.

Figure 2-20: Entering filter criteria in the advanced filter form

Once you have finished entering filter criteria, close the advanced filter form by
clicking the button OK. The filter then applies and the list page only shows
matching records.

2.1.6.6 Related Tables

The Structure pane in the upper part of the advanced filter form enables entering of
filter criteria on tables, which are linked to the basic table of the list page or detail
form. In order to apply this option, select the related table choosing the option 1:n
or n:1 in the pop-up menu (doing a right-hand click) on the appropriate basic table
in the Structure pane.
Since it is possible to select different tables in the filter lines of the advanced filter
form, you have to make sure to select the right table in the column Table then.
Displaying only customers in the customer list page, which have got transactions
in the current year, is an example for a filter on related tables. The appropriate
selection for this filter would be a 1:n-relation from the customer table to the
customer transactions, where the advanced filter contains a filter line on the field
Date of the table Customer transactions.
When applying a filter on related tables, you have to keep in mind that the
structure of the filter has to comply with the database and program structure –
especially for filters in reports – in order to show correct results. To make sure, you
should apply a quick check of the result when choosing a new filter combination of
related tables.

2.1.6.7 Clearing a Filter

If you do not want to apply a selected filter any longer, clear it by pushing the
shortcut key Ctrl+Shift+F3, or by choosing the command File/Edit/Filter/Remove

mabenito@parcisa.com
2.1 User Interface and Common Tasks 37

Filter/Sort in the jewel menu, or by clicking the icon . After clearing the filter, the
list page shows all records again.

2.1.6.8 Active Filter and Filter Button

The icon for clearing a filter indicates whether a filter is active in a particular list
page. If the icon is active and you can click it, a filter is in use. In order to display
this filter, open the advanced filter form (Ctrl+F3).
A funnel in the filter button (e.g. ) on the left side of the
filter pane in list pages additionally indicates an active filter. The filter button also
provides an alternative access to all filtering options mentioned above.

2.1.6.9 Filtering in Detail Forms (Grid View)

In setup forms and in the grid view of detail forms, the filter pane is not available
and accessing filter features is only possible through shortcuts keys or a right-hand
click. As an alternative, choose the jewel menu (command File/Edit/Filter).

2.1.6.10 Saving a Filter

If you frequently need particular filter criteria or if you want to apply them in your
favorites, you can save them. The button Modify/Save as in the advanced filter form
allows saving filter criteria. A dialog box then requires entering a filter name.
Saved filters are stored in your Usage data, which means that nobody else can use
your saved filters. In order to select a saved filter, choose it in the lookup of the
field Select query in the advanced filter form as shown in Figure 2-21.
In addition to the filters saved manually, the filter you have used the last time is
available in every page by selecting the option Previously used query in the Select
query lookup.

Figure 2-21: Selecting a saved filter in the advanced filter form

As an alternative to the advanced filter form, the filter button in the filter pane of
list pages also allows saving and selecting filters.

2.1.6.11 Saving a Cue

Save a filter as a cue, if you need the cue in your role center. Similar to the way of
regularly saving a filter, click the button Modify/Save as Cue in the advanced filter
form (or the filter button in the filter pane of list pages) to save a filter as a cue.
After saving a filter as a cue, it is available for cues in the Web Parts of role centers
(see section 2.1.4).

mabenito@parcisa.com
38 2 Getting Started: Navigation and General Options

2.1.6.12 Sorting
Sorting in list pages or in the grid view of detail forms is available by simply
clicking the appropriate column header. A second click on the column header
switches between ascending and descending sorting. Alternatively, sort in the
advanced filter form or choose the option Sort ascending or Sort descending in the
pop-up menu (doing a right-hand click on the appropriate column in the grid).
If choosing the advanced filter form, access the tab Sorting in order to enter
applicable sorting criteria. Like entering a filter criterion, register sorting criteria
with table and field name in one or more lines.

2.1.6.13 Search Functionality

Apart from filtering, Dynamics AX offers two additional options to search for
records: The Find function and the Enterprise search.
Whereas the find function is similar to a filter, the Enterprise search resembles the
functionality of search engines.

2.1.6.14 Find Function

You may access the Find dialog by pushing the shortcut key Ctrl+F or by choosing
the command File/Edit/Find. When applying the find function, you should be aware
that finding always refers to the selected column or field. Therefore you have to
click the appropriate column or field before opening the find dialog. The name of
the selected field displays in the header of the find dialog box as shown in Figure
2-22. The rules for entering find criteria are the same as for filter criteria.
The function Filter by field is similar to the find function, except that it opens with
the shortcut key Ctrl+K (or the option Filter by field in the pop-up menu) and by
default already shows the content of the selected field in the dialog box. Since the
Filter by field is a filter function, it enables coupling of criteria – e.g. selecting an
additional filter by applying the Filter by field on a second field.

Figure 2-22: The find dialog box (for the column Customer name as an example)

2.1.6.15 Distinguish Value Lookup

When choosing the Filter or Find function, you should not confuse it with the value
lookup shown in section 2.1.5. Whereas the value lookup is available for entering a
value into a field, the Filter and Find feature select records from the table displayed
in the grid.

mabenito@parcisa.com
2.1 User Interface and Common Tasks 39

2.1.6.16 Enterprise Search

Unlike find and filter functions, which are applied to the current list page or form,
the Enterprise search performs a full search through all Dynamics AX data,
documents and help topics according to the system configuration.
Before you can start using the Enterprise search, the administrator has to specify
which tables and fields should be included in the search (System administration>
Setup> Search> Search configuration). The setup for the Enterprise search affects
search options for all users – both in the Dynamics AX Windows client and in the
Enterprise portal. Therefore, Dynamics AX administration has to be responsible for
the search settings.
Once the setup is finished and the search is started, the Enterprise search is
available through the Search field in the Dynamics AX address bar. Like in the filter
pane of list pages, there is no need to enter wild cards in the Search field.

2.1.6.17 New in Dynamics AX 2012

In Dynamics AX 2012, the Enterprise search with enhanced functionality replaces
the Global Search in Dynamics AX 2009.

2.1.7 Help System

If you need help for functional questions, access the Microsoft Dynamics AX Help
system available throughout the whole application. In the help system, there are
three areas of help content:
¾ Application user help
¾ System administrator help
¾ Developer help
The help system is based on a help server, which ensures a common and up-to-
date content for all users. The content on the help server is focused on application
users. For system administrators and developers, the help viewer in Dynamics AX
shows links to the appropriate web-based help content.

2.1.7.1 Getting Help

In order to access help, press the F1 key or click the button /Help in every list
page or form. The help viewer displays help information referring to the particular
form, and includes the help text, the option to print, a table of contents, and an
enhanced search functionality (see Figure 2-23).
Since the help system is form-based, choose the local search in the help viewer
(Ctrl+F or Options/Find on this page) when looking for the help text on a particular
field.

mabenito@parcisa.com
40 2 Getting Started: Navigation and General Options

Figure 2-23: Dynamics AX help referring to the customer form

In the text, there are three different types of links:

¾ Links referring to other help content (pressing the Shift key while clicking the
link opens it in a new window)
¾ Links referring to menu items in the Dynamics AX client, showing the menu
path (clicking the link opens the related Dynamics AX form)
¾ Links to web resources
The search field at the top of the help viewer provides options similar to the
options in search engines on the web, showing abstracts in the search results to
easily recognize relevant text.

2.1.7.2 Customizing Help Content

The help server also provides an option to publish individual help content for your
organization by simply writing help content in Microsoft Word.
The easiest way to start publishing content is to search for “help template” in the
help system. The help viewer then shows a link to a Word template containing
Macros necessary for publishing, and a description on how to proceed.
Using the template, you want to start Microsoft Word, write the content as needed
and enter required document properties on the tab Microsoft Dynamics Help in the
Word ribbon. These properties include:

mabenito@parcisa.com
2.1 User Interface and Common Tasks 41

¾ Topic ID – Enter “Forms.FormName” to link help content to a particular form,

e.g. “Forms.CustTable” for the customer form. You may view the form name on
the tab Information of the Personalization form (see section 2.3.1).
¾ Publisher ID – Enter your organization name to distinguish your help content
from the content of Microsoft, ISVs and partners.
In order to prepare publishing, save the document as a Webpage (file format mht).
In parallel, the template saves an Html file. For publishing the content, copy both
files to a subfolder of the folder C:/Inetpub/wwwroot/<HelpServerName>/Content on
the help server.

2.1.7.3 New in Dynamics AX 2012

The architecture of the help system has completely changed in Dynamics AX 2012,
providing a help server with the option to easily update and customize help
content.

2.1.8 Case Study Exercises

Exercise 2.1 – Logon
Your first task is to log on to a Dynamics AX training system, where you should
access a company different to your default company. Then open a second
workspace, choose the Accounts payable menu in the navigation pane and access the
list page All vendors. Finally, log out and close the Dynamics AX session.
Exercise 2.2 – Favorites
Start a client session in Dynamics AX, select the training company and open the
favorites pane. Add the list page Released products, which you may find in the menu
Product information management, to your favorites.
Afterwards, create a new favorites folder “Invoicing”. This folder should contain
the list pages All sales orders and All free text invoices in the menu Accounts receivable
as well as the form Payment journal in the menu Accounts receivable> Journals.
Exercise 2.3 – Detail Forms
As an example of detail forms in Dynamics AX, access the vendor detail form
through the vendor list page (Accounts payable> Common> Vendors> All vendors).
When accessing the form, you want to view the vendor in the third line of the list
page. Show an example of a field group and a lookup with and without main table.
Then show an example of a checkbox field. What can you tell about fast tabs and
FactBoxes? How do you proceed if you want to edit the vendor? Is there an option
to edit several vendors in the form?
Exercise 2.4 – Inserting Records
Create a new vendor without applying record templates. For the beginning, you
only have to register the vendor with the name “##-Exercise 2.4 Inc.” (## = your
user ID) and a vendor group.

mabenito@parcisa.com
42 2 Getting Started: Navigation and General Options

Notes: If the number sequence for vendor accounts is set to “Manual”, you have to
enter the vendor number manually. If the Accounts payable parameters require
entering a tax-exempt number (VAT registration number), access the fast tab
Invoice and delivery and enter a Tax exempt number (VAT number), which you create
through the View details feature before.
Exercise 2.5 – Lookup Fields
You want to update the vendor of exercise 2.4. Searching a Buyer group in the
lookup of the appropriate field on the tab Miscellaneous details of the vendor form,
you notice that the required group is not available. Create a new buyer group ##-P
(## = your user ID) using the View details option. Then select the new group for
your vendor.
Exercise 2.6 – Filtering
In order to get some exercise with filtering, enter a few filters in the vendor list
page as given below. For the first filter you should apply the filter field in the filter
pane, for the second filter choose a Filter by selection. For the other filter exercises,
apply the Filter By Grid and the Advanced Filter/Sort.
For filtering, choose following criteria one after the other and clear the filter after
each task:
¾ All vendors containing “inc” in the name
¾ All vendors assigned to the vendor group you selected in exercise 2.4
¾ All vendors with a name starting with “T”
¾ Vendors with a number from 30003 to 30005 or higher than 30008
¾ Vendors with a number ending with “5” and an “i” in the name
¾ Vendors with an “e” on the second character of the name
¾ Vendors with a name not starting with “C”
Once you have finished the filtering tasks above, open the advanced filter window
and select vendors, who do not have Terms of payment “Net 30 days”.
Note: If working in the Microsoft standard demo environment (“Contoso”), apply
similar filter criteria for filters not showing a result with the given criteria.

2.2 Printing and Reporting

Depending on your requirements, there are several options available for viewing
and analyzing data. Apart from Business Intelligence tools, printing structured
reports is one of the most common ways for presenting data.

2.2.1 Printing Reports

Dynamics AX applies Microsoft SQL Server Reporting Services (SSRS) for printing
reports. You may start printing of reports from several places in Microsoft
Dynamics AX:

mabenito@parcisa.com
2.2 Printing and Reporting 43

¾ Menu path – Reports in the navigation pane, address bar and area pages
¾ Buttons – In list pages and detail forms
¾ Post and print – Checkbox Print in posting forms
¾ Auto-reports – In list pages and forms

2.2.1.1 Standard Reports

In each module, there are standard reports in the folder Reports – in most cases
containing subfolders. In addition, some list pages and detail forms also provide
the option to run a standard report by clicking an appropriate button – e.g. a
customer account statement by clicking the button Collect/Statements in the
customer list page (Accounts receivable> Common> Customers> All customers).

2.2.1.2 Post and Print

When posting an external document like an invoice or a packing slip, you also
want to print the document in most cases. Posting forms therefore contain a
checkbox for printing the related document – e.g. the checkbox Print invoice when
posting an invoice. The buttons Select (filter selection) and Printer setup (printer
selection) in posting forms enable specifying filter criteria and print destinations as
described for standard reports below.
If the printout of a posted document is required at a later date (e.g. if you missed to
select the checkbox Print), print it in the inquiry of the particular posted document.
For (re-)printing a sales invoice for example, access the invoice journal (e.g. by
clicking the button Journals/Invoice on the action pane tab Invoice of the sales order
form) and click the button Preview/Print there.

2.2.1.3 Auto-report
Auto-reports are available in every list page and detail form by pushing the
shortcut key Ctrl+P or choosing the command File/Print/Print. They show a report
containing main fields of the particular table.

2.2.1.4 Report Form

In order to explain how printing works in Dynamics AX, the description below
shows the example of printing a standard report.
After selecting the menu item for a standard report, Dynamics AX shows the
report form where you may enter filter criteria and print destinations. Figure 2-24
for example shows the report form of the customer list (Accounts receivable>
Reports> Customer> Customers) after a filter on the group “10” has been entered.

mabenito@parcisa.com
44 2 Getting Started: Navigation and General Options

Figure 2-24: Report form for the customer list

2.2.1.5 Print Destination (Printer Selection)

The button Destinations in the report form opens the print destination settings,
where you can select the destination for the printout choosing between the
different options show in Table 2-2.
Table 2-2: Print destinations for reports
Destination Explanation
Print archive Saves the report selection to the print archive
Screen Shows a report preview on the screen
Printer Prints the report to the selected printer
File Saves the report content to a CSV, Excel, HTML, XML or PDF file or
to an image (JPEG or other format)
E-mail Saves the report content to a file and sends it to an e-mail recipient
(the recipient has to be entered manually)

2.2.1.6 Filter in Reports

The button Select in the report form opens an advanced filter form, where you may
enter filter criteria. The filter form for reports works in the same way as the
advanced filter in list pages and forms (see section 2.1.6). You may enter filter
criteria on the tab Range as well as sorting criteria on the tab Sorting.
After closing the filter form, the selected filter shows in the report form.

2.2.1.7 Report Form Defaults

Once you have finished entering the filter criteria and the print destination in the
report form, run the report by clicking the button OK in the report form. The
settings applied for running the report are automatically stored in the user options.
They show by default when starting the report the next time again. You can change
the filter criteria and the print destination as required then.

mabenito@parcisa.com
2.2 Printing and Reporting 45

2.2.1.8 Print Archive

The print archive allows saving a report within Dynamics AX. In the print
destination settings, choose the archive either by directly selecting the print archive
as print destination or – if choosing a different print destination – by selecting the
checkbox Save in print archive.
The report selection is stored in the print archive in this case, making it possible to
reprint the report later. For accessing your print archive, choose the command
File/Tools/Print archive. In order to access the print archives of all users, open the
form Organization administration> Inquiries> Print archive.
Printing to the archive during the regular operation time and applying a batch job
to finally print the archive on a printer at night time might be an option to deal
with high-volume printing.

2.2.1.9 Print Preview

Figure 2-25: Print preview options

If selecting the screen as print destination, Dynamics AX shows a print preview on

the screen. The preview includes following options (see Figure 2-25):

mabenito@parcisa.com
46 2 Getting Started: Navigation and General Options

¾ Print [1] the preview (command File/Print/Print or shortcut Ctrl+P)

¾ Apply or change filter [2] selections (button Select in the section Options)
¾ Scroll [3] between pages entering the page number or applying one of the
available shortcut keys and buttons (Ctrl+Home/ , Page Up/ , Page Down/ and
Ctrl+End/ )
¾ Refresh [4] the preview to retrieve current data (button )
¾ Export [5] the preview to different file formats like XML, CSV, PDF, HTML,
TIFF, Excel or Word (button )
¾ Zoom [6] in and out
¾ Find [7] text in the report
¾ Link [8] to access the detail form of fields concerned

2.2.1.10 Batch Processing

If you do not immediately need the results of a particular report, switch to the tab
Batch in the report form for submitting the report to a batch process. After selecting
the checkbox Batch processing and – if required – a Batch group, specify the starting
time and repetitions for the batch job by clicking the button Recurrence.

Figure 2-26: Batch processing selection in a report form

As a prerequisite for applying batch processing, a batch server has to be set up and
started. For setting up the batch server, access the menu item System administration>
Setup> System> Server configuration.
Batch processing is performed in the background on the batch server except for
client and private tasks, which require running the periodic activity Organization
administration> Periodic> Batch processing on a client.
If you want to check and to edit the status of batch jobs, access the form System
administration> Inquiries> Batch jobs> Batch jobs.

2.2.1.11 Printing and Modifying Auto-reports

Auto-reports are another kind of report. You may start them in every list page or
detail form choosing the command File/Print/Print or pushing the shortcut key

mabenito@parcisa.com
2.2 Printing and Reporting 47

Ctrl+P. Auto-reports show a list containing the main data (field group Auto-report)
of the particular table shown in the form. Apart from the additional button Modify
enabling to create personal reports, they work similar to regular reports.
Clicking the button Modify/New in the auto-report form starts a report wizard for
creating a personal report. This report is stored in your usage data. Once you have
finished the report wizard, the new auto-report is available in the lookup field
Select report of the auto-report form.
Compared to reports in the development environment, the wizard for auto-reports
has only got limited functionality.

2.2.1.12 New in Dynamics AX 2012

The technical basis of reports has completely changed in Dynamics AX 2012, now
applying SSRS reports instead of the MorphX reports in earlier releases. Among
other advantages, SSRS reports provide the options to apply filters in the preview,
refresh data, search for text within the preview and generate multiple export
formats including Word and Excel.

2.2.2 Copy/Paste and Microsoft Office Add-Ins

Whereas copying data from Dynamics AX and pasting them to another program
works with any Windows application, the Office add-ins are designed to work
specifically with Microsoft Office.

2.2.2.1 Copy and Paste

A comfortable way for retrieving data from Dynamics AX is the data export
through the clipboard. For this purpose, select lines by marking the appropriate
grid check boxes leftmost in the grid of list pages (or in the grid view of detail
forms). Alternatively, select lines by clicking them directly in the grid while
holding the Ctrl key. The Shift key selects several consecutive lines, the shortcut
key Ctrl+A (or the grid check box in the header line) selects all lines of the grid.
For copying the selected records to the clipboard, push the shortcut key Ctrl+C, or
choose the command File/Edit/Copy, or the option Copy in the pop-up menu (doing
a right-hand click). Finally, insert the records into another Windows application
(like Microsoft Excel) by pushing the shortcut key Ctrl+V.
Copying in a Dynamics AX list page only includes columns displayed in the list
page. In the original release of Dynamics AX 2012 (not in AX 2012 R2), copying in
the grid view of detail forms does not only copy fields of the grid but also fields
shown on the other tabs of the form.

2.2.2.2 Microsoft Office Add-Ins

Microsoft Office add-ins in Dynamics AX enable data interaction with Microsoft
Office. This data interaction includes:

mabenito@parcisa.com
48 2 Getting Started: Navigation and General Options

¾ Exporting data from Dynamics AX to Microsoft Excel

¾ Refreshing and editing AX-data in Microsoft Office
¾ Importing data from Microsoft Excel into Dynamics AX
In the general section of your user options (File/Tools/Options), there are two
settings for the Export to Microsoft Excel, which are relevant for the Office add-ins:
¾ Workbook support refresh – Apply either static or refreshable exports (choose
Never for static exports when sharing reports with external people)
¾ Remote desktop session exports to – Applicable for Remote Desktop Clients
(Terminal Services), making it possible to export data directly to Microsoft
Office on the local PC.
Changes of Office add-in settings in the user options apply after restarting the
Dynamics AX client session.

2.2.2.3 Export to Excel and Refresh

On list pages and in the grid view of detail forms, the command File/Export to
Microsoft Excel (and the appropriate button on the first tab of the action pane) is
available to export the list to Microsoft Excel.

Figure 2-27: Using the Office add-ins (Excel export in the customer list page)

Depending on your user options, the Dynamics AX export to Excel generates a

static or refreshable Excel sheet, where you may find the tab Dynamics AX in the
ribbon (see Figure 2-27). When saving a refreshable sheet, you can open it later and

mabenito@parcisa.com
2.3 Advanced Options 49

retrieve current data from Dynamics AX including new lines for new records by
simply clicking the button Refresh in the Excel sheet.
The button Field Chooser in Excel enables adding Dynamics AX data columns. In
addition, include regular Excel columns as required – e.g. using Excel formulas for
calculation.
The button Filter in Excel enables applying a query filter for retrieving
Dynamics AX data. If a filter applies in Dynamics AX when starting the Excel
export, this filter also applies in Excel by default (e.g. customer group “80” in
Figure 2-27).

2.2.2.4 Edit Data in Excel and Dynamics AX Import Options

When exporting to Excel, Dynamics AX generates a read-only query. For editing
Dynamics AX data directly in Excel, a Web service for the specific use of the
Dynamics AX Office add-ins has to be registered in the Organization management
module (Organization management> Setup> Document management> Document data
sources).
In order to edit data in Excel, click the button Add Data/Add Data in Excel. A dialog
then displays, showing installed queries and services which are available for you
according to your permissions. After selecting a data source (e.g. Budget register
entries), Microsoft Excel shows the available fields in the task pane. Indicators show
key and required fields, making sure they are entered when editing Dynamics AX
data. Clicking the button Publish Data transfers the data from Excel to
Dynamics AX.

2.2.2.5 New in Dynamics AX 2012

In addition to the static Excel export available already in Dynamics AX 2009, Excel
integration now includes options for refreshing, editing and importing (presuming
you have got access to the appropriate Web services).

2.2.3 Case Study Exercise

Exercise 2.7 – Printing
Print a vendor list (Accounts payable> Reports> Vendors> Vendors), selecting a print
preview for the print destination. Then print the vendor list again, filtering on any
vendor group of your choice and choosing a PDF-file as print destination.

2.3 Advanced Options

Before you can access the Microsoft Dynamics AX workspace, system administra-
tion has to set up a Dynamics AX user with appropriate permissions for you. In
some areas of the application, a worker record (see section 10.2.2) assigned to your
user is required in addition.

mabenito@parcisa.com
50 2 Getting Started: Navigation and General Options

After accessing the Dynamics AX workspace, individual settings enable adjusting

the user interface to your needs.

2.3.1 User Options and Personalization

Options for personally adjusting the Dynamics AX user interface are available in
the user options. In addition, personalization provides enhanced features for
individually configuring every single form.

2.3.1.1 User Options

The user options are a form controlling core personal settings in Dynamics AX.
You may access your user options choosing the command File/Tools/Options in the
jewel menu, if you have got appropriate permissions. In addition, the user
management form (System administration> Common> Users> Users, button Options)
allows administrators to access your user options as well.

Figure 2-28: Managing preferences in the user options form

Main settings in the user option form as shown in Figure 2-28 include following
preferences for your workspace:
¾ Language – Language of the user interface
¾ Alternate help language – Language of the help system
¾ Default country/region – Default for the country/region when entering a postal
address
¾ Start company accounts – Default-company when logging on
¾ Autocomplete – Characters entered in a field apply as default for the next
record when starting to enter the same characters in the same field
¾ Infolog / Detail level – Show warnings and error messages
¾ Automatic shutdown – Minutes of inactivity, after which your session is closed
¾ Filter by grid on by default – Show filter line (see section 2.1.6)

mabenito@parcisa.com
2.3 Advanced Options 51

¾ Default global view/edit mode – Start all detail forms in view or edit mode
¾ Document handling – See section 10.5.1
¾ Notifications tab – Alerts and workflow-notifications (see section 10.4.1)
¾ Status bar tab – Fields shown in the status bar
¾ Confirmation tab – Show a confirmation dialog in forms before deleting or
saving modified records

2.3.1.2 Usage Data

The button Usage data in the action pane strip of user options form opens a form,
which shows detailed settings of a user. These settings include filter settings, auto-
reports, form settings and record templates (user templates), which have been
stored automatically or manually.
In the usage data, switch from the tab General to the other tabs for showing a list of
usage data lines in the particular area. Clicking the button Data after selecting a
usage data record shows the record details. It is not possible to modify usage data
records, but you can delete usage data lines by pushing the shortcut key Alt+F9 or
choosing the command File/Delete Record. Clicking the button Reset on the tab
General deletes all your usage data.
If your administrator implements modifications or updates in your Dynamics AX
application, it may happen that your usage data do not fit to the form settings
required by the new application status. In this case, you have to delete the affected
usage data records (or reset all usage data) in order to display the new form
content correctly.

2.3.1.3 Form Configuration

Apart from modifications in the development environment, which apply to all
users, changes of the user interface in list pages and forms are also available at
personal level. For this purpose, each user with appropriate permissions in
Dynamics AX may adapt forms according to his personal requirements.
The first option to adjust a form individually is to configure it. The button View
in the command bar provides access to the form configuration. In the form
configuration, optionally choose to hide or show FactBoxes and preview panes
separately for every form.
For hiding or showing columns on list pages (and fields or fast tabs on detail
forms), select the option Hide or Show in the pop-up menu accessed by a right-hand
click on the appropriate column.
In list pages, change the width and position of columns with your mouse (drag and
drop in the header column). In addition, add columns by choosing the option More
in the lookup of the filter field if required (see section 2.1.6). In order to remove an
additional column, access the personalization form.

mabenito@parcisa.com
52 2 Getting Started: Navigation and General Options

2.3.1.4 Personalization
If you need enhanced options for individual form settings, access the
Personalization form available in every list page or detail form by choosing the
command File/Command/Personalize or the option Personalize in the pop-up menu.,
Figure 2-29 for example shows a personalization form, which has been opened
from the vendor list page (Accounts payable> Common> Vendors> All vendors) for
personalizing the vendor page.

Figure 2-29: Form settings in the personalization form for the vendor page

On the tab Layout of the personalization form, hide or move fast tabs, field groups
and fields as well as button groups and buttons in the action pane as required. You
can move elements within and between tabs by pushing the buttons Up, Down, Left
and Right or using your mouse (drag and drop). If required, click the button Add
fields for adding additional table fields to the form.
After selecting an element in the Layout pane of the personalization form, settings
in the Properties pane show if it is visible and editable.
Once closing the personalization form, the modified settings apply. Clicking the
button Save in the personalization form enables storing different versions for
displaying a particular form. When saving a version, enter a name for identifying
the version later. Selecting a saved version requires clicking the button Load in the
personalization form. If you want to apply the standard form again, click the
button Reset.
All individual form settings are stored in your usage data. If applicable, it is
possible to restrict access to form settings by appropriate user permissions.

2.3.2 Record Information and Templates

The record information dialog in Dynamics AX provides access to data and general
features not directly shown on a list page or detail form.

mabenito@parcisa.com
2.3 Advanced Options 53

2.3.2.1 Options in the Record Information Dialog

After selecting the appropriate record line, open the record information dialog in a
list page or detail form by choosing the command File/Command/ Record info or the
option Record info in the pop-up menu.

Figure 2-30: The record information dialog in the vendor detail form

The Record information dialog provides following options for the selected record:
¾ Rename key field – Agree with system administration before using this option
¾ Fill utility – Modify multiple records (not available in AX 2012 R2)
¾ Show all fields and Database log – Information on the selected record
¾ Script – Create an insert script
¾ Company accounts template and User template – Create a record template
(only available in detail forms)
Notes: Depending on your permissions and the Dynamics AX configuration, some
options might not be available.

2.3.2.2 Renaming
You may rename the key field of a record by clicking the button Rename in the
record information dialog. Renaming then opens a second dialog box for entering
the new field content.
Processing a request for renaming may be a time-consuming activity, because
Dynamics AX has to update all references. If you want to modify a vendor number
for example, the vendor number also changes in vendor transactions, purchase
orders and all other tables where it is used. You have to take into account, that
references are only updated within Dynamics AX. Other applications and external

mabenito@parcisa.com
54 2 Getting Started: Navigation and General Options

partners like customers or vendors have to receive appropriate information

separately.
Therefore, renaming usually is an exceptional activity with restricted access,
secured by appropriate permission settings.

2.3.2.3 Fill Utility

The fill utility in the original release of Dynamics AX 2012 (not in R2) provides the
option to change the content of a field in multiple records – similar to the Find and
Replace feature in Microsoft Office.
If you want to change the payment terms for a number of vendors for example,
open the vendor detail form (through Accounts payable> Common> Vendors> All
vendors) and choose the fill utility for the Terms of payment after selecting the option
Record info in the pop-up menu for this field. The fill utility then displays a form
where you may select a filter identifying the vendors to be modified. Once you
have finished entering the filter, click the button OK in the filter form.
Dynamics AX then displays a separate form with the result of your filter. After
confirming the selection with OK, enter the new payment terms in the next dialog.
Unlike Find and Replace in Microsoft Office, the fill utility in Dynamics AX does not
only provide the option to change the content of a field from one value to another.
The selection of records for the update is independent from the previous content in
the field.
The fill utility is available for most fields in master data tables and in non-posted
financial journals. As a prerequisite for applying the fill utility, it has to be
activated in the license configuration (System administration> Setup> Licensing>
License configuration, folder Administration). In addition, you need appropriate user
permissions to run the fill utility.

2.3.2.4 Show All Fields and Database Log

The button Show all fields in the record information dialog displays the content of
all fields of the selected record. You may choose this option if you want to know
the content of fields not shown in a particular list page or detail form. The Show all
fields form also displays field groups – e.g. the field group Auto-report containing
the fields of the default auto-report.
The button Database log in the record information dialog shows a log file of all
changes to the selected record. As a prerequisite, logging for the particular table
has to be enabled in the form System administration> Setup> Database> Database log
setup or in the development environment.

2.3.2.5 Record Templates

Record templates help creating new records by copying the content of fields from a
template created before. As an example, it might be useful for a European
company to provide templates in the vendor table for domestic vendors, for

mabenito@parcisa.com
2.3 Advanced Options 55

vendors within the EU, and for foreign vendors, to make sure that correct posting
groups apply when inserting a new vendor.
When working with record templates, you have to distinguish between two types
of templates:
¾ User templates
¾ Company accounts templates

2.3.2.6 User Templates

A user template is only available to the user who has created it. You may create a
user template by clicking the button User template in the record information dialog.
A second dialog then opens where you can enter the name and description of the
template. The template is a copy of the record you have selected when opening the
record information dialog.
User templates are stored in your usage data, where it is not possible to modify
them later. If a user template is not required any more, you can delete it in the
usage data (command File/Tools/Options> button Usage data> tab Record templates).
Alternatively, delete a user template pushing the shortcut key Alt+F9 in the
template selection dialog as shown in Figure 2-31.

2.3.2.7 Company Accounts Templates

Unlike user templates, company accounts templates are available to all users. You
may create a company accounts template by clicking the button Company accounts
template in the record information dialog.
If you want to edit a company accounts template, open the form Home> Setup>
Record templates. On the tab Overview of the record templates form, select the table
to which the template belongs. Then switch to the tab Templates and select the
particular template. Finally click the button Edit to modify it.

2.3.2.8 Using Templates

Once templates are available for a table, they display in a template selection dialog
when inserting a new record in the particular table. Figure 2-31 for example shows
the dialog displayed when creating a new vendor in the vendor detail form
(Accounts payable> Common> Vendors> All vendors) if at least one template is
available.
In the dialog, apply a template by clicking the button OK after selecting it or by
double-clicking the appropriate line. Company account templates show the icon ,
and user templates the icon . In the far right column, optionally select one line
for specifying the default template.

mabenito@parcisa.com
56 2 Getting Started: Navigation and General Options

Figure 2-31: The dialog for template selection

If selecting the checkbox Do not ask again at the bottom of the template selection
dialog, Dynamics AX applies the default template without showing the dialog
when inserting further records. If you want to show the template dialog when
creating new records again, click the button Show template selection which then
displays in the record information dialog.

2.3.2.9 New in Dynamics AX 2012 R2

The fill utility is only available in the first releases of Dynamics AX 2012, not in
Dynamics AX 2012 R2.

2.3.3 Case Study Exercises

Exercise 2.8 – User Options and Worker Record
You want to access your user options in order to make sure your name and e-mail
address is correct. In addition, select the training company to be the Start company
accounts to avoid opening a different company when you log on the next time.
Your settings for the status bar should include showing the user ID.
Since you need a worker assignment in some of the later exercises, create a new
worker W-## (## = your user ID) with your name in the worker form. Your
employment in the training company starts at the current date. Then assign the
new employee to your Dynamics AX user ID in the user relations.
Note: If an automatic number sequence for personnel numbers applies, you don’t
have to enter a personnel number.
Exercise 2.9 – Record Templates
Create a new user template based on the vendor which you have entered in
exercise 2.4. To get to know how to use templates, insert a new vendor applying
this template afterwards.

mabenito@parcisa.com
2.4 Global Address Book 57

2.4 Global Address Book

Dynamics AX has got a common table for all business relationships of your
enterprise – companies and persons, internal and external. This common table is
the global address book, applying the label “parties” for the business relationships.
Parties in the global address book are shared across companies and include
customers, sales leads, vendors, organization units, employees and other contacts.

2.4.1 Parties and Addresses

When creating a new customer, vendor or any other kind of party, Dynamics AX
inserts a record in the global address book. A party may show one or more (postal)
addresses and contact information data. Therefore, a party is not the same as an
address – a party is an organization or person characterized by its name.
Depending on permission settings, you can access all parties in the global address
book (Home> Common> Global address book). The party detail form accessed from the
global address book shows record details like name, addresses and contact data.

2.4.1.1 Directly Creating Parties

You may insert a new party directly in the global address book by clicking the
button New/Party in the action pane. In the new party record, the Party ID usually
derives from the appropriate number sequence. The lookup field Record type then
provides the alternative options “Organization” or “Person”, controlling which
fields display (e.g. the field First name only shows for a person).

Figure 2-32: Managing a party with multiple addresses in the party detail form

mabenito@parcisa.com
58 2 Getting Started: Navigation and General Options

After entering the party name in the field Name (for an organization) or in the
fields First name and Last name (for a person), register additional data including the
postal address on the tab Addresses and contact data like e-mail address and phone
number on the tab Contact information. Section 3.2.1 shows managing postal
addresses and contact information in more detail on the example of vendor
management.

2.4.1.2 Indirectly Creating Parties

Apart from directly creating a party in the global address book, alternatively create
a party indirectly by entering a customer, a vendor, or any other kind of party in
any module.
In forms indirectly creating parties, the field Name is a lookup providing the option
to search an existing party. If selecting an existing party in this lookup, the party
receives a new role. If not selecting an existing party, but typing a new name,
Dynamics AX automatically creates a new party with this name.
If inserting a new customer in the customer form (Accounts receivable> Common>
Customers> All customers) for example, a new party is created if a name is entered in
the lookup field Name of the Create new form. If selecting an existing party in the
lookup field Name, the new role “Customer” is assigned to the party.
Since a party may already exist in the global address book – e.g. a customer being a
vendor in your own or an affiliated company within a common Dynamics AX
database and partition – you should check existing parties before creating a party
record in order to avoid duplicate parties. As a last resort when entering a
duplicate party name, a confirmation dialog displays if duplicate check is selected
in the global address book parameters (see below).

2.4.1.3 Internal Organizations

Apart from external parties (organizations and persons), internal organizations like
operating units and legal entities (see section 10.1.3) are also parties in the global
address book. You may know internal organizations from the Record type (e.g.
“Legal entities”). Record types of internal organizations are not available when
manually inserting a party directly in the global address book.

2.4.2 Address books

An address book is a collection of party records. You may set up one or more
address books in the form Organization administration> Setup> Global address book>
Address books, e.g. one for sales and one for purchasing.
In order to link a party to one or more address book, put a checkmark in front of
the address books which display when accessing the lookup of the field Address
books on the tab General of the party detail form (see Figure 2-32).

mabenito@parcisa.com
2.4 Global Address Book 59

Figure 2-33: Conceptual structure of the global address book

You can use address books for filtering addresses – e.g. in the filter field Address
books in the global address book list page. But different address books may also
apply as a basis for setting access permissions (see section 10.2.4).
The global address book then is the collection of all parties in all companies of a
Dynamics AX system (see Figure 2-33).

2.4.2.1 Roles
A role (e.g. “Vendor” or “Customer”) describes the kind of relationship between a
party and your enterprise. A party may refer to one or more roles in one or more
companies. There are two ways of assigning a role to a party:
¾ Indirectly – Entering a record in other areas like the customer list page
automatically creates a party with the appropriate role.
¾ Directly – Clicking the appropriate button in the action pane (e.g.
New/Customer) of the party detail form creates a record in the selected area (e.g.
customer record) and assigns the specific role.
The roles of a party are shown in the FactBox Roles of the global address book list
page. If you want to switch from a form like the customer detail form to the related
party record, choose the option View details on the field Name there.

mabenito@parcisa.com
60 2 Getting Started: Navigation and General Options

2.4.2.2 Address Book Parameters

If duplicate check is selected in the global address book parameters (Organization
administration> Setup> Global address book> Global address book parameters, checkbox
Use duplicate check), a dialog shows duplicate party records whenever you try to
create a party (directly or indirectly) with a name of an already existing party. In
the dialog you may choose whether to use the existing party or to create a new
party, which by chance has got the same name.
Other global address book parameters include the default party type (Organization
or Person), the name sequence for persons (first/last name), and security policy
options (see section 10.2.4).
Settings regarding the format of postal addresses and available ZIP/postal codes or
cities are specified in the address setup (Organization administration> Setup>
Addresses> Address setup).

2.4.2.3 New in Dynamics AX 2012

The concept of the global address book has been enhanced in Dynamics AX 2012,
now easily sharing parties and addresses across several companies.

2.4.3 Case Study Exercise

Exercise 2.10 – Global Address Book
In order to check the functionality of the global address book, check if you can find
the party record of your vendor from exercise 2.4.
Next you want to insert a new party in the global address book. Fields to be
entered include the name “##-Exercise 2.10” (## = your user ID) and a postal
address in London. This new party becomes a vendor in your company. What do
you do in Dynamics AX?

mabenito@parcisa.com
3 Purchasing

The primary responsibility of purchasing is to provide your company with goods

and services from suppliers. This task requires following activities:
¾ Determine material requirements in operations planning
¾ Process purchase requisitions, requests for quotations and purchase orders
¾ Post item arrivals and purchase invoices

3.1 Business Processes in Purchasing

Before we start to go into details, the lines below give an overview of business
processes in purchasing.

3.1.1 Basic Approach

Starting point for procurement are correct master data, especially vendor and
product data. Instead of products, alternatively choose procurement categories for
purchasing services or non-inventoried commodities.

3.1.1.1 Master Data and Transactions in Purchasing

As for all master data, vendor and product records (item records) are usually
entered once and do not change frequently. In the course of purchase processing,
master data are copied to transaction data. Planning records and purchase orders
therefore retrieve defaults from item and vendor data. You may modify these
default data in transactions, for example if you agree on different payment terms in
a specific purchase order.
Changing data in a transaction does not change related master data. If you
generally agree to change the payment terms with a particular vendor for example,
you have to update the payment terms in the vendor record therefore.
Starting from correct master data, we may split the purchasing business process
into six steps as shown in Figure 3-1.

Figure 3-1: Purchase order processing in Dynamics AX

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_3, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
62 3 Purchasing

3.1.1.2 Material Requirements, Purchase Requisition and Request for Quotation

The identification of material requirements usually is the first step in the
purchasing process. Depending on the particular product and the preconditions in
the company, there are two different ways for processing material requirements:
¾ Automatically – Generating planned orders
¾ Manually – Entering purchase requisitions
The basis for generating planned orders within operations planning (master
scheduling, see section 6.3) are accurate figures on inventory, sales orders,
purchase orders and forecasts on the one hand, and appropriate item coverage
settings on the other.
Purchase requisitions – unlike planned orders, which are created automatically by
master scheduling – are manually entered, internal documents asking the purchase
department to obtain particular items (like consumables and office supplies). A
purchase requisition runs through an approval process workflow, before it is
released as a purchase order.
Requests for quotation are sent to vendors in order to receive information on prices
and delivery times. The purchasing department may either enter requests for
quotation manually, or generate them in planned purchase orders and purchase
requisitions.

3.1.1.3 Purchase Order

You may create purchase orders either manually or by transferring planned orders,
purchase requisitions, or requests for quotation. A purchase order consists of a
header, containing fields which are common to the whole order (e.g. vendor data),
and one or more lines, containing the required items.
Once order entry is completed, start the approval process if change management is
activated. After approval – or without approval if change management does not
apply – you have to post a purchase order confirmation before you may continue
order processing. Posting a confirmation means to store it, optionally sending it to
the vendor electronically or in a printed document. The purchase order
confirmation is available with its original content, no matter if there is a
modification on the current purchase order afterwards.
The status of a purchase order is indicated by the order status and the document
status in the header, and by the posted quantities in the lines. In addition to
periodic reports and inquiries, alerts provide the option to receive a warning of
problems like late shipments in order processing.

3.1.1.4 Product Receipt, Invoice Receipt and Vendor Payment

Once goods or services actually arrive, register the product receipt related to the
purchase order in Dynamics AX. Posting the product receipt increases the physical
quantity in inventory and reduces the open quantity in the purchase order.

mabenito@parcisa.com
3.1 Business Processes in Purchasing 63

Together with the item or some time later, the vendor submits an invoice. When
registering the invoice in the vendor invoice form, Dynamics AX supports invoice
control by matching the invoice with the purchase order and the product receipt. If
receiving an invoice not referring to a purchase order, enter it either in the vendor
invoice form or in an invoice journal (see section 9.5.3).
Based on posted invoices, you can register payments to vendors either manually or
by running a payment proposal. Payment proposals include due date and cash
discount period calculation. Payment processing is independent from purchase
orders and usually a responsibility of the finance department. You can find a
description on vendor payments in section 9.5.4 later in this book.

3.1.1.5 Ledger Integration and Voucher Principle

Because of the deep integration of Dynamics AX, all inventory and vendor
transactions in purchasing are posted to ledger accounts depending on the setup as
described in section 9.6.
In order to keep record of the whole business process, Dynamics AX comprehen-
sively applies the voucher principle to transactions: You have to register a
document (voucher), before you can post it. After posting, it is not possible to
modify the document any more.
Figure 3-2 shows an overview of the documents in purchase order processing.

Figure 3-2: Posted and non-posted documents in purchasing

mabenito@parcisa.com
64 3 Purchasing

3.1.2 At a Glance: Purchase Order Processing

In order to provide an overview of the main steps in purchase order processing,
this section shows the basics. For convenience, we create the order starting in the
vendor list page and post all transactions directly in the purchase order form. Of
course, you may alternatively enter the order in the Purchase Orders list page and
access the specific posting forms through the menu.
When creating a new purchase order in the vendor list page (Procurement and
sourcing> Common> Vendors> All vendors), apply a filter for selecting the particular
vendor first. Clicking the button New/Purchase order on the action pane tab
Procurement opens the line view of the purchase order form in Edit mode, creating
a new purchase order header with default data like language or currency from the
selected vendor.
After clicking the button Add line on the tab Purchase order line, or clicking on a new
line there, start entering a purchase order line with item number (or procurement
category), quantity, and price. When selecting the item, Dynamics AX applies
appropriate defaults for quantity, price, and other fields like site or warehouse.
Clicking the button Header view (or Line view) in the action pane switches between
the line view shown in Figure 3-3 and the header view.

Figure 3-3: Registering a purchase order line (Line view, in edit mode)

If change management applies, a yellow workflow message bar displays. In this

case, click the button Submit there after registering all order lines. After approval –
or without change management immediately – the order shows the Approval status
“Approved”.
In the next step, post the purchase order confirmation by clicking the button
Generate/Purchase order (or Confirm) on the action pane tab Purchase. If you want to
print the purchase order, select the checkboxes Posting and Print purchase order in

mabenito@parcisa.com
3.1 Business Processes in Purchasing 65

the posting form. The button Printer setup enables selecting a printer for the
printout as described in section 2.2.1.
Note: If registering only one line or if waiting for approval, you might need to press
the F5 key refreshing the form before you can confirm the order.

Figure 3-4: Confirming and printing the purchase order

When receiving the item, post the product receipt by clicking the button
Generate/Product receipt on the action pane tab Receive of the purchase order form.
Posting the product receipt is similar to purchase order posting as described above.
But unlike purchase order posting, the product receipt usually does not include
printing. If no previous item registration applies, select the option “Ordered
quantity” in the lookup field Quantity. In the column Product receipt you have to
enter the vendor’s packing slip number. The product receipt increases the physical
quantity in inventory and changes the order status to “Received”.
If you want to post the invoice receipt directly in the purchase order form, click the
button Generate/Invoice on the action pane tab Invoice of the order form. Showing an
action pane and FactBoxes, the form for vendor invoice posting is different from
the other posting forms. In order to check the totals there, view the appropriate
FactBox on the right of the form or click the button Totals. After entering the
vendor invoice number in the field Number (Invoice identification), post the invoice
by clicking the button Post/Post in the action pane. Invoice posting generates an
open vendor transaction to be paid and changes the order status to “Invoiced”.
Note: If you want to quit the vendor invoice form without saving, click the button
Cancel in the action pane – not the button Close at the bottom.

mabenito@parcisa.com
66 3 Purchasing

3.2 Vendor Management

Vendor records are required both in purchasing and in finance. According to the
deep integration of Dynamics AX, there is only one data record for each vendor,
which then applies to all areas of the application. Setting appropriate permissions,
you can limit access to fields and field groups of the vendor form.

3.2.1 Vendor Records

For checking existing or creating new vendors, access the vendor list page in the
procurement module (Procurement and sourcing> Common> Vendors> All vendors) or
in the accounts payable module (Accounts payable> Common> Vendors> All vendors).
According to the general structure of list pages, the vendor page shows the list of
available vendors.

Figure 3-5: Selecting a vendor in the vendor list page

If you want to view the details of a vendor in the list page, double-click the line of
the particular vendor for accessing the vendor detail form. In the vendor detail
form, you can switch to the edit mode by clicking the button Edit in the action pane
or the button in the status bar. Alternatively, access the vendor detail form in
edit mode by clicking the button Edit in the action pane of the list page after
selecting the vendor concerned.
The vendor detail form contains numerous fields representing default values for
purchase orders. Below you may find a description of core settings. Additional
information is available in the online help.

mabenito@parcisa.com
3.2 Vendor Management 67

3.2.1.1 Creating a Vendor

If you want to register a new vendor, insert a record in the vendor list page or
detail form by pushing the shortcut key Ctrl+N or by clicking the button
New/Vendor on the action pane tab Vendor. If there are templates for vendors in
your company (see section 2.3.2), optionally populate fields of the new record by
choosing a template.
Depending on the settings of the number sequence, a unique vendor number in the
field Vendor account is assigned automatically or has to be entered manually.

3.2.1.2 Global Address Book Integration

In the vendor detail form, the Record type determines if the vendor is a company
(organization) or a person. Depending on the record type, the General tab shows
different fields – e.g. First name and Last name for the record type “Person”.
Vendors in parallel are parties in the global address book. When creating a new
vendor, the field Name therefore is a lookup field providing the option to select an
existing party from the global address book. If manually entering a name of a new
vendor, a dialog displays in case an existing party has got exactly the same name
and duplicate check is selected in the global address book parameters (see section
2.4.2). This dialog provides the option to link the vendor to an existing party or to
create a new party, which by chance has got the same name.
After saving the vendor record, you can access the related party in the global
address book applying the table reference (View details) on the vendor name field.
As an alternative to the vendor form, create new vendors in the global address
book (Home> Common> Global address book, see section 2.4) in order to reduce the
probability of duplicate party records. In the global address book, it is easy to
check before creating a new vendor if this vendor is already a party – e.g. being a
vendor in an affiliated company. If the vendor is a party, convert the party to a
vendor in your company. If not, create the party record before converting it to a
vendor.

3.2.1.3 General Data

The search name in the vendor record copies from the vendor name, but you may
modify it. Mandatory fields in the vendor form apart from the name are the vendor
group in the lookup field Group (usually controlling ledger integration, see section
3.2.3), and the currency on the tab Purchasing demographics (by default obtaining the
company currency).
Further core fields on the tab General are the Language, specifying the language for
printing purchase orders or other documents, and – in case address books are
used, especially for access control – the Address books linked to the vendor.
The display field Vendor hold on the tab Miscellaneous details shows whether the
vendor is blocked. If you want to change the hold status, click the button On hold

mabenito@parcisa.com
68 3 Purchasing

on the action pane tab Vendor. After selecting the status “All” it is not possible to
enter or to post any purchase order or other transaction for the vendor. The options
“No” and “Never” enable all transactions, with “Never” showing that the vendor
should not be blocked after a period of inactivity.

3.2.1.4 Input Tax

Tax settings are available on the tab Invoice and delivery, where you should enter a
Sales tax group (VAT group) specifying the tax duty depending on the vendor
location. A correct sales tax group is necessary to distinguish between domestic
vendors, who charge sales tax or VAT, and foreign vendors, who do not.
The setup of sales tax groups and tax calculation depends on your company and its
location. Section 9.4.6 contains more information on tax setup in Dynamics AX.
If your company is located within the European Union and you need to record the
VAT registration number of vendors for tax purposes, enter it in the Tax exempt
number (VAT number) field below the sales tax group. Since it is a lookup field, you
have to insert a new tax-exempt number in the main table (View details in the pop-
up menu, or General ledger> Setup> Sales tax> External> Tax exempt numbers) before
selecting it in a vendor record. The setting Tax exempt number requirement in the
accounts payable parameters (Accounts payable> Setup> Accounts payable parameters,
the tab General) determines if you have to enter a tax exempt number when
creating a vendor.

3.2.1.5 Settings for Delivery and Payment

The field Delivery terms on the tab Invoice and delivery of the vendor detail form
specifies the usual delivery terms of the particular vendor. You may access the
setup of required delivery terms including text in foreign languages in the form
Procurement and sourcing> Setup> Distribution> Terms of delivery.
The tab Payment of the vendor detail form contains settings for payment terms and
cash discount. You may find more details on these settings in section 3.2.2.

3.2.1.6 Postal Address

Address data are available on the tab Addresses of the vendor detail form, where
you may enter multiple addresses per vendor. Addresses and contact data are
shared with the party in the global address book linked to the particular vendor.
If you want to enter a new postal address of a vendor, click the button in the
action pane strip of the tab Addresses. In the New address dialog, enter the
identification (Name or description) of the address then – for the primary address
usually the vendor name.
The Purpose in the address dialog determines the transactions, for which the
address applies as default. For the primary address, choose the purpose
“Business”. If entering a second address, choose the appropriate purpose for this
address – for example the option “Payment” identifying an alternative payee. One

mabenito@parcisa.com
3.2 Vendor Management 69

postal address can have several purposes at the same time. If no specific address is
specified for a particular purpose, the primary address applies.
For setting up individual address purposes in addition to the standard purposes,
access the form Organization administration> Setup> Global address book> Address and
contact information purpose.
In the primary address of a vendor, make sure the checkbox Primary is and the
checkbox Private is not selected.
Another important setting of a postal address is the Country/region, which is the
basis for the address format on the one hand and for reports to the authorities –
like sales tax and Intrastat reports – on the other.
After selecting the country code, only postal codes of this country show in the
lookup of the ZIP/postal Code field. When entering a postal code, it is validated in
the ZIP/postal code table depending on the settings in the address setup form
(Organization administration> Setup> Addresses> Address setup). If ZIP/postal code
validation is activated in the address setup, you have to insert a new postal code in
the ZIP/postal code table before you can enter it in an address. You may access
postal codes on the tab ZIP/postal codes of the address setup form, or applying the
table reference (View details) on the ZIP/postal code field.
The tab Contact information in the address dialog contains contact data, which are
specific to the particular address (e.g. the phone number of the alternate payee),
not general contact data of the vendor.

3.2.1.7 Contact Information

On the tab Contact information of the vendor detail form, click the button in
the action pane strip for entering general contact data as applicable (e.g. the vendor
telephone number or the general e-mail address).
On the tab Purchasing demographics of the vendor detail form, select the main
contact person in the field Primary contact. If you want to enter a new main contact,
register data of this person by clicking the button Set up/Contacts/Add contacts on
the action pane tab Vendor of the vendor form first.

3.2.1.8 Features in the Vendor Form

Clicking the buttons in the action pane of the vendor list page or detail form
provides access to various inquiries and activities on the selected vendor:
¾ Action pane tab Vendor:
o Contacts – Managing vendor contact persons
o Bank accounts – Managing vendor bank accounts for payment
o Transactions – Showing vendor invoices and payments
o Balance – Showing the total of open liabilities

mabenito@parcisa.com
70 3 Purchasing

¾ Action pane tab Procurement:

o New/Purchase order – Entering an order, see section 3.4.5
o Related information/Purchase orders – Viewing existing orders
o Agreements/Trade agreements, Purchase prices, Discounts –
Viewing purchase prices and discounts, see section 3.3.3
o Agreements/Purchase agreements – Blanket orders, see section 3.4.9
¾ Action pane tab Invoice:
o New/Invoice – Entering a vendor invoice, see section 9.5.3
o Settle/Settle open transactions – Settling invoices, see section 9.4.5
o Related information/Invoice – Viewing posted invoices

3.2.1.9 One-time Vendor

One-time vendors provide the option to keep master data of regular suppliers
separate from vendors, which supply items rarely or only once.
The accounts payable parameters (Accounts payable> Setup> Accounts payable
parameters, tab General) include the vendor number of a vendor used as template
for one-time vendors. In addition, a separate number sequence for one-time
vendors is available on the tab Number sequences of the parameters.

Figure 3-6: Creating a one-time vendor in a new purchase order

If these parameters are set up for one-time vendors, select the checkbox One-time
supplier in the dialog as shown in Figure 3-6 (instead of choosing an existing
vendor) when creating a purchase order from a one-time vendor in the list page
Procurement and sourcing> Common> Purchase orders> All purchase orders. Every new
order with a selected checkbox One-time supplier automatically generates a new
vendor. In the vendor record of these vendors, the vendor account number derives
from the number-sequence for one-time vendors and the checkbox One-time
supplier (tab Vendor profile on the vendor form) is selected. Clearing the checkbox
One-time supplier in the vendor record transforms a one-time vendor to a regular
vendor (keeping the original one-time vendor number).

3.2.1.10 New in Dynamics AX 2012 and in AX 2012 R2

In Dynamics AX 2012, items new to vendor management refer to the deeper
integration of the global address book and to the new user interface design.

mabenito@parcisa.com
3.2 Vendor Management 71

Unlike Dynamics AX 2012 R2, the original version of Dynamics AX 2012 requires
clicking the button Change name in the action pane strip of tab General in the vendor
detail form for changing the vendor name.

3.2.2 Payment Terms and Cash Discount

Unlike other business applications, which include cash discount settings in the
payment terms, Dynamics AX clearly distinguishes payment terms and cash
discount providing two different fields for these settings.
Payment terms and cash discounts in Dynamics AX are shared between vendors
and customers. The appropriate administration forms therefore are available in
both menus – the accounts payable menu and the accounts receivable menu.
The calculation of due date and cash discount date starts from the document date,
which you may enter when registering an invoice. If you leave the document date
empty, Dynamics AX applies the posting date as the start date for due date
calculation. Especially in purchase invoices, the document date may deviate from
the posting date.
You may modify the due date and cash discount date when posting the invoice or
when settling it in the settle open transactions form (see section 9.4.5).

3.2.2.1 Terms of Payment

In order to manage payment terms, access the form Accounts payable> Setup>
Payment> Terms of payment in the accounts payable menu or Accounts receivable>
Setup> Payment> Terms of payment in the accounts receivable menu. The left-hand
side of this form shows the list of payment terms with IDs and descriptions. The
settings for due date calculation of a particular payment term are available on the
right-hand side then.

Figure 3-7: Specifying due date calculation in the terms of payment

mabenito@parcisa.com
72 3 Purchasing

The lookup field Payment method on the tab Setup determines the start date for due
date calculation. The payment method “Net” means starting from the document
date, “Current month” means starting from month end. The period length for due
date calculation is specified by the number of Days and Months. If required, there is
the option to choose a payment schedule.
The button Translations provides the option of entering a longer text in own and
foreign languages. If entered in the language of the particular document, this text
will be printed on external documents (e.g. the printed purchase order) instead of
the content in the field Description of the payment terms.

3.2.2.2 Cash on Delivery

If you want to enter a record for terms of payment applying cash on delivery,
choose the Payment method “COD”, select the checkbox Cash payment, and enter the
main account number of the appropriate petty cash account in the field Ledger
posting/Cash. When posting an invoice referring to this term of payment,
Dynamics AX immediately posts the payment and settles the invoice applying the
petty cash account of the payment term.

3.2.2.3 Cash Discount

As with payment terms, the cash discount setup is available in the accounts
payable menu as well as in the accounts receivable menu (Accounts payable> Setup>
Payment> Cash discounts and Accounts receivable> Setup> Payment> Cash discounts).

Figure 3-8: Setting up a cash discount

Setting up new cash discounts works like setting up payment terms, except that
you have to add a cash discount percentage and settings for posting the cash
discount to the general ledger. Since cash discounts do not only apply to accounts

mabenito@parcisa.com
3.2 Vendor Management 73

payable but also to accounts receivable, different settings for vendors and
customers are required:
¾ Accounts receivable – Main account for customer discounts
¾ Accounts payable – The main account applicable for posting the cash discount
when posting the vendor payment is depending on the lookup Discount offset
accounts in the cash discount settings, providing following options:
o Use main account for vendor discounts – Posting to the Main account for vendor
discounts entered in the field below
o Accounts on the invoice lines – Posting to the accounts of the invoice lines
(offsetting part of the invoiced expense accounts with the cash discount)

3.2.2.4 New in Dynamics AX 2012 R2

Compared with the initial version of Dynamics AX 2012, the R2 version in addition
provides the option of posting the vendor cash discount to the accounts of the
invoice lines (if the Public sector configuration key is activated).

3.2.3 Ledger Integration

Whenever posting an invoice in purchasing, the invoice automatically posts in
finance in parallel. These postings in finance refer to two different areas: The
general ledger on the one hand and subledgers for accounts payable, accounts
receivable, inventory and others on the other hand.

3.2.3.1 Subledger
As mentioned, there is no separate form for vendors in purchasing and in the
accounts payable (finance administration). Data of both areas are available in a
common vendor form. When posting vendor invoices, credit notes, or payments,
Dynamics AX also posts vendor transactions in the accounts payable.

3.2.3.2 General Ledger

In parallel to subledger posting, Dynamics AX posts transactions in the general
ledger as described in section 9.6. There are two different settings relevant for
assigning main accounts to purchasing transactions:
¾ Assignment of products (items) to main accounts – Settings for main accounts,
applicable when receiving or invoicing items (or procurement categories), are
available in the inventory posting setup depending on the vendor and the item
or category (see section 9.6.2).
¾ Assignment of vendors to main accounts – Settings for applicable summary
accounts are available in the posting profiles.
Both assignments – item and vendor transactions – are not only available at the
level of individual items and vendors, but also at group level.

mabenito@parcisa.com
74 3 Purchasing

3.2.3.3 Settings for Vendor Transactions

Vendor groups in the form Accounts payable> Setup> Vendors> Vendor groups are the
primary setting for vendor transactions. In addition to the ID and the description,
optionally enter a Default tax group for the input tax in the vendor group. When
creating a vendor, the default tax group applies as default for the sales tax group in
the vendor record.
Vendor posting profiles, which control the assignment of vendors to summary
accounts, are available in the form Accounts payable> Setup> Vendor posting profiles.
As a prerequisite for posting purchase transactions, at least one posting profile has
to be specified in your company. In addition, the posting profile defaulting regular
purchase transactions has to be entered in the accounts payable parameters
(Accounts payable> Setup> Accounts payable parameters, tab Ledger and sales
tax/Posting).
The column Summary account on the tab Setup in the posting profile form contains
the main accounts used as summary accounts for vendors.

Figure 3-9: The vendor posting profiles form

As shown in Figure 3-9, the assignment of summary accounts is available at three

different levels. The specification level of a line shows in the column Account code:
¾ Table – Assigning a summary account to a particular vendor (enter the vendor
number in the column Account/Group number)
¾ Group – Assigning a summary account to a vendor group (enter the vendor
group in the column Account/Group number)
¾ All – Assigning a general summary account (Account/Group number remains
empty)
If settings are available on multiple specification levels, Dynamics AX applies the
most appropriate setting starting the search with the vendor number. The
specification level “All” has the lowest priority.

mabenito@parcisa.com
3.3 Product Management for Purchasing 75

If you have to use different profile settings for transactions like prepayment, set up
additional posting profiles containing account assignments which are different to
the general posting profile. In order to apply one of these additional posting
profiles to a specific transaction, choose it in the particular transaction (e.g. for a
purchase order on the Setup tab of the purchase order form header view). For
prepayment, the posting profile is included in the accounts payable parameters.

3.2.4 Case Study Exercises

Exercise 3.1 – Terms of Payment
Your company wants to establish new terms of payment “60 days net”, which you
have to enter in Dynamics AX with a code P-## (## = your user ID). In addition, a
new cash discount D-## for “14 days with 3 percent discount” is required.
Be sure to enter the values for due date and cash discount date calculation
correctly. When registering the cash discount in Dynamics AX, choose main
accounts similar to the accounts in existing cash discounts.
Exercise 3.2 – Create Vendor
The responsible department accepts a new domestic vendor, who wants to ship
items to your company. Enter a new record for this vendor in Dynamics AX
without applying a template. Register a name (starting with you user ID) and a
primary address, select an appropriate vendor group and sales tax group. For this
vendor, the terms of payment and the cash discount entered in exercise 3.1 apply.
Note: If a Balancing financial dimension is specified in the ledger form (General ledger>
Setup> Ledger), enter a default value for this dimension on the tab Financial
dimensions of the vendor detail form.
Exercise 3.3 – Ledger Integration
You want to find out about ledger integration. To which summary account in the
general ledger will an invoice from your new vendor post?

3.3 Product Management for Purchasing

Goods received in purchasing include on the one hand stocked products and on
the other hand intangible items like services, fees and licenses. Before purchasing
any item, you have to ensure correct and complete master data. These item master
data serve two different purposes:
¾ Identification – Clearly describing the item to make sure the vendor sells the
right product
¾ Internal settings – Multiple settings in the item master data like the item group,
which determines applicable main accounts in finance, control the way the
particular item works in Dynamics AX

mabenito@parcisa.com
76 3 Purchasing

Item master data in Dynamics AX 2012 show two levels – the shared and the
released products. Whereas item records are required for purchasing inventoried
items, procurement categories are an alternative for purchasing intangible items.
Along with a short introduction to the basics of product management, this section
primarily contains an explanation of product data necessary for purchasing. A
more general description of product management is available in section 7.2.

3.3.1 Procurement Category Management

Product categories are groups of similar products and services, creating a simple or
multilevel structure in category hierarchies. Depending on the hierarchy type, a
category hierarchy contains procurement categories, sales categories, or other
categories.
Linking products to product categories enables setting up a hierarchical structure
of products. Depending on the requirements, set up multiple hierarchies in parallel
and assign every item to a different category in each hierarchy.
In addition, you can enter a product category instead of an item number in
purchase and sales order lines, simplifying the management of services and
intangible items not tracked on stock.

3.3.1.1 Category Hierarchies

You may access category hierarchies in the list page Product information
management> Setup> Categories> Category hierarchies. If you want to set up a new
hierarchy, click the button New/Category hierarchy in the action pane and enter a
name and a description for the new hierarchy. Dynamics AX then shows the
category hierarchy detail form, where you may enter the categories of the new
hierarchy.
For assigning a category hierarchy to a type, open the form Product information
management> Setup> Categories> Category hierarchy types. You may assign one
hierarchy to each Category hierarchy type – for purchasing applying the type
“Procurement category hierarchy”, and for sales the type “Sales category
hierarchy”. Depending on your requirements, choose the same or different
hierarchies.
Purchasing-related detail data of categories included in the procurement category
hierarchy (category hierarchy assigned to the hierarchy type “Procurement
category hierarchy”) are available in the Procurement categories form as described
further down this section.

3.3.1.2 Product Categories

If you want to view the structure of an existing hierarchy, double-click the line of
the particular hierarchy in the category hierarchy list page for accessing the
category hierarchy detail form. Clicking the button Edit in the action pane then
allows editing the structure.

mabenito@parcisa.com
3.3 Product Management for Purchasing 77

In order to add a new category or a new category folder, select the parent node in
the tree structure on the left and click the button New category node in the action
pane (or do a right-hand click on the parent node). In the new category, you should
at least enter the Name, Code and Friendly name (see Figure 3-10).

Figure 3-10: Editing a product category in the category hierarchy detail form

3.3.1.3 Procurement Categories

Product categories belonging to the “Procurement category hierarchy” are
available in the lines of purchase transactions, including purchase orders, purchase
requisitions, and purchase agreements. When entering a line in these forms,
optionally select a procurement category instead of a product number.
Purchasing-related settings for product categories are available in the procurement
categories (Procurement and sourcing> Setup> Categories> Procurement categories),
where the item sales tax group shows on the tab Item sales tax groups. Clicking the
button Edit category hierarchy in the action pane strip of the procurement categories
form provides an alternative access to the product category hierarchy assigned to
purchasing.
As another prerequisite for using procurement categories in purchase transactions,
the inventory posting setup (see section 9.6.2) has to include settings for the
categories concerned (Inventory management> Setup> Posting> Posting, tab Purchase
order, option Purchase expenditure for expense).

mabenito@parcisa.com
78 3 Purchasing

3.3.2 Product Master Data for Purchasing

In order to support large enterprises with a multi-company structure, the data
structure of product master data in Dynamics AX shows two levels:
¾ Shared products – Common to all companies
¾ Released products – Holding company-specific item data
The data structure of shared products applies to all implementations. But in a
small enterprise with only one company, it is possible to access product
management directly in the released product form. When creating a new released
product there, Dynamics AX automatically generates a related shared product in
the background.

3.3.2.1 Shared Products

The aim of shared product records is to link the products (items) of companies
working in a common Dynamics AX database and partition. Apart from product
number and name/description, shared products do not contain extensive
information.
You may check existing products or create new products in the menu item Product
information management> Common> Products> All products and product masters. The all
products list page shows all items, including regular products, configurable
products, and service items.

Figure 3-11: Selecting an item in the all products list page

mabenito@parcisa.com
3.3 Product Management for Purchasing 79

If you want to enter a new product, click the button New/Product in the action pane
of the all products list page. In the Create product dialog, you want to enter
following data:
¾ Product type – “Item” for stocked products, “Service” optional for services
¾ Product subtype – “Product” for regular items, “Product master” for
configurable items with variants (see section 7.2.1)
¾ Product number – Manually, if no automatic number applies from the number
sequence
¾ Product name
¾ Search name
Further fields in the dialog include the Retail category for retail business (only
displayed, if a category hierarchy is assigned to the hierarchy type “Retail product
hierarchy”) and the checkbox CW product for catch weight items (see section 7.2.1).
In order to create a regular stocked item, choose the Product type “Item” and the
Product subtype “Product”. For intangible items like services, choose the Product
type “Service”. Alternatively, you can also choose the Product type “Item” for an
intangible item if linking it to an item model group for non-inventoried items (see
section 7.2.1) in the released product.
In addition to the fields in the create dialog, the shared product detail form
contains optional settings – e.g. for linking the product to categories clicking the
button Set up/Product categories in order to create hierarchical product structures.
Clicking the button Dimension groups in the action pane of the shared product form
provides access to the assignment of inventory dimensions. Available inventory
dimensions are divided into three dimension groups:
¾ Product dimension group – Only for the subtype “Product master”; specifying
if the item is available in different configurations, sizes, colors, or styles
¾ Storage dimension group – Specifying if you track inventory of the item by
site, warehouse, location, or pallet
¾ Tracking dimension group – Specifying if batch or serial numbers apply
Dynamics AX 2012 R3 includes the additional storage dimensions Inventory status
and License plate for the new warehouse management module (see section 8.1.1).
You may leave dimension groups in the shared product empty. In this case,
dimension groups not entered in the shared product have to be entered in the
related released products. You may want to specify dimension groups in the
released product, if different dimension settings are required at company level –
for example if only one company in your enterprise applies pallet management.

3.3.2.2 Releasing a Product

Before you can actually register transactions for a new product, you have to release
it by clicking the button Release products in the action pane of the shared product.

mabenito@parcisa.com
80 3 Purchasing

The selected product then shows on the tab Select products in the release products
dialog. After switching to the tab Select companies on the left pane of the dialog, put
a checkmark in front of all companies which use the product and confirm the
selection by clicking the button OK.

3.3.2.3 Managing Released Products

Released products (Product information management> Common> Released products),
also labeled “Item” in some areas of Dynamics AX, contain the item details. For
directly accessing a released product from the shared products, click the link More
in the FactBox Authorized by company and then apply the table reference (View
details) on the column Item number in the dialog.

Figure 3-12: Released order detail form, showing the action pane tab Plan

After releasing a new product, you have to populate the following mandatory
fields in the released product from:
¾ Item group (tab Manage costs) – Linking main accounts for ledger integration
¾ Item model group (tab General) – Specifying item handling and inventory
valuation
¾ Dimension groups (button Product/Dimension groups) – If not specified on the
shared product
In addition, you should enter the Item sales tax group for purchasing on the tab
Purchase, and for sales on the tab Sell. Another important setting is the Unit
(inventory unit of measure, defaulting from inventory parameters) on the tab
Manage inventory. In the lookup field Production type on the tab Engineer, you

mabenito@parcisa.com
3.3 Product Management for Purchasing 81

should select the option “None” if the item is only supplied through purchase
orders, but you can also purchase a BOM or formula item.
In the field Price on the tab Manage costs, enter a general cost price for the item as
applicable. The button Item price on the action pane tab Manage costs is provides the
option to enter a cost price per site as described in section 7.2.4.
If applicable (e.g. in a single-company implementation), optionally skip creating a
shared product and immediately create a new product in the released products
page by clicking the button New/Product on the action pane tab Product. If creating
a released product this way, the New released product dialog creates a shared
product in parallel.

3.3.2.4 Purchasing Related Data and Default Order Settings

The tab Purchase in the released product form contains core purchasing
information, including the item sales tax group already mentioned. The Buyer
group there provides the option to specify purchasing responsibility for the item.
Additional data required for purchasing the released product include purchase
prices as well as item coverage and order settings.
The lookup field Approved vendor check method in AX 2012 R2/R3, receiving its
default from the corresponding field in the item model group, controls if the item
may only be purchased from approved vendors. Available options in this field are
“No check”, “Warning only”, and “Not allowed”. For entering allowed vendors,
click the button Approved vendor/Setup in the action pane tab Purchase.
Clicking the button Default order settings on the action pane tab Plan of the released
product form provides access to the order settings for the product at company
level. An important field in the default order setting form is the Default order type
on the tab General. If the default order type is “Purchase order”, the item is to be
purchased from vendors (if no different settings apply from item coverage).
The tab Purchase order in the default order settings contains settings specific for
purchasing – including defaults for lot size (field Multiple), order quantity (field
Standard order quantity), and purchase site. Selecting the checkbox Stopped on this
tab blocks the item to purchase transactions.
The second order settings button on the released product form – Site specific order
settings – enables overriding the default order settings at site level (Sites represent
subsidiaries within a company, see section 10.1.7). After creating a line with the
particular site, register a default warehouse for purchasing, inventory transfer and
sales as applicable. For overriding the default order settings for quantity defaults
and lead time, select the checkbox Override in the site-specific order settings.
When entering an order, defaults like the order quantity from the order settings
apply. You can override the defaults in the order line then (except item blocking).

mabenito@parcisa.com
82 3 Purchasing

3.3.2.5 Item Coverage

The primary setting for item coverage is the Default order type in the default order
settings (see above). On the tab Purchase of the released product detail form, the
field Vendor determines the main vendor for purchasing the item.
Coverage groups contain settings for requirements planning (see section 6.3.3). The
basic default coverage group is specified in the master planning parameters
(Master planning> Setup> Master planning parameters, lookup field General coverage
group). On the tab Plan of the released product detail form, optionally assign
specific coverage groups to the particular items.
After clicking the button Item coverage on the action pane tab Plan in the released
product form, further settings for the item – including a minimum and a maximum
quantity – are available in the item coverage form. In addition, the item coverage
contains a Planned order type (overriding the default order type) and a Vendor
account (overriding the main vendor in the released product form). Depending on
the dimension groups, coverage settings are required at inventory dimension level
(e.g. per warehouse).

3.3.2.6 New in Dynamics AX 2012 and in AX 2012 R2

Dynamics AX 2012 introduces the concept of shared products and product masters
containing basic item data common to all companies. The released product form
replaces the item form, and the former single inventory dimension group splits to
three separate dimension groups. The item type “BOM” is removed – default item
replenishment is specified by the default order type now.
Compared with the initial version of Dynamics AX 2012, the R2 version contains
additional settings in the product records like the CW product, the Production type,
approved vendors and further settings for process industries and for retail.

3.3.3 Purchase Price and Discount

In Dynamics AX, the base functionality for pricing is the same in purchasing and in
sales. Pricing includes a multi-stage calculation of prices and discounts, which
starts at the base price in the released product form and continues with trade
agreements for vendor groups and individual vendors.
Since sales uses discount calculation to a greater extent than purchasing in many
companies, the section below focuses on price calculation. Details on discount
calculation are available in section 4.3.2.

3.3.3.1 Purchase Base Price

The purchase base price shows in the field Price on the tab Purchase of the released
product form. The Price unit specifies the quantity which is the basis for the price.
A price unit “100” for example applies a price for hundred units (e.g. for
inexpensive screws).

mabenito@parcisa.com
3.3 Product Management for Purchasing 83

If you want to record different purchase base prices per subsidiary (site), click the
button Item price on the action pane tab Manage costs. In the item price form,
register and activate a price per site as shown in section 7.2.4 then (applying the
Price type “Purchase price”).
Purchase order lines apply the base price, if no trade agreement is applicable for
the vendor and the item concerned. Since prices (and price charges) in the released
product form are in the currency of your company, Dynamics AX converts the
prices to the currency of the order if the order is in a foreign currency.

3.3.3.2 Price Charges

In order to record charges (like fees and freight), which are added to the base price,
optionally enter Price charges on the tab Purchase of the released product form.
If the checkbox Incl. in unit price is cleared, the amount entered in the field Price
charges adds to the total of an order line independent from the quantity. With this
setting, purchasing for example 10 units of an item with a Price of GBP 3.00 and
Price charges of GBP 1.00 gives a unit price in the purchase order line of GBP 3.00
and a line amount of GBP 31.00. The price charges do not show in a separate field
on printed purchasing documents.
If the checkbox Incl. in unit price is selected, Dynamics AX adds the price charges to
the unit price. In this case, the field Price quantity is the quantity basis for allocating
the price charges to the unit price. With this setting, purchasing for example 10
units of an item with a Price of GBP 3.00, a Price quantity of 0.00 (or 1.00), and Price
charges of GBP 1.00 gives a unit price in the purchase order line of GBP 4.00 and a
line amount of GBP 40.00.
In addition to the general price charges in the released product form, site-specific
price charges are available in the item price form (accessible by clicking the button
Item price on the action pane tab Manage costs of the released product form).
When working with charges, do not confuse price charges specified in the item
record (released product form) with charges transactions assigned to charges
codes, which are managed in orders separately. Details on charges management in
orders are available in section 4.4.5.

3.3.3.3 Trade Agreements for Purchase Prices

You may view the trade agreements for purchase prices of a particular product by
clicking the button View/Purchase prices on the action pane tab Purchase of the
released product form. Trade agreements, available for specifying detailed settings
for prices and discounts, show following levels:
¾ Period of validity – From date and to date, depending on the procurement
parameter Date type (on the tab Prices) referring to order entry or delivery date
¾ Quantity – From and to quantity
¾ Unit of measure

mabenito@parcisa.com
84 3 Purchasing

¾ Currency
¾ Vendor dimension level (column Account code) – Individual vendor, vendor
group, or all vendors
In addition to the options listed above, trade agreements also include prices at
inventory dimension level. You need this option if prices are different per site, or
per warehouse, or depending on product dimensions like size or color. In order to
control the dimension columns displayed in the purchase prices form, click the
button Inventory/Dimensions display in this form. As a prerequisite for applying
dimensions in pricing, the dimension group of the particular item has to include
the selected dimensions in the price search (see section 7.2.2).

3.3.3.4 Search Priority

The price search in Dynamics AX runs from the most specific to the general
agreement, in other words from vendor prices to vendor group prices and finally
to general prices.
If the checkbox Find next in the right-most column of the trade agreements is
selected, Dynamics AX searches for the lowest price in trade agreements – a lower
group price overrides a higher vendor-specific price. You may stop this search by
clearing the checkbox Find next in the appropriate trade agreements.

3.3.3.5 Registering New Trade Agreements

If you want to set up a new agreement for purchase prices, you have to register
and post a journal in the form Procurement and sourcing> Journals> Price/discount
agreement journals. As an alternative to the particular menu item, access
price/discount agreement journals by clicking the button Create trade agreements on
the action pane tab Purchase of the released product form.

Figure 3-13: Registering purchase prices in a price/discount journal

Like all journals (compare inventory journals in section 7.4.2), price/discount

agreement journals consist of a header and at least one line. The lookup field Show
at the top of the price/discount agreement journal form enables to view only open

mabenito@parcisa.com
3.3 Product Management for Purchasing 85

journals or to include posted journals. In order to register a new journal, click the
button New and select a journal name.
After clicking the button Lines, start inserting the first journal line. When recording
a purchase price, make sure the option “Price (purch.)” is selected in the column
Relation. The Account code specifies if the price is for a vendor (“Table”), for a
vendor price group (“Group”) or for all vendors. For prices, the column Item code
has to show the option “Table” along with the product number in the Item relation.
In addition to the columns in the grid, fields for the validity dates, the price unit
and the lead time are available at the bottom of the form. Price, price unit, and lead
time of an applicable trade agreement override the defaults from the item record
when entering an order line.
In order to view available inventory dimensions pricing, check the information text
in the header part of the journal. In Figure 3-13, this header information tells that
price agreements for the selected item may be entered at site level.
After entering the journal lines, click the button Post to activate the agreement.
Other buttons available in the journal lines facilitate price management, providing
the option to select and adjust existing agreements.

3.3.3.6 Updating or Deleting Existing Trade Agreements

If you want to edit or delete a price agreement in Dynamics AX 2012 R2/R3, open
the trade agreements for example by clicking the button View/Purchase prices (or the
button Trade agreement/View trade agreements) on the action pane tab Purchase of the
released product form. After selecting the applicable trade agreement, click the
button Edit selected lines in the action pane strip. Then choose the journal name,
which applies to the new agreement journal used for updating, in the confirmation
dialog and click the button OK.
The new price/discount agreement journal contains a line connected to the selected
trade agreement, which you may edit before clicking the button Post to update the
trade agreement. If you want to delete the existing trade agreement instead of
updating, click the button Select all agreements to be deleted in the price/discount
agreement journal and then post the journal.

3.3.3.7 Required Setup for Pricing

As a prerequisite for applying trade agreements, the appropriate price options in
the price/discount setup (Procurement and sourcing> Setup> Price/discount> Activate
price/discount) have to be selected.
If you want to enter prices at group level, you have to set up the required vendor
price groups (Procurement and sourcing> Setup> Price/discount> Vendor price/discount
groups, Show “Price group”). In the vendor detail form (Procurement and sourcing>
Common> Vendors> All vendors), select the appropriate price group on the tab
Purchase order defaults. When selecting a vendor in a purchase order, the vendor

mabenito@parcisa.com
86 3 Purchasing

price group defaults the order. You can override the price group in the purchase
order detail form then (Procurement and sourcing> Common> Purchase orders> All
purchase orders, tab Price and discount in the header view).

3.3.3.8 New in Dynamics AX 2012 and in AX 2012 R2

In Dynamics AX 2012, you have to post price/discount agreement journals in order
to update in trade agreement prices and discounts. In the trade agreement form
itself, an additional column for the to-quantity is available.
Compared with the initial version of Dynamics AX 2012, where you can only edit
existing trade agreements by choosing the Select option in price/discount
agreement journals, the R2 version contains the additional button Edit selected lines
in trade agreements for creating appropriate journals.

3.3.4 Case Study Exercises

Exercise 3.4 – Procurement Categories
Your company purchases a new kind of services, for which you want to set up
appropriate product categories in the procurement hierarchy. Enter a new category
node “##-services” containing the categories “##-assembling” and “##-fees” (## =
your user ID). In addition, make sure the procurement categories receive the item
sales tax group referring to the standard tax rate.
Exercise 3.5 – Product Record
In order to accomplish purchase order processing in the following exercises, you
need to set up a new product. This first product is a trade item, later on we will
continue with the more complex structures of BOM items.
Enter a new shared product with the product number I-## and the name “##-
merchandise” (## = your user ID). It should be a regular stocked product without
variants, serial or batch numbers. You want to track inventory per site and
warehouse. Choose appropriate dimension groups in the shared product.
Then you want to release the product to your test company. In the released
product, select an appropriate item group for merchandise and an item model
group with FIFO-valuation. The item does not require approved vendors.
The item sales tax group for sales and for purchasing should refer to the standard
tax rate. The unit of measure for the item is “Pieces” in all areas, and the main
vendor is the vendor of exercise 3.2. The base purchase price and the base cost
price are 50 pounds, the base sales price is 100 pounds.
In the Default order settings for purchasing and sales, you should enter the main site
as well as default quantities (Multiple 20, Min. order quantity 40, Standard order
quantity 100). In the Site specific order settings, you should enter the main warehouse
of the main site for purchasing and sales.
Notes: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the released product. If the number

mabenito@parcisa.com
3.4 Purchase Orders 87

sequence for product numbers is set up for automatic numbering, you don’t have
to enter a product number.
Exercise 3.6 – Trade Agreement
You agree upon a lower price for the new item with your main vendor. Enter a
trade agreement for the vendor of exercise 3.2, which specifies a purchase price of
45 pounds for the item of exercise 3.5. There is no minimum quantity and no end
date for this price.

3.4 Purchase Orders

An order is a definite promise to deliver goods or services on agreed terms. Orders
therefore have to include at least following details:
¾ Vendor with name and address
¾ Currency, Payment terms, Terms of delivery
¾ Product
¾ Quantity, Unit of measure
¾ Price
¾ Delivery date, Delivery address
When entering a purchase order, Dynamics AX monitors these requirements
before you may post and print the purchase order.

3.4.1 Basics of Purchase Order Processing

For creating a new purchase order, either insert or generate it as follows:
¾ Automatically create a purchase order as a result of a purchase requisition
workflow or of master scheduling
¾ Transfer a request for quotation, a planned order, or a purchase requisition to a
purchase order
¾ Transfer a purchase journal to a purchase order
¾ Create a release order based on a purchase agreement (see section 3.4.9)
¾ Create a purchase order in a sales order (direct delivery, see section 4.7)
¾ Create a purchase order in a production order (Subcontracting, see section 5.7)
Other ways for creating purchase orders in Dynamics AX are automatic transfers –
both through the AIF-framework from external applications, and through the
intercompany functionality from affiliated companies within a common
Dynamics AX database and partition.
Purchase order processing related to projects is part of the project module,
described in the relevant online help and training documentation.

3.4.1.1 Possible Documents prior to Purchase Orders

Within procurement, there are three different documents, which you may process
before creating a purchase order:

mabenito@parcisa.com
88 3 Purchasing

¾ Planned orders
¾ Purchase requisitions
¾ Requests for quotation
A request for quotation is required, if you want to obtain and compare quotes from
several vendors in Dynamics AX. You may create requests for quotation either
automatically in a planned order or a purchase requisition, or enter them
manually.
When purchasing common items in daily business, usually skip the request for
quotation and create a purchase order directly from a planned order or a purchase
requisition.
Planned purchase orders are a result of master scheduling. Depending on master
planning setup, master scheduling may skip planned orders and directly create
purchase orders. You may find details on the appropriate setup in section 6.3.3.

3.4.1.2 Approving and Processing Purchase Orders

After creating and – if required – approving a purchase order, you want to process
it from the start to the end as shown in Figure 3-14.
If change management applies to a purchase order, you have to submit the order
for approval. Depending on the order and the approval workflow, approval may
be granted automatically or involve manual authorization. If change management
does not apply, the approval status of the order immediately shows Approved.
The first step in processing an approved purchase order then is to confirm the
order. Confirming may include sending a hardcopy or electronic document to the
vendor. Depending on the setup, optionally skip all subsequent steps of order
processing except posting the vendor invoice.

Figure 3-14: Purchase order processing in Dynamics AX

mabenito@parcisa.com
3.4 Purchase Orders 89

3.4.1.3 Receipts List and Inventory Registration

If your warehouse requires a list of items for information purposes and for
preparing item arrival, print a receipts list.
Unlike the receipts list, inventory registration as the next step actually updates the
on-hand quantity in inventory. The inventory registration transaction, which
contains all required inventory dimensions like warehouse, serial number and
batch number, is an optional step before posting the product receipt. You may do
this registration either by posting an item arrival journal in inventory, or through
the registration form which is accessible by clicking the button Update
line/Registration in the action pane strip of the purchase order line.
If the checkbox Registration requirements is selected in the item model group of the
purchased product, you have to execute inventory registration before posting the
product receipt.

3.4.1.4 Product Receipt

When posting a product receipt, Dynamics AX posts inventory transactions and –
depending on the setup – general ledger transaction. You may access the product
receipt posting form either from the related purchase order, or through the
appropriate summary update in the procurement module, or from the posted item
arrival journal in inventory.

3.4.1.5 Vendor Invoice

Once the invoice arrives, post it in the purchase order or in the pending vendor
invoices. If applicable, you can’t post the invoice before obtaining approval
through a workflow.
Alternatively, record the vendor invoice in an invoice register and a subsequent
invoice approval journal (see section 9.5.3).

3.4.1.6 Physical and Financial Transactions

The following sections contain more detailed explanations on purchase order
processing. But when posting inventory transactions, be aware that there are two
different kinds of transactions: Physical and financial transactions.
Generally speaking, physical transactions are packing slips (product receipts) and
financial transactions are invoices. You have to distinguish between these
transactions, in particular regarding inventory valuation and general ledger
posting. Details on these topics are available in section 7.2.5.

3.4.2 Planned Purchase Orders

Planned purchase orders are based on the demand for a purchased item. The
settings, whether item requirements calculation in master scheduling should
include forecasts, available inventory on hand, sales quotes, sales orders,

mabenito@parcisa.com
90 3 Purchasing

production orders, and purchase orders are available in the operations planning
(master planning) setup.
The description below shows a simple procedure for generating planned orders in
master scheduling. The item requirement in the example is triggered by a
minimum inventory quantity entered in the item coverage form, which exceeds the
quantity on hand.

3.4.2.1 Minimum Quantity

In order to enter a minimum inventory quantity for an item, open the item
coverage form by clicking the button Item coverage on action pane tab Plan in the
released product form (Product information management> Common> Released products)
after selecting the particular item.

Figure 3-15: Entering a minimum inventory quantity in the item coverage form

In the item coverage, you can enter the minimum quantity in a new record.
Depending on the dimension groups of the item, the minimum quantity is to be
entered at dimension level, for example per site and warehouse.

3.4.2.2 Net Requirements and Master Scheduling

Item coverage settings and the item availability are displayed in the net
requirements form, accessible by clicking the button Net requirements on the action
pane tab Plan of the released product form.
In the net requirements form, update master scheduling as required (see Figure
3-16). When updating the master schedule by clicking the button Update/Master
scheduling in the action pane strip of the lower pane in the net requirements form,
Dynamics AX generates planned orders.
You can use multiple master plans in Dynamics AX, including a static master plan
for current master scheduling and a separate dynamic master plan for simulation
purposes (see section 6.3.1). When updating a master schedule, planned orders are
only generated in the selected plan – the static, the dynamic, or any alternative
master plan. If master planning parameters determine a two master plan strategy,
the dynamic plan is the default for updating the master schedule in the net
requirements form.

mabenito@parcisa.com
3.4 Purchase Orders 91

Figure 3-16: Local master scheduling in the net requirements form

3.4.2.3 Planned Purchase Order

In order to access planned purchase orders generated in master scheduling, open
the list page Procurement and sourcing> Purchase orders> Planned purchase orders. If
the master planning setup includes a separate dynamic plan (two master plan
strategy), choose the dynamic plan in the lookup field Plan above the grid in the
planned order list page.

Figure 3-17: Processing a planned purchase order

After selecting the planned order concerned, modify it in the planned order detail
form as necessary. If you want to know the origin of a requirement, check the tab
Pegging on the detail form.

mabenito@parcisa.com
92 3 Purchasing

The field Vendor on the tab Planned supply shows the suggested vendor for the item,
derived from the main vendor in the item record, from a trade agreement, or from
item coverage. If there is no default for the vendor, you have to assign a vendor
manually before you can transfer the planned order to an actual purchase order.

3.4.2.4 Creating a Purchase Order

Once you have finished updating planned orders, you can transfer them to
purchase orders. Clicking the button Process/Firm in the action pane of the planned
orders, Dynamics AX generates purchase orders for one or more planned orders.
As an alternative to directly creating purchase orders, change a planned purchase
order to a request for quotation by clicking the button Maintain/Change to…/Request
for quotation in the action pane (see section 3.4.4).

3.4.3 Purchase Requisitions

A purchase requisition is an internal document, asking the purchase department to
buy requested goods or services. Unlike a planned order, which is created
automatically because of an item requirement, a purchase requisition has to be
entered manually by the person, who needs the item.

3.4.3.1 Prerequisites for Processing Purchase Requisitions

Before a purchase requisition is transferred to a purchase order, it has to run
through an approval process. This approval process is based on the workflow
system (see section 10.4).
In order to configure the purchase requisition workflow, you have to access the
form Procurement and Sourcing> Setup> Procurement and sourcing workflows. When
configuring a workflow for purchase requisitions, you want to choose the template
“Purchase requisition review” (refers to the Type “PurchReqReview”) or the
template “Purchase requisition line review” (refers to “PurchReqLineReview”).
As a prerequisite for specifying the items available for purchase requisitions, you
have to set up and activate a procurement catalog (Procurement and Sourcing>
Common> Catalogs> Procurement catalog) containing applicable categories and
products. In the purchasing policies (Procurement and Sourcing> Setup> Policies>
Purchasing policies), you want to make sure this catalog is selected in the policy rule
Catalog policy rule of the policy applying to your organization.

3.4.3.2 Entering a Purchase Requisition

You may enter purchase requisitions both in the regular Dynamics AX Windows
client and in the Enterprise Portal, which is the web access for occasional users.
If choosing the Dynamics AX Windows client, access the list page Procurement and
Sourcing> Common> Purchase Requisitions> All purchase requisitions. When clicking
the button New/Purchase requisition in the action pane, Dynamics AX shows a create
dialog where you may enter a name for the requisition.

mabenito@parcisa.com
3.4 Purchase Orders 93

Depending on purchasing policy settings, optionally request a line on behalf of a

different person or organization by selecting an appropriate Requester, Buying legal
entity, or Receiving operating unit in the purchase requisition lines.
The way for entering requisition lines depends on the type of the particular item:
¾ Internal catalog products – Regular released products, linked to the current
procurement catalog, may be selected in the Item number column.
¾ Non-catalog products – Services and new products may be registered entering
a Procurement category and a Product name (description).
¾ External catalog products – Creating these requisition lines is only possible in
the Enterprise Portal, navigating to an external vendor website.
Apart from entering lines directly on the tab Purchase requisition lines by choosing
an item number or procurement category, alternatively click the button Add items
in the action pane strip on this tab for opening the Add items form.
In the Add items form, click the button Select in the lower pane after selecting items
on the upper tabs Catalog items and Non-catalog items. Clicking the button OK at the
bottom of the form then transfers the items to the requisition lines.

3.4.3.3 Approval Workflow

As long as you are working on entering a purchase requisition, it shows the Status
“Draft”. Once you have finished and the purchase requisition is complete, click the
button Submit in the in the yellow workflow message bar in order to start the
requisition workflow. The requisition status switches to “In review” and the
workflow system starts processing the submitted requisition in a batch process.
The further proceeding for approval depends on the workflow configuration of the
purchase requisition workflow. Section 10.4 in this book contains a brief
description of configuring and processing workflows.
As long as a purchase requisition shows the status “In review”, you can create a
related request for quotation by clicking the button Create request for quotation in the
action pane tab of the purchase requisition.

3.4.3.4 Creating a Purchase Order

Once a purchase requisition is approved, it shows the status “Approved” and may
be released for generating a purchase order.
In the purchasing policies (Procurement and Sourcing> Setup> Policies> Purchasing
policies), there is the policy rule Purchase order creation and demand consolidation. This
policy rule of the policy applying to your organization determines, if purchase
orders are generated automatically or if they have to be released manually.
If manual releasing is necessary, click the button New/Purchase order in the action
pane of the list page Procurement and sourcing> Common> Purchase requisitions>
Release approved purchase requisitions for releasing a requisition to a purchase order.

mabenito@parcisa.com
94 3 Purchasing

3.4.3.5 New in Dynamics AX 2012

In Dynamics AX 2012, purchasing policies and organization hierarchies are new
features applying to purchase requisitions.

3.4.4 Requests for Quotation

A request for quotation (RFQ) is an external document asking vendors to submit a
quotation. In Dynamics AX, a single request for quotation may apply to multiple
vendors. Once a quotation from a vendor arrives, register it in a “request for
quotation reply” in order to prepare a comparison of quotes. If accepting a quote,
transfer it to an order.
For creating a request for quotation, enter it manually in the request for quotations
form or generate it from planned purchase orders and purchase requisitions.

3.4.4.1 Entering a Request for Quotation

In order to create a new request for quotations, click the button New/Request for
quotation in the form Procurement and sourcing> Common> Requests for quotations> All
requests for quotations. In the create dialog, choose the Purchase type “Purchase
order” for a request referring to a regular purchase order. After entering the
delivery and the expiration date, close the dialog clicking the button OK.

Figure 3-18: Entering lines in the request for quotation form

mabenito@parcisa.com
3.4 Purchase Orders 95

Requests for quotation consist of a header part containing general data like
delivery date and quotation deadline (Expiration date), and a lines part containing
items and quantities. Both, the header and the lines, contain the fields Lowest status
and Highest status showing the status (“Created”, “Sent”, “Accepted,” or
“Rejected”) of the request and related quotations.
Like in the lines of purchase requisitions or purchase orders, a line in the request
for quotation either refers to an item number or to a procurement category. In the
request for quotation form, the column Line type controls whether an item or a
procurement category applies. Data like delivery date and address in the lines
retrieve appropriate defaults from the header. Applying document management
(see section 10.5.1) allows adding details like data sheets or drawings to the request
header or lines.
In order to specify the vendors receiving the request for quotation, switch to the
tab Vendor and insert a new line for each vendor.

3.4.4.2 Sending the Request to Vendors

After registering the vendors concerned, click the button Send in the action pane to
open the posting form for processing the request. When clicking the button Print in
the action pane strip of the posting form, optionally select the checkbox Print
request for quotation. Then click the button OK in the posting form for posting and
printing the request.

Figure 3-19: Printing a request for quotation

If you later want to know to which vendor you have sent the request for quotation,
click the button Journals/Request for quotation journals in the request for quotation
form for viewing the posted requests.

mabenito@parcisa.com
96 3 Purchasing

3.4.4.3 Request for Quotation Reply

In the action pane of the request for quotation form, click the button
Replies/Configure request for quotation reply for specifying the fields to be included in
a reply. These fields show on the request for quotation reply sheet, which you may
print by selecting the appropriate checkbox in the printing options dialog when
sending the request for quotation. The default for the reply field settings derives
from the procurement parameters (Procurement and sourcing> Setup> Procurement
and sourcing parameters, button Default request for quotation reply fields on the tab
Request for quotation).
Once a vendor replies to a request by sending a quotation, register the quotation
(reply) in the form Procurement and sourcing> Common> Requests for quotations>
Request for quotation replies. Alternatively, access the replies by clicking the button
Replies/Enter reply in the action pane of the request for quotation form, making sure
to edit the reply of the right vendor in the reply form then.
In the reply form, enter details of the vendor quote on the tab Purchase quotation
lines for the lines and on the tab Quotation for the header. In order to support data
input, optionally click the button Process/Copy data to reply for copying data from
the request into the reply fields.
Once you have finished entering the reply, the highest/lowest status of the request
and the reply show the status “Received”.

3.4.4.4 Approving and Rejecting Vendor Quotations

If you want to compare the different replies (quotes) from your vendors, click the
button Replies/Compare replies in the action pane of the request for quotation form
opening the Compare request for quotation replies form.
In the compare form, accept a quotation by selecting the checkbox in the column
Mark of the reply and clicking the button Accept in the action pane. Alternatively,
accept a quotation in the request reply form by clicking the button Accept there.
When posting the acceptance, Dynamics AX automatically creates a purchase
order. If accepting all lines of a request in a reply, Dynamics AX suggests rejecting
the other replies for the request. Alternatively reject a request by clicking the
button Process/Reject in the reply.

3.4.5 Purchase Order Registration

Like all documents, purchase orders consist of a header and one or several lines.
The header contains data, which are common to the whole order – e.g. the order
number, vendor, language, currency, and payment terms. Other fields in the order
header like the delivery date provide a default value for the order lines, where you
can change them at line level.
The default for the Purchase type in the purchase order header derives from the
procurement parameters (Procurement and sourcing> Setup> Procurement and

mabenito@parcisa.com
3.4 Purchase Orders 97

sourcing parameters), usually showing the type “Purchase order” for creating
regular purchase orders. You may choose any of the following options for the
purchase type in the purchase order then:
¾ Purchase order – Regular purchase order
¾ Journal – Draft or template, not affecting inventory or finance
¾ Returned order – Credit note, see section 3.7

Figure 3-20: Structure of purchase orders

Order lines contain data like item number or procurement category, description,
quantity, price, discount, and delivery date. When ordering a stocked product, you
have to select the item number of the released product. For non-inventoried items
(e.g. services), either enter the item number of an intangible item or skip the item
number and enter a procurement category.

3.4.5.1 Defaults for Purchase Orders

When inserting a new purchase order header or line, Dynamics AX retrieves
defaults for numerous fields after selecting the vendor in the header or the item in
a line. Depending on your permissions, change the content of fields in the purchase
order subsequently.
If you agree with your vendor for example on different payment terms for a
particular order, change the terms of payment in the order header. If the new
payment terms apply to all future orders, you should also change the terms of
payment in the vendor record for receiving the right default when entering the
next order for this vendor.

3.4.5.2 Entering a New Purchase Order

Depending on how you want to proceed, there are two different ways for accessing
purchase orders:
¾ Vendor form – Preferable, if first searching the vendor when accessing orders
¾ Purchase order form – Preferable, if the vendor is not the primary search key
(e.g. if looking for all orders not yet approved)

mabenito@parcisa.com
98 3 Purchasing

When starting in the vendor list page (Procurement and sourcing> Common> Vendors>
All vendors) or the related detail form, immediately create a new order after
selecting a vendor by clicking the button New/Purchase order on the action pane tab
Procurement. Dynamics AX creates a purchase order header applying defaults from
the selected vendor and switches to the line view in the purchase order detail form,
where you can enter the first order line.
If you are in the vendor list page and want to check existing purchase orders for a
vendor, click the button Related information/Purchase orders/All purchase orders on the
action pane tab Procurement of the vendor form. After clicking this button,
Dynamics AX shows the purchase order list page filtered on the selected vendor.
When accessing the purchase order list page through the menu item Procurement
and sourcing> Common> Purchase orders> All purchase orders, it shows the list of all
purchase orders. If you want to view the details of a purchase order displayed in
the list page, double-click the line concerned or click the button Edit on the action
pane tab Purchase order for accessing the detail form.
If you want to register a new purchase order in the purchase order list page, push
the shortcut key Ctrl+N or click the button New/Purchase order on the action pane
tab Purchase order. In the Create purchase order dialog, you want to choose a vendor
in the vendor lookup then (e.g. applying a Filter by field with a right-hand click in
the column Name of the lookup).

Figure 3-21: Creating a new order in the purchase order list page

mabenito@parcisa.com
3.4 Purchase Orders 99

After selecting a vendor number, the create order dialog retrieves various defaults
from the vendor record. Expanding the tabs General and Administration in the
create order dialog provides access to additional fields of the new order header. If
you want to change data like the vendor number, purchase type or currency, edit
the appropriate fields in the dialog or – after closing the dialog – in the header
view of the purchase order detail form.
After clicking the button OK in the Create purchase order dialog, Dynamics AX
creates the purchase order header and switches to the purchase order detail form
showing the line view.

3.4.5.3 Purchase Order Lines

In order to register an order line in the line view of the purchase order detail form,
simply click the first line in the lines pane or click the button in the action
pane strip of the Purchase order lines tab and start selecting an item number
(released product) or a purchase category. Item master data provide various
defaults for fields like quantity, purchase unit, unit price, site or warehouse. If site
and warehouse are entered in the order header, they take priority over the defaults
from the item record.

Figure 3-22: Registering a purchase order line

Trade agreements may override the unit price from the released product, and
provide a default for the discount fields (see section 4.3.2). The net amount of a line

mabenito@parcisa.com
100 3 Purchasing

is calculated based on quantity, unit price, and discounts. If manually entering a

net amount, Dynamics AX shows an empty unit price and discount.
The default for the Line number displays when saving the order line. The increment
applicable for line numbering is specified in the system parameters (System
administration> Setup> System parameters).
For viewing the delivery date and other extended line data, expand the fast tab
Line details and switch to the appropriate sub-tab.
The delivery date available on the sub-tab Delivery receives the default value from
the purchase order header, if this date is after the lead time of the item. Otherwise,
the default for the delivery date of the line is the lead time added to the session
date. You may specify the lead time for an item in the default or site-specific order
settings of the item, in the purchase price trade agreements and in the item
coverage form.

3.4.5.4 Intangible Items and Procurement Categories

If you want to order an intangible item (e.g. a particular service), select the item
number of a non-inventoried product (item with product type “Service”, or linked
to an item model group for non-stocked items – see section 7.2.1) and enter the
order line like you do for regular inventoried items.
As an alternative, skip the item number field in the order line and select a
procurement category. The procurement category does not include as many details
as the item record, however. Therefore you have to manually enter data including
quantity, unit, unit price, line text (on the sub-tab General) and other details as
applicable.

3.4.5.5 Inventory Transaction

When entering a line for an inventoried product in a regular purchase order,
Dynamics AX creates a related inventory transaction. You can view this transaction
by clicking the button Inventory/Transactions in the action pane strip of the order
line. The transaction shows the receipt status “Ordered”, and the fields Physical
date and Financial date are empty. In the course of purchase order processing,
posting the product receipt and the vendor invoice update the inventory
transaction as shown in section 7.2.5.

3.4.5.6 Header View and Line View

When accessing the purchase order detail form, it shows in line view. In the upper
part of the form, a header line between the action pane and the first tab displays
the order number and the vendor on the left-hand side, and the order status on the
right-hand side. After expanding the tab Purchase order header in the line view, it
shows selected header fields like the delivery date.
If you want to access the complete header information, click the button Header view
on the action pane tab Purchase order of the detail form. The header view enables

mabenito@parcisa.com
3.4 Purchase Orders 101

editing data, which are common to the whole order – e.g. the vendor number, the
sales tax group, or the payment terms. In addition, the order header contains other
fields like the delivery date, which are only default values for the order lines. If
you change header data after entering order lines, the procurement parameters
(button Update order lines on the tab Updates) control whether to update existing
order lines automatically.
In order to switch back from the header view to the line view, click the button Line
view on the action pane tab Purchase order.

3.4.5.7 Delivery Address

You may select the delivery address for a purchase order on the tab Address in the
purchase order header view. The default for this delivery address is your company
address as specified on the tab Addresses in the legal entities form (Organization
administration> Setup> Organization> Legal entities). If a delivery address is specified
for a site or warehouse entered in the order header, the purchase order retrieves
the site or warehouse address.
If you want to change the delivery address of a purchase order, choose between
two options:
¾ Select an existing address, already available in the global address book
¾ Insert a new address
If you want to choose an existing address (e.g. a customer address), click the button
near the Delivery address lookup field on the Address tab. The address selection
dialog enables selecting an address from all areas of the global address book.
If you want to enter a completely new address, click the button near the
Delivery address lookup field. In the New address dialog, enter the address for
delivery (similar to entering a vendor address, see section 3.2.1). In the lookup field
Purpose, select a purpose “Other” or “Alternative delivery” (“Delivery” if the
address is the new main delivery address for your company), and additionally
select the checkbox One-Time if applicable.
If different delivery addresses are required at line level, access the sub-tab Address
on the Line details tab in the purchase order line view. In the lines, choose existing
addresses or create new addresses (like in the header).

3.4.5.8 Charges
You may register additional costs like freight and insurance by entering charges at
order header level or at line level. The functionality of charges in purchasing
corresponds to charges in sales (see section 4.4.5).
In order to access charges referring to an order header, click the button
Charges/Maintain charges on the action pane tab Purchase. For accessing line charges,
click the button Financials/Maintain charges in the action pane strip of the tab
Purchase order lines after selecting the line concerned.

mabenito@parcisa.com
102 3 Purchasing

3.4.5.9 Input Tax

Input tax (Sales tax/VAT) calculation is based on the relation of vendor and item:
¾ The vendor record contains the Sales tax group (VAT group) distinguishing
between domestic and foreign vendors. For companies in the European Union,
“EU vendors” usually is a third category.
¾ The item record contains the Item sales tax group (item VAT group) distinguish-
ing between items with a regular tax rate and other items, for which a reduced
rate applies (in many countries for example food).
Purchase order header and lines retrieve the tax groups from the vendor and the
item. Based on these groups and related settings, the applicable tax is calculated
automatically. You may edit the Sales tax group on the tab Setup in the header view.
It is copied to the lines, where you may access the Sales tax group and the Item sales
tax group in the line view on the sub-tab Setup of the Line details tab.
In order to view the calculated sales tax in the purchase order form, click the
button Tax/Sales tax on the action pane tab Purchase.

3.4.5.10 Copying a Purchase Order

As an alternative to manually entering a new purchase order, copy an existing
order. Since this existing order may include a different purchase type, there is the
option to copy for example a journal into an order.

Figure 3-23: Selecting records in the Copy from all dialog

If you want to copy an order to a new purchase order, start with inserting a new
order header which should receive the copied records. In the new order, click the
button Copy/Copy from all on the action pane tab Purchase order for accessing the
Copy from all dialog. In this dialog, which displays a list of orders available for

mabenito@parcisa.com
3.4 Purchase Orders 103

copying, select the checkbox in the left-most column to mark the records to be
copied as shown in Figure 3-23 – entire orders in the upper part or individual
order lines in the lower part.
When copying an order, observe the checkbox Delete purchases lines [1]. If this
checkbox is selected, all lines of the new order are deleted before inserting the lines
selected for copying. Whereas this does not matter for a new order, it may be
undesirable if you want to copy additional lines to an existing order.
Once you have finished selecting order headers and lines (lines may refer to
different headers), close the copy dialog by clicking the button OK. Dynamics AX
copies the selected lines, depending on the checkbox Copy order header including
header data like payment terms (if copying header data, select only one header).
In addition to the Copy from all button, there is another button available for copying
in the purchase order form – the button Copy/Copy from journal. You may apply this
button if there is a purchase order with posted documents like vendor invoices,
and you want to transfer the posted lines into the order again.
In addition to the copy buttons in the action pane, copy feature are also available as
an option in the button Purchase order line of the action pane strip in the order lines.

3.4.5.11 Order Type Journal

Purchase orders of the order type ”Journal“ serve as draft or template. It is not
possible to post documents like an order confirmation or a product receipt for this
purchase type. Apart from copying a purchase journal to a regular purchase order,
transferring a journal to a purchase order is also possible by simply changing the
purchase type in the order header, or through the periodic activity Procurement and
sourcing> Periodic> Post the purchase journal.

3.4.5.12 New in Dynamics AX 2012

Due to the new user interface including header and line view, purchase order
management looks fundamentally different in Dynamics AX 2012. In addition,
there are new features like procurement categories, delivery schedules and other
improvements like the line numbers. The overview of posted line quantities is now
available clicking the button Line quantity on the action pane tab General.

3.4.6 Change Management and Purchase Order Approval

Depending on the setting for change management, you have to run through an
approval workflow after entering a purchase order before you can process it.

3.4.6.1 Change Management Settings

The primary setting for purchase order change management is available in the
procurement parameters (Procurement and sourcing> Setup> Procurement and
sourcing parameters, tab General). Selecting the checkbox Activate change management
there activates approval workflows in all purchase orders.

mabenito@parcisa.com
104 3 Purchasing

If the checkbox Allow override of settings per vendor in the procurement parameters is
selected, enter deviating settings for specific vendors as applicable. Selecting the
checkbox Override settings in the vendor detail form (field group Change
management for purchase orders on the tab Purchase order defaults) then enables
overriding the general setting in both directions: Activating change management
only for specific vendors while approval is not required in general, or the other
way around.
The purchase order approval process is based on the workflow system (see section
10.4). Procurement workflows are available in the form Procurement and Sourcing>
Setup> Procurement and sourcing workflows, where purchase order workflows refer
to the template “Purchase order workflow” (Type “PurchTableTemplate”) or the
template “Purchase order line workflow” (Type “PurchLineTemplate”).

3.4.6.2 Approval Status

The purchase order header contains the Approval status, displayed in a separate
column in the purchase order list page. Depending on the approval workflow, a
purchase order may show the following approval status:
¾ Draft – When registering the order, before submitting approval
¾ In review – While the approval workflow is executed
¾ Approved – After approval, making it possible to post a confirmation
¾ Confirmed – After posting the order confirmation, optionally sending a
hardcopy or an electronic document to the vendor
If change management does not apply to a purchase order, the order immediately
shows the approval status “Approved” and you may continue order processing by
confirming the order.

3.4.6.3 Approval Workflow for Purchase Orders

If change management applies to a purchase order, a yellow workflow message
bar displays above the grid providing the option to submit the order for approval.
You have to submit for approval after entering a new order, or after modifying an
order which has already been approved.
When submitting for approval, the approval status switches to “In review” and the
workflow system starts processing the approval workflow in a batch process.
Because of this batch process, it is not possible to post the order confirmation
immediately for purchase orders applying change management. Even in case of
workflow configurations applying automatic approval you have to wait until the
workflow system has finished the batch process.
If manual approval applies, the responsible may grant approval to the purchase
order in the work items assigned to him or his queues (see section 10.4.3).

mabenito@parcisa.com
3.4 Purchase Orders 105

3.4.6.4 Request Change

If you want to change a purchase order after approval, click the button Maintain/
Request change on the action pane tab Purchase order. After finishing the required
changes on the purchase order, you have to submit the order for approval again.
When deciding on approving the modified order, the responsible may compare the
current purchase order with the last confirmed version by clicking the button
History/Compare purchase order versions on the action pane tab Manage of the
purchase order form. Clicking the button History/View purchase order versions you
may view and compare all previous versions.

3.4.6.5 New in Dynamics AX 2012

Change management and purchase order approval workflows are new features in
Dynamics AX 2012.

3.4.7 Canceling and Deleting Purchase Orders

In Dynamics AX, there is a difference between canceling and deleting a purchase
order. Whereas canceling removes the remaining quantity available for product
receipt, deleting completely eliminates an order line or the entire order.
In addition, deleting an order is not possible after posting the order confirmation
or – if change management applies – after approval, whereas you may always
cancel the order.

3.4.7.1 Canceling an Order or Order Line

You should cancel a purchase order line, if you want to keep the original order
quantity while not expecting any further deliveries for the line.

Figure 3-24: The dialog box to change or cancel a remaining line quantity

In order to cancel a purchase order line or to change the open line quantity, click
the button Update line/Deliver remainder in the action pane strip of the purchase
order lines after selecting the line concerned. Dynamics AX then shows the dialog
Update remaining quantity, where you may change or cancel the remaining quantity
for deliveries. If you want to cancel the deliver remainder, click the button Cancel
quantity in the dialog setting the deliver remainder to zero.
Clicking the button OK in the dialog adjusts the deliver remainder in the order
line. You may cancel the remaining quantity of an order line no matter if there
have been partial deliveries before.

mabenito@parcisa.com
106 3 Purchasing

If you want to cancel all lines of an order, cancel the order lines separately one after
each other. If the purchase order confirmation has been posted already,
alternatively cancel the complete order by clicking the button Cancel on the action
pane tab Purchase order of the order form. After canceling all lines, the Status of the
order shows “Canceled”.

3.4.7.2 Deleting Purchase Orders and Order Lines

Unlike canceling, which reduces the open quantity of an order line, deleting a
purchase order line completely removes it from Dynamics AX. In order to delete a
purchase order line, select the record and click the button Remove in the action
pane strip of the order lines, or push the shortcut key Alt+F9.
If you want to delete a complete order, click the button Delete in the action pane at
the top of the detail form or – after selecting the order header – push the shortcut
key Alt+F9.
Once you have posted the order confirmation or submitted approval, it is not
possible to completely delete the order. If you want to delete order lines of an
approved order to which change management applies, you have to request a
change (button Maintain/Request change, see section 3.4.6).
Note: If you want to delete an order line, make sure to click the Remove button in
the action pane strip – not the button Delete, which deletes the complete order.

3.4.7.3 New in Dynamics AX 2012

In Dynamics AX 2012, deleting a purchase order is not possible once processing
has started (approval or confirmation).

3.4.8 Purchase Order Confirmation and Printing

Once entering and – if required – approving a purchase order is finished, you have
to confirm it before you can continue order processing. Optionally, send the
confirmation to the vendor.
Confirming a purchase order means to save it unchanging and separate from the
current purchase order. The confirmation is evidence of the document which has
been sent to the vendor. It does not create physical or financial transactions.

3.4.8.1 Posting Form for Purchase Order Confirmations

In order to confirm the purchase order, click the button Generate/Purchase order on
the action pane tab Purchase of the purchase order form after selecting the
particular order. Alternatively, click the button Generate/Confirm which executes
the same functionality without showing the posting form.
When generating the purchase order confirmation, the posting form shows
following options:

mabenito@parcisa.com
3.4 Purchase Orders 107

¾ Parameters / Quantity – „Ordered quantity“ is the only option, posting the total
quantity of all lines; in posting forms for other transactions like the receipts list
described later, additional options are available
¾ Parameters / Posting – If selected, the order confirmation is posted; if cleared,
the output is a pro forma document
¾ Print options / Print – When selecting several orders for summary update, the
option “Current” prints documents individually while posting, whereas
“After” prints after the last document has been posted
¾ Print options / Print purchase order – If selected, the order is printed;
otherwise posting is without printing (reprinting is possible nevertheless)
¾ Print options / Use print management destination – If selected, print settings
specified in the setup form Procurement and sourcing> Setup> Forms> Form setup
(button Print management) or in the vendor form (button Set up/Print manage-
ment on the action pane tab General) apply; otherwise, print settings accessible
by clicking the button Printer setup in the posting form apply

Figure 3-25: Selecting to print in the purchase order confirmation form

In order to finally execute posting the confirmation, click the button OK in the
posting form. If the checkbox for printing in the posting form is selected,
Dynamics AX prints to a printer or file depending on the printer selection.

3.4.8.2 Pro Forma Document

If the checkbox Posting in the posting form is cleared, Dynamics AX generates a
pro forma document. A pro forma document, which may be required for purposes
like customs declaration, is not a posted document. Therefore it is not possible to
reprint or display the document independent from the purchase order once
printing is finished.

mabenito@parcisa.com
108 3 Purchasing

You may alternatively print a pro forma document by clicking the button Generate/
Pro forma purchase order on the action pane tab Purchase of the purchase order form.
In the posting form for pro forma documents, the checkbox Posting is not available.

3.4.8.3 Summary Update

Apart from posting by clicking the appropriate button in the order form,
alternatively choose the periodic activity for summary update in order to post an
order confirmation.
The summary order confirmation is available in the menu path Procurement and
sourcing> Periodic> Purchase orders> Confirm purchase orders, showing the same
posting form as the button in the purchase order. Whereas a filter selecting the
current order automatically applies when accessing the posting form from a
purchase order, the summary update requires manually entering a filter. You may
do this by clicking the button Select in the posting form, which opens the advanced
filter form for selecting purchase orders.
After closing the filter form, the selected orders show on the tab Overview of the
posting form. If you do not want to post a particular order listed there, simply
delete the appropriate line before posting by clicking the button OK.

3.4.8.4 Purchase Order Confirmation Inquiry

After confirming a purchase order, the posted document is available independent
from modifications to the current order. For accessing the purchase order
confirmation inquiry, choose the menu item Procurement and sourcing> Inquiries>
Journals> Purchase order confirmations or click the button Journals/Purchase order
confirmations on the action pane tab Purchase of the purchase order form.

Figure 3-26: Selecting to reprint in the purchase order inquiry form

The order confirmation inquiry form shows all purchase order confirmations on
the tab Overview. The tab Lines displays the order lines of the order confirmation
selected on the tab Overview.

mabenito@parcisa.com
3.4 Purchase Orders 109

3.4.8.5 Reprinting a Purchase Order

For displaying a print preview of the posted order confirmation, click the button
Preview/Print/Copy preview or Preview/Print/Original preview in the inquiry form. The
preview form then enables reprinting the document.
In order to print one or more posted order confirmations, alternatively click the
button Preview/Print/Use print management printing to the printer specified in print
management.

3.4.8.6 New in Dynamics AX 2012

In Dynamics AX 2012, posting the purchase order (now called “confirming”) is
compulsory.

3.4.9 Purchase Agreements

Purchase agreements in Dynamics AX provide the option to register and control
blanket orders. Apart from purchase agreements at the level of product number
and quantity, there are agreements not specifying the quantity, but only the value
of a particular product, or agreements not referring to product numbers but to
product categories.

3.4.9.1 Managing Purchase Agreements

For creating a purchase agreement, open the form Procurement and sourcing>
Common> Purchase orders> Purchase agreements and click the button New/Purchase
agreement in the action pane. When entering an agreement, you have to select a
Purchase agreement classification. Agreement classifications (Procurement and
sourcing> Setup> Purchase agreements> Purchase agreement classification) are for
grouping and reporting purposes only, not controlling specific functionality.
The Effective date (start date of the contract) and the Expiration date (end date) in the
agreement header serve as default for the agreement lines. Selecting the Default
commitment in the header determines the level of the agreement:
¾ Product quantity commitment – Product number and quantity
¾ Product value commitment – Product number and value
¾ Product category value commitment – Value of a product category
¾ Value commitment – Total value for a vendor
After switching to the agreement lines by clicking the button Line view in the action
pane, register line details including Item number, Quantity, Unit price, and Discount
percent (or Net amount and Procurement category, depending on the option selected
in the header field Default commitment). If you want to prevent, that the total
quantity of related release order lines exceeds the quantity in the agreement, select
the checkbox Max is enforced on the sub-tab General of the Line details tab.
Once you have finished entering the agreement lines, print the agreement by
clicking the button Generate/Confirmation in the action pane. In the posting form for

mabenito@parcisa.com
110 3 Purchasing

the agreement confirmation, select the checkbox Print report for actually printing
the confirmation and optionally select the checkbox Mark agreement as effective for
setting the Status in the agreement header to “Effective”. If the agreement is not set
as effective with the confirmation, you have to manually change the Status in the
agreement header from “On hold” to “Effective” before you can generate a release
order.

3.4.9.2 Release Orders

If you want to create a release order in the agreement form, click the button
New/Release order after selecting the purchase agreement. Dynamics AX shows the
Create release order form, where you may select items by entering the Purchase
quantity and the Delivery date for the release order. Clicking the button Create
creates the new release order, which is a regular purchase order of the type
“Purchase order”.
Instead of creating a release order in the purchase agreement form, alternatively
start by creating a regular order in the purchase order form (Procurement and
sourcing> Common> Purchase orders> All Purchase orders). On the tab General in the
Create purchase order dialog, select a Purchase agreement ID in order to generate a
release order to this agreement then. When entering an order line with an item
covered by the agreement, Dynamics AX automatically generates a link. If you
create a new purchase order in the vendor form (Procurement and sourcing>
Common> Vendors> All vendors) and there is an applicable agreement, a dialog
displays providing the option to select an agreement.
If you want to check the link to the purchase agreement in the purchase order line,
click the button Update line/Purchase agreement/Attached in the action pane strip. At
header level, click the button Related information/Purchase agreement on the action
pane tab General.
In the release order, you have to post order confirmation, product receipt and
vendor invoice like in any other purchase order. When posting the product receipt
or the invoice, the related purchase agreement updates the order fulfillment (line
view in the purchase agreement form, sub-tab Fulfillment on the tab Line details).

3.4.9.3 New in Dynamics AX 2012

In Dynamics AX 2012, purchase agreements replace the former purchase order
type “Blanket order”.

3.4.10 Case Study Exercises

Exercise 3.7 – Planned Order
In order to avoid processing purchase order approval, make sure change
management does not apply to your vendor entered in exercise 3.2.
A minimum inventory quantity of 200 units on the main warehouse is required for
the item entered in exercise 3.5. After registering this minimum quantity, you want

mabenito@parcisa.com
3.5 Item Receipt 111

to open the net requirements form for the item updating the master schedule. What
is the result of this master scheduling update?
Open the planned purchase order form in the procurement and sourcing menu. If
required, switch to the dynamic master plan which has applied when updating the
net requirements. Select the planned order referring to your item and transfer it to
a purchase order.
Exercise 3.8 – Request for Quotation
You want to receive vendor quotes for your item. For this purpose, enter a new
request in the request for quotations form. This request should contain a line with
your item from exercise 3.5. The RFQ reply configuration for the request should
include the header field Reply valid to and the line fields Quantity and Unit price.
You want to send the request to your vendor from exercise 3.2 and another vendor
of your choice. Once you have finished entering the request, choose the option
Send in order to post and print the RFQ for these vendors.
After a while, you are receiving quotes with quantities and prices of your choice
from both vendors. In order to track the quotes, enter them as request for quotation
replies assigned to the original request. Your vendor from exercise 3.2 has
submitted the better quote, which you want to accept transferring the RFQ reply to
a purchase order. Then send a quote rejection to the other vendor.
Exercise 3.9 – Purchase Order
You want to order your item (entered in exercise 3.5) from your vendor (entered in
exercise 3.2). You may start registering the purchase order in the vendor form.
Which quantity and which price show in the order line by default, where do they
come from? In a second order line, order two hours of the procurement category
“##-assembling” (entered in exercise 3.4) for a price of GBP 100.
After closing the purchase order from, you want to display all orders referring to
your vendor. How do you proceed and how many orders are available?
Exercise 3.10 – Order Confirmation
Post and print both purchase orders which you have created in the last two
exercises. One time you should print to a PDF file, the other time you should
display a print preview.
Then change the quantity in the first order line of exercise 3.9 to 120 units. How do
you proceed?

3.5 Item Receipt

Once an ordered item arrives at your warehouse, you want to post an item receipt
making the item available in inventory.

mabenito@parcisa.com
112 3 Purchasing

3.5.1 Basic Steps for Item Receipt

In order to make sure that required items arrive in time, optionally use following
inquiries in Dynamics AX for displaying open purchase order lines:
¾ Procurement and sourcing> Common> Purchase orders> Backorder purchase lines: List
page showing open order lines with a confirmed delivery date before the
Backorder date entered in the filter area of the list page
¾ Procurement and sourcing> Inquiries> Purchase orders> Open purchase order lines:
Inquiry form showing open order lines, where you may apply a filter – e.g. a
filter by grid (Ctrl+G) – for selecting relevant records

3.5.1.1 Receipts List and Arrival Overview

Printing a receipts list supports preparing an expected item receipt. This list serves
as information for the vendor and/or the responsible in your warehouse.
Independent of the receipts list, the warehouse responsible may choose the arrival
overview form for viewing and preparing expected receipts.

3.5.1.2 Posting Item Receipts

Item receipt includes two different steps of posting:
¾ Inventory registration – You may record inventory registration, which
preliminary increases the quantity on hand in inventory, directly in the order
line or through an item arrival journal. When posting an arrival journal,
depending on the setup pallet transactions in the warehouse may be required.
¾ Product receipt – The product receipt posts the physical inventory transaction
and general ledger transactions for the item receipt finally. Inventory
registration before the product receipt is optional, not compulsory.
Depending on the particular requirements, skip posting the item receipt
(registration and product receipt) for a purchase order. In this case, Dynamics AX
posts the item receipt together with the vendor invoice.
Note: In Dynamics AX 2012 R3, you can optionally use the new warehouse
management module. Posting the item receipt works completely different in this
case (see section 8.1).

3.5.2 Receipts List

The functionality of the receipts list is similar to confirming and printing the
purchase order: If you want a receipts list, you have to access a posting form for
posting and printing. This posting does not create inventory or financial
transactions.
In order to post and print a receipts list, access the purchase order form
(Procurement and sourcing> Common> Purchase orders> All purchase orders) and click
the button Generate/Receipts list on the action pane tab Receive after selecting the
appropriate order. Alternatively, access the applicable posting form for summary

mabenito@parcisa.com
3.5 Item Receipt 113

update (Procurement and sourcing> Periodic> Purchase orders> Posting receipts list). In
the posting form for summary update, enter a filter by clicking the button Select.
Printing of a receipts list is not very common, but you can apply it for information
purposes regarding an expected item receipt.

3.5.3 Inventory Registration

Inventory registration is a preliminary step before posting the product receipt.
There are three options for starting inventory registration:
¾ Registration form (purchase order line)
¾ Item arrival journal
¾ Arrival overview
Inventory registration only applies to products, not to order lines directly related
to purchasing procurement categories.

3.5.3.1 Registration in a Purchase Order Line

If it is required to register the item quantity before posting the product receipt, the
usual way is to post an item arrival journal. But you may also want to enter the
inventory registration independent from the item arrival journal, for example if
you need to split a single order line to different locations, batch or serial numbers.
In order to access the item registration form from the purchase order form, click
the button Update line/Registration in the action pane strip of the tab Purchase order
lines after selecting the appropriate order line.

Figure 3-27: Registering a receipt in the inventory registration form

mabenito@parcisa.com
114 3 Purchasing

The inventory registration form contains two parts: The upper pane (Transactions)
shows the status of the inventory transaction(s) linked to the order line. The lower
pane (Register now) is available for posting the registration.
Initially the upper pane shows a single inventory transaction, created when
entering the order line. This transaction is split into several lines if you post partial
deliveries or if you split the line manually. For registering inventory dimensions
like different batch or serial numbers (if applicable), split a line by clicking the
button Split or Create serial numbers in the registration form if necessary.
In order to record and post the inventory registration, insert appropriate lines in
the Register now pane of the registration form. As an alternative to manually
inserting a record by clicking the button Add there, select the checkbox in the
column Auto-create of the Transactions pane as shown in Figure 3-27.
Before posting the registration by clicking the button Post all, change the
warehouse, quantity and applicable inventory dimensions as required. If recording
a partial registration by entering a smaller than the original quantity in the Register
now pane before posting, the inventory transaction splits into two lines – one for
the registered and one for the remaining quantity.
If you have already started a registration in the Register now pane and want to
cancel it before posting, click the button Delete all. Clicking this button restores the
registration as it has been before starting the current registration.

3.5.3.2 Registration Status

Once the inventory registration is posted, the recorded quantity shows the status
“Registered” and is available in inventory. After registration, transfer, sell, or
consume the registered quantity as required in your company.
Unlike product receipt and invoice posting, which generate voucher documents
containing unchanging transactions, inventory registration is a preliminary
transaction. If you reset an inventory registration, there is no posted transaction of
the original registration any more. The only transaction you may view after
resetting a registration is the posted item arrival journal, if registration has been
posted through an item arrival journal.

3.5.3.3 Item Arrival Journal

If it is required to register item receipts in the warehouse separately from posting
vendor packing slips (product receipts) in the office, use item arrival journals.
Posting an item arrival journal generates the same transactions in inventory and
purchasing as the registration directly in the purchase order line.
Item arrival journals are available in the form Inventory management> Journals> Item
arrival> Item arrival. Registering and posting an item arrival journal works similar
to other inventory journals (see section 7.4.2).

mabenito@parcisa.com
3.5 Item Receipt 115

After posting the item arrival journal, the inventory transaction shows the status
“Registered” and the Line quantity form (button Line quantity on the action pane tab
General of the purchase order) shows the posted quantity in the column Registered.
If the journal contains settings for posting pallet transports from the inbound dock
to the warehouse (checkbox Pallet transports on the tab Default values in the journal
header and on the tab General in the lines), the status is not “Registered” but
“Arrived” after posting the item arrival journal. In this case, the transaction doesn’t
show the status “Registered” until the subsequent pallet transport has been posted.

3.5.3.4 Arrival Overview

The form Inventory management> Periodic> Arrival overview provides an overview of
expected item arrivals. In the upper pane of the form, choose filter criteria like the
date range of expected receipts (Days back, Days forward), the warehouses or the
vendor (Account number). Clicking the button Update applies the selected criteria. If
you want to use the same filter criteria repeatedly, switch to the tab Setup for
saving one or more filter combinations.
After selecting receipts for arrival (column Select for arrival in the Receipts or Lines
pane), click the button Start arrival in the action pane strip of the Receipts pane.
Starting the arrival creates – but does not post – an item arrival journal for the
selected lines.
For posting the arrival journal, open the item arrival journals through the menu
item Inventory management> Journals> Item arrival> Item arrival. Alternatively, click
the button Journals/Show arrivals from receipts in the action pane strip of the arrival
overview after selecting the receipt, for which you have started arrival.
The button Journals/Product receipt ready journals in the arrival overview shows
posted arrival journals, for which the product receipt (see section 3.5.4 below) has
not been posted yet.

3.5.3.5 Reversing an Inventory Registration

In order to reverse and cancel a registration, which has been posted in an item
arrival journal or in the registration form, open the registration form in the
purchase order after selecting the order line concerned. In Transactions pane of the
registration form, select the checkbox Auto-create in the registered transaction
concerned and post the transaction like a regular inventory registration, but with a
negative quantity.

3.5.3.6 Settings for Registration

The item model group of the purchased item controls whether you have to post
inventory registration before posting the product receipt. You have to record
inventory registration, if the checkbox Registration requirements on the Setup tab of
the item model group concerned (Inventory management> Setup> Inventory> Item
model groups) is selected.

mabenito@parcisa.com
116 3 Purchasing

3.5.4 Product Receipt

Posting the product receipt (vendor packing slip / delivery note) executes the
physical inventory transaction, which finally receives the item in an unchanging
voucher document.

3.5.4.1 Posting Form for Product Receipts

Posting the product receipt works similar to confirming and printing the purchase
order. You may open the posting form by clicking the button Generate/Product
receipt on the action pane tab Receive of the purchase order form after selecting the
appropriate order.
The posting form shows the familiar format. The applicable option in the lookup
field Quantity is depending on the preceding procedure:
¾ Registered quantity – Select this option, if an inventory registration (item
arrival) is posted before posting the product receipt. Dynamics AX applies the
quantity registered (not yet received) as default for the posting lines.
¾ Registered quantity and services – In addition to the registered quantity of
inventoried items, Dynamics AX applies the ordered quantity for order lines
referring to product categories and non-inventoried items.
¾ Ordered quantity – Dynamics AX applies the total remaining quantity.
¾ Receive now – Dynamics AX applies the quantity of the order line column
Receive now.
The posting quantity shows in the column Quantity on the tab Lines in the lower
part of the posting form. If required, change the quantities there before posting.
The other parameters in the posting form are similar to the purchase order
confirmation parameters described in section 3.4.8, except for following options:
¾ Product receipt – Column on the tab Overview, in which you have to enter the
packing slip number of your vendor.
¾ Print product receipt – Checkbox in the posting form, which is usually cleared,
because when receiving the vendor’s packing slip you probably don’t print
your own document.
If there is a yellow exclamation mark ( ) on the tab Overview of the posting form,
it indicates a posting problem. A possible reason is that the selected quantity in the
posting form is “Registered quantity”, but there has not been an inventory
registration before product receipt. Selecting the quantity “Ordered quantity” in
the posting form usually solves this problem.

3.5.4.2 Product Receipt in the Item Arrival Journal

An alternative way for accessing the product receipt posting form is available, if an
item arrival journal has been posted for the purchase order. In this case, click the
button Functions/Product receipt in the item arrival journal (Inventory management>
Journals> Item arrival> Item arrival).

mabenito@parcisa.com
3.5 Item Receipt 117

If a Packing slip number has been entered on the tab General in the item arrival
journal before posting, it serves as default for the Product receipt number in the
product receipt posting form.

3.5.4.3 Summary Update

As for the purchase order confirmation and the receipt lists, a posting form for
summary product receipt update is available, which you may access through the
menu path Procurement and sourcing> Periodic> Purchase orders> Product receipt. In
the posting form for summary update, you have to specify a filter clicking the
button Select.
You may then click the button Arrange to collect multiple purchase orders into one
collective product receipt. More information on arranging orders for collective
documents is available in section 4.6.2 of this book.

3.5.4.4 Canceling a Product Receipt

You may cancel a posted product receipt applying the Cancel feature in the product
receipt inquiry form.
In order to access the product receipt inquiry, click the button Journals/Product
receipt on the action pane tab Receive of the purchase order form. After selecting the
appropriate receipt, click the button Cancel in the action pane strip of the tab
Overview. If you just want to reduce the posted quantity, click the button Correct in
the product receipt inquiry.
Canceling and correcting a product receipt does not change the original
transaction, but posts a new transaction offsetting the original one.

3.5.4.5 Ledger Integration and Settings for Product Receipt Posting

If ledger integration is activated for the product receipt, Dynamics AX posts
accrual transactions in the general ledger in parallel to the inventory transactions.
These ledger transactions are reversed when posting the related invoice.
There are two relevant settings for posting product receipts to the general ledger:
¾ Accounts payable parameters – The checkbox Post product receipt in ledger on
the tab Updates has to be selected for enabling ledger posting.
¾ Item model group – On the tab Setup in the item model group of the purchased
item, the checkbox Post physical inventory has to be selected for ledger posting.
Apart from the setting concerning ledger integration, the item model group
contains two other settings relevant for posting the product receipt:
The checkbox Registration requirements on the tab Setup of the item model group
controls, if you have to post the inventory registration before posting the product
receipt. The checkbox Receiving requirement on the tab Setup controls, if you have to
post the product receipt before posting the vendor invoice.

mabenito@parcisa.com
118 3 Purchasing

3.5.4.6 New in Dynamics AX 2012

The option of cancelling a product receipt in the inquiry is new in
Dynamics AX 2012, and the product receipt posting has been called “Packing slip”
in former releases.

3.5.5 Receiving a Deviating Quantity

You have to post a partial delivery, if you do not receive the entire quantity of a
purchase order line in one shipment, but split into several shipments. It is not
possible to post partial deliveries, if the checkbox Complete on the tab Line details
(sub-tab General) of the purchase order line is selected.

3.5.5.1 Inventory Registration of Partial Deliveries

If applying inventory registration, record applicable partial deliveries in the
registration form as shown in section 3.5.3 (compare Figure 3-27). If recording the
inventory registration through an item arrival journal, enter partial quantities in
the journal lines there.
In the product receipt posting form, select the option “Registered quantity” in the
quantity lookup field for a partial product receipt then.

3.5.5.2 Receive Now Quantity

If you do not record inventory registration, optionally enter a Receive now quantity
in the purchase order line as preparation for posting a partial product receipt. The
Receive now quantity shows in the right-most column on the Purchase order lines tab
of the purchase order detail form. As an alternative to the column in the purchase
order lines, enter the Receive now quantity in the Line quantity form, which shows
by clicking the button Line quantity on the action pane tab General of the purchase
order form.

Figure 3-28: Line quantity form for a purchase order after posting a partial delivery

mabenito@parcisa.com
3.5 Item Receipt 119

In the quantity lookup field of the product receipt posting form, choose the option
“Receive now” referring to this column then.

3.5.5.3 Product Receipt of Partial Deliveries

Alternatively, skip the Receive now quantity and choose the option “Ordered
quantity” in the quantity lookup field of the product receipt posting form. In this
case, you have to enter received quantities in the column Quantity on the tab Lines
of the posting form. After posting a partial delivery, the quantity open for future
product receipts shows in the column Deliver remainder of the Line quantity form
(see Figure 3-28). For accessing the line quantity form, click the button Line quantity
on the action pane tab General of the purchase order. The total quantity received
shows in the column Received there.
Once receiving further partial deliveries, post the product receipts in the same way
as described for the first delivery until the total of the received quantity complies
with the ordered quantity.

3.5.5.4 Settings for Over/Under Delivery

You may only post under or over deliveries, if the checkbox Accept underdelivery or
Accept overdelivery on the tab Updates of the procurement parameters is selected.
Additional settings for over and under delivery are available on the tabs Purchase
and Sell of the released product detail form (Product information management>
Common> Released products), where you may enter the maximum percentage for
over delivery and under delivery in purchase and sales orders. The percentages of
the released product default to the order lines, where you may adjust them as
needed in a particular order (tab Line details, sub-tab Delivery).

Figure 3-29: Selecting under delivery in the posting form for the product receipt

mabenito@parcisa.com
120 3 Purchasing

3.5.5.5 Under Delivery

If posting the receipt of a quantity, which is less than the ordered quantity,
Dynamics AX posts a partial delivery unless you mark the receipt to be the last for
the particular order line. As shown in Figure 3-29, under delivery applies by
selecting the checkbox in the column Close for receipt on the tab Lines of the posting
form after entering the received quantity in the Quantity column.
As an alternative, set the open quantity to zero by canceling the deliver remainder
quantity as described in section 3.4.7. But unlike when posting an under delivery
in the posting form, Dynamics AX does not control if the missing quantity is below
the under delivery percentage of the order line in this case.

3.5.5.6 Over Delivery

A transaction is an over delivery, if the total received quantity exceeds the ordered
quantity when posting a receipt (inventory registration or product receipt).
Dynamics AX accepts over delivery, if the exceeding quantity is less than the
allowed over delivery specified in the over delivery percentage of the order line.

3.5.6 Order Status and Inquiries

When posting the item receipt, Dynamics AX changes the inventory quantity and
the order status.

3.5.6.1 Purchase Order Status

The purchase order list page shows the approval status (see section 3.4.6) in the
column Approval status, and the order status in the column Status. The header view
of the purchase order detail form additionally shows the Document status on the tab
General. Whereas the order status indicates the order progress applying the lowest
status of any line in the purchase order, the document status shows the highest
status of a posted document.
Therefore, the order status may still be “Open order” while the document status is
“Invoiced” in case of partial deliveries and invoices. Table 3-1 below shows an
overview of receipt transactions and the related order status.
Table 3-1: Order status and document status for receipt transactions
Transaction Approval status Order status Document status
(Approval) Approved Open order None
Confirmation Confirmed Open order Purchase order
Receipts list Confirmed Open order Receipts list
Inventory registration Confirmed Open order As above, no change:
Purchase order or Receipts list
Partial product receipt Confirmed Open order Product receipt
Complete product Confirmed Received Product receipt
receipt

mabenito@parcisa.com
3.5 Item Receipt 121

Clicking the button Postings on the action pane tab General of the purchase order
form provides access to a form showing the last document number of posted
documents for the particular order.
At line level, the status shows in the field Line status on the sub-tab General of the
Line details tab. In addition, the Line quantity form indicates the status through the
different quantity columns.

3.5.6.2 Inventory Transaction Status and Inquiry

Both, inventory registration and product receipt, change the quantity on hand
through inventory transactions.
When entering a new purchase order line referring to an inventoried item,
Dynamics AX creates an inventory transaction with the status “Ordered” in the
column Receipt. After selecting an order line, view this transaction by clicking the
button Inventory/Transactions in the action pane strip of the tab Purchase order lines.
When posting an inventory registration, the receipt status of the inventory
transaction changes to “Registered”. The registration date is stored in the field
Inventory date on the tab General of the inventory transaction (if reversing the
inventory registration, Dynamics AX clears the inventory date).
When posting a product receipt with or without a previous inventory registration,
the receipt status of the inventory transaction switches to “Received”. The posting
date of the product receipt shows in the column Physical date of the inventory
transaction. The Financial date in the inventory transaction remains empty until
posting the vendor invoice. Additional detail data of the transaction like the
packing slip number show on the tab Update of the inventory transaction.
Since reversing a product receipt is only possible by posting an offsetting
transaction, the physical date of an inventory transaction never changes after
posting the receipt.
In case of partial receipts, the original inventory transaction splits into two
transactions with a different status according to the posted quantities. Figure 3-30
for example shows inventory transactions linked to a purchase order line after
posting the product receipts of two partial deliveries.

Figure 3-30: Inventory transactions after posting product receipts

mabenito@parcisa.com
122 3 Purchasing

3.5.6.3 Product Receipt Inquiry

In order to view posted product receipts, access the menu item Procurement and
sourcing> Inquiries> Journals> Product receipt or click the button Journals/Product
receipt on the action pane tab Receive of the purchase order form. After selecting a
product receipt on the tab Overview of the inquiry form, switch to the tab Lines for
displaying related receipt lines. The button Inventory/Lot transactions on the Lines
tab opens the inventory transactions shown above again.

3.5.6.4 Ledger Transactions

If ledger integration is activated for the product receipt, click the button
Ledger/Physical voucher in the inventory transaction inquiry if you want to view
related general ledger transactions. For viewing the ledger transactions of the
complete product receipt, access the product receipt inquiry and click the button
Vouchers on the tab Overview there.

Figure 3-31: General ledger transactions related to a product receipt

The main accounts in the ledger transactions are depending on the inventory
posting setup. You may access the inventory posting setup form through the menu
path Inventory management> Setup> Posting> Posting.
On the tab Purchase order of this form, the options “Product receipt” and “Purchase,
accrual” specify the main accounts applying to product receipt transactions (see
section 9.6.2). In addition, the account “Purchase expenditure, un-invoiced”
(account 10912 in Figure 3-32) is used as control account, generating offsetting
transactions.
Note: For source documents like the product receipt, settings in the general ledger
parameters on the tab Batch transfer rules determine, if transactions in subledgers
are synchronously posted to the general ledger or if they are summarized in a
scheduled batch. The general ledger transactions shown for a product receipt are
depending on this setting.

mabenito@parcisa.com
3.5 Item Receipt 123

3.5.6.5 Transaction Origin

Clicking the button Transaction origin in the voucher transactions opens the
transaction origin form, which shows related transactions for the voucher in all
modules. Depending on integration settings, the product receipt posts transactions
in inventory and the general ledger. Based on the deep integration of all modules
in Dynamics AX, the transaction origin form provides the option to view the effect
of a document in all parts of the application.
Figure 3-32 for example shows the transaction origin of the journal line selected in
Figure 3-31.

Figure 3-32: Transaction origin form showing all transactions for a product receipt

3.5.7 Case Study Exercises

Exercise 3.11 – Product Receipt
Your vendor ships the goods and services ordered in exercise 3.9 with packing slip
PS311. Before posting the receipt, check following items in the purchase order:
¾ Order status and document status
¾ Inventory quantity of the ordered item (button Inventory/On-hand)
¾ Inventory transaction related to the order line of the product
Then post a product receipt for the complete order quantity (120 units for the first
line according to exercise 3.10) referring to the vendor packing slip number
mentioned above. You execute posting directly in the purchase order form.
Now review the status of the items on the list given above in this exercise again.
What is different after product receipt posting?
Exercise 3.12 – Partial Delivery
You want to order your item (entered in exercise 3.5) from your vendor another
time. Enter a purchase order for 80 units. You may post the product receipt of
packing slip PS312 for a partial delivery of 50 units. Then post the product receipt
of a second partial delivery with 10 units.

mabenito@parcisa.com
124 3 Purchasing

Do you know how to show the remaining quantity? Check the order status, the
inventory quantity, and the inventory transactions like in exercise 3.11. What is
different in comparison to exercise 3.11?
Exercise 3.13 – Product Receipt Inquiry
You want to view the product receipt of exercise 3.11. For this purpose, access the
product receipt inquiry from the appropriate purchase order. In a second step,
open the product receipt inquiry choosing the applicable form in the procurement
and sourcing menu. Check the product receipt header and lines and try to find out,
if there are related ledger transactions.

3.6 Invoice Receipt

Together with the shipment or some time later, the vendor submits an invoice.
Before posting, you have to check the vendor invoice comparing it to order prices
and received quantities.
Whereas the product receipt posts a preliminary inventory value, the invoice
receipt posts the final value. Posting an invoice receipt therefore not only increases
the open vendor balance, but also increases the financial value of inventory.
Once all lines of a purchase order are invoiced, purchase order processing in
Dynamics AX is completed. Payment of vendor invoices runs through a separate
process shown in section 9.5.4.

3.6.1 Different Ways for Processing Vendor Invoices

When receiving vendor invoices, we have to distinguish between following types:
¾ Purchase order invoices – Purchase orders and consequently related invoices
always refer to products or procurements categories.
¾ Invoices without order assignment – Depending on whether the invoice
should be directly assigned to a ledger account, there are two types:
o Invoices for non-stocked products or procurements categories – These
invoices are posted the same way as purchase order invoices, just without
order assignment.
o Invoices for ledger accounts – Usually for specific subjects like office rent or
legal services.

3.6.1.1 Invoice Journals and the Vendor Invoice Form

For registering an invoice, which should directly post to a ledger account, enter a
transaction in an invoice journal with or without separate approval processing (see
section 9.5.3). Invoice journals are independent from purchase orders.
For invoices not entered to ledger accounts, the vendor invoice form (pending
vendor invoices) applies, no matter if the invoice refers to a purchase order or not.
The lines of the vendor invoice form contain products and procurement categories
– instead of ledger accounts required in invoice journal lines. If the invoice entered

mabenito@parcisa.com
3.6 Invoice Receipt 125

in the vendor invoice form does not refer to a purchaser order, only procurement
categories and non-inventoried items are available for selection.

3.6.1.2 Ways of Processing Purchase Order Invoices

When recording an invoice referring to a purchase order, there are two options
depending on whether separate approval registration applies:
¾ Pending vendor invoice – Enter and post of the invoice in the vendor invoice
form, with or without approval workflow.
¾ Invoice register journal – As a prior step to posting in the vendor invoice form,
enter and post the invoice to interim accounts in the invoice register journal
first, followed by posting in the invoice approval journal or the invoice pool
inquiry (see section 9.5.3).
Applying an approval workflow to pending vendor invoices enforces approval
without separately posting an invoice register journal. From a financial
perspective, the difference between the vendor invoice approval workflow on the
one hand and invoice register posting on the other hand is, that the invoice register
already posts an invoice, which is subject to tax calculation, when starting the
approval process.

3.6.1.3 Approval Workflow for Pending Vendor Invoices

If approval workflows should apply to pending vendor invoices, an appropriate
workflow referring to the template “Vendor invoice workflow” (Type “VendPro-
cessInvoice”) or the template “Vendor invoice line workflow” (Type “VendProcess
InvoiceLine”) has to be specified in the form Accounts payable> Setup> Accounts
payable workflows.
The vendor portal as part of the Enterprise Portal enables authorized vendors to
register pending vendor invoices through the Web for themselves. If vendor
invoices are registered this way, you want to make sure applying an appropriate
approval workflow before posting the invoice.

3.6.1.4 Vendor Invoice and Item Receipt

In the vendor invoice form, enter all regular purchase invoices referring to
products or procurement categories. Depending on whether the invoice refers to a
purchase order, the invoice lines are determined by order lines or have to be
entered manually. When manually entering invoice lines, only procurement
categories and non-stocked items are available.
For vendor invoices referring to a purchase order, there are two different cases – on
the one hand invoices referring to a prior product receipt, and on the other hand
invoices received together with the item or the service. If choosing the option
“Ordered quantity” or “Receive now quantity” in the lookup field Default quantity
for lines of the vendor invoice form, the invoiced quantity is not based on received
quantities. If the quantity in an invoice line exceeds the total quantity received

mabenito@parcisa.com
126 3 Purchasing

before for the related order line, invoice posting in parallel posts the product
receipt of the exceeding quantity.
Invoice posting without a prior product receipt is useful, if you receive goods or
services together with the invoice and do not post a separate item receipt in the
warehouse. If you want to apply this way of invoice posting to an inventoried
item, the item model group assigned to the item may not show a checkmark in the
checkbox Receiving requirement (see section 7.2.3).

3.6.2 Posting Vendor Invoices

If you want to register regular purchase invoices referring to products or
procurement categories, access the pending vendor invoice form.

3.6.2.1 Pending Vendor Invoices

Entering vendor invoices works independent from purchase orders in a separate
list page and detail form – the vendor invoice form in the menu item Pending
vendor invoices (Accounts payable> Common> Vendor invoices> Pending vendor invoices).
This form contains all vendor invoices, which have been entered but not posted.
Clicking the button New/Invoice on the action pane tab Vendor invoice of the
pending vendor invoices list page creates a new invoice. If you rather want to start
entering new vendor invoices in the vendor form (Accounts payable> Common>
Vendors> All vendors), click the button New/Invoice/Vendor invoice on the action pane
tab Invoice there.
Registering an invoice not referring to a purchase order is similar to entering a
purchase order in the purchase order form. After selecting a vendor number, the
invoice retrieves various defaults from the vendor record, which you may view
and edit in the header view. But unlike the purchase order form, new lines entered
on the tab Lines in the lines view of the vendor invoices form may only contain
non-stocked items and procurement categories.
When closing the vendor invoice detail form without posting, the invoice is stored
for later posting and – if applicable – approval. Therefore it displays in the pending
vendor invoices. If you want to cancel registration after starting to enter a new
invoice, click the button Maintain/Cancel on the action pane tab Vendor invoice of the
vendor invoice detail form. Clicking the button Maintain/Delete provides the option
to delete a pending vendor invoice already stored.

3.6.2.2 Entering Purchase Order Invoices

For entering a purchase order invoice – a vendor invoice referring to a purchase
order – you want to access the pending vendor invoice form. After clicking the
button New/Invoice in the action pane of the invoice form, select the vendor number
in the field Invoice account.
Then assign the purchase order number, either directly searching in the lookup
Purchase order or clicking the button Actions/Retrieve purchase orders in the action

mabenito@parcisa.com
3.6 Invoice Receipt 127

pane. If entering the order number before selecting a vendor, Dynamics AX

automatically retrieves the correspondent vendor.
If you are working in the purchase order form (Accounts payable> Common>
Purchase orders> All purchase orders), alternatively register a vendor invoice directly
starting there. Clicking the button Generate/Invoice on the action pane tab Invoice in
the purchase order form opens the pending vendor invoice form, already referring
to the appropriate order.
Although the vendor invoice form looks different to the other posting forms like
the product receipt, it shares similar functionality. Like in the other posting
transactions, it is depending on the preceding procedure which of the options to
choose in the quantity selection (available in the lookup Default quantity for lines):
¾ Product receipt quantity – Common option, applies if a product receipt has
been posted before and you want to link the invoice to the receipt.
¾ Ordered quantity or Receive now quantity – If selected, Dynamics AX does
not default the received quantity to the column Quantity in the invoice lines. For
any quantity not yet received, an item receipt will post in parallel to the invoice.
The option “Product receipt quantity” in the lookup Default quantity for lines
defaults the quantity received not invoiced to the Quantity column of the Lines tab.
For checking the product receipts included in the invoice, click the button
Actions/Match product receipts in the action pane of the vendor invoice form.

Figure 3-33: Registering a vendor invoice referring to a purchase order

mabenito@parcisa.com
128 3 Purchasing

The select form shows the product receipts available for invoicing. By clearing or
selecting the checkboxes in the column Match there you may exclude or include
product receipts. After closing the select form by clicking the button OK, the
selected product receipt displays in the column Product receipt on the tab Lines
(“<multiple>”, if linked to several receipts). If the vendor invoice does not include
all open product receipts, adjust the quantities in the invoice lines as applicable
making sure they comply with the matched product receipts then.
Note: After starting to register a vendor invoice, you have to cancel (button
Maintain/Cancel) or delete it, if you do not want to save or post it. Simply closing
the invoice detail form stores the invoice, displaying it in the pending vendor
invoices list page. If product receipts are assigned to this invoice, you can’t assign
them to a second invoice before deleting the first invoice.

3.6.2.3 Collective Vendor Invoices

If a vendor invoice refers to several purchase orders, you have to post a collective
invoice. Entering collective invoices in the vendor invoice form is different to
registering collective documents for other document types (e.g. collective product
receipts), however.
In the vendor invoice form, click the link Add another purchase order below the field
Purchase order or click the button Actions/Retrieve purchase orders in the action pane
for accessing the select form. For selecting purchase orders in the select form,
observe the lookup Default quantity for lines in the vendor invoice form. The
selected option in this field controls which purchase orders – according to prior
product receipts – are available.
In addition, accounts payable settings (Accounts payable> Setup> Summary update
parameters) and settings at vendor level determine common settings in orders
collected to a common invoice (similar to accounts receivables, see section 4.6.2).

3.6.2.4 Total Amount and Input Fields

The invoice number (mandatory field Number in the field group Invoice
identification), the Posting date, the Invoice date and the Due date (receiving the
default from payment term calculation) are available on the tab Vendor invoice
header of the line view. More details are available in the header view, where you
may also clear the checkbox Approved on the Approval tab, if you want to exclude
an invoice from payment proposals.
Before finally posting an invoice, it is useful to view the FactBox Invoice totals or to
click the button Totals for comparing the totals on the vendor invoice with the
totals you are going to post. If necessary, adjust quantities, prices, discounts and
line amounts on the tab Lines or Line details in the lines view of the invoice form.
If you want to prevent posting of an invoice (e.g. because of price differences),
select the checkbox On hold on the tab General of the vendor invoice form.

mabenito@parcisa.com
3.6 Invoice Receipt 129

3.6.2.5 Invoice Matching

If prices, discounts, charges or other items in the vendor invoice do not match the
purchase order, you should not modify prices and amounts in the purchase order
line, but enter the invoiced amounts in the vendor invoice form in order to keep
record of price variance.
If the amounts entered in a vendor invoice do not match the assigned purchase
order and product receipt, but exceed specified tolerances, the vendor invoice form
shows an exclamation mark ( ) in the Match variance field on the invoice header
and – if applicable – in the column Price match on the tab Lines. In order to view
details, click the button Matching/Matching details on the action pane tab Review of
the vendor invoice form.
Primary settings for invoice matching are available on the tab Invoice validation in
the accounts payable parameters. Invoice matching in Dynamics AX applies to
different areas which may be activated independently and with different
tolerances:
¾ Invoice totals matching – Compares the invoice total fields (invoice amount,
sales tax, charges) with the purchase order.
¾ Price and quantity matching
o Line matching policy – “Two-way matching” compares the invoice price
and discount with the order line; “Three-way matching” in addition
compares the quantity of product receipts.
o Match price totals – Applies to partial deliveries and invoices, comparing
the order line with the total of the current invoice line and related partial
invoice lines already posted.
¾ Charges matching – Separate matching settings for charges.
You may access specific setup forms for these validation criteria at the level of
particular vendors or items through the menu path Accounts payable> Setup> Invoice
matching. In addition, business policies (Accounts payable> Setup> Policies) enable
matching rules not covered by the settings mentioned above.

3.6.2.6 Invoice Posting and Ledger Integration

Once you have finished registering an invoice, optionally leave it non-posted and
post it at a later time – e.g. if an approval workflow applies. If you want to finally
post the pending vendor invoice, click the button Actions/Post/Post on the action
pane tab Vendor invoice of the vendor invoice form. After posting, the invoice
shows in the open vendor invoices list page (Accounts payable> Common> Vendor
invoices> Open vendor invoices), which displays all invoices not yet paid.
Posting a vendor invoice posts general ledger transactions, inventory transactions,
vendor transactions and transactions in other subledgers like sales tax if applicable.
As shown in section 3.2.3, the vendor posting profile specifies to which summary
account in the general ledger the vendor transaction is posting. Settings for

mabenito@parcisa.com
130 3 Purchasing

inventory transactions are available in the inventory posting setup – depending on

the particular item and vendor as shown in section 9.6.2.

3.6.2.7 New in Dynamics AX 2012

In Dynamics AX 2012, you do not register vendor invoices in a regular posting
form but in the new pending vendor invoice form (saving invoices before posting).
The vendor invoice form also allows registering invoices not referring to purchase
orders, facilitates collective invoices, and shows enhanced matching features.

3.6.3 Order Status and Inquiries

Like product receipt posting, posting the vendor invoice updates the order status.

3.6.3.1 Purchase Order Status

Depending on whether you have posted a partial or a complete invoice, the
purchase order shows following status:
¾ Partial invoice – Order status “Received” or “Open order”, document status
“Invoice”
¾ Complete invoice or last partial invoice – Order status “Invoiced”, document
status “Invoice”
Posting the vendor invoice affects inventory transactions, vendor transactions and
general ledger transactions.

3.6.3.2 Inventory Transactions

If you want to view the effects of the vendor invoice on inventory transactions,
click the button Inventory/Transactions in the action pane strip on the tab Purchase
order lines after selecting the appropriate order line in the purchase order form.
After posting the invoice, the Receipt status of the inventory transaction is
“Purchased” and the posting date of the invoice shows in the column Financial date.
The invoice number shows on the tab Update of the inventory transaction.

Figure 3-34: Inventory transactions after posting the vendor invoice

The example in Figure 3-34 shows two inventory transactions referring to a

purchase order line, of which only one inventory transaction has been included in
invoice posting.

mabenito@parcisa.com
3.6 Invoice Receipt 131

3.6.3.3 Invoice Inquiry

In order to access a posted invoice, access the form Accounts payable> Inquiries>
Journals> Invoice journal or click the button Journals/Invoice on the action pane tab
Invoice of in the purchase order form. After selecting the appropriate invoice on the
tab Overview of the inquiry form, switch to the tab Lines for displaying related
invoice lines. The button Inventory/Lot transactions on the Lines tab opens the
inventory transactions as shown above already.

3.6.3.4 Ledger Transactions

For viewing the general ledger transactions related to a vendor invoice, click the
button Voucher on the Overview tab of the invoice inquiry. If accessing the ledger
transactions from the inventory transaction inquiry by clicking the button
Ledger/Financial voucher there, only ledger transactions for the invoice related to the
particular inventory transaction display.

Figure 3-35: General ledger transactions related to a posted vendor invoice

The voucher transactions form displays the general ledger transactions of all
vouchers referring to the posted invoice. Figure 3-35 for example shows three
ledger journals with following transactions:
¾ Reversing the packing slip transactions – Accounts 32010, 10911 and 10912
¾ Vendor summary account transaction – Posting the vendor balance (Account
33010, derived from posting profile)
¾ Stock account transaction – Posting inventory items (Account 10310, derived
from inventory posting setup)
¾ Input tax transaction – Posting sales tax (Account 25520, derived from the
ledger posting group of the sales tax code)
In addition, there are two transactions to the control account “Purchase
expenditure for product” (account 51310) offsetting each other.

mabenito@parcisa.com
132 3 Purchasing

More information concerning posting profile setup is available in section 3.2.3, and
concerning inventory posting setup in section 9.6.2.
Note: Like for the product receipt, settings in the general ledger parameters on the
tab Batch transfer rules determine, if vendor invoices are summarized for posting to
the general ledger. In this case, not all described transactions are available at the
level of an individual invoice.

3.6.3.5 Transaction Origin

Clicking the button Transaction origin in the voucher transactions opens the
transaction origin form, which shows related transactions for the voucher in all
modules.

Figure 3-36: Transaction origin form, showing all transactions for a journal

Apart from ledger transactions, the transaction origin includes vendor

transactions, inventory transactions and tax transactions. Figure 3-36 for example
shows the transaction origin of journal line selected in Figure 3-35.

3.6.4 Case Study Exercises

Exercise 3.14 – Purchase Order Invoice
Your vendor submits the invoice VI314, which refers to goods and services
received in exercise 3.11. Before posting the invoice, check following items:
¾ Order status and document status of the purchase order
¾ Inventory transaction related to the order line of the product (button
Inventory/Transactions)
Then register and post the vendor invoice for the received quantity. You want to
register the invoice in the pending vendor invoices page, checking the invoice total
before posting.
Now review the status of the items on the checklist above again. What is different
after invoice posting?

mabenito@parcisa.com
3.7 Credit Notes and Item Returns 133

Exercise 3.15 – Partial Invoice for a Purchase Order

You receive the invoice VI315, which applies to the goods received with packing
slip PS312 in exercise 3.12. Post the vendor invoice starting in the purchase order
form, making sure that the vendor invoice only contains the items received with
packing slip PS312.
Exercise 3.16 – Vendor Invoice Not Related to a Purchase Order
Your vendor now submits the invoice VI316, showing an invoice line with one
hour of the procurement category “##-assembling” (entered in exercise 3.4) for a
price of GBP 105. The invoice does not refer to a purchase order.
You are accepting this invoice and want to register it in the pending vendor
invoices page. Check the invoice total before posting the invoice.
Exercise 3.17 – Invoice Inquiry
You want to view the invoice of exercise 3.14. For this purpose, open the invoice
inquiry for the order concerned in the purchase order form. As an alternative,
choose the appropriate menu path. Check the invoice header and lines as well as
the related ledger transactions.
In exercise 3.3, you were looking for the summary account for your vendor. Can
you find the ledger transaction for this account? Finally, open the transaction
origin form and check, to which modules your invoice has posted.

3.7 Credit Notes and Item Returns

When receiving a credit note from a supplier, you have to register and post it in
purchasing. Posting a vendor credit note is similar to posting a vendor invoice,
except that credit notes require a negative quantity. As with vendor invoices, you
have to distinguish two different kinds of credit notes:
¾ Credit notes for inventoried items
¾ Credit notes for non-stocked items and procurement categories
Vendor credit notes referring to inventoried items have to be registered in the
purchase order form. When posting a credit note for an inventoried item,
Dynamics AX posts an item return (negative receipt) in parallel if no separate item
return has been posted before. If the item model group does not allow physical
negative inventory, posting the return is only possible if the item is still on stock.
Vendor credit notes referring to non-stocked items and procurement categories
may alternatively be registered in following forms:
¾ Purchase order form – Like inventoried items
¾ Pending vendor invoice form – Entering invoice lines with negative quantity
¾ Invoice journal – See section 9.5.3
If posting a vendor credit note in an invoice journal, you have to respect that this
kind of crediting does not affect item statistics and inventory value.

mabenito@parcisa.com
134 3 Purchasing

In case you have to reverse a product receipt, but not an invoice receipt, apply the
functionality for canceling product receipts (see section 3.5.4).

3.7.1 Crediting Purchase Orders

For an inventoried item, you have to access the purchase order form if you want to
post a credit note. In case of a credit note for a non-stocked item or a procurement
category, applying a purchase order is optional.
If the parameter Safety level of invoiced orders in the procurement parameters
(Procurement and sourcing> Setup> Procurement and sourcing parameters, tab Updates)
is not set to “Locked”, optionally post credit notes in the original purchase order.
Otherwise, enter a new purchase order for the credit note. If invoiced orders are
not locked, there are following options for a credit note with inventoried items:
¾ Original purchase order – Registering a new line in the original order
¾ New purchase order – Purchase type “Purchase order“ or “Returned order“

3.7.1.1 Credit Notes in the Original Purchase Order

If you want to register a credit note in a new line of the original purchase order,
you have to access the purchase order in edit mode and enter a regular order line,
showing a negative sign in the column Quantity for the credited quantity. If you
expect a replacement from your vendor, enter a second purchase order line with a
positive quantity for the replacement.
Depending on change management settings, the order may be subject for approval.
Posting the vendor credit note works like posting a vendor invoice – after entering
the credit note number in the invoice number field you may post the credit note
clicking the button Post/Post in the action pane of the vendor invoice form.
If the checkbox Deductions requirement in the item model group of the item
concerned is selected, you have to post a separate product receipt (item return)
before posting the credit note (negative invoice).

3.7.1.2 Returned Order

If you want to enter the credit note in a new order, register a regular purchase
order (Purchase type “Purchase order”) with lines containing a negative quantity.
Alternatively, choose the Purchase type “Returned order” on the tab General in the
Create purchase order form when creating the order. If selecting the purchase type
“Returned order”, pay attention to the following items:
¾ RMA number – The return merchandise authorization provided by the vendor
has to be entered in the Create purchase order form.
¾ Quantity – Has to be negative in the order lines.
¾ Return action – For information purpose, available on the sub-tab Setup of the
purchase order lines (receiving a default from the procurement parameters).

mabenito@parcisa.com
3.7 Credit Notes and Item Returns 135

3.7.1.3 Inventory Marking

In order to avoid unintended changes of inventory value, use inventory marking
for assigning the value of the returned/credited item to the corresponding receipt.
For this purpose, select the new order line in the purchase order detail form and
click the button Inventory/Marking in the action pane strip of the purchase order
lines. In the marking form, select the checkbox in the column Set mark now marking
the original order line of the item now returned. The inventory value of the new
line entered for crediting now will exactly offset the inventory value received from
the original line. Without marking, Dynamics AX calculates the outgoing inventory
value of the credit note according to the item model group of the item, for example
applying the FIFO model.

3.7.1.4 Create Credit Note Feature

In order to facilitate entering a credit note, choose the Create credit note function by
clicking the button Create/Credit note on the action pane tab Purchase of the
purchase order form. Alternatively, click the button Purchase order line/Credit note in
the action pane strip on the order lines.
The credit note feature is similar to the copy feature for purchase orders (see
section 3.4.5). Depending on whether adding credit note lines to an existing or
copying to a new order, you have to pay attention to the checkbox Delete purchase
lines in the Create credit note form.
Unlike the regular copy feature, creating a credit note reverses the quantity sign,
additionally reserves the original order line and applies inventory marking
(exactly offsetting the inventory value received from the original line).

3.7.1.5 Transaction Settlement

Supposing the original invoice has not been paid and settled yet, optionally close
the open vendor transaction of the original invoice immediately when posting the
credit note.
For this purpose click the button Settle/Open transaction on the action pane tab
Invoice of the crediting purchase order. In the Settle open transaction form, select the
checkbox in the column Mark for the invoice concerned. After marking, simply
close the form (the form does not include an OK button). When posting the credit
note, the open vendor transaction of the invoice will be closed.
If not settling the invoice when registering the crediting purchase order, the
responsible has to settle invoice and credit note later in the open transaction
editing as described in section 9.4.5.
When working with settlements, take into account that there is no manual
settlement if automatic settlement is selected in the applicable vendor posting
profile (tab Table restrictions) or in the accounts payable parameters (tab Settlement).

mabenito@parcisa.com
136 3 Purchasing

3.7.1.6 New in Dynamics AX 2012

In Dynamics AX 2012, there is no option to register a credit note entering a
negative Receive now quantity in the original purchase order line.

3.7.2 Inventory Valuation for Separate Credit Notes

If receiving a credit note from a vendor reducing the item price (e.g. refunding
depreciation of damaged goods), there is no actual physical return of an item.

3.7.2.1 Crediting and Re-Invoicing

The easiest way for posting such a refund is to register and post a purchase line
with negative quantity and the original price (credit note) and a new order line
with positive quantity and the new price (invoice). You may register both lines in a
common purchase order.

3.7.2.2 Crediting and Allocating Charges

If this is not suitable, for example if the credited goods are already shipped, you
have to post a credit note not directly referring to the item and allocate the credit
amount to the item separately. There are two ways for entering this credit note:
¾ Vendor invoice form – Entering an invoice line with negative quantity and an
appropriate purchasing category.
¾ Invoice journal – Entering a journal line with negative amount and an
appropriate ledger account (see section 9.5.3).
After posting the credit note, register a charges transaction for adjusting inventory
valuation if applicable. For this purpose, select the original invoice in the invoice
inquiry (Accounts payable> Inquiries> Journals> Invoice journal) and click the button
Charges/Adjustment in the action pane strip. In the Allocate charges form, enter a line
for the charges transaction then. In the lookup Charges code of this transaction, only
charges with a Debit type “Item” and a Credit type “Ledger account” are available.
You may offset the balance on the credit ledger account by choosing a charges code
referring to the ledger account applied in the credit note. The ledger account on the
credit note is either determined by the purchasing category (if posting in the
vendor invoice form) or entered as offset account in the invoice journal.
Information on the general use of charges is available in section 4.4.5 of this book,
detailed information on the Allocate charges form in the online help of this form.

3.7.3 Case Study Exercise

Exercise 3.18 – Credit Note
The goods received in the first order line of exercise 3.11 show serious defects. You
return them to your vendor and receive the credit note VC318. The vendor does
not send a replacement. Which ways do you know for registering the credit note?
You decide to register the credit note in the original order. Enter the required data
and post the credit note.

mabenito@parcisa.com
4 Sales and Distribution

The primary responsibility of sales and distribution is to provide customers with

goods and services. In order to fulfill this task, sales and distribution needs to
manage the material requirements of customers by processing sales orders from
entering the order through picking and shipping to finally submitting the invoice.

4.1 Business Processes in Sales and Distribution

Before we start to go into details, the lines below give an overview of business
processes in sales and distribution.

4.1.1 Basic Approach

Starting point for sales and distribution are correct master data, especially
customer and product data. Instead of products, alternatively choose sales
categories for selling non-stocked items.

4.1.1.1 Master Data and Transactions in Sales

In the course of sales order processing, master data are copied to transaction data.
Sales quotations and orders therefore retrieve defaults from customer and product
records (item records). You may modify these default data in transactions, for
example if your customer requires a different delivery address in a specific order.
If such a modification also applies to future orders, you should change the
customer record.
Sales order processing is very similar to purchase order processing, as it mirrors
the purchasing process. Figure 4-1 shows the primary steps of sales order
processing.

Figure 4-1: Sales order processing in Dynamics AX

4.1.1.2 Sales Quotation

If we disregard prior marketing activities, sales order processing starts with a
request from a customer or prospect. Answering this request, the sales team creates

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_4, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
138 4 Sales and Distribution

a quote and sends it to the possible or actual customer. Based on the sales
quotation, Dynamics AX may generate activities to follow up on the quotation.

4.1.1.3 Sales Order

If the customer agrees to your proposal and orders your goods or services, you
want to register a sales order. Like a purchase order, a sales order consists of a
header, which primarily contains customer data, and one or more lines, which
contain the ordered items (products and sales categories).
If required, send a sales order confirmation to the customer as hardcopy or
electronic version by posting the order confirmation. Posting an order confirmation
means to save it, ensuring that you may access the confirmed order data
unchanged, no matter if there are modifications on the current order later.
For managing long-term contracts (blanket orders), enter sales agreements in
Dynamics AX. If you want to issue a specific shipment related to the blanket order,
create a release order for a partial quantity of the sales agreement. Release orders
are regular sales orders referring to the agreement.

4.1.1.4 Distribution
Depending on the type and the settings of the item, master scheduling as part of
operations planning covers the item supply, which is required to fulfill the sales
order, through purchasing or production.
Before shipping the item, print a picking list preparing delivery if applicable. Then
post the packing slip after finishing the internal shipment procedure.
The packing slip reduces both the physical quantity in inventory and the open
sales order quantity. Posting a packing slip without prior posting a picking list is
possible, if your company does not need picking lists.

4.1.1.5 Invoicing
After posting the packing slip, finally post the invoice. If you do not require a
separate packing slip, optionally post the invoice without a prior packing slip. In
this case, the invoice posts the physical and the financial transaction in parallel.
If you want to sell services or non-inventoried items, enter a sales order with order
lines alternatively containing sales categories or item numbers.
Free text invoice are available, if you just need an invoice and do not require to
process an order. In the lines of a free text invoice, you have to enter main accounts
instead of products or sales categories.

4.1.1.6 Customer Payment

Before the due date, your customer has to pay the invoice with or without cash
discount deduction. Section 9.5.4 contains a description on how to post the
customer payment and to settle the invoice in the customer transactions.

mabenito@parcisa.com
4.1 Business Processes in Sales and Distribution 139

If the customer does not pay in time, process payment reminders in Dynamics AX.

4.1.1.7 Ledger Integration

Because of the deep integration of Dynamics AX, all inventory and customer
transactions in sales and distribution in parallel post to ledger accounts as
described in section 9.6.
In order to keep record of the whole business process, Dynamics AX
comprehensively applies the voucher principle to these transactions.

4.1.1.8 Comparison to Purchasing

As mentioned, sales order processing mirrors the purchasing process in many
ways. Therefore Dynamics AX sales functionality is very similar to the appropriate
purchasing function in various areas.
For your guidance, Figure 4-2 below shows a comparison of purchasing and sales
documents in order processing.

Figure 4-2: Comparison of purchasing and sales documents

mabenito@parcisa.com
140 4 Sales and Distribution

4.1.2 At a Glance: Sales Order Processing

In order to provide an overview of the main steps in sales order processing, this
section shows the basics. For convenience, we create the order starting in the
customer list page and post all transactions directly in the sales order form. Of
course, you may alternatively enter the order in the Sales Orders list page and
access the specific posting forms through the menu.
When creating a new sales order in the customer list page (Sales and marketing>
Common> Customers> All customers), apply a filter for selecting the particular
customer first. Clicking the button New/Sales order (not the big button New/Sales
quotation) on the action pane tab Sell opens the line view of the sales order form in
Edit mode, creating a new sales order header with default data like language or
currency from the selected customer.
After clicking the button Add line on the tab Sales order line, or clicking on a new
line there, start registering a sales order line with item number (or sales category),
quantity and price. When selecting the item, Dynamics AX applies appropriate
defaults for quantity, price, and other fields like site or warehouse. Clicking the
button Header view (or Line view) in the action pane at the top of the form switches
between the line view and the header view shown in Figure 4-3.

Figure 4-3: Entering header data in the sales order header view

Note: If registering only one order line, you might need to press the F5 key
refreshing the form before you can post the order confirmation.

mabenito@parcisa.com
4.1 Business Processes in Sales and Distribution 141

If you want to print the order confirmation, post it by clicking the button
Generate/Sales order confirmation on the action pane tab Sell. In the posting form,
make sure the checkboxes Posting and Print confirmation are selected and optionally
click the button Printer setup for selecting a printer as described in section 2.2.1.
In order to post the packing slip in the sales order form, click the button
Generate/Packing slip on the action pane tab Pick and Pack of the order form. In the
posting form, choose the option “All” in the field Quantity in order to ship the
entire quantity. Making sure the checkboxes Posting and Print packing slip are
selected, click the button OK to post and print the packing slip. Packing slip
posting in sales reduces the physical quantity in inventory and sets the order status
to “Delivered”.

Figure 4-4: Clicking the button Generate/Packing slip in the action pane

Posting the sales invoice by clicking the button Generate/Invoice on the action pane
tab Invoice of the order form is similar to packing slip posting. In order to invoice
only shipped items, make sure to choose the option “Packing slip” in the lookup
field Quantity of the posting form. If choosing the option “All”, invoice posting in
parallel ships the deliver remainder not included in prior packing slips. Invoice
posting generates an open customer transaction to be paid and changes the order
status to “Invoiced”.
If applicable, skip transactions in the process described above. As a minimum, post
the invoice immediately after entering the sales order (Selecting “All” in the
Quantity field of the invoice posting form in this case).

mabenito@parcisa.com
142 4 Sales and Distribution

4.2 Customer Management

Customer records are required for managing business partners, which receive
goods or services. Whereas quotations are also available for leads and prospects,
the business partner in a sales order has to be included in the customer records.
Customer records in sales mirror vendor records in purchasing not only regarding
functional principles. Data management in both areas applies list pages and forms,
which are very similar to each other. Example are one-time customers, payment
terms, cash discounts, posting profiles, or the global address book integration,
which work the same way both in customer and vendor records.

4.2.1 Basic Data and Comparison to Vendors Records

For edit existing or creating new customers, access the customer list page in the
sales module (Sales and marketing> Common> Customers> All customers) or in the
accounts receivable module (Accounts receivable> Common> Customers> All
customers). According to the general structure of list pages, the customer page
shows the list of available customers.

4.2.1.1 Create New Customer Dialog

If you want to create a new customer in the customer list page, click the button
New/Customer in the action pane for accessing the Create new customer dialog. In the
create dialog, which contains all core fields of the customer record, select the
appropriate Record type (“Person” or “Organization”) first. The field Name in the
dialog is a lookup providing the option either to enter a new name or – if the
customer is already a party in the global address book – to select an existing party.
Customer records are linked to the global address book in the same way vendor
records refer to the global address book, which is why features like duplicate
control work as described for vendors (see section 3.2.1).
Clicking the button Save and open/Sales order in the dialog provides the option to
switch immediately to the sales order form for registering an order after entering
the customer.

4.2.1.2 Customer Detail Form

If you want to view the details of a customer in the list page, double-click the line
of the particular customer for accessing the related customer detail form. In the
detail form, clicking the button Edit in the action pane switches to edit mode.
Alternatively, immediately access the customer detail form in edit mode by
clicking the button Edit in the list page after selecting the customer.
The customer form contains numerous fields, which represent default values for
sales orders. Like the vendor group in vendor records, the Customer group in
customer records is a core setting, controlling ledger integration through customer
posting profiles (compare section 3.2.3). Further important fields include the Sales

mabenito@parcisa.com
4.2 Customer Management 143

tax group (VAT group) on the tab Invoice and delivery, the currency on the tab Sales
demographics, the terms of payment on the tab Payment defaults, and settings for
blocking (lookup Invoice and delivery on hold on the tab Credit and collections).

Figure 4-5: Editing a customer in the customer detail form

Since structure and content of the fields in the customer record are very similar to
the vendor record, the description below only covers deviations and elements,
which primarily refer to customer records and which have not been explained for
vendor records.

4.2.1.3 Invoice Account

In sales, it is sometimes required to send an invoice to a customer which is
different to the order customer – e.g. if the invoice for subsidiaries of an affiliated
group should be addressed to the head office. In order to comply with this
situation, select the customer number of the invoice customer in the field Invoice
account on the tab Invoice and delivery. A customer number registered there is the
default for the field Invoice account in related sales order headers. If required,
change the invoice account in the sales order.
Invoices of applicable orders post to the invoice customer instead of the order
customer, generating an open customer transaction referring to the customer
number of the invoice account. Unless chosen different in the lookup field Invoice
address on the tab Invoice and delivery of the customer record, the printed invoice
shows the address of the invoice account.

mabenito@parcisa.com
144 4 Sales and Distribution

4.2.1.4 Alternative Address and Global Address Book Integration

Whereas the invoice account number in the customer form refers to a second
customer number (assigning a separate customer record), adding addresses to a
customer on the Addresses tab of the customer form assigns several postal
addresses to a single customer number.

Figure 4-6: Editing a customer delivery address in the address dialog

Like postal addresses for vendors (see section 3.2.1), customer addresses are shared
with the related party in the global address book.
After clicking the button in the action pane strip of the tab Addresses, the
address dialog displays where you may register the name and one or several
purposes. For the primary customer address, make sure the checkbox Primary is
selected.
If entering an address with the purpose “Invoice”, invoices for the customer print
this address instead of the primary address. An address with the purpose
“Delivery” is the default for the delivery address in sales orders. If you want to
ship to an address which is different to the delivery address or the primary address
(applies as default, if there is no specific delivery address), select one of the other
customer addresses or enter a completely new address in the sales order then.

mabenito@parcisa.com
4.2 Customer Management 145

4.2.1.5 Print Management

Base settings for printing options like the destination (printer), the number of
copies, or the footer text are available in the accounts receivable print management
setup (Accounts receivable> Setup> Forms> Form setup, button Print management).
You may override these settings in the print management at customer level,
accessible by clicking the button Set up/Print management on the action pane tab
General of the customer form. After selecting the appropriate original or copy
document in the left pane of the print management form, choose the option
Override in the pop-up menu (which opens by right-hand clicking) before entering
the individual settings. Customer print management settings are transferred to
sales orders, where you may override them at order level again.
Print management settings (e.g. a specified printer) apply to documents, if the
checkbox Use print management destination is selected in the particular posting form
(see section 3.4.8).

4.2.1.6 Shipping Carrier and Mode of Delivery

If a shipping carrier interface – automatically integrating information from carrier
software of selected carriers – is enabled in the form Inventory management> Setup>
Sipping carrier> Carrier interface, you have to select a Mode of delivery on the tab
Invoice and delivery of the customer form. Modes of delivery (Sales and marketing>
Setup> Distribution> Modes of delivery) specify the transport method, on the tab
Setup in the mode of delivery including if and which carrier applies.

4.2.1.7 Credit Limit

Many companies want to apply credit limit control in sales operations. In order to
activate credit limit control, the accounts receivable parameters (Accounts
receivable> Setup> Account receivable parameters, tab Credit rating) include settings
determining credit rating calculation. Depending on this setup, credit limit control
includes only open invoices, or also packing slips, or additionally open orders, and
shows a warning or an error message.
The tab Credit and collections in the customer form contains the field Credit limit for
entering the credit limit amount of the customer. If the checkbox Mandatory credit
limit is selected, the credit limit amount always applies. Otherwise, a credit limit
amount of zero means unlimited credit.
When entering (or posting, depending on the parameter settings) a sales order,
Dynamics AX checks if the customer exceeds the credit limit and either displays a
warning message or prevents posting showing an error message.

4.2.1.8 New in Dynamics AX 2012

In Dynamics AX 2012, items new to customer management refer to the new user
interface design, to the global address book integration, and to the carrier interface.

mabenito@parcisa.com
146 4 Sales and Distribution

4.2.2 Case Study Exercises

Exercise 4.1 – Customer Record
A new domestic customer wants to order your items. Create a new record for this
customer containing name (starting with our user ID), primary address, a mode of
delivery without carrier and an appropriate customer and sales tax group for
domestic customers. In addition, the terms of payment and the cash discount
entered in exercise 3.1 apply.
The customer wants you to ship ordered goods to a separate delivery address.
Therefore, enter a domestic delivery address of your choice, which should be the
default for orders of this customer.
Note: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the customer detail form.
Exercise 4.2 – Ledger Integration
You want to find out about ledger integration. To which summary account in the
general ledger will an invoice for your new customer post?

4.3 Product Management for Sales

Apart from customer records (which are the main data source for sales order
headers), products and sales categories (applying to order lines) are the second
core area of master data for sales operations.
Product and released product records are required for inventoried items. For
intangible items, alternatively apply item records (with the product type “Service”
or specific item model groups) or sales categories.
The following section primarily contains an explanation of product record data
necessary for sales and distribution. A more general description of product
management is available in section 7.2.

4.3.1 Product Records and Categories in Sales

When entering a sales order line, alternatively enter one of the following fields in
order to identify the sold item or service:
¾ Item number – Depending on the requirements, items may include a sales
category.
¾ Sales category – For services and intangible products.

4.3.1.1 Sales Categories

A product category (see section 3.3.1) is a group of similar products or services,
which you may access through category hierarchy administration (Product
information management> Setup> Categories> Category hierarchies).
Product categories available in sales belong to the sales category hierarchy. An
important category setting for sales is the sales tax group, which you may enter on

mabenito@parcisa.com
4.3 Product Management for Sales 147

the tab Item sales tax groups of the sales categories (Sales and marketing> Setup>
Categories> Sales categories).
If creating a sales order not referring to a specific product, optionally enter the
sales category in the order line and leave the item number field empty.

4.3.1.2 Product Record Structure

The product record structure in Dynamics AX shows two levels, including shared
products for data common to all companies, and released products for company-
specific data (see section 3.3.2 and 7.2.1).
You may access the shared product in the form Product information management>
Common> Products> All products and product masters. Sales specific data are available
in the released product form (Product information management> Common> Released
products).

4.3.1.3 Creating a Product

In order to create a new product (item), access the shared product form and insert
a record by clicking the button New/Product in the action pane. Apart from the
basic product description in default language entered in the field Description of the
shared product, optionally enter item descriptions in foreign languages after
clicking the button Languages/Translations in the action pane.
Once you have finished entering shared product data, click the button Release
products in the action pane of the shared product for creating released products. In
the released product, you have to enter at least the item group, the item model
group, and the dimension groups (if not specified on the shared product) then.
As an alternative to creating a shared product and releasing it, create a released
product directly in the released product form by clicking the button New/Product
on the action pane tab Product. In this case, the New released product dialog creates a
shared product in parallel.

4.3.1.4 Sales Related Data

Core sales data, including the Item sales tax group (specifying whether regular sales
tax / VAT or a reduced rate applies), are available on the tab Sell of the released
product form.
After clicking the button Order settings/Default order settings on the action pane tab
Plan of the released product form, enter settings for order quantities and lot size at
company level. Site-specific settings are available after clicking the button Site
specific order settings in the released product – in case of quantity settings selecting
the checkbox Override in the site-specific order settings form.
The order setting forms contain data for purchasing, sales and inventory. In order
to access sales-related data, switch to the tab Sales order. Marking the checkbox
Stopped there blocks the product for sales transactions.

mabenito@parcisa.com
148 4 Sales and Distribution

4.3.1.5 Discount Groups

Apart from the Base sales price, the tab Sell in the released product form also
contains item discount groups for line discount and multiline discount. As shown
below, line discount calculation is based on individual order lines whereas
multiline discount calculation includes all lines of an order.
Another kind of discounts are total discounts (invoice discounts), which are
specified at order header level, independent from items. But you may exclude
particular products from the basis of total discount calculation by clearing the
checkbox Total discount on the tab Sell in the released product form.

4.3.1.6 New in Dynamics AX 2012

In Dynamics AX 2012, shared products and sales categories are a new.

4.3.2 Sales Price and Discount

In addition to the base sales price available directly in the released product record,
trade agreements provide the option to manage multiple price lists and discount
agreements.

4.3.2.1 Base Sales Prices

The base sales price on the tab Sell of the released product form may be updated
automatically based on the purchase or cost price. Settings for the automatic base
price calculation are available in the field group Price update of the tab Sell, where
the lookup field Base price provides two options:
¾ Purchase price – Sales price calculation refers to the base purchase price (tab
Purchase).
¾ Cost – Sales price calculation refers to the base cost price (tab Manage costs).
The Sales price model specifies, if the price calculation is based on the field
Contribution ratio or on the field Charges percentage. The Sales price model “None”
means that there is no automatic calculation of the base sales price. The other
options regarding base sales price (including price unit and charges) are similar to
the base purchase price settings (see section 3.3.3).
In addition to the base sales price on the tab Sell of the released product form, base
prices at site level are available in the item price form. For accessing the item price
form, click the button Set up/Item Price on the action pane tab Manage costs of the
released product. If applicable, run a calculation of sales prices in the item price
form based on the bill of materials and the route of manufactured items.

4.3.2.2 Structure of Trade Agreements

Trade agreements in sales determine prices and discounts depending on customers
and items (released products). Dynamics AX includes following types of trade
agreements for this purpose:

mabenito@parcisa.com
4.3 Product Management for Sales 149

¾ Sales prices
¾ Line discounts
¾ Multiline discounts
¾ Total discounts (Invoice discounts)
A description on managing prices in trade agreements on the example of purchase
prices is available in section 3.3.3. In addition to the options available in
purchasing, specify a Generic currency and an Exchange rate type in the accounts
receivable parameters (Accounts receivable> Setup> Accounts receivable parameters, tab
Prices) if applicable for automatically converting from price list prices in the
generic currency to other currencies when registering a sales order line.
Discounts show two different levels of assignment:
¾ Line and multiline discounts – Assigned to order lines
¾ Total discounts – Assigned to order headers
In trade agreements, discounts and prices may refer to different pricing levels. A
line discount agreement for example may apply to an individual customer, to a
customer discount group, or to all customers. In parallel, the discount agreement
may apply to an individual item, to an item discount group, or to all items.
Table 4-1 shows an overview of the different levels in two dimensions – the item
and the customer dimension – available for line and multiline discounts.
Table 4-1: Discount specification levels for line discount and multiline discount
Item number Item discount group All items
Customer number Only line discount Line and multiline Line and multiline
Customer discount group Only line discount Line and multiline Line and multiline
All customers Only line discount Line and multiline Line and multiline
In comparison, trade agreements for prices and trade agreements for total
discounts show only one dimension. Prices are available per item, which restricts
the item dimension to “Item number”, whereas total discounts apply at order
header level, restricting the item dimension to “All items”.

4.3.2.3 Viewing Line Discount Agreements

In order to view sales line discounts, access the line discounts form from different
menu items depending on the basis for the discount:
¾ For an item (including the line discount group of the item) – In the released
product form, click the button View/Line discount on action pane tab Sell
¾ For a customer (including the line discount group of the customer) – In the
customer form, click the button Trade agreements/Discounts/Line discount on
action pane tab Sell
¾ For an item discount group – In the item discount group form (Sales and
marketing> Setup> Price/discount> Item discount groups), click the button Trade
agreements/View line discount

mabenito@parcisa.com
150 4 Sales and Distribution

¾ For a customer discount group – In the customer price/discount group form

(Sales and marketing> Setup> Price/discount> Customer price/discount groups), select
the option “Line discount group” in the lookup Show and click the button Trade
agreements/View line discount
If you want to view the line discounts for a customer discount group for example,
open the customer price/discount groups (Sales and marketing> Setup>
Price/discount> Customer price/discount groups) and choose the option “Line discount
group” in the lookup field Show. After clicking the button Trade agreements/View
line discount you may view available line discounts.

Figure 4-7: Viewing line discounts based on a customer discount group

In the line discounts form, discount percentages display in the footer part of the
form. The column Discount shows a discount amount.
Another important setting for discount calculation is available in the column Find
next of the discounts form. The checkbox there should only be marked for
discounts, which apply in addition to discounts entered at a different level. In
Figure 4-7 for example, the discount in a sales order line would be 17 percent, if the
checkbox Find next was marked for the 12 percent discount line and a discount of 5
percent would apply to the appropriate item discount group.

4.3.2.4 Creating, Updating and Deleting Line Discount Agreements

Like registering a new price agreement (see section 3.3.3), registering a new sales
line discount agreement requires entering and posting a price/discount agreement
journal (Sales and marketing> Journals> Price/discount agreement journals). After
creating a journal by clicking the button New in the agreement journal header form,
click the button Lines in order to switch to the journal lines.

mabenito@parcisa.com
4.3 Product Management for Sales 151

When registering a sales line discount in an agreement journal line, make sure to
select “Line discount (Sales)” in the column Relation. Similar to price agreements,
line discount agreements may refer to following fields:
¾ Period of validity – From date and to date, depending on the accounts
receivable parameters Date type on the tab Prices referring to order entry or
delivery date
¾ Quantity – From and to quantity
¾ Unit of measure
¾ Currency
¾ Customer dimension level (column Account code) – Individual customer,
customer group or all customers
¾ Item dimension level (column Item code) – Individual item, group or all
When entering line discounts you have to keep in mind that discount percentages
show in the footer part of the journal lines (compare Figure 4-7).
If you want to enter line discounts at inventory dimension level (e.g. per site or
color) and the appropriate dimension column does not show, click the button
Inventory/Dimensions display in the action pane strip and select the appropriate
dimension. As a prerequisite, the dimension group of the particular item has to
include the selected dimension in the price search.
After registering the line discounts in the agreement journal, click the button Post
to activate the agreement.
If you want to update or delete an active trade agreement, access the appropriate
form for viewing the trade agreement and select the agreement before clicking the
button Edit selected lines. Like when updating purchase prices (see section 3.3.3), the
update or deletion is posted through a new journal referring to the selected
agreement.

4.3.2.5 Managing Multiline Discounts

Whereas line discount calculation is based on individual order lines, multiline
discount calculation includes all items of the particular order, which got the same
multiline discount group. You may apply multiline discounts for example if you
want to give a quantity discount based on the total quantity of several items.
Viewing and managing multiline discounts is similar to managing line discounts.

4.3.2.6 Total Discounts

Unlike line discounts, total discounts (invoice discounts) are not based on items or
item groups. Total discounts refer to the complete invoice and show the option to
enter a discount based on the invoice total.

mabenito@parcisa.com
152 4 Sales and Distribution

4.3.2.7 Settings for Discount

As a prerequisite for applying trade agreements at group level, the appropriate
price and discount group has to be entered in the customer form and/or the
released product form.
In the customer form, fields for assigning discount groups are available on the tab
Sales order defaults. In the released product form, fields for assigning the line and
the multiline discount group in sales are available on the tab Sell. The checkbox
Total discount in the released product is available for including or excluding an
item from total discount calculation.
If line discount and multiline discount in parallel apply to a particular sales order
line, the lookup field Discount on the tab Prices of the accounts receivable
parameters controls, how to calculate the total of line and multiline discount.
The setting, which levels (“Table”, “Group”, “All”) are applicable in price and
discount calculation, is available in the form Sales and marketing> Setup>
Price/discount> Activate price/discount.
Within the activated elements, discount calculation searches from the specific
definition to the general – first the customer and item number level, then the group
level, and finally the general discount level. Depending on the setting in the
checkbox Find next of the selected trade agreements, only one discount or the total
of discounts at several levels applies to the particular order line.

4.3.2.8 Ledger Integration

Since discounts affect finance, Dynamics AX includes discount posting in ledger
transactions. Concerning both, ledger transactions and revenue calculation in sales,
you have to distinguish between line and multiline discounts on the one hand and
total discounts on the other hand.
Line and multiline discounts are included in item revenue calculation, therefore
reducing revenue and gross margin. Settings for the ledger integration of line and
multiline discounts provide the option to either reduce the amount posted to
revenue accounts of the sold products, or to post these discounts to separate
accounts. Dynamics AX posts to separate accounts, if the inventory posting setup
(see section 9.6.2) contains appropriate main accounts (Inventory management>
Setup> Posting> Posting, tab Sales order, option Discount).
Unlike line and multiline discounts, total discounts do not reduce the revenue at
item level. As a limitation of total discounts, it is not possible to post these
discounts to different main accounts. The account number for total discount
transactions is available in the accounts for automatic transaction (General ledger>
Setup> Posting> Accounts for automatic transactions), where a line for the posting type
“Customer invoice discount” contains the appropriate main account.

mabenito@parcisa.com
4.4 Sales Orders and Quotations 153

4.3.2.9 Discounts in Sales Orders

Line discounts immediately show in an order line, if an applicable trade agreement
is available. For multiline discounts and total discounts, you have to run a
calculation for determining the discount amount when finishing order entry (see
section 4.4.4).
If applicable in a sales order line, override the line discount default or manually
enter a new discount, independently from trade agreement settings. If manually
entering or changing a line discount, and later modifying data in fields of the order
line which are among the basis of price calculation (e.g. the ordered quantity),
Dynamics AX may overwrite the manual discount with the applicable trade
agreement. Depending on the accounts receivable parameters (tab Prices, include
the source “Manual entry” in the section Trade agreement evaluation), Dynamics AX
shows a dialog before overwriting the manual discount.

4.3.2.10 New in Dynamics AX 2012

New items in Dynamics AX 2012 are the option of price lists in a generic currency
and the requirement to post agreement journals for updating trade agreements.

4.3.3 Case Study Exercises

Exercise 4.3 – Sales Categories
Your company offers installation services to your customers. For this purpose enter
a new sales category “##-installation” (## = your user ID) independent from the
product categories for purchasing of exercise 3.4. When setting up the new sales
category, make sure it contains the item sales tax group referring to the standard
tax rate.
Exercise 4.4 – Price List
Your company requires an additional price list applicable to new sales markets.
Enter a new customer price group P-## (## = your user ID) for this price list and
attach it to your customer of exercise 4.1.
The new price list should show a price of GBP 90.00 starting from the current date
for the item of exercise 3.5. Enter and post this price in a price/discount agreement
journal. Finally you want to check if the price shows correctly on your customer.
Exercise 4.5 – Line Discount
You agree with your customer of exercise 4.1 to grant a line discount of 10 percent
for all items. Enter and post a trade agreement for this discount, which only
applies to your customer. Make sure to enter a percentage, not a discount amount.
Which setting is required to make use of this discount in sales order lines?

4.4 Sales Orders and Quotations

The first step of sales order processing in Dynamics AX often is a sales quote,
which you may send to a prospect or customer in reply to a request for quotation.

mabenito@parcisa.com
154 4 Sales and Distribution

Once the customer orders goods or services, you want to enter an appropriate sales
order. With regard to the functionality and structure of forms and list pages, sales
orders largely mirror purchase orders. This section therefore primarily contains the
description of issues, which are different in sales compared to purchasing.

4.4.1 Basics of Sales Order Processing

Unlike purchase orders, which are primarily based on item demand available as a
data source within the Dynamics AX database, sales orders in most cases originate
from sources outside the database.
Apart from the manual entry of a sales order, there are only a few other options
within Dynamics AX for generating a sales order. Possible preliminary steps to a
sales order are as follows:
¾ Sales quotations
¾ Sales agreements – Blanket orders
¾ Enterprise Portal – Web shop
¾ AIF framework – exchanging data with other applications
¾ Intercompany functionality – Purchase orders of another legal entity

4.4.1.1 Sales Agreements

In Dynamics AX, blanket orders are covered by sales agreements (Sales and
marketing> Common> Sales orders> Sales agreements), which do not only contain
contracts at the level of product number and quantity, but also at the level of the
sales amount for a product, or at the level of the total sales volume for a customer.
In order to ship and invoice deliveries referring to a sales agreement, you have to
create release orders (regular sales orders linked to a sales agreement). The
functionality of sales agreement matches the purchase agreements functionality as
shown in section 3.4.9.

4.4.1.2 Sales Order Processing

Once you have finished creating a new sales order – either manually or
transferring a prior document like the sales agreement – you may post and print
the order confirmation. The further proceeding depends on the actual transactions
in inventory and sales, and on the company settings in Dynamics AX.
As shown in Figure 4-8, there are four different options for processing a sales order
in Dynamics AX:
¾ Packing slip – Without prior transactions in Dynamics AX
¾ Picking list – Posting a picking list before packing slip posting
¾ Picking list registration – Registration of the posted picking list before packing
slip posting
¾ Output orders and shipments – Specific transactions in inventory (with ware-
house locations and pallet transports) before packing slip posting

mabenito@parcisa.com
4.4 Sales Orders and Quotations 155

Figure 4-8: Sales order processing in Dynamics AX

The primary difference between the available options is the way of executing
picking in inventory management.

4.4.2 Sales Quotations

In Dynamics AX, the business partner in a sales quotation hasn’t got to be a
customer – it may be a prospect as well. But since sales orders require a customer
record, you have to convert the prospect to a customer before accepting a
quotation and transferring it to an order.

4.4.2.1 Managing Prospects

Prospects are parties – companies or persons – in sales, which are not customers
yet. Unlike customers, which are applicable to accounts receivable transactions,
prospects do not show transactions relevant to finance. But they are available for
CRM activities like mailings and marketing campaigns, and for sales quotations.
If you want to register a new prospect, access the form Sales and marketing>
Common> Prospect> All prospects and click the button New/Prospect in the action
pane for accessing the Create new prospect dialog. The create prospect dialog works
like the create customer dialog (see section 4.2.1), integrating prospects with the
global address book.
In the detail form, check core data like the sales tax group (VAT group) and the
customer group of the new prospect then. Some default data like the prospect type
(Type ID on the tab General) for a new prospect derive from the tab Prospects in the
sales and marketing parameters. A new prospect is generated automatically when
entering an opportunity (Sales and marketing> Common> Opportunities> All
opportunities) with a new party name.
If you want to convert the prospect to a customer, click the button Convert/Convert
to customer on the action pane tab General of the prospect form. Depending on the
setting in the type (Sales and marketing> Setup> Prospects> Relation types) of the
prospect, the prospect is deleted automatically when converting.

mabenito@parcisa.com
156 4 Sales and Distribution

4.4.2.2 Processing Sales Quotations

For creating a new sales quotation, click the button New/Sales quotation on the
action pane tab Quotation of the list page Sales and marketing> Common> Sales
quotations> All quotations. Alternatively, create a sales quotation by clicking the
button New/Sales quotation on action pane tab Sell in the customer form or in the
prospect form.
If creating a quotation in the sales quotation form, the Create quotation dialog
displays where you have to select the Account type (“Customer” or “Prospect”).
Depending on the selected type, subsequently enter a prospect or a customer in the
appropriate lookup field. Dynamics AX then applies default values from the
selected customer or prospect to the sales quotation, which you may override in
the create dialog. Clicking the button OK in the dialog finally creates the quotation
header and switches to the quotation detail form showing the line view.

Figure 4-9: Creating a new quotation for a prospect

In the quotation detail form, start to enter a line on the tab Lines by simply clicking
the first line in the grid or clicking the button in the action pane strip.
Then select an item number or a sales category and other line details as required.
Clicking the button Generate/Send quotation on the action pane tab Quotation of the
quotation detail form posts and prints the quotation (similar to an order
confirmation in a sales order). Depending on the answer of the prospect or
customer, click the button Confirm on the action pane tab Follow up of the quotation
form later for confirming the quotation and automatically generating a sales order.
If the quote refers to a prospect, you have to transfer the prospect to a customer
before creating the sales order. For this purpose, the button Convert to customer is
available on the action pane tab Follow up directly in the quotation form.

mabenito@parcisa.com
4.4 Sales Orders and Quotations 157

4.4.3 Sales Order Registration

Like in a purchase order, the order type in a sales order is a core characteristic.
Sales orders may contain following order types:
¾ Sales order – Regular sales order
¾ Journal – Draft or template, not affecting inventory and finance
¾ Subscription – Periodic order, remains open after invoicing
¾ Returned order – Credit notes, see section 4.6.4
The order type “Item requirements” shown as additional option is applicable for a
specific kind of sales orders generated in the Dynamics AX project module, which
is beyond the scope of this book. It is not possible to manually enter orders of the
type “Item requirements” in sales.

4.4.3.1 Entering a New Sales Order

If you want to enter a sales order manually, either start in the customer form
(clicking the button New/Sales order on the action pane tab Sell) or in the sales order
form.
If starting in the sales order form (Sales and marketing> Common> Sales orders> All
sales orders), click the button New/Sales order on the action pane tab Sales order. In
the Create sales order dialog, choose a customer in the lookup then (e.g. applying a
Filter by field doing a right-hand click in the column Name of the lookup). Default
values from the selected customer apply to the order, which you may override in
the dialog. Clicking the button OK in the dialog finally creates the sales order
header and switches to the order detail form showing the line view.

Figure 4-10: Entering a sales order line with a sales category in the order form

In the sales order detail form, start to enter a line on the tab Lines by simply
clicking the first line in the grid or clicking the button in the action pane

mabenito@parcisa.com
158 4 Sales and Distribution

strip. Then select an item number or a sales category and other line details as
required.
Working in sales orders widely matches purchase orders, which is why you may
refer to section 3.4.5 regarding following topics:
¾ Structure and functions in the order form
¾ Delivery address in order header and lines
¾ Sales tax / VAT (see also section 9.4.6)
¾ Copy function
¾ Using orders of the type “Journal”
In the description of purchase order processing, following subjects also apply to
sales order processing:
¾ Canceling orders (Section 3.4.7)
¾ Partial delivery, over and under delivery (Section 3.5.5)
¾ Order status and inquiries (Section 3.5.5.5 and 3.6.3)

4.4.3.2 Deleting a Sales Order

Unlike purchase orders, sales orders do not apply change management and order
approval. Among other items, there are differences between sales orders and
purchase orders with regard to deleting an order. When deleting sales orders,
following accounts receivable parameters (Accounts receivable> Setup> Accounts
receivable parameters) apply:
¾ Mark order as voided (tab General) – If selected, deleted sales orders show in
the form Sales and marketing> Inquiries> History> Voided sales orders.
¾ Delete order line invoiced in total and Delete order after invoicing (tab
Updates) – If marked, orders or order lines are deleted when posting the invoice.

4.4.3.3 Delivery Date Calculation

An issue in sales orders, which is quite different to purchase orders, is the
assignment of delivery dates. A number of aspects determine the calculation of
delivery dates in sales:
¾ Order entry deadlines
¾ Sales lead time
¾ Delivery date control
¾ Availability and item requirements
Regarding delivery date, Dynamics AX distinguishes between the shipping date
and the date when the customer receives the item on the one hand and between a
requested and a confirmed date on the other hand. In order to manage these
different dates, four different fields referring to the delivery date are available on
the sub-tab Delivery of the tab Line details in the sales order lines.

mabenito@parcisa.com
4.4 Sales Orders and Quotations 159

4.4.3.4 Order Entry Deadlines and Sales Lead Time

Order entry deadlines (Inventory management> Setup> Distribution> Order entry
deadlines) determine the final time for entering same-day shipments in sales order
lines. After the deadline, delivery date calculation starts with the next day.
The sales lead time is the number of days required internally until shipping an
item. A general setting for the sales lead time is available on the tab Shipments of
the accounts receivable parameters. The lead time specified there applies as a
default to the ship date in the order header. Order lines accept the header ship
date, if the calculated date based on the sales lead time of the item is not after the
header ship date.
You may specify sales lead times for items in the default or site-specific order
settings (button Default order settings or Site specific order settings on the action pane
tab Plan of the released product form), and in trade agreements for sales prices.

4.4.3.5 Delivery Date Control

If you want to check shipping calendars and item availability for determining
delivery dates when entering a sales order line, activate the delivery date control
on the tab Shipments of the accounts receivable parameters. For this purpose, the
lookup Delivery date control provides following options for delivery date
calculation:
¾ None – Not applying delivery date control
¾ Sales lead time – Delivery date based on lead time and calendar settings
¾ ATP (“Available to promise”) – Delivery date based on the item availability
¾ ATP + Issue margin – Adding the issue margin from the item coverage to the
delivery date of ATP calculation
¾ CTP (“Capable to promise”) – Immediately performing local master scheduling
Selecting the option “Sales lead time”, delivery date calculation in sales order lines
is only based on the applicable sales lead time and calendars.
Selecting the option “ATP”, delivery date calculation is based on the item
availability within the ATP time fence. Existing planned orders are included in the
ATP calculation, if the checkbox ATP incl. planned orders in the accounts receivable
parameters is selected. If the quantity entered in a sales order line is not available
(the calculation includes the quantity on hand and transactions within the ATP
time fence), the shipping date is the first day after the ATP time fence. In order to
avoid unnecessary delays, the ATP time fence should consequently match the lead
time.
The ATP offset time settings in the accounts receivable parameters apply to the
calculation of delayed demand and supply transactions, which are scheduled for
past periods.

mabenito@parcisa.com
160 4 Sales and Distribution

Figure 4-11: Delivery control settings in the accounts receivable parameters

Selecting the option “CTP”, delivery date calculation immediately performs local
master scheduling in the current dynamic master plan (see section 6.3.1), creating
planned purchase and production orders as required. In case of a planned
production order, the delivery date resulting from the planned order includes the
delivery time for components.
Delivery date control settings on the item (default/site-specific order settings in the
released product form) override the base settings in the accounts receivable
parameters. If you want to activate or deactivate delivery control for a specific
sales order or sales order line, optionally override the lookup Delivery date control
on the (sub-)tab Delivery of the order header or line.
Delivery date calculation includes following calendar and transport time settings:
¾ Inventory management> Setup> Inventory breakdown> Warehouses, tab Master
planning – Calendar of the shipping and the receipt warehouses
¾ Organization administration> Setup> Organization> Legal entities, tab Foreign trade
and logistics – General Shipping calendar of your company
¾ Sales and marketing> Common> Customers> All customers – In the detail form,
Receipt calendar for the customer or the assigned delivery addresses
¾ Sales and marketing> Setup> Distribution> Modes of delivery, button Transport
calendar – Transport calendar for delivery mode and – optionally – warehouse
¾ Inventory management> Setup> Distribution> Transport – Transport days depending
on delivery mode, shipping warehouse and receipt address or warehouse
In case delivery date control is activated, Dynamics AX checks if the item in the
order line is available at the entered delivery date. In order to receive a proposal of
possible delivery dates, click the button near the field Confirmed ship date on the
(sub-)tab Delivery in the order header or line.
If necessary, deactivate delivery date control by selecting the option “None” in the
lookup Delivery date control on the order header or line. After deactivating delivery

mabenito@parcisa.com
4.4 Sales Orders and Quotations 161

date control, you can enter a date which is not included in the regular dates of
possible delivery.

4.4.3.6 Inquiries on Item Availability

Multiple inquiries are available in the sales order form for checking the availability
of an item. If you only want to view the current inventory quantity of the item
including applicable inventory dimensions (like site/warehouse), click the button
Inventory/On-hand inventory in the action pane strip of the order line. In addition to
the current quantity on hand, the form also displays data referring to reservation
and transaction totals (see section 7.2.5).

Figure 4-12: Checking inventory for an order line in the on-hand form

For viewing the distribution of the item quantity among warehouses and other
inventory dimensions, click the button Overview in the On-hand-form. Clicking the
button Dimensions display (rightmost in the action pane strip) there enables
selecting displayed inventory dimensions. If clicking the button Net requirements,
the net requirements form for starting local master scheduling displays.
For accessing the net requirements form, alternatively click the button Product and
supply/Net requirements in the action pane strip of the sales order line. The button
Product and supply/Explosion in the action pane strip of the order line opens the
explosion form, which shows the item availability at multiple BOM levels.

mabenito@parcisa.com
162 4 Sales and Distribution

More details on master scheduling and BOM explosion are available in section 6.3
of this book.

4.4.3.7 Delivery Address

The delivery address for a sales order derives from the primary address or – if
specified – from the delivery address of the customer. The tab Address in the
header view of the order then provides the option to choose an alternative address:
¾ Selecting an existing address – An address, which is already included in the
global address book, may be selected by clicking the button near the Delivery
address lookup field.
¾ Register a new address – A completely new address may be entered by clicking
the button near the Delivery address lookup field.
If a sales order requires shipping to different addresses at order line level, select
appropriate addresses on the sub-tab Address of the order lines. In this context, a
setting on the tab Summary update of the accounts receivable parameters specifies
whether posted documents (e.g. invoices) are split based on different addresses.

4.4.3.8 Invoice Address

Unlike the delivery address, address data for the invoice address in a sales order
are not directly editable. The invoice address is the address of the Invoice account on
the tab General in the sales order header view. The default for the invoice account
number derives from the customer record of the order customer, but you can
choose a different invoice account number in an order.
If the invoice account field in the customer record is empty, Dynamics AX inserts
the order customer number into the invoice account of the order. In case the
customer record of the invoice account contains an address of the type “Invoice”,
this address prints on documents instead of the primary address of the invoice
customer.

4.4.3.9 Extended Search for Customers and Items

In Dynamics AX 2012 R3, an enhanced search functionality for searching
customers, prospects and items is available.
For setting up this search functionality, define basic search parameters in the form
Sales and marketing> Setup> Search> Search parameters. Then open the form Sales and
marketing> Setup> Search> Define criteria and select the fields to be included in the
search functionality. Choose the Type “Customer” for fields in the customer search
and the Type “Item” for the item search.
When creating a new sales order in the sales order form, you can select to Search by
“Keyword” for executing a customer search according to the selected criteria.

mabenito@parcisa.com
4.4 Sales Orders and Quotations 163

The item search shows up if you enter – for example – part of a product name in
the item number field of a sales order line. As a prerequisite in this case, the setup
for the search criteria should include the product name.

4.4.3.10 New in Dynamics AX 2012 R3

The extended search is new in Dynamics AX 2012 R3.

4.4.4 Sales Prices and Discounts

Based on price and discount groups in the order header, ordered products and
applicable trade agreements, Dynamics AX determines prices and discounts. Apart
from prices and discounts, trade allowances (see section 4.8.1) have an impact on
the sales revenue and profitability.

4.4.4.1 Sales Price

The sales price in an order line derives from the base price in the item record, or
from applicable trade agreements. Trade agreements for prices at customer
number level take priority over prices at price group level.
You may assign a customer to a price group (representing a price list in
Dynamics AX) by selecting the appropriate Price group on the tab Sales order defaults
of the customer form. When entering a sales order, the price group of the customer
defaults to the price group on the tab Price and discount of the sales order header
view. If required, change the price group in the sales order.
In the sales order lines, override the sales price default or manually enter a new
price independently from trade agreements if applicable.
If manually entering or changing a sales price, and later modifying data in fields of
the order line which are among the basis of price calculation (e.g. the ordered
quantity), Dynamics AX may overwrite your manual discount with the applicable
trade agreement. Depending on the accounts receivable parameters, Dynamics AX
shows a confirmation dialog in this case (see also section 4.3.2).

4.4.4.2 Discounts
If trade agreements include applicable total discounts, multiline discounts or line
discounts, sales orders retrieve appropriate defaults. If you want to change a
discount group in the order header, select the appropriate group on the tab Price
and discount of the sales order header view.
Since the total discount is a discount at header level, the order header does not
only contain the discount group for the total discount, but also the discount
percentage.

mabenito@parcisa.com
164 4 Sales and Distribution

Figure 4-13: Price and discount groups in the sales order header view

The percentage for the line discount shows in a column on the tab Sales order lines
in the line view. Together with the multiline discount, the line discount percentage
also shows on the sub-tab Price and discount of the tab Line detail in the order line. In
parallel to the percentage, there are separate fields for a line discount amount and a
multiline discount amount – be aware not to confuse percentage and amount
fields.
Dynamics AX calculates the line discount for a sales order line whenever saving
the line. Unlike line discount calculation, multiline discount and total discount
calculation need to be started manually by clicking the button Calculate/Multiline
discount or Calculate/Total discount on the action pane tab Sell.
For the total discount, optionally skip manual calculation if the checkbox Calculate
total discount on posting on the tab Prices of the accounts receivable parameters is
selected. In this case, Dynamics AX calculates the total discount whenever printing
or posting an order.

4.4.4.3 New in Dynamics AX 2012

The option to show a dialog for retrieving prices and discounts from applicable
trade agreements after changing an order line is new in Dynamics AX 2012.

mabenito@parcisa.com
4.4 Sales Orders and Quotations 165

4.4.5 Managing Charges

Charges (in former releases called “Miscellaneous charges”) in sales and purchase
orders are available to cover expenses, which are not included in the price shown
in order lines – for example fees for freight and insurance.
You can enter charges manually in a sales or purchase order. In addition, default
charges automatically applying when entering an order are available.
Charges are available at header level and at line level. Standard documents like the
order confirmation only print the charges total amount, no matter if the applicable
charges refer to the header or to specific lines.

4.4.5.1 Charges Codes

As a prerequisite for applying charges, you have to set up the required charges
codes. Charges codes for sales and purchasing are independent from each other.
For sales you have to access the form Accounts receivable> Setup> Charges> Charges
code, and for purchasing the form Accounts payable> Setup> Charges> Charges code.
When creating a new charges code, enter the charges code ID, the description, and
the item sales tax group (if applicable) before switching to the tab Posting, where
you want to record appropriate ledger integration settings.
For sales charges posting, choose the Debit/Type “Customer/Vendor” if you want to
calculate the charges on top of the item sales, printing them on documents (e.g.
invoices) separately. The Credit/Type is “Ledger account” in this case, referring to
an appropriate revenue account in the Account field.

Figure 4-14: Managing charges codes for sales

For purchase charges shown separately on the vendor invoice, choose the option
“Customer/Vendor” in the Credit/Type. In the Debit/Type, select “Ledger account”

mabenito@parcisa.com
166 4 Sales and Distribution

(posting to a separate ledger account) or “Item” (including the charges amount in

the inventory value).
In addition to the charges described above, which show separately on documents,
it is also possible to set up charges codes only generating internal transactions in
finance. These codes only include the types “Ledger account” or “Item” for the
Debit and the Credit transaction.

4.4.5.2 Manual Charges

If you want to apply charges to a sales order or to a purchase order, access the
charges transactions form.
At header level, the charges transaction form of a sales order is available by
clicking the button Charges/Charges on the action pane tab Sell of the sales order
form. In purchase orders, click the button Charges/Manage charges (or Charges/
Maintain charges) on the action pane tab Purchase. For assigning line charges in the
sales order or purchase order detail form, click the button Financials/Maintain
charges in the action pane strip on the tab Order lines after selecting the appropriate
order line.
In the charges transactions form, select the appropriate charges code first. In the
column Category you may specify if the charge is a fixed amount or if it is
calculated based on the line amount or the line quantity.

4.4.5.3 Auto Charges

If particular charges should automatically apply to sales orders, enter automatic
charges in the form Accounts receivable> Setup> Charges> Auto charges. Auto charges
default to the charges in the charges transactions of related sales orders, where you
can override them if necessary.

Figure 4-15: Managing auto charges

mabenito@parcisa.com
4.4 Sales Orders and Quotations 167

The header of the auto-charges form contains the lookup Level for choosing
whether to apply the charges to order headers (Level = “Main”) or to lines (Level =
“Line”).
The right pane of the form contains the customers and items to which the charge
applies. Line charges may depend on the customer (customer number, group, or all
customers), the mode of delivery (mode of delivery, group, or all) and on the item
(item number, group, or all). For header charges, the item selection is fixed to
“All”.
In order to enter the calculation formula for the charge, access the tab Lines then.
As a prerequisite for applying auto charges in sales orders, the checkboxes Find
main charges (for header charges) and Find charges for line (for line charges) on the
tab Prices of the accounts receivable parameters have to be selected.
For purchasing, similar settings are available in the form Procurement and sourcing>
Setup> Charges> Automatic charges and in the procurement parameters.

4.4.5.4 New in Dynamics AX 2012 R2

Compared with the initial version of Dynamics AX 2012, the R2 version contains
modes of delivery as additional level for auto-charges in sales.

4.4.6 Sales Order Confirmation

Printing an order confirmation requires posting it in Dynamics AX. Like
confirming a purchase order, posting a sales order confirmation does not create
inventory or financial transactions.
Posting an order confirmation means to save it unchanging and separately from
the current sales order. Within Dynamics AX, it is evidence of the document which
has been sent to the customer.

4.4.6.1 Posting Form for Sales Order Confirmations

In order to post and print an order confirmation, click the button Generate/Con-
firmation (or Generate/Sales order confirmation) on the action pane tab Sell after
selecting the appropriate order in the sales order form.
The posting form for the sales order confirmation is similar to the posting forms in
purchasing (see in section 3.4.8). Like there, choose the printer by clicking the
button Printer setup or by selecting the checkbox Use print management destination.
Making sure the checkboxes Posting and Print confirmation are selected, click the
button OK in the posting form for finally posting and printing the confirmation.
As an alternative to the sales order form, access the posting form for order
confirmations through the appropriate menu item for summary update (Sales and
marketing> Periodic> Sales update> Sales order confirmation). In the posting form for
summary update, apply a filter by clicking the button Select then.

mabenito@parcisa.com
168 4 Sales and Distribution

4.4.6.2 Inquiries
Once a sales order confirmation has been posted, the posted document is available
for displaying and reprinting independent from modifications to the current order.
For viewing posted order confirmations, access the form Sales and marketing>
Inquiries> Journals> Confirmation or click the button Journals/Sales order confirmation
on the action pane tab Sell in the sales order form.

4.4.7 Case Study Exercises

Exercise 4.6 – Sales Order
Your customer (entered in exercise 4.1) orders 20 units of the item entered in
exercise 3.5. You want to register the sales order starting in the customer form.
Which quantity and which price show as default, where do they come from?
Switching to the header view, you want to check the delivery address and the price
group of the current order.
Exercise 4.7 – Charges
Your company wants to invoice a handling fee to customers. Enter a charges code
C-## (## = your user ID) to which the standard tax rate applies, selecting the
posting type “Customer revenue” and an appropriate revenue account for credit
posting.
In the sales order header of exercise 4.6, make sure this new handling fee is
charged to the customer by entering a charge of 10.00 pounds.
Exercise 4.8 – Order Confirmation
Post and print the order confirmation for your order of exercise 4.6, selecting to
display a print preview. Can you tell which amount shows in the order line and
where the confirmation prints the charges?

4.5 Distribution
On the ship date, the warehouse has to pick and to ship the ordered items. Picking,
as a preparation of the shipment, is collecting required items within the ware-
house.

4.5.1 Basics and Setup for Picking and Shipping

In Dynamics AX, you are not required to register picking separately. You can ship
an item by immediately posting a packing slip or an invoice.
If you want to process picking in Dynamics AX, choose between following options
depending on system configuration and setup:
¾ One-step picking
o Pick form – Manual registration in the pick form
o Picking list – With automatic picking list registration

mabenito@parcisa.com
4.5 Distribution 169

¾ Two-step picking
o Order picking – Picking list, followed by picking list registration
o Consolidated picking – Output order and shipment
One-step picking applies, if you have to perform picking, but do not require
confirming the picked quantity. Two-step picking requires confirming the quantity
actually picked – either entering the picking list registration (order picking) or
through consolidated picking, enabling combined picking of several orders.

Figure 4-16: Options for sales order picking in Dynamics AX

When posting picking lists, Dynamics AX always generates output orders and
shipments. Except for consolidated picking, these transactions are automatically
completed and ended in the background.
Note: In Dynamics AX 2012 R3, you can optionally use the new warehouse
management module. The picking process and the related setup is completely
different in this case (see section 8.1).

4.5.1.1 Review Pending Deliveries

No matter whether you perform picking in Dynamics AX, you have to check
expected deliveries continuously. In order to support in-time deliveries, there are
several forms available for reviewing pending shipments:
¾ Sales and marketing> Common> Sales orders> Backorder lines
¾ Sales and marketing> Inquiries> Order status> Open sales order lines
¾ Sales and marketing> Inquiries> Order status> Backorder lines
In addition, pending shipments also show by filtering on the delivery date or the
ship date in the posting form of picking lists and packing slips.

4.5.1.2 Release Sales Order Picking

For picking list posting, the release picking form (Inventory management> Periodic>
Release sales order picking) provides another option to select sales order lines for
shipping.
The release picking form only shows sales order lines containing items, which are
on stock currently. When opening the release picking form, an advanced filter
displays for entering filter criteria on order lines. In the release picking form,

mabenito@parcisa.com
170 4 Sales and Distribution

modify this filter through clicking the button Select in the action pane strip as
applicable then.

Figure 4-17: Release sales order picking

Selecting the appropriate option of the button Activation in the action pane strip or
manually entering quantities in the column Activate now activates items for
picking. This activation includes reserving the item quantity.
For the quantities in the column Activate now, post the picking list by clicking the
button Release for pick in the action pane strip then.

4.5.1.3 Customer Classification

You may set priorities for sales order picking by entering a Customer classification
group on the tab General of the customer form. This group displays in the left-most
column of the release picking form, providing the option to filter on this criterion.

4.5.1.4 Core Settings for Picking

A number of settings control the picking process. In particular, you have to check
following settings:
¾ Accounts receivable parameters – One-step or two-step picking
¾ Item model group – Picking requirements, Consolidated picking
If the Picking route status on the tab Updates of the accounts receivable parameters
shows the option “Completed”, automatic picking list registration is enabled.
Dynamics AX then immediately reduces the quantity in inventory when posting
the picking list.

mabenito@parcisa.com
4.5 Distribution 171

If the Picking route status is set to “Activated”, two-step picking is enabled.

Dynamics AX in this case does not change the quantity in inventory when posting
the picking list. Depending on the item model group of the released product, you
have to update subsequently either the Picking list registration or the Output order.

4.5.1.5 Settings on the Item Model Group

On the tab General of the released product form, each item is assigned to an item
model group. For editing item model groups, open the form Inventory management>
Setup> Inventory> Item model groups. On the tab Setup of the item model group form,
there are two essential checkboxes for picking:
¾ Picking requirements – If selected, picking is required before posting the
packing slip.
¾ Consolidated picking method – If selected, functionality for picking multiple
orders in picking routes and pallet transports applies (see section 4.5.4).
The setting for the Consolidated picking method is not only available in the item
model group. It also shows at following levels overriding the item model group:
¾ Warehouse (Inventory management> Setup> Inventory breakdown> Warehouses, tab
Warehouse management)
¾ Warehouse item (Released product form, button Warehouse/Warehouse items on
the action pane tab Manage inventory; in the warehouse item form, tab Locations)
¾ Picking list posting form (When posting a picking list, checkbox Consolidated
picking method on the tab Line details of the posting form)

4.5.1.6 New in Dynamics AX 2012 R3

In Dynamics AX 2012 R3, you can optionally use the new warehouse management
module. Picking works completely different in this case (see section 8.1).

4.5.2 Pick Form and Picking List

Picking in sales mirrors inventory registration in purchasing: After picking, the
related quantity shows the status “Picked” and is not available in inventory any
more. Like inventory registration in purchasing, picking is a preliminary
transaction not shown separately in inventory transactions.

4.5.2.1 Pick Form

The first option for picking, the pick form (manual picking of sales orders) works
similar to the registration form (see section 3.5.3). In the sales order form, click the
button Update line/Pick in the action pane strip of the order lines for accessing the
pick form.
In order to record picking in the pick form, insert appropriate lines in the lower
pane (Picking list updates) of the registration form then. Apart from manually
entering records through clicking the button Add in the lower pane, the button Add
picking list update in the action pane strip of the upper pane provides another

mabenito@parcisa.com
172 4 Sales and Distribution

option for inserting lines. After editing the quantity, the warehouse, or other
inventory dimensions in the lower pane as applicable, post the picking transaction
by clicking the button Register all.

4.5.2.2 Picking List

If you need a printed report to support picking in the warehouse, post and print a
picking list instead of registering picking in the pick form. You may access the
posting form for picking lists in several forms:
¾ Sales order – Sales order form, button Generate/Picking list on the action pane tab
Pick and pack
¾ Summary update – Sales and marketing> Periodic> Sales update> Picking list
¾ Release picking – Release sales order picking form, see above
After posting and printing the picking list, hand a hardcopy of the picking list over
to the warehouse personnel.
If warehouse usually picks items immediately, it is useful to enable one-step
picking by setting the parameter Picking route status in the accounts receivable
parameters to “Completed”. In this case, manual picking registration is not
required and the next step in Dynamics AX is posting the packing slip.

4.5.2.3 Picking List Registration

Picking list registration is required after posting a picking list, if both the
parameter Picking route status is set to “Activated”, and consolidated picking does
not apply.
In this case, access the picking list registration form by clicking the button Generate/
Picking list registration on the action pane tab Pick and pack of the sales order form.

Figure 4-18: Picking list registration accessed from a sales order (fast tab General collapsed)

Alternatively, access this form through the menu item Sales and marketing>
Journals> Sales order> Picking list registration or the menu item Inventory

mabenito@parcisa.com
4.5 Distribution 173

management> Periodic> Picking list registration. If starting in the sales order, picking
list registration applies a filter on the current order. Otherwise, you have to
manually enter a filter for selecting appropriate orders.
In the Lines pane of the picking list registration form, choose the lines for update by
selecting the checkbox in the column Select as shown in Figure 4-18. Before
confirming the picked quantity of these lines by clicking the button Updates/Update
selected (or Updates/Update all for all lines), adjust the quantity in the Pick quantity
column as applicable.

4.5.2.4 Reverse Picking Transactions

If you want to reverse and to cancel a picking transaction, which has been posted
in the pick form or through a picking list, you can use the pick form. Like when
registering the original picking transaction, access the pick form in the sales order
detail form by clicking the button Update line/Pick in the action pane strip of the
order lines after selecting the order line concerned. In the upper pane of the pick
form, click the button Add picking list update after selecting the appropriate
transaction. Posting the reversing transaction by clicking the button Register all
works similar to regular picking, but with negative quantity.
If the original picking transaction has been posted through a picking list,
alternatively apply the picking list registration to reverse picking. In this case,
access the picking list registration form by clicking the button Generate/Picking list
registration on the action pane tab Pick and pack of the sales order form. In the
picking list registration form, click the button Functions/Unpick in the action pane
strip of the tab Lines in order to reverse the picking list registration. In a second
step, you have to click the button Functions/Cancel picking line in the picking list
registration form to cancel the picking list itself. Alternatively, skip the second step
by selecting the checkbox Cancel unpicked quantity in the unpicking dialog shown in
the first step.

4.5.2.5 New in Dynamics AX 2012 R3

In Dynamics AX 2012 R3, you can optionally use the new warehouse management
module. Picking works completely different in this case (see section 8.1).

4.5.3 Picking Workbench

The picking workbench is an enhancement for sales order picking, which provides
support for paper-based warehouse processes by grouping picking lists to batches
(picking waves).
Optionally you can apply a boxing logic for collecting items in boxes or carts if
your picking processes are based on a procedure of putting items into boxes.
Dynamics AX then suggests boxes of an appropriate size for picking.
You can use the picking workbench as an alternative to the Release sales order
picking functionality described in section 4.5.1. It is only available for sales orders

mabenito@parcisa.com
174 4 Sales and Distribution

and does not support WMS II (pallets and consolidated picking, see section 4.5.4)
or the new warehouse management in Dynamics AX 2012 R3 (see section 8.1).

4.5.3.1 Setup for the Picking Workbench

In the inventory parameters (Inventory management> Setup> Inventory and warehouse
management parameters), number sequences for the picking workbench have to be
specified. If you want to use the boxing logic, select the checkbox Boxing logic for
picking workbench on the tab General of the parameters.
In the workbench profile (Inventory management> Setup> Picking workbench>
Workbench profiles), set up one or more profiles used as filtering criteria in the
picking workbench.
In the warehouse form (Inventory management> Setup> Inventory breakdown>
Warehouses), the tab Picking workbench contains settings for splitting picking waves
(workbench sessions) – e.g. the maximum number of lines per picking list.
For using the boxing logic in the picking workbench, access the form Inventory
management> Setup> Boxing logic> Box definitions and set up the different boxes
circulating in your warehouse with their physical dimensions and weight. The
checkbox Active determines if a box is available for picking.
In the released products detail form, the fast tab Deliver contains the checkbox
Apply boxing logic for picking workbench which has to be selected for items using the
boxing logic. The selection of applicable boxes for an item is only based on the
physical dimensions and the weight of the item (tab Manage inventory of the
released product). If selecting the checkbox Ship alone on the fast tab Deliver of the
released product, the item will be picked separately without boxing.

4.5.3.2 Working with the Picking Workbench

Picking processes in the picking workbench are based on sales orders which you
have to enter before you can start picking.
In the picking workbench (Inventory management> Common> Picking workbench),
start the picking process by clicking the button New in the action pane strip. On the
tab Criteria in the picking workbench form, select the criteria like the Ship date of
the order line for specifying which sales orders to include in current picking. In the
field Profile of the criteria, you can select to default criteria form a workbench
profile.
After selecting appropriate criteria, click the button Generate picking batches in the
action pane of the picking workbench. Depending on the selection criteria, on
settings for splitting picking batches on the warehouse, and on settings for boxing
(box size and item size/weight), Dynamics AX then creates one or more picking
batches. Generating picking batches executes picking list posting, the picking lists
related to a picking batch are shown on the tab Picking list in the workbench.

mabenito@parcisa.com
4.5 Distribution 175

Figure 4-19: Managing a picking batch in the picking workbench

Printing the picking batch label and the picking list is a required step, which you
can do by clicking the button Print batch in the action pane strip of the Picking
batches pane of the picking workbench. For items applying the boxing logics, the
selected box name is printed in the picking list header.
After printing all picking lists of a picking batch, select the checkbox Complete in
the picking batch. The checkbox Complete in the picking session completes all
related picking batches.
Depending on whether one-step picking or two-step picking applies to your
company (see section 4.5.1), the next step is posting the packing slip (one-step
picking) or confirming the picking list before (two-step picking).
In case of two-step picking (Picking route status = “Activated” on the tab Updates of
the accounts receivable parameters), confirming the picking list through picking
list registration works the same way as if posting the picking list without the
picking workbench. In addition to the other options for accessing the picking list
registration form, the button Picking list registration in the picking workbench
provides direct access to this form.

4.5.3.3 New in Dynamics AX 2012 R3

The picking workbench is new in Dynamics AX 2012 R3.

4.5.4 Output Order and Shipment

Consolidated picking in Dynamics AX includes output orders, picking routes and
pallet transports, providing the option to merge several orders into one shipment.

mabenito@parcisa.com
176 4 Sales and Distribution

Dynamics AX generates output orders and shipments even if you do not apply
consolidated picking. Without consolidated picking, Dynamics AX posts output
orders and shipments automatically when posting and registering picking lists.

4.5.4.1 Prerequisites and Setup for Consolidated Picking

As a prerequisite for consolidated picking, locations and a location structure
including outbound docks within your warehouses have to be specified in
Dynamics AX. In addition, companies applying consolidated picking want to
manage picking routes and pallet transports, requiring pallet management in
Dynamics AX. The storage dimension group of the items therefore has to include
the dimensions Location and Pallet ID.
Consolidated picking applies to items, which are assigned to an item model group
with activated consolidated picking. In addition, settings on the warehouse and the
released product (warehouse item) apply as described further up in this section.
Further settings required for consolidated picking include shipment templates,
shipment reservation sequences and shipment reservation combinations. You may
access these settings in the menu Inventory management> Setup> Distribution.
A detailed description of consolidated picking is beyond the scope of this book,
which is why the following lines only explain the basics of consolidated picking.

4.5.4.2 Output Order

Dynamics AX automatically generates an output order when posting a picking list.
Alternatively, create an output order manually by clicking the button Inventory/
Output order in the sales order line or in the release picking form (Inventory
management> Periodic> Release sales order picking).
In order to view and edit output orders, access the form Inventory management>
Inquiries> Output orders. As a preparation for shipments, update reservations
through clicking the button Inventory/Reservation in the action pane strip of the
output order form if applicable.
If required, delete a record in the output order form – for example if you want to
stop the picking process for a sales order.

4.5.4.3 Shipment and Shipment List

Shipments in inventory are based on output orders. If you do not apply
consolidated picking, Dynamics AX creates shipments of the type “Order picking”
automatically in parallel to output orders when posting the picking list. In this
case, you don’t have to go through the steps described below (like activating the
shipment).
If you do use consolidated shipping, continue with the picking process by creating
a shipment in the form Inventory management> Common> Shipments clicking the

mabenito@parcisa.com
4.5 Distribution 177

button New in the action pane strip. Depending on the options in the shipment
form (button Functions/Options), inserting a record in the shipments starts a wizard.
Since a shipment of the type “Consolidated picking” contains one or more output
orders, you have to assign output orders to the shipment. If you do not go through
the wizard, assign them manually clicking the button Add in the shipment lines.
For accessing the shipment lines form, click the button Show lines in the action pane
strip of the shipment form.
When working with shipments and output orders, be aware that creating new
shipments or adding output orders to existing shipments might happen
automatically as a function of appropriate settings in the shipment templates.
If you want to print a shipment list in order to support item picking in the
warehouse, click the button Print/Shipment list in the shipments form.
Clicking the button Functions/Activate in the shipment form activates the shipment.
Activating generates pallet transports for lines, which may be shipped in complete
pallets. For smaller quantities, picking routes are activated.
Pallet transports are available in the form Inventory management> Common> Pallet
transports, where you may start and complete the transport.
Picking routes are available in the form Inventory management> Common> Picking
routes, where you may first choose the picking route in the lookup field Picking
route, then select – or create (button Create picking pallet) – a picking pallet and
finally start the picking route (button Start picking route). Once picking is actually
done, click the button Approve details for switching to the approve form, where you
may click the button Pick selected. Finally, click the button Deliver picked items for
completing the shipment in the dialog which shows next.
If using consolidated picking without pallet transports, complete an activated
shipment in the picking list registration form (see section 4.5.2), which shows after
clicking the button Inquiry/Picking routes in the shipment form.

4.5.5 Packing Slip

Posting the packing slip (delivery note) is the last transaction in the picking and
shipping process.

4.5.5.1 Posting Form for Packing Slips

You may open the posting form for packing slips either by clicking the button
Generate/Packing slip on the action pane tab Pick and pack of the sales order form, or
through the menu item Sales and marketing> Periodic> Sales update> Packing slip.
The posting form shows the familiar format. The applicable option in the lookup
field Quantity is depending on the preceding procedure:

mabenito@parcisa.com
178 4 Sales and Distribution

¾ Picked – Select this option, if picking is executed before posting the packing
slip. The picked quantity then applies to the column Update on the tab Lines of
the posting form.
¾ All – The total remaining order quantity applies.
¾ Deliver now – The quantity of the column Deliver now in the order lines applies.
Making sure the checkboxes Posting and Print packing slip in the posting form are
selected, click the button OK to post and print the packing slip then.
Like in purchasing, partial deliveries, over deliveries, and under deliveries (see
section 3.5.5) are also available in sales. Regarding the order status and the
document status update, please refer to the corresponding purchase order status
described in section 3.5.5.5.

4.5.5.2 Ledger Integration

If ledger integration is activated for packing slip posting, Dynamics AX posts
transactions to the general ledger in parallel to inventory transactions. These ledger
transactions are reversed when posting the related invoice.
Following core settings control packing slip posting to the general ledger:
¾ Post packing slip in ledger – Checkbox in the accounts receivable parameters
(tab Updates), which has to be selected if ledger integration applies.
¾ Post physical inventory – Checkbox in the item model group (tab Setup) of the
sold item, which has to be selected if ledger integration applies.

4.5.5.3 Transaction Inquiry

If you want to view the inventory transactions in the sales order form after posting
the packing slip, click the button Inventory/Transactions in the action pane strip of
the order lines. After posting the packing slip, the issue status of the inventory
transaction is “Deducted”. The posting date of the packing slip shows in the
column Physical date, the Financial date remains empty until posting the invoice. If
you want to know the packing slip number, switch to the tab Update.

Figure 4-20: Inventory transaction after packing slip posting

In order to access posted packing slips, choose the form Sales and marketing>
Inquiries> Journals> Packing slip or click the button Journals/Packing slip journal on the
action pane tab Pick and pack of the sales order form. After selecting a packing slip

mabenito@parcisa.com
4.5 Distribution 179

on the tab Overview of the inquiry form, switch to the tab Lines for viewing related
packing slip lines.
If you want to view related transactions in the general ledger, open the voucher
transactions form by clicking the button Vouchers on the Overview tab of the
packing slip inquiry, or the button Ledger/Physical voucher in the inventory
transactions.

4.5.5.4 Canceling a Packing Slip

You may cancel a posted packing slip applying the Cancel feature in the packing
slip inquiry form (Sales and marketing> Inquiries> Journals> Packing slip). After
selecting the particular packing slip, click the button Cancel in the action pane strip
of the tab Overview. If you just want to reduce the posted quantity, click the button
Correct instead.

4.5.5.5 New in Dynamics AX 2012

The option of canceling a packing slip in the inquiry is new in Dynamics AX 2012.

4.5.6 Case Study Exercises

Exercise 4.9 – Packing Slip
You want to check which order lines are available for shipping. The inquiry should
not be limited to your orders, but also include other orders available in your
company. Which options do you know?
Knowing your order of exercise 4.6 is among the orders to be shipped, you want to
post the packing slip. Before posting, check following items in the sales order:
¾ Order status and document status
¾ Inventory quantity of the ordered item (button Inventory/On-hand)
¾ Inventory transactions related to the order line (button Inventory/Transactions)
Post and print a packing slip for the complete order quantity directly in the sales
order form, selecting a print preview as printing destination.
Now review the status of the items on the checklist above again. What is different
after packing slip posting?
Exercise 4.10 – Picking List
Your customer of exercise 4.1 orders another 20 units of the item entered in
exercise 3.5. Enter an appropriate sales order.
Warehouse does not want to apply consolidated picking, but requires a picking list
this time. Therefore, you want to post a picking list containing 10 units of the
ordered item. Can you tell which setting controls if you need to enter picking list
registration? If required, update the picking list registration.
Then post the packing slip for the picked items.

mabenito@parcisa.com
180 4 Sales and Distribution

Exercise 4.11 – Packing Slip Inquiry

You want to view the packing slip of exercise 4.10. Open the packing slip inquiry
from the sales order form. In a second step, open the packing slip inquiry through
the appropriate menu path. Check packing slip header and lines and try to find
out, if there are related ledger transactions.

4.6 Invoicing
Posting the sales invoice is the last step in sales order processing. The invoice on
the one hand increases the open customer balance and on the other hand reduces
the financial value of inventory. After invoicing all lines of a sales order, the sales
order is completed. Payment of invoices then runs through a separate process in
finance (see section 9.5.4).
If you want to invoice inventoried products, you have to enter a sales order. But
you are free to post the sales order invoice immediately after registering the order
– without separately posting an order confirmation or a packing slip.
Free text invoices (see section 4.6.3) apply, if you want to post invoices not
referring to products or sales categories. In the lines of a free text invoice, you have
to enter ledger numbers instead of item numbers. Such an invoice has no
connection to items and no impact on inventory and supply chain management.

4.6.1 Invoicing Sales Orders

The way of posting a sales invoice is similar to posting the packing slip.

4.6.1.1 Posting Form for Sales Order Invoices

You may open the posting form for invoices either by clicking the button
Generate/Invoice on the action pane tab Invoice of the sales order form, or through
the menu item Accounts receivable> Periodic> Sales update> Invoice.
The posting form shows the familiar format. The applicable option in the lookup
field Quantity is depending on the preceding procedure:
¾ Packing Slip – Common option, since a packing slip is posted first in most
cases and you want to link the invoice to the shipped quantity.
¾ All or Deliver now – If selected, Dynamics AX does not default the shipped
quantity to the column Update in the invoice lines. For any quantity not shipped
yet, a packing slip transaction is posted in parallel to the invoice.
If choosing “Packing Slip” in the lookup Quantity, the button Select packing slip in
the posting form enables selecting the packing slips applicable for invoicing –
similar to selecting product receipts for vendor invoices in purchasing.
Before posting, optionally click the button Totals in the posting form for checking
the totals. Making sure the checkboxes Posting and Print invoice in the posting form
are selected, click the button OK to finally post and print the invoice.

mabenito@parcisa.com
4.6 Invoicing 181

4.6.1.2 Transaction Inquiry

Posting the invoice generates transactions in the general ledger, inventory
transactions, customer transactions, and transactions in other subledgers like sales
tax, if applicable. Once all lines of an order are completely invoiced, the order
status changes to “Invoiced”.
If you want to view the inventory transactions in the sales order form after posting
the invoice, click the button Inventory/Transactions in the action pane strip of the
order lines. After posting the invoice, the issue status of the inventory transaction
is “Sold” and the posting date of the invoice shows in the column Financial date.
In order to access posted sales invoices, choose the form Accounts receivable>
Inquiries> Journals> Invoice journal or click the button Journals/Invoice on the action
pane tab Invoice of the sales order form. After selecting an invoice on the tab
Overview of the inquiry form, switch to the tab Lines for displaying related lines.
If you want to view corresponding transactions in the general ledger, open the
voucher transactions form by clicking the button Voucher on the Overview tab of the
invoice inquiry, or the button Ledger/Financial voucher in the inventory transactions.

4.6.1.3 Transaction Origin

Clicking the button Transaction origin in the voucher transactions form opens the
transaction origin form, which shows related transactions for the voucher in all
modules. Figure 4-21 for example shows a domestic invoice for an item, which has
been shipped with a separate packing slip.

Figure 4-21: Transactions of a sales invoice in the transaction origin form

When classifying the transactions of the invoice shown in Figure 4-21, you have to
distinguish following transactions types:

mabenito@parcisa.com
182 4 Sales and Distribution

Table 4-2: Transactions of the sales invoice in Figure 4-21

Transaction General ledger Subledger
Packing slip Account 10921 offsetting [1]
reversing account 10922
Inventory Account 51310 for COGS [2a] Financial inventory [2b]
offsetting stock account 10310 transaction for item 4001
Customer Summary account 20010 [3a] Customer transaction [3b]
offsetting tax account 35210 [4a] and sales tax transaction [4b]
and revenue account 40210 [5]
Invoice posting only generates reversing packing slip transactions, if a prior
packing slip has been posted to the general ledger.
The particular ledger accounts in all transactions are depending on the actual
operation and on the applicable setup. Therefore, you may notice additional or
missing transactions if comparing the transactions of Figure 4-21 to other invoices.
For example, sales tax transactions are missing for invoices to foreign countries.
The customer summary account related to the customer transaction is specified in
the applicable customer posting profile, which works similar to the vendor posting
profile (see section 3.2.3). Apart from the sales tax transaction, settings for the other
transactions are available in the inventory posting setup (see section 9.6.2).

4.6.2 Collective Invoice

If you want to post an invoice referring to several sales orders (e.g. a monthly
invoice), you have to post a collective invoice in a summary update. Collective
documents are available for all document types. Therefore, apart from collective
invoices you may also post collective packing slips for example.
The way to post collective documents is not different from posting an individual
document. Settings at company and customer level control, whether to generate a
collective document.

4.6.2.1 Setup for Summary Update

Basic configuration settings for collective documents in sales are available on the
tab Summary update of the accounts receivable parameters. The first setting there is
the lookup field Default values for summary update, where you choose if settings for
collective document posting are available at order level. In most cases the choice is
“Automatic summary”, which allows deselecting specific orders from a collective
document in the order form. If selecting the option “Invoice account”, excluding a
particular order is only possible by removing it in the posting form.
Clicking the button Summary update parameters in the accounts receivable
parameters form, displays the summary update parameters form. This form
contains a separate tab per document type, where you may select the fields which
must be equal in sales orders to join a collective document.

mabenito@parcisa.com
4.6 Invoicing 183

Figure 4-22: Summary update parameters for sales

If “Automatic summary” is selected in the Default values for summary update,

automatic summary has to be enabled on the particular customers in addition
(button Setup/Summary update on the action pane tab Customer in the customer
form). The setting on the customer defaults to sales orders, where you may change
it after clicking the button Setup/Summary on the action pane tab General of the
sales order form.

4.6.2.2 Posting Collective Invoices

In order to post a collective invoice, open the summary update form Accounts
receivable> Periodic> Sales update> Invoice. In most cases you want to select “Packing
slip” in the lookup field Quantity of the posting form, making sure invoice posting
only refers to shipped quantities.
As shown in Figure 4-23, click the button Select [1] in order to select appropriate
sales orders in the advanced filter form next. After closing the filter form, the
selected orders show on the tab Overview of the posting form.
If there are orders which you do not want to invoice, delete the appropriate lines.
Deleting a line in the posting form only removes the selection. It does not delete
the order or the packing slip, which is why the order will show again, whenever
you want to post an appropriate invoice the next time.
If you want to exclude particular packing slips from invoice posting, click the
button Select packing slip [2].

mabenito@parcisa.com
184 4 Sales and Distribution

Figure 4-23: Posting a collective invoice receipt

Once you have finished selecting sales orders and packing slips, click the button
Arrange [3]. The Arrange feature combines the orders into a common invoice
according to the summary update parameters. If the setting in the accounts
receivable parameters is not suitable for posting a particular invoice, choose a
different option on the tab Other of the posting form before arranging.
In the example shown in Figure 4-23, the Arrange feature will merge the two orders
into one common line. Clicking the button OK in the posting form afterwards posts
the collective invoice.

4.6.3 Free Text Invoices

Free text invoices apply to sales invoices, which do not refer to order processing
and do not include product numbers or sales category.
The structure of free text invoices is similar to sales orders: Every free text invoice
consists of a header and one or more lines. But instead of product numbers and
sales categories, the lines of a free text invoice contain main accounts.
Once you have finished registering the free text invoice, post and print it. The only
posted document available in free text invoices is the invoice – it is not possible to
post an order confirmation for example.
Entering a negative invoice amount in the free text invoice form creates a credit
note. But free text invoices and credit notes do not affect item statistics and
inventory valuation.

mabenito@parcisa.com
4.6 Invoicing 185

Figure 4-24: Registering an invoice line of a free text invoice

4.6.3.1 Registering Free Text Invoices

In order to enter a free text invoice, access the form Accounts receivable> Common>
Free text invoices> All free text invoices and click the button New/Free text invoice in
the action pane. Alternatively, access the customer form and create a free text
invoice by clicking the button New/Free text invoice on action pane tab Invoice there.
The free text invoice consists of a header, where you have to select the customer
account number, and invoice lines. Unlike the sales order form, the free text
invoice does not show a separate Create new dialog when creating a new invoice
starting in the free text invoice list page. But the free text invoice provides the
option to select the customer in the line view, showing a field for the Customer
account and the Invoice account on the tab Free text invoice header.
On the tab Invoice lines of the free text invoice form, enter the lines with Description,
Main account and Amount (or Quantity and Unit price) then. If a line requires a
longer description, enter it in the invoice text field on the sub-tab General of the Line
details tab. If sales tax (VAT) applies, make sure to choose a correct Sales tax group
and Item sales tax group.
If you want to check financial dimensions like department or cost center, switch to
the sub-tab Financial dimensions line of the tab Line details and enter applicable
dimension values. Alternatively, choose a financial dimension default template in
the lookup Template ID.

mabenito@parcisa.com
186 4 Sales and Distribution

For selling fixed assets, enter the Fixed asset number on the sub-tab General of the
Line details tab.

4.6.3.2 Posting and Inquiry

In order to post the free text invoice, click the button Post/Post in the action pane of
the free text invoice form. After posting, you can view the posted invoice by
clicking the button Related information/Invoice journal in the action pane.
In the invoice inquiry Accounts receivable> Inquiries> Journals> Invoice journal, free
text invoices display in parallel to sales order invoices. You may recognize free text
invoices in this inquiry by the missing order number and by different invoice
numbers (if a separate number sequence applies).

4.6.3.3 Recurring Free Text Invoices

If you want to post and to print a particular free text invoice periodically, apply
recurring free text invoices. As a prerequisite for this kind of invoices, set up a free
text invoice template (Accounts receivable> Setup> Free text invoice templates) first.
Next you may assign customers to one or more templates by clicking the button Set
up/Recurring invoices on the action pane tab Invoice of the customer form.
For generating a periodical free text invoice then, access the menu item Accounts
receivable> Periodic> Recurring invoices> Generate recurring invoices. The periodic
activity generates regular free text invoices, which you may access in the free text
invoice form before posting.

4.6.3.4 New in Dynamics AX 2012

In Dynamics AX 2012, new features for free text invoices include recurring free text
invoices and the option to enter quantities and unit prices.

4.6.4 Credit Notes and Item Returns

If a customer returns an item to your company and receives a replacement or a
financial compensation, you want to post a credit note. Other types of crediting
apply, if the customer does not actually return defective items or if you have to
credit a price variance.
In order to manage customer returns, apply the return order management in
Dynamics AX. In case of a simple return process, alternatively use regular sales
orders instead of return orders.
If crediting does not refer to the delivery of items, use a free text invoice.

4.6.4.1 Setup of Disposition Codes

As a prerequisite for return orders, you have to configure disposition codes (Sales
and marketing> Setup> Sales order> Returns> Disposition codes). The core setting in a
disposition code is the field Action, which controls handling of a defective item:

mabenito@parcisa.com
4.6 Invoicing 187

¾ Credit only – Credit without item return

¾ Credit or Scrap – Return items and credit
¾ Replace and credit or Replace and scrap – Return items and replace
¾ Return to customer – Do not credit
If scrap applies, an item receipt has to be posted (similar to an item receipt for
products returned to stock). But in parallel to the packing slip of the return order,
Dynamics AX posts an inventory transaction for scrapping.

4.6.4.2 Return Order Registration

In order to process item returns, open the list page Sales and marketing> Common>
Return Orders> All return orders. Return orders are sales orders of the type
“Returned order”, showing the sales order number in the return order header.

Figure 4-25: Registering an item in the return order form

But except for return orders referring to a disposition code “Credit only”, return
orders do not show in the regular sales order form until posting the item arrival.
When creating a return order by clicking the button New/Return order in the action
pane of the return order form, optionally select a Return reason code in the header
for statistical purposes and – if applicable – for automatically assigning charges.
Clicking the button Return/Find sales order on the action pane tab Return order
enables copying existing sales invoice lines into the return order. Alternatively,
enter return order lines with a negative quantity manually. The Disposition code for
a line is available on the sub-tab General of the Line details tab. But don’t enter the
disposition code before item arrival (except for disposition codes “Credit only”,
crediting without item return).

mabenito@parcisa.com
188 4 Sales and Distribution

Optionally, click the button Send/Return order for printing a RMA document, which
you may send to your customer then.
If you want to send a replacement for returned items to the customer in advance,
create an appropriate sales order clicking the button New/Replacement order in the
return order form.

4.6.4.3 Return Orders without Physical Returns

If you do not want your customer to return the item, choose a disposition code
without item return (“Credit only”) on the sub-tab General of the Line details tab in
the return order. In this case, you can immediately post the credit note in the sales
order form (Sales and marketing> Common> Sales Orders> All sales orders) or in the
summary update Accounts receivable> Periodic> Sales update> Invoice.

4.6.4.4 Return Orders – Item Arrival and Crediting

Once receiving the items of a return order, you have to enter inventory
registration. Like the inventory registration in purchasing (see section 3.5.3), the
registration for return orders may be done either in the registration form (button
Update line/Registration in the return order lines) or in the item arrival journal.
If applying an item arrival journal (Inventory management> Journals> Item arrival>
Item arrival, see section 7.4.2), select the return order in the journal header and/or
lines. For this purpose, switch to the journal header tab Default values after creating
a new journal, select the option “Sales order” in the lookup Reference, and enter the
return order number in the lookup RMA number. Since a Disposition code is required
for posting the item return, optionally enter it in the header as a default for the
journal lines. In order to create the journal lines, either click the button
Functions/Create lines in the journal header, or enter them manually after switching
to the lines by clicking the button Lines. After posting the item arrival journal by
clicking the button Post, the status of the return order line updates to “Registered”.
Then optionally print an acknowledgement of the receipt by clicking the button
Send/Acknowledgement in the action pane of the return order form.
For completing the item receipt, post the packing slip either in the return order
form (button Generate/Packing slip) or in the sales order form (button
Generate/Packing slip on the action pane tab Pick and pack).
In order to credit the item return finally, access the sales order form and click the
button Generate/Invoice on the action pane tab Invoice, or choose the summary
update Accounts receivable> Periodic> Sales update> Invoice.

4.6.4.5 Crediting through Sales Orders

As an alternative to return orders, credit a customer in the regular sales order form.
Since the order type “Returned order” is not available for manual selection, the
order header looks like the header of a regular sales order providing following
options for crediting:

mabenito@parcisa.com
4.6 Invoicing 189

¾ Credit note registered in the original order line

¾ Credit note in a new order line
¾ Credit note in a new sales order
The options for registering a new order or a new line are similar to purchasing (see
section 3.4.5). If you want to register a credit note in the original order line, enter a
negative quantity in the column Deliver now of the appropriate sales order line.
When posting the credit note, choose the option “Deliver now” – which refers to
the Deliver now column – in the quantity lookup field of the invoice posting form.

4.6.4.6 Inventory Valuation for Returned Items

If registering a credit note in a new order or order line, you should enter the
original invoice number in the lookup Return lot ID (sub-tab Setup of the Line details
tab) in the order line before posting. This link ensures that the inventory value of
the crediting line exactly matches the inventory value of the original delivery.
Dynamics AX automatically applies the return lot ID, if you either click the button
Return/Find sales order in the action pane of the return order form, or the button
Create/Credit note on the action pane tab Sell of the sales order form.
If you do not select a return lot ID, Dynamics AX applies the Return cost price on
the sub-tab Setup of the crediting order line for inventory valuation.

4.6.4.7 Scrapping Items

If you do not ask the customer to return a defective item, select the checkbox Scrap
on the sub-tab Setup of the Line details tab in in the crediting order line. When
posting the invoice (credit note) then, Dynamics AX posts the item receipt and a
related inventory loss at the same time.
In return orders, the checkbox Scrap is controlled by the disposition code.

4.6.4.8 Refunds not Referring to Returns

The free text invoice form (see section 4.6.3) is an option for registering and posting
customer refunds. But if a refund refers to an item, you should not use a free text
invoice, since this kind of invoicing does not affect item statistics and inventory
valuation.
In case of crediting a price variance, rather enter a new sales order containing a line
with a negative quantity and the old price and a second line with a positive
quantity and the right price. Applying Inventory/Marking as shown in section 3.7.1
enables linking the two transactions for offsetting inventory value.

4.6.5 Case Study Exercises

Exercise 4.12 – Invoice
You want to invoice the items shipped in exercise 4.9. Before posting the invoice,
check following items:

mabenito@parcisa.com
190 4 Sales and Distribution

¾ Order status and document status of the sales order

¾ Inventory transaction related to the order line (button Inventory/Transactions)
Post and print the invoice directly in the sales order form, checking the invoice
total in the posting form before posting.
Now review the status of the items on the checklist above again. What is different
after invoice posting?
Exercise 4.13 – Partial Invoice
You want to invoice the items picked and shipped in exercise 4.10. Post and print
the invoice directly in the sales order form, making sure to invoice only shipped
items.
Exercise 4.14 – Shipping with Invoice
Your customer of exercise 4.1 orders another unit of the product entered in exercise
3.5. In addition, he wants to order one hour of the installation service entered in
exercise 4.3 for a price of GBP 110. This time you do not post a packing slip, you
want to ship the items with the invoice.
Enter an appropriate sales order and immediately post the invoice. After posting
the invoice, review the order status, the document status and the inventory
transaction of the product.
Exercise 4.15 – Invoice Inquiry
You want to view the invoice posted in exercise 4.12. Open the invoice inquiry and
check the invoice header and lines as well as the related ledger transactions.
In exercise 4.2, you were looking for the summary account for your customer. Can
you find the ledger transaction for this account? Finally, open the transaction
origin form and check, to which modules your invoice has been posting.
Exercise 4.16 – Free Text Invoice
You want to invoice specific services, for which no product or sales category is
available, to your customer of exercise 4.1. Enter a free text invoice choosing an
appropriate revenue account and post the invoice. What is the difference between
a free text invoice and an invoice related to a sales order?
Exercise 4.17 – Credit Note
Your customer complains defects on the items invoiced in exercise 4.12. You agree
to an item return before crediting the invoice. Enter an appropriate return order
and post the item receipt applying a suitable disposition code. After posting the
packing slip return, you want to post and print the credit note.

4.7 Direct Delivery

Direct delivery means shipping goods from a vendor directly to a customer.
Avoiding a warehouse in between saves time and expenses for transportation and
stocking.

mabenito@parcisa.com
4.7 Direct Delivery 191

4.7.1 Processing Direct Deliveries

In order to process direct deliveries, there are two different options in the sales
order form:
¾ Create purchase order
¾ Create direct delivery
Both options start by entering a sales order for the customer receiving the items.

4.7.1.1 Registering the Sales Order

When registering an order for direct delivery, there is no difference to registering a
regular order. However, selecting a specific warehouse for direct deliveries avoids
mixing direct deliveries and regular inventory transactions in the warehouse.
When you have finished registering the sales order, create a related purchase order
by clicking the button New/Purchase order or New/Direct delivery on the action pane
tab Sales order of the sales order form.

4.7.1.2 Using the Create Purchase Order Option

The button New/Purchase order in the sales order provides the option to generate a
regular purchase order, which refers to the sales order. You may choose this
option, if you want to process the purchase order separately from other purchases,
but nevertheless receive and ship it through a warehouse of your company.
When generating the purchase order, you have to select the vendor in the Create
purchase order form in case no main vendor is specified for the item. Processing of
purchase and sales order works like processing regular orders, including change
management for the purchase order.
In the purchase order, the delivery address for the vendor is the warehouse or
company address (like in any regular purchase order). You may post the product
receipt in your warehouse and then perform picking and shipping to the customer.

4.7.1.3 Using the Create Direct Delivery Option

The button New/Direct delivery generates a purchase order like the create purchase
order option, but links it closer to the sales order. The delivery address of the
purchase order is the customer address, modifications of the address and other
data in the sales order relevant to purchasing – like quantity or delivery date –
synchronize to the purchase order. In case of changes you have to respect the
purchase order change management, at least requiring confirmation of the
modified purchase order.
When posting the product receipt for a direct delivery in purchasing,
Dynamics AX automatically posts the related sales packing slip. If you are required
to print a packing slip for the customer, select the checkbox Print sales documents in
the posting form for the product receipt (see Figure 4-26).
Invoice posting in sales is independent from the purchase invoice then.

mabenito@parcisa.com
192 4 Sales and Distribution

Figure 4-26: Printing a sales packing slip when posting the product receipt

4.7.1.4 Links between Purchase and Sales Order

If you want to know the sales order line linked to a purchase order line or the other
way around, check the item reference on the sub-tab Product (tab Line details) of the
purchase or sales order line.
In the header of purchase or sales orders, the reference is available by clicking the
button Related information/References on the action pane tab General. In the sales
order form, click the button Related information/Purchase order on the action pane tab
General if you want to directly access the assigned purchase order.

4.7.2 Case Study Exercise

Exercise 4.18 – Direct Delivery
Your customer of exercise 4.1 orders 100 units of the item entered in exercise 3.5. In
order to avoid stocking that large quantity in your warehouse, you want to process
a direct delivery. Enter an appropriate sales order and choose the option Direct
delivery for generating a purchase order from your vendor of exercise 3.2.
Your vendor confirms shipping the item with packing slip PS418. You want to post
this product receipt in the purchase order. In the next step, check the status of the
sales order, then post and print the sales invoice. After receiving the purchase
invoice VI418, post the invoice receipt.

4.8 Trade Allowances and Incentive Management

Trade allowances are rebate contracts with customers, which specify a discount
depending on the sales volume. Usually the customer receives a credit note or a
payment at the end of a period if the total sales amount or quantity meets the
target as agreed in the rebate contract.

mabenito@parcisa.com
4.8 Trade Allowances and Incentive Management 193

For this purpose, Dynamics AX 2012 R3 introduces following new features

supporting incentive management:
¾ Trade allowance agreements – Enhancement of the customer rebates
¾ Vendor rebates – Use the rebate functionality in purchasing similar to sales
¾ Broker contracts – Pay agents (vendors) based on the sales revenue with
selected customers
¾ Royalty contracts – Pay royalty owners (vendors) based on the sales volume of
selected items
The new trade allowance module in Dynamics AX 2012 R3 is based on the
customer rebate functionality already included in AX 2012 R2 (originally a part of
the Process Industries solution).

4.8.1 Trade Allowances

The trade allowance module contains the required menu items for managing trade
allowance agreements and the prerequisite setup, for calculating and paying the
rebate, and for analyzing the profitability of promotions through trade allowances.
Trade allowances in Dynamics AX are grouped in three categories:
¾ Bill back – Allowances based on posted invoices in a period, paid to the order
customer or the invoice customer
¾ Lump sum – Allowances paid upfront to an agent (vendor or customer)
¾ Invoicing rebate – Allowance immediately deducted from the sales invoice

4.8.1.1 Required Base Setup for Trade Allowances

As a prerequisite for using trade agreements, set up at least one customer
hierarchy containing the customers which are subject to trade allowances.
Customer hierarchies are available in the form Trade allowance management> Setup>
Customer category hierarchies, where you can click the button New for setting up a
new hierarchy.

Figure 4-27: Managing customer hierarchy categories

mabenito@parcisa.com
194 4 Sales and Distribution

Clicking the button New category node in the customer category hierarchies allows
creating a multilevel hierarchy structure before assigning individual customers by
clicking the button Add/remove customer.
Released products included in trade allowance agreements have to be assigned to a
product category. For this purpose, make sure a product category hierarchy as
described in section 3.3.1 is available and assign applicable products to categories
(click the button Set up/Product categories in the action pane of the shared or
released product form).
In the rebate program types (Sales and marketing> Setup> Rebate program> Rebate
program types), create at least one rebate program type with the Rebate program type
“Bill back” and the applicable default accrual and expense account.
In the merchandising event categories (Trade allowance management> Setup>
Merchandising event category), create at least one category with the Default type “Bill
back”. If you work with lump sum allowances, create an additional category with
the Default type “Lump sum”.
Parameter settings in the accounts receivable and in the trade allowance
management module apply to trade allowances:
¾ In the accounts receivable parameters (Accounts receivable> Setup> Accounts
receivable parameters), switch to the tab Rebate program and select an
AR consumption journal and a Rebate accrual journal (usually creating specific
journal names in finance for this purpose before). In addition, select the
checkbox At invoicing if you want to immediately create a rebate transaction
when posting an applicable sales invoice. On the tab Number sequences, make
sure a number sequence for the Reference “Rebate ID” is selected.
¾ In the trade allowance management parameters (Trade allowance management>
Setup> Trade allowance management parameters), specify required number
sequences and optionally select a default Customer hierarchy and a Default rebate
program ID. If working with lump sum allowances, select an Expense account
and/or a Procurement category for lump sum transactions.

4.8.1.2 Funds and Optional Setup

Trade allowances funds provide the budget for carrying the costs caused by the
rebates specified in trade allowances. Although funds are not mandatory, they are
an important part in trade allowance management because they are necessary if
you want to check the profitability of sales promotions through rebates. For setting
up trade allowance funds, access the form Trade allowance management> Periodic>
Funds. When creating a new fund, select the From date and the To date for specifying
the validity period and enter the budget amount in the Fund budgeted. On the tabs
Customers and Items, select the customers and items applicable for the specific fund.
For setting a fund effective, change the Status to “Approved”.

mabenito@parcisa.com
4.8 Trade Allowances and Incentive Management 195

Trade allowance agreement periods (Trade allowance management> Setup> Trade

allowance agreement period) provide the option to specify date interval which you
can use as a default when entering trade allowance agreements.
If you want to apply an approval process for trade allowance agreements, you can
set up approval workflows in the form Trade allowance management> Setup> Trade
allowance workflows.

4.8.1.3 Trade Allowance Agreements

Trade allowance agreements specify rebates which are applicable to customers. For
entering a new agreement, access the menu item Trade allowance management>
Common> Trade allowance agreements and click the button New/Trade allowance. After
entering a description, enter the validity dates – including Order from and Order to –
specifying which sales orders and invoices are the basis for calculating the rebate
(optionally defaulting the dates by selecting a Trade allowance agreement period).
In the field group Analysis, select the mandatory Unit before you can specify the
sales target of the agreement. This target is given by entering the usual sales
quantity without trade allowances in the Base units and the intended increase in the
Lift percent.
The tabs Customers, Items, and Funds in the header view of the trade allowances
provide the option to set defaults for the trade allowance lines.
After switching to the line view by clicking the button Line view you should make
sure that appropriate customers are selected on the tab Customers. On the tab
Merchandising event, add one or more lines with the applicable Category. After
selecting a merchandising event line, switch to the other sub-tabs for providing
event details. The sub-tab Amounts contains the allowance calculation for the
selected event line. Depending on whether the particular merchandising event line
is linked to a Category with the Default type “Bill back” or to a Category with the
Default type “Lump sum”, this sub-tab shows different fields.
When entering the calculation details for a “Bill back” event, the Minimum quantity
and Minimum amount on the sub-tab Amounts specify the minimum sales volume
within the period selected in the field Cumulate sales by for a customer to be eligible
for the allowance rebate. The Payment type defines if the order customer is credited,
or if the invoice customer is credited, or if the customer receives a payment
(reimbursement through accounts payable by paying to a vendor associated with
the customer). At least one line on the tab Trade allowance lines of the tab Amounts is
required, in the column Amount type specifying whether the Value is an amount or
a percentage. If the allowance percentage or amount is different depending on the
actual sales volume, enter multiple trade allowance lines. The field Rebate line break
type in the field group Limits determines whether From qty and To qty in the lines
are quantities or amounts.

mabenito@parcisa.com
196 4 Sales and Distribution

Figure 4-28: Amount calculation settings in a bill back trade allowance agreement line

Once you are finished with entering the trade allowance with its lines, click the
button Confirmed in the action pane of the trade allowance agreements form to
make it effective.
If you have to set up similar trade allowance agreements multiple times, you can
create a template (Trade allowance management> Periodic> Templates) in a similar way
to setting up a trade allowance. Clicking the button Create trade allowances in the
template creates a new trade allowance as a copy of the template.

4.8.1.4 Processing Lump Sum Agreements

Lump sum agreements are one-time payments or credit notes funding sales
promotion activities of customers or vendors. For setting up a lump sum
agreement, enter a merchandising event line in a trade allowance agreement as
shown before. In comparison to bill back events, the sub-tab Amounts for lump
sum events only shows the fields Amount (for entering the claim amount) and the
Payment type (specifying whether the allowance is credited to a customer or paid to
a vendor).
Once the trade allowance agreement is confirmed, you can credit or pay the claim
by clicking the button Approve on the sub-tab Amounts of the trade allowance
agreements.
If the Payment type is “Customer deductions”, Dynamics AX creates a customer
invoice (credit note) for the customer in the field Pay to (applying the expense
account specified in the trade allowance parameters). If the Payment type is “Pay

mabenito@parcisa.com
4.8 Trade Allowances and Incentive Management 197

using accounts payable”, Dynamics AX creates a vendor invoice for the vendor in
the field Pay to (applying the procurement category specified in the trade
allowance parameters).

Figure 4-29: Amount calculation settings in a lump sum agreement line

You can view the customer or vendor invoice in the (open) transactions of the
particular customer or vendor.

4.8.1.5 Processing Bill Back Agreements

Bill back agreement rebates are based on sales invoices and apply to the customers
and items specified in the agreement. Depending on the checkbox At invoicing on
the tab Rebate program in the accounts receivable parameters, Dynamics AX
immediately creates a rebate transaction when posting an invoice. If this checkbox
is not selected, execute the periodic activity Sales and marketing> Periodic> Rebate
program> Rebate program batch calculation for creating rebate transactions.
If you want to manage the transactions for bill back agreements then, access the bill
back workbench (Trade allowance agreements> Common> Bill back workbench). For
processing the rebates at the end of the trade allowance cumulating period,
calculate the rebate amount by clicking the button Cumulate.
Then approve the rebates by clicking the button Approve after selecting the lines for
approval in the grid. Finally click the button Process for generating rebate
transactions and posting accrual transactions.
In the next step, access the open transactions of the particular customers receiving
a rebate (button Settle/Settle open transactions on the action pane tab Collect in the
customer list page). In the Settle open transactions form, click the button Functions/
Bill back program and select the checkbox Mark in the rebate line to be credited. If
the rebate should be credited in sales according to the payment type of the trade
allowance agreements, click the button Functions/Create credit note then. In case the

mabenito@parcisa.com
198 4 Sales and Distribution

rebate is to be paid, click the button Functions/Pass to AP which creates an open

vendor transaction included in the next payment proposal.

Figure 4-30: Calculating rebates in the bill back workbench

Note: Whereas lump sum agreements are subject to sales tax/VAT calculation (for
this purpose you can for example specify an item sales tax group on the lump sum
expense account), bill back agreement transactions are posted like payments and
currently do not apply sales tax/VAT.

4.8.1.6 Deductions and End of Period Promotions

Trade allowance deductions, which are an optional feature, serve the purpose to
manage the business process in case a customer does not want to wait for the
rebate payout. Independent from the credit note (or the vendor payment)
generated when processing the bill back agreement at period end, the customer
transfers a reduced amount indicating the deduction when paying an invoice.
As a prerequisite for using deductions, following setup is required:
¾ Deduction journal name – Select a journal name for posting the deductions in
the trade allowance parameters
¾ Deduction types – Create at least one type with the related offset account in the
form Trade allowance management> Setup> Deductions> Deduction types for posting
deductions
¾ Deduction denial reasons – Create at least one reason in the form Trade
allowance management> Setup> Deductions> Deduction denial reasons
¾ Deduction write-off reasons – Create reasons as applicable in the form Trade
allowance management> Setup> Deductions> Deduction write-off reasons
Deductions are registered when entering customer payments in the payment
journal (Accounts receivable> Journals> Payments> Payment journal) as described in
section 9.5.4. After entering the payment journal line which does not fully match
the invoice amount, click the button Deductions rightmost in the action pane strip
of the journal lines. In the deductions form, create a new line entering the
deduction amount and selecting the deduction type and the trade allowance ID.

mabenito@parcisa.com
4.8 Trade Allowances and Incentive Management 199

The Balance fields in the upper pane of the deduction form support registration by
displaying the balance of settled amount, payment and deduction. After closing
the deduction form, the payment journal shows an additional line for the entered
deduction. Posting the payment journal posts payment transactions for the
payment and for the deduction lines.
Open deductions display in the deduction workbench then (Trade allowance
agreements> Common> Deduction workbench). Credit transactions for trade
allowances, which you create independently by processing trade allowances for
bill back and applicable lump sum agreements as described in the sections above,
are available for reconciliation in the lower pane of the deduction workbench.

Figure 4-31: Matching a deduction with a credit transaction in the deduction workbench

For matching a deduction with a credit transaction in the deduction workbench,

select the checkbox Mark in the appropriate deduction first and click one of the
Select buttons in the lower pane of the from then. Clicking the Match button in the
action pane then posts the matching transaction through the deduction journal.
In case a deduction is incorrect, click the button Deny in the action pane of the
deduction workbench for reversing the deduction transaction. The denied amount
then shows as an open customer transaction again.
The button Split allows splitting a deduction line, for example if you want to deny
only part of the deduction.
If you want to allow a final one-time deduction for an amount exceeding the trade
allowance agreement, you can post an additional promotion by clicking the button
End of period promotion. Click the button OK and optionally select a fund in the
dialog box shown next. The end of period promotion is posted as a lump sum
transaction based on the trade allowance template selected as End of period template
in the trade allowance parameters.

mabenito@parcisa.com
200 4 Sales and Distribution

Note: If you settle the invoice when posting the payment and the deduction in the
payment journal already before creating the credit note for the bill back agreement,
there possibly are no open customer transactions. You cannot access the bill back
program transactions from the Settle open transactions form then. In this case,
reverse the settlement in the closed customer transactions for generating open
customer transactions.

4.8.1.7 Analyzing Trade Allowance Agreements

In the trade allowance agreement form, click the button Analysis in the action pane
for viewing the results of a trade allowance agreement.
For checking the sales transactions and costs related to a trade allowance
agreement you can access the form Trade allowance management> Periodic> Trade
allowance activity.

4.8.1.8 New in Dynamics AX 2012 R3

Trade allowances, vendor rebates, broker contracts and royalty agreements are
new in Dynamics AX 2012 R3.

4.8.2 Vendor Rebates

Rebate and trade allowance agreements are not only available in the sales module.
You can also manage rebate agreements with your vendors in Dynamics AX.
For managing vendor rebate agreements, open the form Procurement and sourcing>
Common> Rebate agreements and set up agreements similar to the way setting up
customer rebate agreements and trade allowance agreements.
The required setup for vendor rebate agreements is available in the procurement
and sourcing parameters, and in the forms of the menu item folder Procurement and
sourcing> Setup> Rebate program.

4.8.3 Broker Contracts

Broker contracts in Dynamics AX support agreements with agents (vendors),
which require to pay the agent based on your sales revenue with selected
customers and items.

4.8.3.1 Required Setup for Broker Contracts

As a prerequisite for broker contracts, you have to set up at least one charges code
for broker charges in the accounts receivable charges (Accounts receivable> Setup>
Charges> Charges code). This code is used for posting the broker charges when
posting a sales invoice.
In the Accounts payable parameters, select appropriate journal names and an
expense account for the broker claim on the tab Broker and royalty. On the tab
Number sequences of the accounts payable parameters, select a number sequence for
the Broker claim invoice.

mabenito@parcisa.com
4.8 Trade Allowances and Incentive Management 201

4.8.3.2 Entering and Processing Broker Contracts

Since the broker itself is a vendor, the broker contracts are available in the accounts
payable module (Accounts payable> Common> Broker> Broker contracts).
When setting up a broker contract, select the broker and a default for the charges
code in the upper pane of the form. In the lower pane, specify which items and
customers are covered by the broker agreement. Break type and Break in the line
determine the minimum quantity or amount for applying a broker charge.
Depending on the Category selected in the upper pane, the Charges value is a
percentage or an amount. You can enter multiple lines in the lower pane if there
are different charges depending on the sales quantity or amount.
The contract is effective once the Status is set to “Approved”.

Figure 4-32: Managing a broker contract

When entering a sales order line covered by the broker contract, you can view the
calculated broker commission by clicking the button Sales order line/Broker
commission in the action pane strip of the sales order line. Clicking the button
Financials/Maintain charges in sales order line provides access to the related charges
transaction. When posting the sales order invoice, the charges transaction posts an
accrual transaction and a broker contract claim.
In the broker claims (Accounts payable> Common> Broker> Broker claims), you can
view the claims generated in sales. For paying relevant claims, make sure that the
checkbox Mark is selected in the claims to be paid (manually select in the upper
pane or click the button Mark all). Enter the approved claim amount in the column
Approving and click the button Approve for accepting the claim. Approving posts a
reversal of the accrual and a vendor invoice with the broker expense.

4.8.4 Royalty Agreements

Royalty agreements in Dynamics AX support contracts with royalty owners
(vendors), which require to pay the royalty owner a fee (e.g. a license fee) based on
your sales of selected items.
Royalty contracts work similar to vendor rebate agreements, but they are based on
customer invoice transactions covered by the royalty agreement.

mabenito@parcisa.com
202 4 Sales and Distribution

Required setup for royalty contracts includes settings on the tabs Broker and royalty
and Number sequences in the accounts payable parameters.
Royalty contracts are available in the form Accounts payable> Common> Royalty>
Royalty agreements, the form Accounts payable> Common> Royalty> Royalty claims is
used to manage the calculation.

mabenito@parcisa.com
5 Production Control

The primary responsibility of production control is to manufacture finished goods.

In order to meet this task, items and resource capacity (men and machinery) are
consumed. The manufacturing process may include semi-finished items, which are
included in the bill of materials of finished items.

5.1 Business Processes in Manufacturing

Depending on the requirements of your company, apply following manufacturing
concepts in Dynamics AX:
¾ Discrete manufacturing – Core production functionality including bills of
materials (BOM), resources, routes and production orders.
¾ Process manufacturing – Supporting additional requirements of batch-produc-
ing industries like formulas and co-products.
¾ Lean manufacturing – Supporting production flows and Kanbans (working
independently from routes and production orders).
You can use these concepts in mixed mode, for example choosing process
manufacturing for components, and lean manufacturing for finished products.
The explanations in this book are limited to the core production functionality,
covered by discrete manufacturing. Before we start to go into details, the lines
below give an overall picture of discrete manufacturing.

5.1.1 Basic Approach

Like in purchasing and sales, correct master data are an essential prerequisite for
successfully executing production control.

5.1.1.1 Master Data and Transactions in Production Control

The released product form contains the main characteristics of an item. The bill of
materials (BOM) then describes the structure of a finished or semi-finished item,
consisting of components (raw materials, parts or semi-finished products).
Resources (e.g. machines or human resources) are another basic element, providing
capacity for manufacturing. Required resources are then included in routes and
operations, which describe the necessary activities for producing an item.
In the course of production order processing, master data are copied to transaction
data. You may modify these default data in transactions, for example choosing a
non-standard bill of materials in a specific production order.
Figure 5-1 below shows the required steps in production order processing.

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_5, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
204 5 Production Control

Figure 5-1: Production order processing in Dynamics AX

5.1.1.2 Demand and Supply Planning

The first step in the manufacturing process is to identify material supply, which is
required for covering item demand, in operations planning (master planning, see
section 6.3). Depending on item coverage settings, the item demand derives from
different sources: Master planning may include forecasts, current sales quotations,
sales orders, quantity in inventory and coverage settings for minimum stock.

5.1.1.3 Creating a Production Order

As a preliminary step for creating production orders, master scheduling in
operations planning generates planned production orders, which you may transfer
to actual production orders. Apart from transferring planned orders, following
options are available for creating a production order:
¾ Manually – Entering an order in the production order form
¾ Sales order – Creating a production order in a sales order line
¾ Pegged supply – Automatically creating a production order for a semi-finished
item (sub-production) in the production order of a finished item
¾ Project – Creating a production order from a project in project accounting
A production order consists of an order header, which refers to the produced item,
and order lines. Unlike purchase and sales orders, which only contain lines for
items, production orders contain two different types of lines: BOM item lines and
route operation lines. These line types show in separate forms.
After creating a production order, you have to execute all subsequent steps – from
estimating to ending – one after the other. But depending on parameter settings,
optionally skip steps which you do not require in a particular order.

5.1.1.4 Estimating and Scheduling

Estimation is the first step in order processing after creating a production order.
Estimation determines the quantity and cost of all items and resources, which are
required for manufacturing the product.
Whereas estimation only calculates item quantity and resource capacity demand
without timing it, scheduling as the next step calculates exact dates for production.

mabenito@parcisa.com
5.1 Business Processes in Manufacturing 205

5.1.1.5 Releasing and Starting

Releasing a production order means to hand it over from the front office to the
shop floor. When releasing the order, print the production papers if required.
Once manufacturing of a production order should actually start, set the order
status to “Started”. This status enables posting item and working time
consumption. When starting an order, optionally print the picking list and post
automatic consumption of items and resource capacity.

5.1.1.6 Production Journals

In the course of the manufacturing process, the shop floor consumes material and
resource capacity. Reporting this consumption requires posting production
journals. Depending on production settings, post these journal either manually or
automatically (applying estimated data). Alternatively, use shop floor terminals in
the Manufacturing execution module in order to report consumption.

5.1.1.7 Reporting as Finished and Ending the Production Order

Once manufacturing is completed for the entire or a partial quantity of the finished
product, post a reporting as finished transaction. After posting, the reported
quantity of the finished product is available in inventory. Ending the production
order is the last step in production order processing, calculating actual costs of
production and finally posting to the general ledger.

5.1.1.8 Ledger Integration and Voucher Principle

Yet before ending an order, production journals for material and resource
consumption on the one hand and finished product receipts on the other hand are
posting to ledger accounts (see section 9.6.3).
According to the general principle for processing transactions in Dynamics AX, the
voucher principle also applies to transactions in manufacturing. You have to
register a transaction in a journal before you can post it.

Figure 5-2: Posted and non-posted documents in production control

mabenito@parcisa.com
206 5 Production Control

5.1.2 At a Glance: Production Order Processing

In order to provide an overview of the main steps in production order processing,
this section shows the basics. For convenience, we post all transactions directly in
the production order form.
If you want to create a new production order manually, access the form Production
control> Common> Production Orders> All Production Orders and click the button
New/Production order on the action pane tab Production order. Dynamics AX then
shows the Create production order form, where you want to choose the Item number
of the manufactured item. The selected item provides default data like quantity,
BOM number and route number to the production order. Clicking the button
Create in the create order form finally creates the new production order.
The action pane tab Production order of the production order form provides access
to the form showing material components (button Production details/BOM) and
route operations (button Production details/Route).
Note: Pressing the F5 key refreshes the form for displaying the new order.

Figure 5-3: Managing a production order in the production order form

For processing the production order, change the order status by clicking following
buttons one after the other:
¾ Process/Estimate (action pane tab Production order)
¾ Production order/Schedule operations or Schedule jobs (action pane tab Schedule)
¾ Process/Release (action pane tab Production order)
When changing the status, select applicable parameters – e.g. setting the
scheduling direction – on the tab General of the update dialog of each step. When
releasing the order, optionally select to print production papers (job card, route
card) in the update dialog. When starting the order, print the picking list if
necessary.

mabenito@parcisa.com
5.1 Business Processes in Manufacturing 207

Once the production order should be processed in the shop floor, click the button
Process/Start for starting the order and posting automatic material and route
consumption as applicable. If you start an order without separately performing the
preceding steps, they are executed automatically when starting.
In order to register consumption of items configured for manual posting, click the
button Journals/Picking list on the action pane tab View of the production order. In
the production journal, click the button Picking list/Create lines for generating a
proposal with picking list lines. Selecting “Remaining quantity” in the lookup field
Proposal of the Create lines dialog provides a default for open quantities to the
journal lines. If required, edit the consumption quantity, the warehouse, or other
data in the journal lines before posting the picking list by clicking the button Post.

Figure 5-4: Creating a proposal for the picking list lines

Depending on the scheduling type (Operations scheduling or Job scheduling) executed

for scheduling the production order, register the actual working time consumption
either at route level or at job level (button Journals/Route card or Journals/Job card on
the action pane tab View of the production order).
Unlike picking lists, route card and job card journals do not contain proposals for
manual working time consumption. Click the button Create new in the route card or
job card journal header for creating a new journal, and enter operation/job number,
resource, hours and good quantity in the lines before clicking the button Post.
Clicking the button Process/Report as finished on the action pane tab Production order
of the production order form increases the quantity on stock of the finished item. If
you want to ignore missing consumption postings, select the checkbox Accept error
on the tab General in the update dialog.
Once posting of all transactions for the production order is finished, cost and close
the order by clicking the button Process/End.

mabenito@parcisa.com
208 5 Production Control

5.2 Product Data and Bills of Materials

All material components required for production control are included in the
product and released product records (item records). Apart from inventoried items
like finished products, semi-finished products and raw material or parts, product
records are also necessary for phantom items or purchased services.
A bill of materials (BOM) controls, which material components are included in a
finished product. You may assign an individual bill of materials to only one item,
to multiple items, or multiple bills of material to one individual item. Multiple bills
of material for one item are required, if the applicable bill of materials for example
is depending on the lot size or on the production date.
If you want to manage a product with variants, choose the product subtype
“Product master” when creating a shared product (see section 7.2.1). A multi-
model production is available through the use of product configuration models or
configuration groups and rules. A detailed description of the options for product
configuration is beyond the scope of this book, however.

5.2.1 Product Master Data for Manufacturing

The item records of all finished products and raw materials or parts are available
in the shared product form (Product information management> Common> Products>
All products and product masters) and in the released product form (Product
information management> Common> Released products).
Details on general product data are included in section 7.2 of this book. The lines
below therefore only cover product data specifically applying to production
control. Except for the product type, which is specified in the product form, these
data are included in the released product form.

5.2.1.1 Item Model Group, Production Type and Default Order Type
The first essential setting in the released product is the Item model group shown on
the tab General of the released product form. All items in production control –
including finished products, semi-finished products and raw materials or parts –
have to be linked to an item model group for stocked products (see section 7.2.1).
Since this setting is also required for non-inventoried BOM-components like
subcontractor work, choose the Product type “Service” for non-inventoried
products in order to avoid inventory control for these items.
In the item record of finished or semi-finished products, select the option “BOM”
in the lookup field Production type on the tab Engineer. The production type “None”
– an option for purchased raw materials or parts – prevents assigning a BOM to the
item. The production types “Formula” and “Co-product” enable assigning a
formula instead of a BOM, which is applicable to process manufacturing.
Controlling item sourcing, the default order type is another important setting. The
lookup field Default order type is available on tab General in the default order

mabenito@parcisa.com
5.2 Product Data and Bills of Materials 209

settings form, which you may access clicking the button Default order settings on the
action pane tab Plan of the released product form. Following options are available
for the default order type:
¾ Purchase order – Supply through planned or actual purchase orders
¾ Production – Supply through planned or actual production orders
¾ Kanban – Supply through planned or actual Kanbans (lean manufacturing)
If you need to override the default order type for a specific site, warehouse or other
inventory dimension, open the item coverage form (button Item coverage on the
action pane tab Plan of the released product form). On the tab General there, the
lookup field Planned order type enables overriding the default order type.

5.2.1.2 Settings for Quantity and Price

Apart from the default order type, the default order settings contain additional
default data for production orders including lot size (field Multiple) and order
quantity on the tab Inventory. Site-specific order settings, accessible through the
button Site specific order settings on the action pane tab Plan of the released product
form, may override the default order settings at site level.
On the tab Manage costs in the released product form, the field Price specifies the
general cost price for the item. Site-specific cost prices are available in the item
price form, accessible by clicking the button Set up/Item Price on the action pane tab
Manage costs of the released product form (see section 7.2.4).
If the item model group of the released product applies the valuation model
“Standard cost”, you have to activate a cost price with a costing version referring
to the costing type “Standard cost” in the item price form.

5.2.1.3 Phantom Item

The checkbox Phantom on the tab Engineer in the released product form determines
a default, which applies to the Line type when inserting the item as a component in
a BOM line. Phantom items are semi-finished products with a bill of materials and
optionally a route. When estimating a production order, Dynamics AX explodes
BOM lines of the type “Phantom”. As a result, the production order contains BOM
lines with the components of the phantom item (instead of a line with the phantom
item itself).

5.2.1.4 Flushing Principle

The Flushing principle on the tab Engineer of the released product form controls, if
production orders should post automatic consumption of the particular item in
BOM lines. It contains three different options:
¾ Start – Automatic consumption when starting the production order
¾ Finish – Automatic consumption when reporting as finished
¾ Manual – No automatic consumption

mabenito@parcisa.com
210 5 Production Control

In the BOM line, override the flushing principle specified in the released product
record if necessary.
As a prerequisite for automatic consumption based on the released product or
BOM line setting, you have to select the option “Flushing principle” in the lookup
Automatic BOM consumption on the tab General of the update dialog when starting –
or reporting as finished – a production order (see section 5.4.3).

5.2.1.5 Calculation Group

Another setting available on the tab Engineer in the released product form is the
Calculation group. If you select a calculation group in a released product, this group
overrides the general calculation group in the inventory management parameters
(Inventory management> Setup> Inventory and warehouse management parameters, tab
Bills of materials) when calculating costs for the item.
You may access calculation groups in the form Inventory management> Setup>
Costing> Calculation groups. Calculation groups control the basis for calculating the
cost price and sales price of items.

5.2.1.6 New in Dynamics AX 2012 and in AX 2012 R2

Referring to product master data relevant for manufacturing, Dynamics AX 2012
replaces the item type “BOM” by the default order type “Production”.
Compared with the initial version of Dynamics AX 2012, the R2 version contains
the additional field Production type.

5.2.2 Bills of Materials (BOM)

A bill of materials (BOM) primarily is a list of products and quantities. The main
purpose of a bill of materials is to determine the components (raw material or
parts) of a finished item.

5.2.2.1 Bill of Materials Structure

Items, which are part of a BOM, may themselves consist of other items and
therefore refer to a secondary BOM. Such items are semi-finished goods,
generating a multi-level product structure.
As shown in Figure 5-5, bills of materials in Dynamics AX are independent from
items. You may assign only one or multiple bills of materials to an individual item.
In order to make use of a bill of materials in production control, it has to be
approved. In addition, the bill of materials has to be activated if it should apply as
a default in production orders and in master planning. An active BOM has to be
unique per period, quantity and site.
If a single bill of materials is assigned to multiple finished items, approve and
activate the BOM for the different items independently. As an example referring to
Figure 5-5, you might approve and activate BOM 1 and BOM 2 for other finished
items, no matter if they are approved or activated for the first finished item.

mabenito@parcisa.com
5.2 Product Data and Bills of Materials 211

Figure 5-5: Example of a multi-level product structure

5.2.2.2 Managing Bills of Materials

You may access bills of materials in two ways:
¾ From the released product (Product information management> Common> Released
products, button BOM/Lines on the action pane tab Engineer)
¾ From the menu (Inventory management> Common> Bills of materials)
Although both forms show the same BOM records with a common data structure,
the functionality and structure of these forms is different.
Since understanding the data structure is easier starting in the menu, choose the
BOM form accessed from the menu first. The upper part of the BOM form in this
case shows a list of available bills of materials, and the lower part the finished
items assigned to the BOM selected in the upper part (see Figure 5-6).
In order to enter a new bill of materials, click the button New in the action pane
strip of the BOM form (inserting a record in the upper pane). Depending on the
settings of the applicable number sequence, the BOM number is assigned
automatically or has to be entered manually.
If the bill of materials is site-specific, enter the site in the column Site. Leaving the
site empty creates a general bill of material for all sites.
In the next step, enter a record in the lower part of the form in order to assign the
BOM to a finished product. Dynamics AX applies the expression “Versions” for the
assignment of bills of materials to items. This expression is another name for the
BOM assignment.

mabenito@parcisa.com
212 5 Production Control

Figure 5-6: Viewing bills of materials (accessed from the menu)

In the assignment line, enter the Item number of the finished product. If the BOM is
only valid for a particular period, enter the From date and the To date. If the BOM
assignment depends on the lot size, enter a From qty. And if the BOM assignment
depends on the site, enter the Site in the assignment line.
If you want to assign the BOM to another finished item, enter a second assignment
line.

5.2.2.3 BOM Lines

Clicking the button Lines in the upper pane of the BOM form opens the BOM lines
form, which contains the components of the finished product. BOM lines include
raw materials and parts required for producing the finished item.
When inserting a new BOM line, enter at least the Item number and the Quantity.
The column Per series determines the quantity of finished items produced with the
component quantity entered in the column Quantity.
If a bill of materials is site-specific, you can enter a picking warehouse in the
column Warehouse of the BOM lines. For bills of materials not referring to a
particular site, the picking warehouse in the BOM lines is not available. In both
cases, the checkbox Resource consumption is available for applying the picking
warehouse of the resource group or production unit.
Two other important fields are available on the tab General of the BOM lines form:
¾ Operation number (Oper.No.)
¾ Line type
Production order scheduling as well as master planning calculates item demand in
a way that all components have to be available at the start date of the production
order. If this does not apply to some components because they are required at a
later date, enter the operation number of the route operation, for which the

mabenito@parcisa.com
5.2 Product Data and Bills of Materials 213

component is required, in the BOM line. Available operation numbers are

depending on the route assigned to the finished item. Therefore, the lookup for the
operation number only works if accessing the BOM lines – or the BOM designer,
see below – from the released product form.
The Line type controls the explosion of a BOM line providing following options:
¾ Item – Semi-finished or purchased item, considered as demand in inventory
¾ Phantom – Semi-finished item, replaced by its components when estimating a
production order
¾ Pegged supply – Semi-finished or purchased item, creating a linked sub-
production order, Kanban, or purchase order for the item in the BOM-line when
estimating the production order of the finished item
¾ Vendor – Service item for subcontracting
BOM lines of the line type “Item” generate a demand in inventory. For generating
production or purchase orders, master planning pools different demands (orders
and warehouse replenishing proposals) according to item coverage settings. The
default order type (or the order type in the item coverage) controls, if master
planning creates a planned purchase order, production order, or Kanban. There is
no direct link between the order for the semi-finished item and the original
production order of the finished product.
On the tab Setup of the BOM lines, optionally select a Flushing principle (see section
5.2.1 above) for automatic consumption. If the flushing principle in the BOM line is
empty, the setting in the released product record of the BOM line item applies.
If you want to enter a new bill of materials, which is similar to an existing one, use
the copy-function by clicking the button Functions/Copy in the action pane strip of
the BOM lines.

5.2.2.4 Approving and Activating

Only approved bills of materials are available when creating a production order. In
order to approve the bill of materials itself and the assignment of the BOM to a
finished product (Version), click the button Approve in the upper and in the lower
pane of the BOM form. If approving the BOM version in the lower pane before
approving the BOM itself in the upper pane, a checkbox in the approval dialog
provides the option to approve the BOM in parallel to the BOM version.
If you want to default the bill of materials in production orders and in master
planning, activate the BOM assignment by clicking the button Activation. Activated
BOM assignments show a checkmark in the column Active.

5.2.2.5 Bills of Materials in the Released Product

As an alternative to the menu item, access bills of materials from the released
product (Product information management> Common> Released products).

mabenito@parcisa.com
214 5 Production Control

Clicking the button BOM/Lines on the action pane tab Engineer in the released
product form after selecting a finished item opens the BOM lines form, displaying
the bills of materials assigned to that item. If a bill of materials is assigned to
several items, you have to keep in mind that modifying the bill of materials in this
form applies to all other items concerned in parallel.
Unlike the BOM form accessed from the menu, the BOM lines form accessed from
the released product form shows the BOM lines of the selected bill of materials
directly in the lower pane (see Figure 5-7).

Figure 5-7: Working in the BOM line form accessed from the released product form

If you want to enter a new bill of materials in this form, click the button Create
BOM in the action pane strip of the upper pane. Clicking the button New in the
upper pane for inserting a line is only applicable, if you want to assign the item to
an existing bill of materials.
Note: If the Production type of the finished item is not “BOM”, but “Formula” or
“Co-product”, the item refers to process manufacturing. In this case, you can
assign a formula to the item instead of a BOM. Formulas, which you may access by
clicking the button Formula/Lines on the action pane tab Engineer in the released
product form of these items or through the menu item Inventory management>
Common> Formula, work similar to BOMs, but offer additional options required for
process industries.

5.2.2.6 BOM Designer

The BOM designer is an alternative option for viewing and editing bills of
materials. You may access the BOM designer by clicking the button BOM/Designer
on the action pane tab Engineer of the released product form, or the button Designer
in the action pane strip of the BOM form.

mabenito@parcisa.com
5.2 Product Data and Bills of Materials 215

Figure 5-8: Working in the BOM designer accessed from the released product form

The BOM designer shows a multi-level structure of the bill of materials with the
option to insert items into the selected BOM by simply dragging and dropping
them from the right pane into the left pane.
If accessing the BOM designer from the released product form, it does not only
show the bill of materials but also the route of the selected item. Dragging and
dropping a BOM line to a route operation there specifies the operation number
(Oper.No., see above) of the route operation, for which the component is required.
If you want to change display settings in the BOM designer, switch to the tab
Setup. On this tab, for example choose the Display principle “Selected/Active” (or
“Selected”) for viewing another BOM version instead of the active BOM. Unlike
other settings, choosing the display principle “Selected” then requires clicking the
button Edit BOM versions on the tab Designer. In the BOM versions form, select the
appropriate BOM and click the button Select in the action pane strip before closing
the form.

5.2.2.7 Where-Used
The bill of materials shows the components of an item. If you need to know for a
component, in which products it is included, open the where-used form. The
where-used form, which shows all bills of materials and assigned finished items, is
available by clicking the button BOM/Where-used on the action pane tab Engineer of
the released product form after selecting the particular component item.

5.2.3 Case Study Exercises

Exercise 5.1 – Components
Your company wants to produce a new finished item, which consists of two
components. Enter these components in Dynamics AX, registering an item with the
product number I-##-C1 and the name “##-Component 1” (## = your user ID) and

mabenito@parcisa.com
216 5 Production Control

an item with the number I-##-C2 and the name “##-Component 2” in the released
product form. Variants, serial or batch numbers do not apply and inventory
control is at the level of site and warehouse.
For both items, choose applicable settings for product type, product subtype,
dimension groups, item group (raw material/parts), and production type. The item
model group should refer to the inventory model “FIFO”. The unit of measure is
“Pieces”, and the items are subject to the standard tax rate. Approved vendors are
not required.
The base purchase price and the base cost price of both items is 100 pounds. In
addition, choose your vendor of exercise 3.2 as main vendor for the items. The
flushing principle should be “Manual”. For purchasing and inventory, enter the
main site in the Default order settings and the main warehouse of the main site in
the Site specific order settings.
Notes: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the released products. If the number
sequence for product numbers is set up for automatic numbering, don’t enter a
product number.
Exercise 5.2 – Finished Item
For the finished item, enter an item with the product number I-##-F (if no
automatic number sequence applies) and the name “##-Finished product” in the
released product form. Variants, serial or batch numbers do not apply and
inventory control is per site and warehouse.
Choose applicable settings for product type, product subtype, dimension groups,
item group (finished product), and production type. The item model group should
refer to the inventory model “FIFO”. The unit of measure is “Pieces”, and the item
is subject to the standard tax rate.
The base cost price is 500 pounds and the base sales price 1,000 pounds. In the
Default order settings, make sure the appropriate Default order type is selected and
enter the main site in the settings for inventory and sales. Finally register the main
warehouse as default for inventory and sales in the Site specific order settings.
Note: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the released product.
Exercise 5.3 – Bill of Materials
After registering item records for the finished item and its components in the
exercises above, enter a bill of materials for the finished item of exercise 5.2 starting
in the released product form.
The BOM applies to the main site and contains two units of the first and one unit of
the second item entered in exercise 5.1. The warehouse for picking the components
should be the main warehouse. Once you have finished entering the components,
approve and activate the BOM.

mabenito@parcisa.com
5.3 Resources and Routes 217

5.3 Resources and Routes

Resources are entities in a company executing the operations in manufacturing.
They include working places and personnel as well as machines, tools and vendors
(subcontractors). Resources provide the available capacity, which master planning
compares with capacity requirements.
Routes are the basis for calculating the capacity requirement, specifying necessary
resources and working time for producing a particular item.
Along with items and bills of materials, resources and routes therefore are the
second area of master data required for production control.

5.3.1 Production Units and Resource Groups

Production units represent plants for capacity management. Within a production
unit, resource groups collect resources according to the physical organization in
the shop floor. Resources within a resource group may show different capabilities
and do not need to be interchangeable.

5.3.1.1 Production Units

Production units, which refer to capacity management, are controlled separately
from the storage dimension “Site”, which refers to material management. Multiple
production units may be linked to one common site.
Setting up production units is optional. If you want to create a production unit,
access the form Production control> Setup> Production> Production units and enter
identification, name and site of the new production unit. On the tab General,
optionally enter a picking warehouse applying to BOM lines with a checkmark in
the checkbox Resource consumption.
For linking resource groups to the production unit, access the resource groups
form (Organization administration> Common> Resources> Resource groups). Production
units are not included in inventory transactions, but they are available for
filtering/sorting in applicable production control forms (e.g. Production control>
Common> Current operations).

5.3.1.2 Resource Groups and Resource Assignment

Resource groups in Dynamics AX reflect the physical organization of resources
and serve following purposes:
¾ Resource structure – Linking resources to production units, sites and
warehouses
¾ Operations scheduling – Capacity planning at resource group level
Assigning resources to resource groups is date effective, providing the option to
manage organizational and seasonal changes. At a given date, a resource may not
be member of more than one resource group.

mabenito@parcisa.com
218 5 Production Control

When creating a new resource or when detaching a resource from the resource
group (setting an expiry date), the resource is not member of any group. Because of
required settings like the site specified on the group, resource scheduling includes
only resources which are assigned to a resource group.

5.3.1.3 Managing Resource Groups

For editing resource groups, access the form Organization administration> Common>
Resources> Resource groups. If you want to insert a new resource group there, click
the button New/Resource group in the action pane and enter the applicable
identification, name and site.
On the tab General of the resource group form, optionally assign a production unit.
The Input warehouse specifies the warehouse for consuming BOM lines, which
show a checkmark in the checkbox Resource consumption (overriding the default of
an applicable production unit). Other parameters like scheduling and operation
settings correspond to equivalent settings on resources in the resource form (see
section 5.3.2 below).
The tab Resources of the resource group on the one hand shows the resources which
are already member of the group, and on the other hand enables assigning
additional resources by clicking the button Add in the action pane strip of this tab.
For viewing past resource assignments, click the button View/All. As an alternative
to assigning resources to resource groups in the resource group form, start in the
resource form and select the resource group of a resource there.

Figure 5-9: Managing resource groups

mabenito@parcisa.com
5.3 Resources and Routes 219

By selecting the checkbox Work cell on the tab General in the resource group form,
the resource group refers to lean manufacturing and is not available for operations
and production orders in discrete manufacturing. In addition, the tab Work cell
capacity specifying capacity for lean manufacturing is editable in this case.

5.3.1.4 Working Time Calendars and Templates

The working time calendar assigned determines the operating hours of a resource
or resource group. Accordingly, the available capacity is the result of working time
calendar and efficiency percentage.
The calendar assignment for resource groups is available directly on the resource
group record. For resources, the calendar assignment is specified on the resource
assignment line (assignment of the resource to the resource group) and not directly
on the resource record.
If you want to assign a calendar to a resource group, access the tab Calendars of the
resource group form. Calendar assignment is date effective, providing the option
to record a future change of the calendar – for example changing the working time
of a particular resource group from regular business hours to a 24 hour operation.
Before you may assign a calendar to a resource group, the calendar has to be set up
in the form Organization management> Common> Calendars> Calendars. If you need to
enter a new calendar (for example if a resource group has working times different
to all existing calendars), insert a new record in the calendar form by clicking the
button New or copy an existing calendar by clicking the button Copy calendar.

Figure 5-10: Managing calendars in the calendar form

In order to assign working days and working hours, click the button Working times
in the calendar form. In the working times form, insert individual dates in the
upper pane and enter the working hours for the particular day in the lower pane.
Alternatively, create working days and hours automatically by clicking the button
Compose working times in the working times form.
As a prerequisite for composing working times automatically, you need to set up
working time templates. Working time templates are available in the form
Organization management> Common> Calendars> Working time templates, where you

mabenito@parcisa.com
220 5 Production Control

may specify the weekly working hours on the tabs Monday to Sunday after selecting
the appropriate template on the tab Overview.
When executing the activity Compose working times in the working times form,
select a working time template for defaulting daily working times.

5.3.1.5 New in Dynamics AX 2012

Dynamics AX 2012 introduces the new operations resource model, also shown by
terminology changes (replacing “Work center” by “Resource”). The new model
includes a flexible and date effective assignment of resources to resource groups.
Since the assignment of route operations to resources is provided by resource
requirements and not by a direct link, the resource group does not refer to a
resource type and resources of a resource group do not need to be interchangeable.

5.3.2 Resources and Capabilities

Resources are the lowest level for capacity management in Dynamics AX, and
therefore constitute the entities used for job scheduling.

5.3.2.1 Managing Resources

For editing resources, access the form Organization administration> Common>
Resources> Resources. If you want to insert a new resource, take into account that
the resource identification needs to be unique – not only within the resources, but
also within resource groups.
When entering a resource, you have to select one of the following resource types
distinguishing between different kinds of resources:
¾ Machine – General default, for production machines
¾ Human resources – Linking workers from the human resources module
¾ Tool – Device, often subject to wear through usage
¾ Location – Represents physical space (independent from warehouse locations)
¾ Vendor – External resource, for subcontracting
In many cases, you do not require separate resources for a machine and its
operating staff. You may manage them in a common resource of the type
“Machine”. If you want to manage tools, enter tool usage as a secondary operation
in routes (see section 5.3.3 below).
On the tab Resource groups you may view and change the resource group and the
calendar assignment of the resource. In order to change the group assignment,
click the button Maintain/Add to resource group in the action pane. The default for
the calendar in the assignment line is the resource group calendar.

5.3.2.2 Resource Capabilities

Resource capabilities determine the kind of activities, which a resource may
execute – for example welding or cutting. You may assign one or more capabilities
to an individual resource temporarily or permanently.

mabenito@parcisa.com
5.3 Resources and Routes 221

In the resource requirements of each route, assign resources to operations by

specifying required capabilities in addition or instead of assigning resource groups
(see section 5.3.3 below).
For setting up capabilities (shared across companies), access the form Organization
administration> Common> Resources> Resource capabilities and enter the identification
and description of the capability. On the tab Resources of the capabilities form,
assign resources to the particular capability.

Figure 5-11: Managing capabilities in the capabilities form

As an alternative for assigning capabilities to resources in the capability form, start

in the resource form and select the capabilities of each resource by clicking the
button Maintain/Add capability in the action pane – or the button Add on the tab
Capabilities – there.
Capability assignment is date effective, providing the option to record future
changes of resource abilities. In addition, a Priority is available in the assignment
line. When executing job scheduling, Dynamics AX searches for the applicable
resource with the lowest priority number (priority “1” is selected first).

5.3.2.3 Resource Scheduling

There are two types of resource scheduling in production orders, which may run
alternatively or successively (see also section 5.4.3):
¾ Operations scheduling
¾ Job scheduling
Operations scheduling is a rough scheduling, calculating the production time per
day. It reserves capacity on the resource group allocated through resource
requirements in routes. Resource requirements may include capabilities, resource
types, and resource groups. If resource requirements for operations scheduling
directly refer to a resource number, capacity reservation is on the particular
resource instead of the group.

mabenito@parcisa.com
222 5 Production Control

Operations scheduling simultaneously respects the overall capacity of the resource

group, the capacity per resource type, and the capacity per capability. The
available capacity of a resource group is the total capacity of its resources.
Job scheduling at a later stage of production order processing calculates the
capacity at individual resource level, reserving capacity with exact start and end
times. Depending on scheduling parameters, the selected resource is the available
resource with the shortest duration (throughput time) or with the lowest priority
number.

5.3.2.4 Capacity Settings on the Resource

On the tab General of the resource form, enter the Efficiency percentage of the
resource for reducing or increasing the scheduled time of a route. The default for
the efficiency percentage is 100. If creating a resource, which – for example – is 25
percent faster than the other resources, enter 125 in the efficiency percentage.
Scheduling of an operation usually lasting 10 hours for this resource results in a
scheduled time of only 8 hours ( = 10 * 100/125).
The checkbox Finite capacity controls, if scheduling for the selected resource is
based on limited capacity utilization. If this checkbox is selected, Dynamics AX
does not schedule operations of multiple orders to run at the same time on that
resource. Otherwise, scheduling calculates every production order separately
without consideration of other orders on the same resource. In most cases, finite
capacity only applies to selected resources and resource groups with limited
capacity not available for increasing (e.g. by overtime hours).

Figure 5-12: Managing capacity settings of a resource

mabenito@parcisa.com
5.3 Resources and Routes 223

If you want to apply finite capacity, make sure that the master plan for master
scheduling on the one hand and the update dialog for operations and job
scheduling on the other hand select to include finite capacity.
The unit of time for scheduling a resource is hours. If you need a different unit of
time for a resource, enter a conversion factor in the field Hours/time on the resource
form (field group Times on the tab Operation). If the time entered in routes for
example is in minutes, insert 1/60 = 0.0167 in the field Hours/time.
If a particular resource does not apply a unit of time for the unit of measure,
optionally select an alternative Capacity unit on the tab General of the resource form.
The field Capacity then contains the conversion factor to hours. In related route
operations, choose the option “Capacity” in the field Formula on the tab Setup then.
Further fields on the tab Operation in the resource form contain defaults for route
operations. These defaults apply when selecting the resource or resource group as
costing resource in a route operation.

5.3.2.5 Settings for Ledger Integration

The tab Ledger in the resource form contains the main accounts applying to route
consumption. When posting a route card or job card journal in production,
Dynamics AX in parallel posts the cost amount of the consumed working time to
the main accounts specified in the field group Accounts-WIP of the resource form.
When costing and ending a production order, ledger transactions are posted to the
accounts in the field group Accounts-Costing.
The ledger settings in the resource only apply, if the option “Item and resource” is
selected in the lookup field Ledger posting of the production order (see section
9.6.3). If the option “Item and category” is selected, the cost categories in the route
operation determine applicable main accounts.

5.3.2.6 New in Dynamics AX 2012

As part of the new operations resource model, shared capabilities replace and
significantly extend the task group functionality of previous versions.

5.3.3 Routes and Operations

Routes determine the required operations for producing an item. They are a
supplement to the bill of materials, which contains the required material.
Like bills of materials, routes contain planned figures providing targets for
production. In the course of manufacturing, your workshop reports actual figures
in production journal transactions. Comparing and analyzing target and actual
figures is a basis for possible improvements.
In order to sufficiently describe the operations in manufacturing, a route has to
contain at least following data:

mabenito@parcisa.com
224 5 Production Control

¾ Manufacturing activity – Operation

¾ Provider of capacity – Resource requirements
¾ Sequence of operations – Next operation (Next)
¾ Time consumption – Setup time, Run time
¾ Finished item – Item number in route assignment (route version)
¾ Required material – Assigned operations in BOM lines
If the workshop does not require all components of the bill of materials to be
available when starting the first operation, link items in the bill of materials to the
applicable operation of the route as shown in section 5.2.2.

5.3.3.1 Managing Operations

Operations, available in the form Production control> Setup> Routes> Operations, are
a prerequisite for setting up routes in Dynamics AX. After creating an operation,
select it in as many routes as required.

Figure 5-13: Managing general operation relations for an operation

Operations are independent from routes, containing only a unique identification

and a name to describe the performed activity. Other details required to execute an
operation – like the allowed time or the resource assignment – are not available in
the operation record itself, but in the operation relations.
In order to view and edit operation details (operation relations), click the button
Relations in the operations form. Depending on your requirements, set up
operation relations at a general level, or specific to only one route:
¾ General – For entering operation details at a general level, select the option
“All” in the columns Item code and Route code on the tab Overview of the
operation relations form (see Figure 5-13).
¾ Route-specific – Route-specific operation details show the option “Route” in
the Route code and the route number in the Route relation column.
After switching to the other tabs of the operation relations form, enter details of the
particular operation relation including applicable resources and times. More

mabenito@parcisa.com
5.3 Resources and Routes 225

information on this subject is available in the description of route operations

further below in this section.

5.3.3.2 Operation Sequence

The sequence of operations is not specified in the operation record, but in the
route. You may distinguish two types of operation sequences:
¾ Simple sequence
¾ Complex sequence
If the checkbox Route network on the tab General of the production control
parameters is cleared, simple operation sequences apply. Routes in this case only
contain operations executed one after the other.

Figure 5-14: Example of a simple operation sequence

If the checkbox Route network is selected, you have to enter the next operation in
each operation of a route. This setting enables complex operation sequences, where
you may connect a particular operation to several independent prior operations.

Figure 5-15: Example of a complex operation sequence

Irrespective of simple or complex operation sequences, operations to be performed

on multiple resources in parallel are available by entering a secondary operation in
routes (selecting the Priority “Secondary” for the particular route operation).

mabenito@parcisa.com
226 5 Production Control

If the available options in the route do not meet your specific requirements, set up
an intermediate level of a virtual semi-finished item in the structure of the finished
product. The line type of the BOM line, which contains the virtual item, should be
“Pegged supply” for connecting the production order for the virtual semi-finished
item directly to the production order of the finished item.

5.3.3.3 Managing Routes

Managing routes in Dynamics AX is similar to managing bills of materials,
including the way for accessing the particular Dynamics AX form:
¾ From the released product (Product information management> Common> Released
products, button View/Route on the action pane tab Engineer)
¾ From the menu (Production control> Common> Routes> All routes)
Although both forms show the same route records with a common data structure,
the functionality and structure of the forms is different. Like the assignment of bills
of materials, the assignment of routes to finished items is called “Version”
optionally containing validity dates and a from-quantity. Unlike bills of materials,
a route version always refers to a site.
If accessing routes from the menu item, Dynamics AX displays the routes in a list
page. Clicking the button Maintain/Route versions in the action pane of the list page
opens the route detail form of the specific route, showing the route header and one
or more assigned finished items (“Versions”).
In order to access the route operations from the routes list page, click the button
Maintain/Edit in the action pane or double-click a route record in the list page. If
you are in the route detail form (showing the route versions), clicking the button
Maintain/Route in the action pane opens the route operations – the button Edit there
switches between view mode and edit mode.
The route form shows the list of operations for the selected route in the upper
pane. In the lower pane of the route form, you can edit the operation relations
(operation details) of the operation selected in the upper pane. Depending on the
requirements, route-specific operation relations or a general operation relation –
applicable to all routes and items for an operation – may apply.

5.3.3.4 Creating a Route

In the routes list page, create a new route by clicking the button New/Route in the
action pane. In the route detail form, the route number derives from the
appropriate number sequence or has to be entered manually. After entering a Name
for the new route in the upper pane, assign one or more finished items together
with the applicable site in the lower pane.
Clicking the button Maintain/Route in the action pane of the route detail form opens
the route operations, where you may insert the particular route operations.

mabenito@parcisa.com
5.3 Resources and Routes 227

Like bills of materials, routes and route assignments (Versions) have to be approved
before they are available for production orders. You may approve a route clicking
the button Approve in the action pane of the route list page or detail form. In order
to approve a route version, click the button Approve in the action pane strip of the
tab Versions in the route detail form. If approving the route version before
approving the route, a checkbox in the approval dialog provides the option to
approve the route in parallel.
If you want to default the route in production orders and in master scheduling,
activate the route version by clicking the button Activation.

5.3.3.5 Route Operations

If accessing the route from the routes list page, the sequence of route operations
shows in the upper pane of the form. Making sure the upper pane is selected,
insert a new route operation by pushing the shortcut key Ctrl+N or choosing the
command File/New in the jewel menu.
After selecting the operation number in the column Oper.No., choose the applicable
operation in the column Operation. Operation details (operation relations) are
available in the lower pane of the form.
If a general operation relation – indicated by the option “All” in the column Route
code – exists for the selected operation, it shows in the lower pane of the route form
after saving the record in the upper pane. If you change data of a general operation
relation in the route form, keep in mind that these changes apply to all routes
referring to the particular general operation relation.
If you want to register route-specific operation details, insert a line for a new
operation relation in the lower pane of the route from. When inserting this
operation relation, select the option “Route” in the column Route code and enter
required data on the other tabs of the lower pane.
In the upper pane of the route form, you have to enter the number of the next route
operation (except for the last operation) in the column Next, if the production
control parameters (checkbox Route network) specify complex operation sequences.
If the shop floor should execute operations in parallel, enter two operations with
the same operation number, but a different Priority. In the example of Figure 5-16,
the operation number 30 shows two parallel operations – one with priority
“Primary” and the other with priority “Secondary 1”.

5.3.3.6 Routes in the Released Product

As an alternative to the appropriate menu item, access the routes from the released
product form (Product information management> Common> Released products).
Clicking the button View/Route on the action pane tab Engineer in the released
product form after selecting a finished item opens the routes form, displaying the
routes assigned to this item.

mabenito@parcisa.com
228 5 Production Control

Figure 5-16: Managing routes in the route form, accessed from the released product

The route form accessed from the menu looks different to the route form accessed
from the released product – it shows the route version (or versions) in the upper
pane and the operations with operation number and operation relation details in
the lower pane. If you want to enter a completely new route in this from, click the
button Create route in the upper pane. Clicking the button New in the upper pane is
applicable, if you want to create a version assigning the item to an existing route.
If a general operation relation – indicated by the option “All” in the column Route
code – exists for an operation, detail data from this relation apply to the route
operation. Unlike the route form accessed from the menu, overriding data from the
general operation relation in this form automatically creates a route-specific
operation relation – indicated by the option “Route” in the column Route code.
In order to create a route-specific operation relation based on an applicable general
operation relation, optionally click the button Copy and edit relation in the action
pane strip of the lower pane (in order to view the new route-specific operation
relation, it might be required to refresh the form pushing the F5 key afterwards). If
you want to delete a route-specific operation relation for applying the general
operation relation again, click the button Delete relation in the action pane strip.
If no general operation relation exists for a route operation, enter a new operation
relation with all required data in the lower pane manually.

5.3.3.7 Route Groups

An essential setting for posting working time consumption related to an operation
is the Route group on the tab Overview (also available on the tab General) of the
operation relation in the route form. If you want to apply automatic posting of time
consumption (actual = estimate), you have to select a route group with appropriate
settings for automatic route consumption.

mabenito@parcisa.com
5.3 Resources and Routes 229

In order to access route group settings, choose the form Production control> Setup>
Routes> Route groups. In route groups for automatic posting, the checkboxes for
Setup time, Run time and Quantity in the field group Automatic route consumption on
the tab General have to be selected. In addition, clear the checkboxes in the column
Job management on the tab Setup for these route groups (automatic consumption is
posted through route cards).
The checkboxes in the field group Estimation and costing control, whether to include
assigned operations in estimation and cost calculation. For regular operations, you
want to select the checkboxes for time based cost calculation or the checkbox for
quantity based cost calculation. If all checkboxes for costing are deselected,
Dynamics AX will only calculate the time but no costs for assigned operations.

5.3.3.8 Costing Resource and Cost Categories

The tab Setup of the operation relations in the route form contains the Costing
resource specifying the resource applicable for the cost estimation of production
orders. When selecting a costing resource in a route operation, data from the
resource default to the Cost categories and the fields on the tab Times as applicable.
Cost categories are a second setting in addition to the route group for controlling
cost estimation and cost calculation. You can assign different cost categories for
setup time, run time and quantity. When assigning cost categories, make sure the
appropriate checkbox in the route group is selected for including time or quantity
in the cost calculation.
Before creating a new cost category, you have to enter a shared category in the
form Production control> Setup> Routes> Shared categories (alternatively accessible
through the table reference – View details – on the field Category ID of the cost
categories form). Shared categories ensure common category definitions across
companies. For categories applicable to production, the checkbox Can be used in
Production in the shared category has to be selected.
In production control, required cost categories are available in the form Production
control> Setup> Routes> Cost categories. These categories contain three important
settings:
¾ Cost price – Determining the hourly rate of capacity
¾ Cost group – Classifying cost types in cost calculation (see section 5.4.1)
¾ Ledger-Resources – Determining main accounts similar to ledger integration
settings of resources (see section 5.3.2 above), if the production order applies
the option “Item and category” in the lookup field Ledger posting
In order to specify a cost price for a category, click the button Price in the cost
categories form for accessing the cost category price form. In the item price form,
enter a cost price for the category per site or – if leaving the field Site empty –
company-wide with a start date, assigned to a costing version (for costing versions,

mabenito@parcisa.com
230 5 Production Control

please refer to section 7.2.4). In order to apply the price, activate it by clicking the
button Activate.
Estimation will use the cost price of the cost categories assigned to the route
operation. The cost price for actual costs derives from the resource entered in the
posted route consumption transaction.

5.3.3.9 Route Operation Times

The tab Times of the operations relations contains the allowed time for the
operation, split into setup time, run time, queue times and transit time. The field
Run time contains the time, in which the workshop should process the quantity of
the product entered in the field Process qty.
If the Process qty. is 1.00, the run time is the time in hours to produce one unit. You
may apply other units of time, entering a conversion factor Hours/time in the route
operation or selecting a capacity unit in the resource (see section 5.3.2).
The processing time of an operation calculates according to following formula:
Setup time + (Run time × Quantity )
PROCESSING TIME =
Efficiency percentage of the resource

In order to calculate the total lead time, add queue and transit times.

5.3.3.10 Resource Requirements

On the tab Resource requirements of the operation relations, specify which resources
are applicable for the operation (independent from the costing resource). If there
are several requirement lines, applicable resource must meet all requirements.
You may specify requirements for Operations scheduling independent from the
requirements for Job scheduling, selecting the checkbox in the appropriate column
as applicable. In the column Requirement type, choose if a requirement is based on a
resource group, resource, resource type or capability. The options “Skill”,
“Courses”, “Certificate” and “Title” apply to job scheduling for resources of the
resource type “Human resource”, referring to worker data in human resource
management.
The field Quantity in the field group Resources specifies the number of required
resources, this is how many resource should work in parallel. As a result,
scheduling multiplies the run time with this field for calculating required capacity.
Clicking the button Applicable resources at the top of the lower pane in the route
form helps checking which resources meet the requirements entered for a route
operation. The button Route feasibility in the upper pane of the route form displays
an overview of the resource availability for all operations. Since the assignment of
resources to resource groups and capabilities is date effective, you have to choose a
date for displaying applicable resources.

mabenito@parcisa.com
5.3 Resources and Routes 231

5.3.3.11 New in Dynamics AX 2012

Items new in Dynamics AX 2012 related to routes include the resource
requirements on route operations (replacing direct work center and work center
group assignment in previous releases) and shared categories for cost categories.

5.3.4 Case Study Exercises

Exercise 5.4 – Route Setup
In order to better understand the function of capabilities, route groups and cost
categories, you want to set up an example.
As a start, create a capability C-## (## = your user ID) with the name “##-specific”.
Then you want to enter a route group R-## for manual posting of working time
consumption. Estimation and costing should be based on setup time and run time.
Next you want to set up a new cost category G-## (together with a shared category
applying to production). Assign the cost category to an appropriate cost group of
your choice and enter main accounts similar to the settings in existing cost
categories. For the hourly rate, enter a cost price of 100 pounds specific for a
costing version of the costing type “Planned cost” and the main site. Then activate
the cost price.
Exercise 5.5 – Resources and Resource Group
In order to produce the finished product of exercise 5.2, new resources are
required. Enter a new resource group W-## with the name “##-assembly”, referring
to the main site and an appropriate production unit. The cost categories are the
ones entered in exercise 5.4. For the resource group calendar, select a regular
calendar of your choice.
Then create two new resources, W-##-1 and W-##-2, of the type “Machine”. For
both resources, the route group and – for setup and for run time – the cost category
of exercise 5.4 applies. The main accounts for the resources may be similar to
existing resources. Assign both resources to the new resource group W-##, but only
the resource W-##-2 to the capability entered in exercise 5.4. The resources use the
same calendar as the resource group.
Note: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the resources and the resource group.
Exercise 5.6 – Operation
In order to produce your product, you need a new operation. Register this
operation O-## (## = your user ID) with the name “##-processing”.
Generally, the setup time for the operation is one hour and the run time two hours
per unit. Select the resource W-##-1 of exercise 5.5 as costing resource, providing
defaults for route group and cost categories. Resources applicable to the operation
belong to the resource group W-## and show the capability C-## of exercise 5.4.

mabenito@parcisa.com
232 5 Production Control

Exercise 5.7 – Route

Manufacturing your product also requires a new route, which you want to enter
based on the elements set up in the previous exercises.
After selecting your item I-##-F of exercise 5.2 in the released product form, open
the route form by clicking the appropriate button. Insert a new route, which
contains the operation O-## of exercise 5.6 as the only route operation. There is no
setup time, and the run time for the operation is one hour per unit. The other
settings of route operation – including costing resource, route group, cost
categories and resource requirements – are the same as the applicable general
operation relation entered in exercise 5.6.
Once you are finished entering the route details, approve and activate the route.
Can you check applicable resources for executing the route operations? Finally,
check all operation relations referring to the operation of exercise 5.6.

5.4 Production Orders

A production order is a request to manufacture a particular product. Apart from
the item number and quantity of the finished or semi-finished item, production
orders contain data regarding required materials and resources.
The production status displays the progress of a production order. Therefore, the
status is updated with every step in the sequential flow of order processing.

5.4.1 Basics of Production Order Processing

You may create a production order either manually or automatically. For
automatic creation, following options are available:
¾ Master scheduling – Within the firming time fence immediately generating a
production order (see section 6.3.3)
¾ Planned production order – Transfer to a production order by firming (see
section 6.3.4)
¾ Pegged supply – Automatic generation from the BOM line of another
production order (sub-production, see section 5.4.3)
¾ Sales order – Creating a production order by clicking the button Product and
supply/New/Production order in the action pane strip of a sales order line

5.4.1.1 Production Order Status

If you create a production order manually, the first status is “Created”. The status
“Created” is the only status, which allows deleting a production order. If you need
to delete a production order in a later status, you have to reset the status first.
After creating a production order, it runs through the manufacturing cycle
updating the order to following status:
¾ Created
¾ Estimated

mabenito@parcisa.com
5.4 Production Orders 233

¾ Scheduled
¾ Released
¾ Started
¾ Reported as finished
¾ Ended
The order status changes every time when you update the production order, either
by clicking an appropriate button on the action pane tab Production order or
Schedule of the production order form, or by running a periodic activity in the
menu Production control> Periodic> Production orders or Production control> Periodic>
Scheduling. Depending on production control parameters, you can skip particular
steps. In this case, Dynamics AX automatically executes the omitted steps when
starting a subsequent step, applying standard parameter settings in this case.
If you want to reset the status of an order, click the button Process/Reset status on
the action pane tab Production order of the production order form. When resetting
the status, keep in mind that Dynamics AX reverses all posted transactions
referring to the reversed status.

5.4.1.2 Default Values in Update Dialogs

When updating the status of a production order, an update dialog displays. In the
update dialog, click the button Default values if you need default values different to
the standard defaults. Clicking the button User default in the default values form
applies customized default values to all users.

5.4.1.3 Production Control Parameters and Scheduling Parameters

Unlike parameter settings in other areas, production control parameters are not
only available at company level, but also per site. The lookup field Parameter usage
in the production control parameters at company level (Production control> Setup>
Production control parameters) controls in this context, if site-specific parameters
apply to your company. Site-specific parameters in this case are available in the
form Production control> Setup> Production control parameters by site.
On the tab Status of the production control parameters (general or site-specific) you
may specify from which status to which status production orders may be updated.
These settings on the one hand apply to skipping steps in regular production order
processing and to resetting the production order status on the other hand.
Scheduling parameters, providing defaults to the update dialogs for scheduling
production orders, are available in the form Organization administration> Setup>
Scheduling> Scheduling parameters separate from the production control parameters.
Like the production control parameters, they are available at company level and
per site. Key scheduling parameters include the Primary resource selection,
specifying if capability-based scheduling is to be based on the shortest duration
(latest start date when scheduling backwards) or on the lowest priority number.

mabenito@parcisa.com
234 5 Production Control

5.4.1.4 Production Journals

As a prerequisite for posting transactions in manufacturing, you have to set up the
required journals in the form Production control> Setup> Production journal names.
Picking lists, route cards, job cards and report as finished journals refer to different
journal names, which you have to set up selecting the appropriate Journal type.

5.4.1.5 Cost Groups

Cost calculation requires two basic settings:
¾ Cost groups
¾ Costing sheets
Cost groups classify and group different types of costs in cost calculation on the
one hand and specify different margins for sales price calculation on the other
hand. You may access cost groups in the form Inventory management> Setup>
Costing> Cost groups or in the form Production control> Setup> Routes> Cost groups.
The Cost group type, which provides the basic costing structure, contains following
options:
¾ Direct materials – Material consumption
¾ Direct manufacturing – Resource operations
¾ Direct outsourcing – Purchased subcontracting services
¾ Indirect – Overhead margins
¾ Undefined – Unspecific cost classification
In one cost group per Cost group type you should select the checkbox Default to
specify appropriate default groups.
In order to specify margins applying to sales price calculation, access the tab Profit
of the cost group form. You may register up to four lines with a different Profit-
setting on this tab, entering an appropriate Profit percentage per profit-setting level.
When executing cost calculation or estimating production orders later, choose an
appropriate Profit-setting in the calculation dialog – e.g. if you want to apply a
lower margin in a competitive situation.
In the released product form, there is the field Cost group on the tab Manage costs
for assigning a cost group to the particular item. For items not assigned to a
specific cost group, the default cost group for the cost group type “Direct
materials” applies to BOM lines.
Route operations are not directly assigned to a cost group. As shown in section
5.3.3, route operations are linked to cost categories, and cost categories refer to cost
groups.

mabenito@parcisa.com
5.4 Production Orders 235

5.4.1.6 Costing Sheet

In order to establish a clear structure of costs for estimation and costing, there is
the costing sheet in the form Inventory management> Setup> Costing> Costing sheets.
The costing sheet has got two different purposes:
¾ Classify costs – Classification by cost groups
¾ Overhead costs – Specifying rules for calculating overhead costs of
manufactured and purchased items
For classification purposes, the costing sheet constitutes a multi-level structure of
the different costs. Apart from the cost groups, which are the bottom level in the
structure, the costing sheet may contain nodes for totals at multiple levels.
Directly below the Root node, the costing sheet may show two primary nodes with
the Node type “Price”, characterized by a different Type in the field group Setup for
distinguishing following items:
¾ Manufactured items – Applying the node with the Type “Cost of goods
manufactured”
¾ Purchased items – Applying the node with the Type “Costs of purchase”
(optional structure, if you want to apply indirect costs from the costing sheet
instead of indirect costs through charges in purchase orders)

Figure 5-17: Setting up a simple costing sheet

If you want to enter a new node in the costing sheet, do a right-hand click on the
higher-level node and choose the option Create in the pop-up menu.
In case you want to create a node for a cost group, choose the option “Cost group”
in the lookup field Select node type of the dialog shown next. Then select the
appropriate Cost group on the tab Edit in the new node.
If you want to specify calculation rules for overhead costs, choose (or create) a
node in the costing sheet with a Cost group referring to the Cost group type
“Indirect”. The nodes specifying calculation rules for overhead costs are sub-nodes

mabenito@parcisa.com
236 5 Production Control

of such a node. When creating a sub-node for overhead cost calculation, choose the
option “Surcharge” or “Rate” for the Node type in the sub-node. On the tab
Calculation of the sub-node, select a Code specifying the basis for the calculation.
Then you may enter a percentage or rate referring to a costing version (see section
7.2.4) in the lower pane of the form and activate it clicking the button Activate.
Main accounts for posting indirect costs to the general ledger have to be entered on
the tab Posting.
Before closing the costing sheet setup, save your changes clicking the button Save.

5.4.1.7 New in Dynamics AX 2012

Items new in Dynamics AX 2012 include the scheduling parameters. In the costing
sheet, the additional node type “Output unit based” for indirect costs and the
option to specify indirect costs for purchasing are available.

5.4.2 Production Order Registration

Like all documents, production orders contain a header with data common for the
whole order – including the order number, the item number of the finished
product, the order quantity and the delivery date. But unlike sales or purchase
orders, production orders include two different types of lines:
¾ BOM lines – Containing required material
¾ Route lines – Containing required operations
The production order detail form, which you may access double-clicking an order
in the production order list page (Production control> Common> Production Orders>
All Production Orders) only includes the production order header.
In order to access the BOM lines of a specific production order, click the button
Production details/BOM on the action pane tab Production order of the production
order form. Clicking the button Production details/Route in the action pane of the
production order shows the production route (containing resource operations).
Note: In parallel to orders for producing BOM items, the production order list page
contains orders for formula items (with the Production type “Formula” or “Co-
product”) referring to process manufacturing. The button New/Batch order in the
production order form creates a new order for a formula item. For accessing the
formula lines of a batch order (working similar to a production order), click the
button Production details/Formula.

5.4.2.1 Defaults for Production Orders

Production orders contain a copy of the bill of materials and the route, which you
may modify within the particular order.
When creating a production order, Dynamics AX copies the active BOM and route
of the finished item into the production order. If several BOMs and routes are
active for a finished item, the applicable version is determined based on site,

mabenito@parcisa.com
5.4 Production Orders 237

validity date, order quantity, and item configuration. For the validity date, the field
BOM date – receiving its default from the delivery date – in the Create production
order dialog determines the date applied for BOM selection.

Figure 5-18: Deriving BOM and route when creating a production order

If you do not want to apply the active BOM or route in a particular production
order, select another approved BOM or route version – e.g. an alternative BOM
and route for subcontracting – in the create order dialog.

5.4.2.2 Entering a New Production Order

In order to manually enter a new production order, access the form Production
control> Common> Production Orders> All production orders and click the button
New/Production order on the action pane tab Production order or push the keyboard
shortcut Ctrl+N. Dynamics AX then shows the Create production order dialog, where
you have to choose the item number of the finished product. Depending on the
selected item, Dynamics AX applies several defaults. If required, override these
default values in the create dialog, for example selecting a different BOM.
You may also change settings in a production order later, for example modifying
the BOM or route lines in the order. If estimation or scheduling has been executed,
you should update estimation and/or scheduling after changing the production
order to ensure correct production data. If production papers have been printed
already, you might need to reprint them with updated data.
Clicking the button Create in the create order dialog then, Dynamics AX inserts the
production order. After creating, the order shows the status “Created” and
switches to a subsequent status when updating the order. A summary of executed
status updates is available on the tab Update of the production order detail form,
which you may access by double-clicking an order in the list page.

mabenito@parcisa.com
238 5 Production Control

Figure 5-19: Creating a production order

5.4.2.3 References to the Origin

Production orders, which are not created manually, show a reference to their
origin on the tab References of the production order detail form. If the production
order refers to another order, this original order displays in the item reference type
and number.
If you have created the production order in a sales order line, the item reference
type is “Sales order”. In production orders generated as sub-production for the
BOM line of another production order, the item reference type is “Production line”.

5.4.3 Processing Production Orders

After creating a production order, you want to update the status in order to
prepare production order processing.

5.4.3.1 Estimation
Estimation is the first step after creating a production order. The primary task of
estimation is to calculate the material and of resource capacity requirements for
executing a production order. The basis for this calculation is the bill of materials
and the route of the order.
In order to run estimation, click the button Process/Estimate on the action pane tab
Production order of the production order form. The tab General in the estimation
dialog contains a lookup field for the profit setting in the sales price calculation.

mabenito@parcisa.com
5.4 Production Orders 239

In parallel to calculating required quantities and times, estimation determines

estimated costs based on the cost price of material components and route
operations. The markup of the calculated sales price derives from the cost groups
of the items and route operations.
After estimation, the cost estimation is available by clicking the button Related
information/Price calculation of the action pane tab View of the production order
form. The tab Overview estimation of the price calculation form contains the list of
individual estimation lines. For viewing a summary according to the costing sheet
setup, switch to the tab Costing sheet in the price calculation form.
The BOM lines of the production order create inventory transactions, which look
similar to the inventory transactions of open sales and purchase order lines, when
estimating. For accessing them, click the button Inventory/Transactions in the BOM
lines of the production order.
The inventory transaction for the finished item, accessible by clicking the button
Inventory/Transactions on the action pane tab Production order of the production
order form, is generated when creating the production order (independently from
estimation).
For BOM lines of the Line type “Pegged supply”, estimation creates a referenced
order:
¾ Sub-production order – For BOM lines containing an item with the default
order type “Production”, estimation creates and estimates a sub-production
order (regular production order linked to the main production order).
¾ Purchase order – For BOM lines containing an item with the default order type
“Purchase order”, estimation creates a referenced purchase order.
For BOM lines of the line type “Phantom”, estimation replaces the BOM line by the
components of the phantom item (BOM and route).

5.4.3.2 Scheduling
Scheduling of a production order is necessary to calculate exact dates for material
and resource requirements. There are two types of order scheduling: Operations
scheduling and job scheduling. Whereas operations scheduling is the first step,
determining dates at an aggregate level of capacity planning, job scheduling
itemizes planned data:
¾ Split resource groups – Reserving capacity on individual resources
¾ Split operations – Reserving capacity for jobs with start and end time
Depending on the requirements, execute either only operations scheduling, or only
job scheduling, or both (first operations scheduling, then job scheduling).
Operations scheduling calculates and reserves required capacity per day at the
level of resource groups (for operations in the route not directly assigned to a
particular resource). The applicable resource group is determined based on the

mabenito@parcisa.com
240 5 Production Control

resource requirements of the operation (capabilities, resource groups, resource

types).
Job scheduling calculates exact start and end times and generates jobs, splitting the
route operations of a production order to individual tasks. These individual tasks
show different job types, corresponding to the different time fields – including
Setup time and Run time – on the tab Times of the route operation. Available job
types for a particular operation are determined by the Route group of the operation
(settings on the tab Setup in the route group form).
Job transactions (referring to job scheduling) are independent from route
transactions (referring to operations scheduling). Therefore you have to decide
whether to schedule capacity and post actual time consumption at operations level
or at detailed job level. Jobs are recorded in a separate table, which you may access
by clicking the button Production details/All jobs on the action pane tab Production
order of the production order or Inquiries/Jobs in the production route form
(Production details/Route in the action pane of the production order).

Figure 5-20: Jobs form, accessed from the production route

Jobs are not available for a production order, if you skip job scheduling.
In order to run scheduling, click the button Production order/Schedule operations or
Production order/Schedule jobs on the action pane tab Schedule of the production
order form. If you want to schedule multiple orders, access the corresponding
periodic activity in the menu item Production control> Periodic> Scheduling.
On the tab General of the update dialog for scheduling, following parameters are
available:
¾ Scheduling direction – Choose an option of forward or backward scheduling
(“Forward form today” applies if empty)
¾ Schedule references – Select for scheduling sub-productions in parallel
¾ Finite capacity and Finite material – Select for considering resource or item
availability

mabenito@parcisa.com
5.4 Production Orders 241

¾ Keep warehouse from resource – Prevents selecting a resource assigned to a

different input warehouse when re-scheduling a production order (applicable if
the checkbox Resource consumption in BOM lines is selected)
¾ Primary resource selection – For job scheduling, specifying whether capability
based resource selection should primarily search for the shortest duration
(latest start date when scheduling backwards) or for the lowest priority number
In addition, choose to skip job types on the tab Cancellation if applicable. This is
useful if it is for example possible to skip queue time for a particular production
order of high importance.
If you do not execute operations or job scheduling as a separate task, scheduling
runs automatically when updating to a later status like Release. In this case, the
Scheduling method on the tab Automatic update of the production control parameters
specifies, whether Dynamics AX runs operations scheduling or job scheduling.

5.4.3.3 Releasing
At the time you want to transfer the production order to the shop floor, you have
to release the order clicking the button Process/Release on the action pane tab
Production order of the production order form. Released production orders are
available in the Manufacturing execution module in Dynamics AX.
On the tab General of the update dialog for releasing, optionally choose to print
production papers like job cards or route cards. Selecting the checkbox References
releases referenced sub-production orders in parallel.

5.4.3.4 Starting
Starting a production order (button Process/Start on the action pane tab Production
order) enables posting inventory and resource transactions referring to this order. If
you do not want to start the entire production quantity, enter a partial quantity on
the tab General of the update dialog for starting. Entering a From Oper.No. and a To
Oper.No. only starts the selected operations.
The automatic posting of route consumption (working time consumption) is
controlled by the field group Route card journal on the tab General of the update
dialog. The field Route card there specifies the journal name for posting, showing a
default from the production control parameters. In order to control posting of
Automatic route consumption, the following options are available:
¾ Route group dependent – Automatic consumption, depending on the route
group of the operation (see section 5.3.3)
¾ Always – Automatic consumption of the whole route
¾ Never – No automatic consumption
The checkbox Post route card now controls whether to post the consumption journal
immediately. If automatic route consumption is selected but not posted,
Dynamics AX generates a non-posted journal for manual editing.

mabenito@parcisa.com
242 5 Production Control

Controlling automatic BOM consumption in the field group Picking list journal of
the update dialog works similar to the automatic route consumption. If you want
to post automatic consumption depending on settings in the BOM lines, choose the
option “Flushing principle” (see section 5.2.1) in the lookup field Automatic BOM
consumption. This option refers to the corresponding field on the tab Setup of the
BOM in the production order.
Selecting the checkbox Print picking list in the update dialog prints the picking list
in parallel to starting the order. For a complete picking list, select the checkbox
Complete picking list journal. Otherwise, the picking list only contains items, which
are included in the picking list journal generated for automatic consumption.

5.4.4 Case Study Exercises

Exercise 5.8 – Production Order
Your company has a demand for five pieces of the finished item entered in exercise
5.2. Enter an appropriate production order and check the bill of materials and the
route in the order.
Exercise 5.9 – Change Status
Run the estimation for your production order of exercise 5.8. Once the estimation is
finished, check the price calculation. Then you want to update the order – first
operations scheduling, then job scheduling, and finally releasing the order.
When starting the order, make sure to print a complete picking list as a print
preview. You do not want to post the picking list. Is it possible to apply these
settings as a default for all users?

5.5 Production Journal Transactions

In order to update scheduling and to analyze production performance, reporting of
actual material and working time consumption is required.
Reporting of actual consumption is done through production journals, which may
be registered and posted in one of three ways:
¾ Manually – Entering and posting journals as described below (if applicable,
usually done in the office based on manual reports of the shop floor).
¾ Automatically – Creating journals based on route group and flushing principle.
¾ Through terminals – Applying the shop floor control module (Manufacturing
execution) in Dynamics AX, consumption may be reported on touch-screen
terminals in the shop floor.

5.5.1 Journal Transactions and Ledger Integration

Production journals for posting consumption include following types:
¾ Picking list – Posting item consumption
¾ Route card – Posting time consumption referring to operations
¾ Job card – Posting time consumption referring to jobs

mabenito@parcisa.com
5.5 Production Journal Transactions 243

Another journal type available – Report as finished – does not refer to item
consumption, but to finishing production receiving the product in inventory.
For automatic route and item consumption, Dynamics AX creates production
journals automatically (Route card for time consumption and Picking list for item
consumption) when starting a production order or when reporting as finished.
Production journals are also generated automatically, if registrations are
transferred from the shop floor control module (Manufacturing execution).
If BOM lines or route operations require manual entries in the production control
module, you have to create production journals. Manual journals apply to the
following lines:
¾ Operations – If assigned to a route group, in which the checkboxes for
automatic route consumption are cleared
¾ Items – If showing a flushing principle “Manual”
The setting for automatic consumption in the operation (route group) or BOM line
(flushing principle) applies, if you refer to these settings in the dialog when
starting a production order or reporting as finished. Usually, this is the default
setting. If choosing the option “Never” for automatic consumption in the dialog for
both order status updates, you have to post manual journals for all BOM lines and
operations.
When ending and costing a production order, item and resource consumption are
posted to the general ledger. When posting production journal transactions, the
consumption may post to clearing accounts for WIP (work in progress).
As a prerequisite for posting item consumption to WIP accounts, the checkbox Post
picking list in ledger on tab General of the production control parameters has to be
selected. In addition, the checkbox Post physical inventory on the tab Setup in the
item model group of the picked item has to be selected.
Like ledger transactions referring to packing slips in purchasing and sales, general
ledger transactions for route/job consumption journals and picking lists are
reversed when ending and costing the production order.

5.5.2 Picking List

Picking list journals are there for posting item consumption. In order to access the
picking list journals, click the button Journals/Picking list on the action pane tab
View of the production order form or select the menu item Production control>
Journals> Picking list.
Journals are non-posted vouchers, consisting of a header and a lines part. When
accessing the picking list journals, the form shows a list of registered journals. The
lookup field Show at the top of the journal header form controls whether posted or
open journals are displayed.

mabenito@parcisa.com
244 5 Production Control

If you want to enter a new journal, insert a new line by clicking the button New in
the action pane strip of the journal header form. After selecting an appropriate
journal name, switch to the journal lines by clicking the button Lines. The button
Create new in the journal header, creating a header and immediately switching to
the lines, provides an alternative way for creating a journal.

5.5.2.1 Consumption Proposal

In order to facilitate picking list registration, click the button Picking list/Create lines
in the journal header form instead of the button Create new.
In the Create lines dialog box, choose the item selection for the proposal then.
Selecting “Remaining quantity” in the field Proposal defaults the open BOM line
quantity of the order estimation to the column Proposal of the picking list lines. If
selecting the checkbox Consumption=Proposal, the column Consumption in the
journal lines also receives the proposal quantity. In this case, you can immediately
post the journal without manually entering quantities.

5.5.2.2 Journal Lines

When registering regular picking list lines manually in the journal, you have to
select a Lot ID linking the consumption to a BOM line before entering the
Consumption quantity. Selecting the checkbox in the column End of the journal line
sets the BOM line to finished, no matter if consuming the total estimated quantity
or less.
If you want to record the consumption of an item not included in the BOM lines of
the production order, insert a picking list line entering the item number and
leaving the lot ID empty. Dynamics AX in this case automatically creates a
corresponding BOM line on the order and applies the lot ID to the picking list line.

Figure 5-21: Registering picking list lines

Figure 5-21 shows an example of lines in a picking list journal, which are generated
by a consumption proposal. The checkbox Consumption=Proposal has been selected

mabenito@parcisa.com
5.5 Production Journal Transactions 245

in the consumption proposal dialog, which is why the column Consumption in the
journal lines contains defaults for the actual quantity. The last line in Figure 5-21
shows a manual entry for an item not included in the BOM. Therefore, the columns
Proposal and – only before saving the line – Lot ID are empty in this line.
Once you have finished picking list registration, post the journal clicking the
button Post in the journal header or lines. The posted transactions are similar to the
packing slip transactions of sales orders, reducing the quantity in inventory of the
picked items.
In inventory valuation, the journal posting applies a preliminary valuation.
Financial valuation is posted later when ending and costing the production order.
Costing a production order is the corresponding action to invoicing a sales order.

5.5.2.3 Inquiries and Reversal

For viewing a posted journal, access the picking list journal form and select the
option “All” or “Posted” in the lookup field Show. The posted journal shows a
checkmark in the column Posted and does not allow modifications.
Alternatively, view the posted transactions in the production posting form. For
accessing this form, click the button Related information/Production posting on the
action pane tab View of the production order form or choose the menu item
Production control> Inquiries> Production> Production posting.
If you want to reverse a posted picking list journal, register and post a picking list
journal with negative quantities. In order to facilitate registration, create an
appropriate picking list proposal by clicking the button Picking list/Create lines and
selecting the option “Full reversal” in the field Proposal of the proposal dialog.

5.5.3 Working Time Registration

Depending on route group settings and on the way of scheduling the production
order, choose route cards or job cards for recording working time consumption.

5.5.3.1 Route Card and Job Card

If not executing job scheduling for a production order, there are no records in the
job table for this order. Therefore, report resource consumption in route cards.
If job scheduling has been executed, register resource consumption in job cards.
This is required for operations with a route group with activated job management
(checkmarks in the column Job management on the tab Setup of the route group).

5.5.3.2 Journal Registration

You may access route card journals clicking the button Journals/Route card on the
action pane tab View of the production order form or through the menu item
Production control> Journals> Route card. For job cards, click the button Journals/Job
card in the production order or access the menu item Production control> Journals>
Job card.

mabenito@parcisa.com
246 5 Production Control

Entering of journal headers and lines for resource consumption works like entering
picking list journals. But except for automatic consumption, you do not have the
option to create a consumption proposal for route cards or job cards.
When inserting a journal line for resource consumption, select the operation
number or the job identification first. Then you may enter the resource, the number
of hours, the produced quantity (Good quantity), and other data like the worker or –
if applicable – the defective quantity (Error quantity) of the finished product. In a
job card, in addition register the start time and the end time usually.
Once you have finished entering journal lines, post the journal clicking the button
Post in the journal header or lines.

5.5.3.3 Reporting as Finished

When registering the last operation or job in a journal line, selecting the checkbox
in the column Production report as finished enables posting a report as finished
journal for the good quantity of the finished item in parallel to the route card or job
card. A default for the report as finished setting in journal lines is available in the
production control parameters (tab Journals, checkbox Automatic report as finished).

5.5.3.4 Inquiries
After posting the route card or job card, the posted journals show in the particular
journal form. In addition, the posted transactions are also available in the inquiry
after clicking the button Related information/Route transactions or Related information/
Production posting on the action pane tab View of the production order form.

5.5.4 Case Study Exercises

Exercise 5.10 – Purchasing Components
In order to process the production order of exercise 5.8, the required components
have to be available in inventory.
Enter a purchase order, purchasing nine units of the first and five units of the
second item of exercise 5.1 from your vendor of exercise 3.2. Once you have
finished entering and confirming the purchase order, post the product receipt and
the vendor invoice.
Exercise 5.11 – Picking List
You may now pick the components required for the production order of exercise
5.8. Enter and post a picking list journal, picking nine units of the first and five
units of the second item. Picking should be done from the warehouse to which you
have posted the items in exercise 5.10.
Exercise 5.12 – Job Card
Choosing a job card, you want to record the working time required to execute the
manufacturing operations. Enter and post a job card referring to the production
order of exercise 5.8, producing five units in the time between 8:00 AM and 2:00
PM (6 hours). You do not want to post reporting as finished in parallel.

mabenito@parcisa.com
5.6 Reporting as Finished and Ending Production 247

5.6 Reporting as Finished and Ending Production

In the cycle of production order processing, reporting as finished and ending are
the last steps. Since reporting as finished posts physical transactions, it increases
the inventory quantity of the finished product. Ending the order is the final step of
order processing, in parallel costing the order and posting financial transactions.

5.6.1 Reporting as Finished

Reporting as finished physically receives the finished item in inventory. In
Dynamics AX, there are three options to report a production order as finished:
¾ Order status update – Updating the status of the production order
¾ Production journal – Posting a report as finished journal
¾ Time registration – Reporting as finished when posting the route card or job
card for the last operation
Section 5.5.3 shows the option of reporting as finished together with the time
registration of the last operation – the description below shows the other options.

5.6.1.1 Order Status Update

In order to report as finished by updating the order status, click the button Process/
Report as finished on the action pane tab Production order of the production order
form or select the periodic activity Production control> Periodic> Production order>
Report as finished. If you want to report only a part of the entire order quantity,
adjust the Good quantity on the tab Overview or General of the update dialog.
If you do not expect additional receipts for the current order to be reported as
finished, select the checkbox End job to clear any remaining open quantity.
If you are sure that the actual consumption of items and working time has been
posted already, select the checkbox Accept error on the tab General in case you want
report as finished disregarding missing consumption (compared to the estimation).

5.6.1.2 Automatic Consumption

Like the appropriate option when starting the production order (see section 5.4.3),
reporting as finished posts automatic item and route consumption.
In the BOM line, select the flushing principle “Start” for consumption when
starting the production order, and “Finish” for consumption when reporting as
finished. This setting allows consuming some items at the start, and other items at
the end of a production order.
Route operations do not show this option. For all operations with automatic
posting, you have to decide in common for the production order, whether
automatic posting should apply when starting or when reporting as finished. In
order to avoid duplicate posting, select the option “Route group dependent” in the
lookup field Automatic route consumption only in the dialog for starting, or for
reporting as finished – not in both dialogues.

mabenito@parcisa.com
248 5 Production Control

5.6.1.3 Production Journal

Apart from the status update, reporting as finished is also possible by posting a
production journal. In order to access this journal, click the button Journals/Report
as finished on the action pane tab View of the production order form, or choose the
menu item Production control> Journals> Report as finished.
Posting a report as finished journal in a production order works similar to posting
a product receipt in a purchase order. Inventory physically receives the item with a
preliminary value and the quantity in inventory then includes the received
quantity.

5.6.1.4 Ledger Integration

If you want to post the items to clearing accounts in the general ledger when
reporting as finished, ledger integration has to be activated for reporting as
finished. For this purpose, select the checkbox Post report as finished in ledger on tab
General of the production control parameters. In addition, the checkbox Post
physical inventory on the tab Setup in the item model group of the finished item has
to be selected.
General ledger transactions for reporting as finished are reversed when ending and
costing the production order.

5.6.2 Ending and Costing

Ending a production order is required for cost-accounting and closing the order. In
parallel, WIP ledger transactions for production journals are reversed. BOM-item
and route consumption as well as finished item receipts post to the final ledger
accounts.
You should end a production order in time. Otherwise, the finished item is still
included in the WIP account balance instead of the stock account balance.

5.6.2.1 Ending
Ending a production order closes the order. Since it is not possible to post any
transaction for a closed production order, you should not end the order until you
are sure all transactions have been posted.
In order to end the production order, click the button Process/End on the action
pane tab Production order of the production order form. If you want to end multiple
orders, access the corresponding periodic activity in the menu item Production
control> Periodic> Production orders> End.
After ending, the ending date of the production order shows in the field Financial
date of the inventory transactions. The receipt status in inventory transactions of
items reported as finished is “Purchased”. For consumed items (BOM lines), the
issue status is “Sold”.

mabenito@parcisa.com
5.6 Reporting as Finished and Ending Production 249

5.6.2.2 Costing
When costing the order in the course of the ending routine, Dynamics AX
calculates the actual costs for all item and route consumption transactions. Based
on these actual costs of the production order, the cost price of the finished item is
calculated. If standard cost valuation applies to the finished item, costing posts cost
price differences to deviation accounts.

Figure 5-22: Comparing estimation and costing in the calculation form

For comparing the actual and the estimated consumption, click the button Related
information/Price calculation on the action pane tab View of the production order
form. The tab Overview Costing of the price calculation form then shows – at item
and operation line level – a comparison of estimated and realized quantity
consumption, and of estimated and realized costs. The tab Costing sheet contains a
summary of estimation or costing according to the costing sheet setup.

5.6.2.3 Ledger Integration and Inquiries

Like when posting invoices in purchasing or sales, costing a production order
posts financial transactions for the items consumed and reported as finished.
In the first step of ledger posting, costing reverses the WIP ledger transactions
posted through picking list journals, route card journals, job card journals and
report as finished journals. In the second step, costing posts following ledger
transactions for closing the order in finance:
¾ Consumption of components – To the stock accounts of the BOM line items
¾ Consumption of working time – To the costing accounts of the resources
¾ Receiving the finished item – To the stock account of the finished item
Main accounts applying to the item transactions are specified in the inventory
posting setup (Inventory management> Setup> Posting> Posting). Main accounts for
resource consumption may derive from settings in the resource form or in cost

mabenito@parcisa.com
250 5 Production Control

categories. As an alternative, choose production groups for specifying applicable

main accounts.
Receiving a default from production control parameters, the lookup Ledger on the
tab Setup of the production order detail form determines which setting actually
applies to retrieve appropriate main accounts (see section 9.6.3).
In order to view the transactions generated when ending and costing the order,
click the button Related information/Production posting on the action pane tab View of
the production order form. Alternatively, access the menu item Production control>
Inquiries> Production> Production posting.
In the production posting form, the transactions posted when ending and costing
the production order show the type “Costing”. In order to view related ledger
transactions, click the button Ledger/Voucher.

5.6.3 Case Study Exercise

Exercise 5.13 – Ending Production
By clicking the button Process/Report as finished in the production order form, report
the entire quantity of the production order in exercise 5.8 as finished. On the tab
General of the update dialog, select the checkboxes End job and Accept error. Finally,
end the production order locking it for further postings. After ending, view the
price calculation inquiry to compare estimation and costing.

5.7 Subcontracting
If a company cannot process a specific operation internally for technological
reasons or because of the current capacity utilization, this operation is usually
subcontracted to an external vendor. BOM and/or route of the finished item then
have to include the subcontracted service.
In addition, there are situations where a finished product is produced internally or
at a subcontractor alternatively. In this case, there are two (or more) approved
route and/or BOM versions for the item.
In Dynamics AX, there are two basic options for subcontracting:
¾ Outsourced operation – Resource of the type “Vendor” in an operation
¾ Purchased service – Service item in a BOM line with the line type “Vendor”
Since a purchase order requires purchasing a (service) item, only the second option
includes creating a purchase order.

5.7.1 Outsourced Operation

An outsourced operation not linked to a BOM line with a service item applies, if
you do not need to generate a corresponding purchase order – for example if it is
based on a contract with fixed capacity reservation and a fixed monthly payment.

mabenito@parcisa.com
5.7 Subcontracting 251

In this case, create a separate resource group and resource per subcontractor. The
resource is similar to a regular internal resource (see section 5.3.2), but applies the
Type “Vendor” enabling to enter the vendor number in the field Vendor on the tab
General of the resource form. In addition, make sure to apply appropriate settings
for the cost categories (depending on the contract, maybe only a Quantity category)
and main accounts for posting right amounts to the right accounts in finance. The
selected calendar and finite capacity settings are depending on the contract.
In the related route operation, select the Route type “Vendor” on the tab General and
enter the vendor resource as Costing resource together with appropriate resource
requirements. Processing the outsourced operation in a production order works
similar to a regular internal operation.

5.7.2 Purchased Service

If you need a purchase order for the outsourced operation, create a service item
and include it in the BOM of the finished product. Optionally, the BOM line for the
service item may be linked to an outsourced operation for scheduling purposes.

5.7.2.1 Master Data for Purchasing Subcontracting Services

The required service item is a product of the Product type “Service” with an Item
model group generating inventory transactions (“Stocked product”). In the Cost
group on the tab Manage costs of the released product, select a cost group of the type
“Direct outsourcing”. The flushing principle should be “Finish”. Other relevant
settings in the released product include the item group, the cost price, dimension
groups, units of measure, the purchase price, the main vendor, the default order
settings, and the site-specific order settings.

Figure 5-23: Settings in a BOM line for a subcontracted service

mabenito@parcisa.com
252 5 Production Control

In the BOM of the finished product, insert a BOM line with the service item and the
Line type “Vendor”, optionally including a Vendor account overriding the main
vendor from the released product.
If you need an outsourced operation for scheduling purposes, you can set it up as
described in the previous section. But unlike the settings for an outsourced
operation not linked to a BOM line service item, the operation should contain a
route group with settings for automatic consumption and – if all subcontracting
costs are included in the service item – deactivated cost calculation (cleared
checkboxes in the field group Estimation and costing of the route group). In order to
link the BOM line with the service item for the subcontracted activity to the route
operation for the same activity, select the appropriate operation number in the
field Oper. No. on the tab General of the BOM line and make sure the checkbox End
there is selected (the service item is not required before the operation is finished).
If material is supplied to the subcontractor, link the BOM lines of the appropriate
components to the outsourced operation the same way as for an internal operation.

5.7.2.2 Production Order Processing with Purchased Services

Production orders including subcontracted service items are created manually or
automatically the same way as regular production orders (see section 5.4.2). When
estimating the production order, a purchase order is created for a BOM line with
the Line type “Vendor”. The purchase order number shows on the tab Reference in
the production BOM, which you may access by clicking the button Production
details/BOM on the action pane tab Production order of the production order. Like
any other purchase order, the order has to be confirmed before you can receive the
service item.
Scheduling and releasing the production order is similar to other production
orders. For starting the order, alternatively access the list page Production control>
Common> Subcontracted work and click the button Start in the action pane after
selecting the order there. On the tab General in the Start dialog, make sure to apply
appropriate settings for automatic consumption (not consuming BOM items which
are consumed when receiving the purchase order). In the Print options for the
picking list accessible from the dialog, you can select the checkbox Use delivery note
layout for the picking list if supplying BOM items as components to the
subcontractor.
When posting the product receipt for the purchase order afterwards, settings in the
field group Receive purchase order on the tab Automatic update of the production
control parameters determine if BOM and route consumption is posted in parallel
to the product receipt. Choosing the option “Flushing principle” for the Automatic
BOM consumption there ensures posting the consumption of appropriate BOM lines
including the service item. Reporting the production order as finished and ending
the order works the regular way.

mabenito@parcisa.com
6 Operations Planning

The primary responsibility of operations planning is to make sure that items are
available when needed while meeting the target of high economic efficiency at the
same time. Accordingly, operations planning has to solve the conflicting priorities
of high supply readiness on the one hand and low inventory on the other.

6.1 Business Processes in Operations Planning

In Dynamics AX, long-term forecasting and short-term master planning are
covered by the operations planning module (“Master planning”).

6.1.1 Basic Approach

Operations planning includes forecasting in order to identify the item demand on a
long-term basis. On the other hand it includes master planning used for calculating
requirements and planned orders on a daily basis.

Figure 6-1: Operations planning in Dynamics AX (Forecasts and master planning)

6.1.1.1 Forecasting
Forecasting is a long-term prognosis for planning and budgeting purposes. It
includes demand forecasts (sales and other issues) as well as supply forecasts
(purchasing and other receipts). Different versions of forecasts provide the option
of running multiple scenarios for the total forecast in parallel.

6.1.1.2 Master Planning

Master planning covers short-term planning for daily business. Based on current
orders and on-hand inventory, master scheduling calculates demand and supply
for scheduling actual and planned purchase and production orders. Like in
forecasting, different scenarios of master planning are possible in parallel.
Dynamics AX distinguishes a static master plan for current master scheduling and
a separate dynamic plan for simulation.

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_6, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
254 6 Operations Planning

6.1.2 At a Glance: Master Planning

Before we start to go through the details of master planning, this section shows the
basics on the example of the net requirements for a finished item.
As a basis for analyzing net requirements, enter a sales order to be delivered today
with a line containing a finished item (default order type “Production”) which is
out of stock. Clicking the button Product and supply/Net requirements in the action
pane strip of the sales order line provides access to the net requirements of the
item. If existing production orders and the quantity in inventory do not cover the
item requirements, click the button Update/Master scheduling in the action pane
strip of the lower pane to run local master scheduling for the item.

Figure 6-2: The net requirements form after running local master scheduling

Master scheduling then generates a planned production order for producing the
finished item. If the requested delivery date in the sales order line is not feasible,
the planned production order shows the earliest possible delivery date. The arrows
in the columns on the right side show proposals in order to avoid missing the
delivery date. Details are available on the tab Action and Futures.
Master scheduling is available in multiple scenarios, distinguishing between a
static and a dynamic plan. The static plan is the operations plan used in purchasing
and production. If applying a dynamic plan for simulation purposes, this is the
default for master scheduling in the net requirements form. In order to switch
between the different plans, choose the appropriate option in the lookup field Plan
at the top of the net requirements form.

mabenito@parcisa.com
6.2 Forecasting 255

6.2 Forecasting
Forecasting is a long-term prognosis, required to estimate and adjust future
capacities of resources and material supply. In parallel, forecasting is also a basis
for budgeting in finance. In order to support planning of alternative scenarios for
business development, multiple forecasts are available in parallel.
Forecasting in Dynamics AX does not only include sales forecasts. Demand
forecasts also include other sources of item issue. In addition, supply forecasts are
available, which for example may be a basis for long-term contracts with vendors.

6.2.1 Basics of Forecasting

When entering forecast figures in Dynamics AX, you have to select a forecast
model in inventory. Forecast models represent the different planning scenarios.
Forecast models are then assigned to forecast plans, which are the basis for
calculating forecasts in forecast scheduling. You may also include forecast plans in
master scheduling.

Figure 6-3: Forecasting in Dynamics AX

6.2.1.1 Demand/Sales Forecast

Forecasting demand with estimated sales figures is the starting point of the
forecasting process. You may enter a sales forecast at item or at item group level.
Apart from direct sales, a demand forecast also may contain other demand – e.g.
the demand for semi-finished items (instead of finished items) if it is not possible
to determine reliable forecast figures at the detail level of finished products.
Since forecast scheduling and master scheduling are based on item numbers, you
have to enter an item allocation key if you do not enter forecasts per item number.

mabenito@parcisa.com
256 6 Operations Planning

Item allocation keys are groups, containing a percentage for each item included in
the key.

6.2.1.2 Supply Forecasts

In parallel or after finishing demand forecasting, optionally enter a separate supply
forecast which includes purchasing and other receipts. In the next step, the
inventory forecast enables aligning demand and supply forecasts.

6.2.1.3 Forecast Scheduling

Once you have finished registering forecast figures, forecast scheduling is available
for calculating the gross requirements of finished items, based on corresponding
bills of materials. Depending on settings of the selected forecast plan,
Dynamics AX creates planned purchase and production orders covering the gross
requirements of forecasting as a result of forecast scheduling. These planned
orders refer to the selected forecast plan.
If entered, the supply forecast provides the minimum figures for generating
planned purchase or production orders, no matter if they exceed the direct and
indirect demand from the demand forecast.
Since forecast scheduling refers to a long-term prognosis, the calculation does not
include the current inventory and current orders.

6.2.1.4 Forecasts in Master Scheduling

You may include forecasts in master scheduling. For this purpose, settings in
master planning determine if and how to include forecasts.
The Reduction principle in master plans and the Reduction key in coverage groups are
there to avoid duplicate consideration of future demand. Without reduction, a
duplicate consideration results from a forecasted demand for periods in the near
future already including actual sales orders – supposing these sales orders are part
of the forecasted quantity and not in addition to the forecast.

6.2.2 Forecast Settings

Before starting to register forecasts, you have to finish the required setup in
Dynamics AX.

6.2.2.1 Forecast Models

Forecast models represent the different scenarios for forecasting. In order to
register forecasts, you have to set up at least one forecast model in the form
Inventory management> Setup> Forecast> Forecast models.
If you want to apply a structure to forecasts (e.g. grouping forecasts by region),
you can set up two-stage forecasts by assigning submodels to a main model. If
applying submodels, first set up the submodels in the forecasts model form like

mabenito@parcisa.com
6.2 Forecasting 257

regular forecast models. Then enter the main model and assign submodels on the
tab Submodel of the forecast model form.
If you want to protect forecasts from changes, select the checkbox Stopped in the
forecast model. Blocking applies for example, if an annual forecast should not
change once it is finished – use a separate forecast model for the next year then.

6.2.2.2 Forecast Plan

Whereas forecast models are used for entering forecasts, forecast plans are the
grouping element of separate forecast scenarios in master planning. For assigning
forecast models to forecast plans, access the form Master planning> Setup> Plans>
Forecast plans. Selecting a main model in the lookup field Inventory forecast model on
the tab General of the forecast plans includes related submodels. In addition, the
forecast plan contains settings for including supply or demand forecasts.
On the tab Time fences of the forecast plan, enter the period in days (starting from
the day of calculation) which should be covered by forecast scheduling.

Figure 6-4: Editing a forecast plan in the forecast plans form

6.2.2.3 Parameters and Item Allocation Keys

The forecast plan in the field Current forecast plan of the master planning
parameters (Master planning> Setup> Master planning parameters) is the default
forecast plan for displaying forecast scheduling results. Another important setting
for item forecasts is the coverage group, which specifies how to summarize net
requirements. More information on coverage groups is available in section 6.3.3
later in this chapter.

mabenito@parcisa.com
258 6 Operations Planning

If you do not want to enter forecasts for individual items, use item allocation keys
entering a forecast total for a group of items. For setting up item allocation keys,
access the form Inventory management> Setup> Forecast> Item allocation keys. After
selecting or inserting an item allocation key there, click the button Lines in the
action pane strip for accessing the item allocation lines containing items with their
percentage of the group total.

6.2.3 Forecasts and Forecast Scheduling

For entering forecasts, access the appropriate form in the menu tree node Inventory
management> Periodic> Forecast> Entry. An alternative access is available by clicking
the button Forecasting or Forecast in the particular master table form, for example in
the released product form or in the customer form.
Forms referring to items and item groups allow registering both, demand forecasts
and supply forecasts. Demand forecasts are also available in the customer and
customer group form, supply forecasts in the vendor and vendor group.

6.2.3.1 Entering Demand/Sales Forecast

This section contains a description for entering a demand forecast based on an item
group. But registering forecasts based on other elements – e.g. a customer – works
the same way.

Figure 6-5: Registering a sales forecast line in the demand forecast form

In order to access the demand forecast for an item group, click the button Demand
in the form Inventory management> Periodic> Forecast> Entry> Item groups. In the
demand forecast form, insert records selecting the appropriate (forecast) model
then. If you want to record different scenarios, enter different models in separate
lines.

mabenito@parcisa.com
6.2 Forecasting 259

In the date column, enter the start date of the individual forecast period – for
example the first day of a month if entering a line per month. If choosing an
allocation method in pane Allocation the middle of the form, enter one line for the
whole period and distribute it by clicking the button Create lines.
In order to enable gross requirement calculation, enter either an item number or an
item allocation key. Depending on the dimension groups of the item (checkbox
Coverage plan by dimension in the tracking and the storage dimension group) you
have to enter inventory dimensions in the forecast line.

6.2.3.2 Supply Forecast and Inventory Forecast

If you want to register a supply forecast independent from the demand forecast,
enter it – similar to the demand forecast – after clicking the button Forecast/Supply
forecast in the action pane of the appropriate master table form. Forecast scheduling
then may include the supply forecast in parallel to the demand forecast.
In addition to demand and supply forecasts, inventory forecasts are available for
showing the result of supply and demand forecasts at the level of item numbers
and individual periods. You may access inventory forecasts in appropriate master
table forms by clicking the button Inventory forecast.

6.2.3.3 Forecast Scheduling

The results of forecasting are a valuable basis for preparing future production and
purchase of merchandise, finished items, raw materials, parts, and components.

Figure 6-6: Forecasting results for a semi-finished item in the gross requirements

In order to determine these multi-level forecast figures, execute forecast scheduling

(Master planning> Periodic> Forecast scheduling) which includes the explosion of bills

mabenito@parcisa.com
260 6 Operations Planning

of materials. The update form for forecast scheduling includes the lookup field
Forecast plan for selecting the forecast plan to be calculated.
The results of forecast scheduling are available in the gross requirements form,
which you may access clicking the button Requirements/Gross requirement on the
action pane tab Plan of the released product form. By default, the form shows the
forecast plan set up as current forecast plan in the master planning parameters.
You may select a different scenario in the lookup Plan at the top of the net
requirements form.
Forecast scheduling results are not only available in the gross requirements form.
The list page Master planning> Common> Planned orders also shows planned orders
generated by forecast scheduling after selecting the appropriate forecast plan in
lookup field Plan.

6.2.3.4 Budget Transfer

If you want to apply demand and supply forecasts for budgeting in finance,
transfer them to ledger budgets. Transferring requires running the corresponding
periodic activity for sales and/or purchase in the menu Inventory management>
Periodic> Forecast> Update for the ledger budget model, which should receive
forecast figures.

6.2.3.5 New in Dynamics AX 2012

In Dynamics AX 2012, the terminology for sales and purchase forecasts has
changed to demand and supply forecasts reflecting flexible forecasting options.

6.2.4 Case Study Exercises

Exercise 6.1 – Forecast Settings
You need a sales forecast for items, which you have set up in previous exercises –
the merchandise item of exercise 3.5 and the finished item of exercise 5.2. Your
forecast should be in a scenario separate from other forecasting scenarios.
In order to meet this requirement, create a new forecast model F-## (## = your user
ID) without applying submodels. In a second step, insert a new forecast plan Y-##.
Assign your forecast model to this forecast plan and make sure demand forecasts
are included in this plan. The number sequences required may be similar to
settings in existing forecast plans.
Exercise 6.2 – Demand Forecast
For the next quarter, you expect your customer of exercise 4.1 to order 200 units of
your merchandise item and 100 units of your finished item on the last day of each
month.
You want to record these figures in a sales forecast, applying your forecast model
of exercise 6.1. Once you have finished, run forecast scheduling for your forecast
plan and check the results afterwards.

mabenito@parcisa.com
6.3 Master Planning 261

6.3 Master Planning

Master planning in Dynamics AX covers the short-term calculation of material and
capacity requirements. It is the basis for the daily work in purchasing and
production management.
For this purpose, the calculation in master planning includes relevant information
of setup, master and transaction data for items and resources in all areas of
Dynamics AX. Depending on the setup, these data contain the current quantity in
inventory, purchase orders, production orders, sales orders, forecast plans as well
as master data in released product and resource records.
As a result, master planning generates planned orders for purchasing, production,
Kanbans and inventory transfer on the one hand, and action and futures messages
for adjusting existing orders on the other hand.

6.3.1 Basics of Master Planning

Data regarding item transactions – including orders – and quantity in inventory
are an essential basis for master planning. In addition, master planning may cover
sales quotations, requests for quotation, approved purchase requisitions, and
forecasts. You may reduce the demand from forecasts and sales quotations by
applying a probability percentage or a reduction principle.

Figure 6-7: Elements of master planning

Like forecasting, master planning optionally includes multiple scenarios. A

scenario is represented by a master plan, which contains the particular settings for

mabenito@parcisa.com
262 6 Operations Planning

the scenario. These settings include on the one hand the elements covered by
scheduling, and on the other hand the calculation principles for planned orders.

6.3.1.1 Master Planning Strategies

Master scheduling usually is a batch job, which runs every night for calculating net
requirements for all items. The result of this calculation is available in a scenario
called “Static master plan”. The static plan is the master plan to be used in
purchasing and production control for scheduling orders. It is the default plan
when accessing planned order forms.
On the other hand, the sales department needs a plan to run simulations for
determining possible delivery dates in sales orders and quotations. This requires
executing a master scheduling simulation locally, only for a particular item. The
result of this simulation is available in a scenario called “Dynamics master plan”.
Based on both requirements, the master planning parameters enable two different
strategies:
¾ One plan strategy
¾ Two plan strategy
If applying the same master plan for the static and the dynamic master plan in the
master planning parameters, you run a one master plan strategy. Planned orders of
current master scheduling simulations in the sales department are updating the
static plan, which is used in purchasing and production control. Depending on the
requirements of your company, this strategy may fit to your business.
For applying a two master plan strategy, enter a different master plan for the static
and the dynamic plan. When running the batch job for static master scheduling in
the night, you probably want to copy the static plan into the dynamic plan in order
to base simulations on the current static plan.
In this case, simulation in sales starts with the same data basis as purchasing and
production control in the morning. Simulation throughout the day does not change
planned orders in the static plan, thereby avoiding problems in purchasing and
production control caused by planned orders changing every moment.

6.3.1.2 Customer Order Decoupling Point

Depending on the structure of your products, there are two key supply policies in
production control for fulfilling demand from customer orders:
¾ Make-to-Stock – Produce based on sales forecasts and historical demand
¾ Make-to-Order – Produce based on confirmed sales orders
In addition, there are hybrid supply strategies applying a make-to-stock strategy
for purchased or semi-finished items with a long lead time and a make-to-order
strategy for finished products. If applying a hybrid strategy, the customer order

mabenito@parcisa.com
6.3 Master Planning 263

decoupling point (push/pull point) determines the level in the product structure, to
which the items are built to stock.
Dynamics AX supports all of these strategies by choosing appropriate coverage
groups (see section 6.3.3). In case of a hybrid supply strategy, you can enter
forecasts at semi-finished product level – which is the customer order decoupling
point for these items. As mentioned in section 6.2.1, reduction settings in master
plans determine how master scheduling offsets forecasted demand with actual
sales orders. Since forecasts on semi-finished products are not offset by sales
orders, you should choose to include all inventory transactions – including
demand from selling finished products derived through bills of materials – in the
coverage groups of applicable semi-finished items in order to comply with this
situation. In the coverage group form, the lookup field Reduce forecast by contains
the required option for this purpose.

6.3.1.3 Master Scheduling and Planned Orders

Master scheduling generates planned purchase orders, planned production orders,
planned Kanbans, and planned inventory transfer orders based on item demand
and settings for master planning. Depending on the scheduling principle (see
section 6.3.4), master planning deletes existing planned orders which are not
approved already.
Once master scheduling is finished, check and edit the planned orders. In the
planned orders form, you can transfer planned orders to actual purchase orders,
production orders, Kanbans and inventory transfer orders.

6.3.1.4 New in Dynamics AX 2012 and in AX 2012 R2

Dynamics AX 2012 supports flexibly specifying the customer order decoupling
point – entering forecasts and calculating offsetting current demand at any level of
the product structure.
Compared with the initial version of Dynamics AX 2012, the R2 version enables to
include approved purchase requisitions in master planning.

6.3.2 Master Planning Setup

Before running master scheduling, you have to finish the setup for requirements
calculation in Dynamics AX.

6.3.2.1 Master Plans

A master plan is a scenario, which contains requirement calculations independent
from other scheduling scenarios. Depending on the planning strategy, one or two
master plans apply. If you need more simulation scenarios, set up additional
master plans.

mabenito@parcisa.com
264 6 Operations Planning

For accessing master plans, choose the menu item Master planning> Setup> Plans>
Master plans. Selecting the appropriate checkboxes on the tab General determines
whether to include following items in the particular master plan:
¾ Current inventory
¾ Inventory transactions (open orders)
¾ Sales quotations (reduced by an optional probability percentage)
¾ Approved purchase requisitions (only for requisitions with the requisition
purpose “Replenishment”, which has to be enabled in the purchasing policy)
¾ Requests for quotation (entered in purchasing)
¾ Forecasts (supply and demand forecasts)
If you want to include forecasts and forecast scheduling, select the appropriate
forecast plan in the lookup Inventory forecast model of the master plan. If forecasts
are included in master planning, offset forecast figures by sales orders and other
demand in order to avoid excessive demand resulting from adding forecasts to
current orders.
The lookup field Reduction principle in this case determines the way of reducing
forecast figures. If the selected principle refers to a Reduction key, you have to enter
reduction keys in the applicable coverage groups (tab Other in the coverage group
form, see section 6.3.3).

Figure 6-8: Editing a master plan in the master plans form

The Scheduling method on the master plans form controls whether to run operations
scheduling or job scheduling (see section 5.4.3) for planned production orders.

mabenito@parcisa.com
6.3 Master Planning 265

Among other settings for scheduling planned production orders, there is the
option to apply finite capacity.
The tab Time fences on the master plans form contains settings for overriding the
time fences specified in the coverage group or in the item coverage.
On the tab Futures message, choose whether master scheduling may set the
requirement date in planned orders to a date, which is after the actual requirement
date, if it is not possible to meet the actual requirement date because of applicable
lead times. This setting prevents impossible dates like a delivery date before today.
On the tab Action message, select whether to postpone planned purchase orders to a
later date, if it is not necessary to receive the item as early as specified in the
planned order date.

6.3.2.2 Master Planning Parameters

General parameters for master planning are available on the form Master planning>
Setup> Master planning parameters. A core setting controls the planning strategy: If
applying a one master plan strategy, enter the same master plan in the field for the
Current static master plan and the Current dynamic master plan.
If applying a two master plan strategy, select two different master plans. In
addition, optionally select the checkbox Automatic copy for resetting the dynamic
plan to the status of the static plan when running master scheduling.
Master planning parameters also contain the General coverage group. This group
applies to items, which do not include a coverage group in the released product.

6.3.2.3 Warehouse Settings

If master scheduling should not include the quantity in inventory of specific
warehouses – e.g. a consignment stock managed by the customer – select the
checkbox Manual on the tab Master planning of the warehouse form (Inventory
management> Setup> Inventory breakdown> Warehouses).
The warehouse form also contains settings, if the warehouse should be refilled
from another warehouse (main warehouse). If selected, master scheduling
generates item transfer proposals. As a prerequisite, the item has to contain a
storage dimension group in which the checkbox Coverage plan by dimension is
selected for the dimension “Warehouse”.

6.3.3 Item Coverage and Item Settings

Coverage groups and settings on the released product control the calculation of lot
sizes and dates of planned orders generated by master scheduling.

6.3.3.1 Managing Coverage Groups

The coverage group is a core setting for item coverage, specifying the coverage
principle and further settings for lot size and delivery date calculation. In order to

mabenito@parcisa.com
266 6 Operations Planning

access coverage group form, choose the menu item Master planning> Setup>
Coverage> Coverage groups.

Figure 6-9: Selecting the coverage code in a coverage group

The main setting in a coverage group is the Coverage code, which specifies the
coverage principle. The coverage principle controls, how requirements summarize
into a planned order.

6.3.3.2 Coverage Principle and Period Settings

In Dynamics AX, the following options are available for the coverage principle as
shown in Figure 6-10:
¾ Period – Summarizing requirements within the coverage period
¾ Requirement – Planned order per requirement (“Make-to-Order”)
¾ Min./Max. – Replenishing to the maximum quantity when inventory drops
below the minimum quantity
¾ Manual – Planned orders are not generated in master scheduling

Figure 6-10: Coverage principles in Dynamics AX

mabenito@parcisa.com
6.3 Master Planning 267

Master scheduling generates a planned order, if the calculated inventory at a date

is below the minimum quantity (or below zero, if a minimum quantity is not
entered in the item coverage of the released product).
The Coverage time fence and the time fence fields on the tab Other of the coverage
group form determine the periods included in master scheduling. Depending on
the planning strategy and the lead time of the items, the number of days entered in
the time fence fields should cover an applicable number of weeks or months.
The Positive days on the tab General sets the time fence to include the current
quantity in inventory for covering requirements and should correspond to the lead
time or the coverage time fence (depending on the order history).
On the tab Other, the Firming time fence determines the period, for which master
scheduling does not create a planned order but an actual purchase or a production
order. If no main supplier is entered in the item record or in the applicable trade
agreement for a purchased item (supposing the checkbox Find trade agreement in
the master planning parameters is selected), master scheduling generates a
planned purchase order instead of an actual order also within the firming time
fence.

6.3.3.3 Forecast Plan Calculation and Reduction Keys

On tab Other of the coverage groups, the time fence for forecasts and forecast
reduction settings control the calculation of forecast in master scheduling.
Reduction keys (Master planning> Setup> Coverage> Reduction keys) control the
periods and percentages applied for reducing forecast figures in the course of time.
As a prerequisite for applying the reduction key selected in the coverage group,
the reduction principle in the master plan has to refer to reduction keys.
The reduction principle in the master plan controls the way forecasted figures are
reduced for considering them as demand. If entering forecasts for semi-finished
items (hybrid supply strategy with customer order decoupling point, see section
6.3.1), reduction should not only include direct sales order demand for the semi-
finished product, but also demand derived from the finished product. Choosing
the option “All transactions” in the lookup Reduce forecast by of the coverage group
offsets forecasts not only by sales orders, but also by all issue transactions.

6.3.3.4 Settings for Action and Futures Messages

Action messages, which are activated on the tab Action of the coverage group form,
are messages from master scheduling to adjust actual or planned purchase and
production orders. The aim of action messages is to support adjustments, which
may not be done automatically (like postponing a purchase order, which is too
early). They show proposals for optimizing quantities and dates of item receipt.
Item availability is granted, no matter if you disregard action messages.

mabenito@parcisa.com
268 6 Operations Planning

Unlike action messages, futures messages show actual problems of item

availability. A futures message is created, if the lead time of items required at all
BOM levels results in a necessary supply before today, therefore causing delays in
order fulfillment.
If activating both futures and action messages, select the option “Futures date” in
the lookup field Basis date on the tab Action. In this case, action messages are based
on the earliest possible date and not the original – impossible – requirement date.

6.3.3.5 Coverage Group Assignment

The assignment of a Coverage group to an item is available at three different levels.
Master scheduling identifies the applicable coverage group in following order:
¾ Item coverage – Button Coverage/Item coverage on the action pane tab Plan of the
released product form
¾ Released product – Tab Plan on the released product detail form
¾ Master planning parameters – General coverage group on the tab General
The coverage group specifies the method for calculating lot sizes. If there is a big
difference in the lead time or in the cost price of your items, you want to control lot
sizes accordingly and group the items by entering different coverage groups in the
released products based on the inventory value and the lead time.

6.3.3.6 Dimension Group Settings

Settings in the storage and tracking dimension groups control the inventory
dimensions covered separately in coverage calculation. The dimension groups of
an item therefore determine the available dimensions in the item coverage and the
dimensions calculated separately in master scheduling (e.g. calculating supply and
demand per warehouse).
For accessing dimension groups, choose the menu path Product information
management> Setup> Dimension groups (see section 7.2.2). In the dimension groups,
select the checkbox Coverage plan by dimension for storage and tracking dimensions
to be calculated separately in master scheduling. This checkbox is always selected
for the dimension Site and for product dimensions.
The assignment of dimension groups to an item shows after clicking the button Set
up/Dimension groups on the action pane tab Product in the shared or released
product.

6.3.3.7 Item Coverage

Apart from the coverage group and the dimension groups, the item coverage is
another important setting for master scheduling in the released product.
Clicking the button Coverage/Item coverage on the action pane tab Plan of the
released product displays the item coverage form, where you may enter a
minimum and – if applicable – a maximum quantity for the item. Depending on

mabenito@parcisa.com
6.3 Master Planning 269

the dimension groups of the item and applicable dimension group settings (see
above) you may register item coverage settings per site, warehouse or other
dimensions like color or configuration.
The item coverage form contains specific settings for the item at dimension level –
e.g. for a particular warehouse by selecting a coverage group on the tab General,
which is different to the coverage group in the released product form. This also
enables specifying to create planned transfer orders to a production warehouse per
requirement (per production order) and at the same time summarizing
requirements for the item on sales warehouses per period.
In addition, choose a specific main vendor and a different planned order type if
applicable, for example purchasing the item from an external vendor for one
specific warehouse but producing it internally for other warehouses.
If entering a minimum quantity, the lookup field Minimum key on the tab General
enables recording a seasonal trend for the minimum quantity. The results of the
selected minimum key show on the tab Min./Max. of the item coverage form.
In order to set up minimum keys, access the form Master planning> Setup>
Coverage> Minimum/Maximum keys and enter a factor per period.

6.3.4 Master Scheduling and Planned Orders

Master scheduling generates planned orders for purchasing, production and
inventory transfer, based on item requirements and coverage settings. You may
run master scheduling on two different occasions:
¾ Local master scheduling – Availability check, e.g. in a sales order line
¾ Global master scheduling – Regular master scheduling for all items

6.3.4.1 Global Master Scheduling

In daily business, global master scheduling is the basis for releasing orders in
purchasing and production. For starting global master scheduling access the menu
item Master planning> Periodic> Master scheduling. Depending on the company size
and the item structure, master scheduling involves extensive calculations causing a
heavy server load. Usually it runs as a batch job in the nighttime.
In the update form for master scheduling, select the applicable Master plan – for
global master scheduling usually the current static master plan. It is not required to
run the current dynamic master plan separately, if the checkbox Automatic copy in
the master planning parameters is selected.
The lookup field Principle in the master scheduling update form determines the
calculation principle with following options:
¾ Regeneration – Complete calculation, deleting all not approved planned orders
¾ Net change – Generating action and futures messages for all requirements, but
planned orders only for new requirements

mabenito@parcisa.com
270 6 Operations Planning

¾ Net change minimized – Like net change, limiting new messages to new
requirements
If selecting the static plan, only the principle “Regeneration” is available. In order
to apply current data to scheduling, you should also choose “Regeneration” for
dynamic plans if there are changes of coverage settings like the minimum quantity
in items.
The tab Scheduling helper in the update form contains settings for distributed master
scheduling on several servers.

6.3.4.2 Local Master Scheduling

Unlike global master scheduling, local master scheduling aims to check item
availability and possible delivery dates limited to a particular item. You may
execute local master scheduling in the net requirements form, which is accessible
by clicking the button Requirements/Net requirements on the action pane tab Plan of
the released product form or clicking the button Product and supply/Net requirements
in the action pane strip of order lines.
The net requirements form shows the result of the last master scheduling
calculation for the dynamic master plan. If a one master plan strategy is in place,
the lines in the net requirements are identical to those used in purchasing and
production control. If the master planning parameter Automatic copy is selected,
this also applies to a two master plan strategy as long as no local master scheduling
has been executed and the static plan has not been edited.
Clicking the button Update/Master scheduling in the action pane strip of the lower
pane in the net requirements form starts local master scheduling. Local master
scheduling updates the current dynamic master plan for the selected item and its
components. When viewing the results, you have to take into account that not all
dependencies of other items are covered by the calculation, in particular regarding
resource capacity requirements.

6.3.4.3 Working with Futures and Action Messages

If futures messages (showing availability problems) and action messages (for
optimization requiring manual decisions) are activated in the applicable coverage
groups, master planning generates corresponding messages. They show on the
corresponding tabs in the net requirements form.
In addition, the list page Master planning> Common> Requirements> Futures messages
contains an overview of all futures messages. Clicking the button Reference in the
action pane of the futures message form opens the related order, which you may
adjust as applicable.
An overview of all action messages is available in the list page Master planning>
Common> Actions> Actions. Apart from the button Reference for accessing related
orders, the action pane in the actions form also contains the button Apply action for

mabenito@parcisa.com
6.3 Master Planning 271

immediately executing the action message of the particular line – e.g. deleting a
purchase order. The button Action graph in the actions form provides access to a
chart showing dependencies between action messages.

6.3.4.4 Planned Orders

Planned orders generated by master scheduling display in the list page Master
planning> Common> Planned orders. When accessing the planned orders list page,
the default plan is the current static master plan. The lookup field Plan then
provides the option to select the current dynamic or any other master plan.

Figure 6-11: Planned orders in the planned orders list page (preview pane hidden)

The planned order form in the master planning menu shows planned orders for
purchasing, for production and for inventory transfers. The icon in the column
Reference and the field Reference in the preview pane or in the detail form shows if a
line contains a planned order for purchasing, production or inventory transfer.
In procurement, the menu item for planned orders (Procurement and sourcing>
Common> Purchase orders> Planned purchase orders) refers to planned purchase
orders, in production control (Production control> Common> Production orders>
Planned production orders) to planned production orders.
Apart from the delivery date and the requirement quantity, the planned orders list
page displays corresponding action and futures messages in separate columns. The
planned order detail form, which opens by double-clicking a planned order in the
list page, shows action and futures message details on the tabs Action and Futures.
The tab Pegging in the detail form shows the requirements covered by the
particular planned order – e.g. sales orders, BOM lines of production orders,
demand forecasts, or safety stock.

mabenito@parcisa.com
272 6 Operations Planning

6.3.4.5 Firming an Order

You may edit the delivery date and the quantity on the tab Planned supply of the
planned orders detail form. For planned purchase orders, to make sure that a
vendor number is entered in the lookup field Vendor.
If your company applies status management for planned orders, change the status
to “Approved” (or to the status “Completed” if the planned order should not be
firmed) by clicking the button Process/Change status or Process/ Approve on the
action pane tab Planned order.
After selecting one or several planned orders in the planned orders list page,
clicking the button Process/Firm on the action pane tab Planned order generates
corresponding purchase orders, production orders and transfer orders. If you want
to create a request for quotation (see section 3.4.4) instead of a purchase order, click
the button Maintain/Change to/Request for quotation.

6.3.4.6 Net Requirements and Explosion

In order to get an overview of the net requirements related to a planned order,
click the button Requirements/Requirement profile on the action pane tab View of the
planned order form. The requirement profile shows the net requirements, which is
the common form also available in the released product form or in order lines.

Figure 6-12: The explosion form for analyzing the availability within the BOM structure

mabenito@parcisa.com
6.3 Master Planning 273

The button Requirements/Explosion on the action pane tab View of the planned order
form provides access to another inquiry form, the explosion form. This form,
which you may also access from the released product or from order lines in
parallel to the net requirements, shows the item availability including components
at all BOM levels. Clicking the button Setup in the lower pane of the explosion form
provides the option to change display settings.
The lookup field Principle at the top of the explosion form determines the direction
for the explosion: If selecting “Down”, the form shows semi-finished items and
raw materials or parts of the selected item at all BOM levels. If selecting “Up”, the
form shows a where-used analysis.
When updating the calculation by clicking the button Update in the explosion form,
a dialog displays where you can select the checkbox Enable trace. With this setting,
Dynamics AX creates a log of the impacts and results of master planning, which
you can view on the tab Explanation in the explosion form afterwards.

6.3.4.7 New in Dynamics AX 2012 R2

Compared with the initial version of Dynamics AX 2012, the R2 version in addition
contains the features Apply action and Action graph in the actions form and the
master scheduling explanations in the explosion. A full log of explanations for
master scheduling may be enabled through the Performance Monitor on the server.

6.3.5 Case Study Exercises

Exercise 6.3 – Min./Max. Principle
You want to apply a Min./Max. coverage principle to your finished item of exercise
5.2. Select an appropriate coverage group in the released product form and enter a
minimum quantity of 500 units and a maximum quantity of 1000 units in the item
coverage of the item.
Once you have finished, run local master scheduling in the net requirements form
and check the result. In a second step, change the minimum quantity to one unit.
After executing local master scheduling a second time, can you explain the result?
Exercise 6.4 – Period Principle
You want to apply a coverage principle summarizing requirements per period for
your finished item of exercise 5.2 now. Choose an appropriate coverage group in
the item record and delete the Min./Max. record in the item coverage.
Your customer of exercise 4.1 orders 100 units of the finished item. Enter a sales
order for this requirement without posting a packing slip or invoice. Execute local
master scheduling in the net requirements form then. After checking the results,
enter a second order of your customer containing 150 units of the finished item for
the same delivery date as the first order.
Start local master scheduling a second time and check the result again.

mabenito@parcisa.com
7 Inventory Management

The primary responsibility of inventory management is to control the item stock by

quantity and value. In order to meet this task, changes of the inventory quantity in
Dynamics AX require posting inventory transactions, which have to be registered
in vouchers before posting.
The current quantity in inventory therefore always is the total of item issue and
receipt transactions. Most of the transactions are not a result of business processes
within the inventory management module, but created automatically in other
modules. Dynamics AX for example posts a receipt transaction in inventory when
posting a product receipt in the procurement module.

7.1 Principles of Inventory Transactions

Before we start to go into details, the lines below show the principles of
transactions in inventory management.

7.1.1 Basic Approach

Core master data in inventory management are the product records of inventoried
items. Inventory management then controls the inventory per product (item
number). Depending on the dimension groups assigned to the specific product,
item quantity and value are available at the level of specific inventory dimensions.
These dimensions include storage dimensions (e.g. warehouse or location),
tracking dimensions (e.g. serial numbers), and product dimensions (e.g.
configurations).

7.1.1.1 Types of Transactions

In order to change the quantity on hand, you need to post an item transaction.
Depending on the direction of this transaction, it belongs to one of the three
available types:
¾ Item receipts – Inward transactions
¾ Item issues – Outward transactions
¾ Inventory transfers
Item receipts increase the quantity on hand. They include product receipts in
purchasing, customer returns in sales, reporting as finished in production as well
as positive inventory counting adjustments and manual journals in inventory.
Item issues on the other hand include vendor returns in purchasing, packing slips
in sales, picking lists in production as well as negative inventory counting
adjustments and manual journals in inventory.

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_7, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
276 7 Inventory Management

Inventory transfers include transfer orders and transfer journals. Transfer orders
support the transfer of items form one warehouse to another, providing the option
to post and print picking lists. Transfer journals on the other hand are not only
available for transfers from one warehouse to another, but also for changing other
dimension values (e.g. adjusting a serial number).
Although registering a transfer in a transfer journal only requires entering a single
line, the posted transactions shows two lines. A transfer between warehouses for
example creates one transaction line for the item issue from the output warehouse
and one for the item receipt at the input warehouse.

7.1.1.2 Transactions from Other Areas

As mentioned, most of the inventory transactions do not originate in the inventory
management module, but derive from other areas of Dynamics AX. Therefore, the
transaction origin in the other module – e.g. in the purchase order line – has to
contain all data required for the inventory transaction (including warehouse,
quantity and cost price).
When viewing a posted inventory transaction then, it shows the reference to the
transaction origin including voucher number and date.

7.1.1.3 Inventory Quantity and Value

In order to grant an accurate inventory valuation, Dynamics AX distinguishes
between the physical transaction (affecting quantity) and the financial transaction
(affecting valuation).
For illustration purposes, Figure 7-1 shows the physical and the financial part of an
inventory transaction related to a purchase order line.

Figure 7-1: Physical and financial transaction in inventory for a purchase order line

The physical transaction in Dynamics AX causes a change of the quantity on hand

in inventory. An example for posting a physical transaction is the product receipt
in purchasing.
In terms of inventory quantity, the transaction is already finished when posting the
product receipt. But inventory valuation only receives a preliminary cost price. The
value of the product receipt shows in the field Physical cost amount separately from
the field Cost amount, which contains the inventory value in finance.

mabenito@parcisa.com
7.1 Principles of Inventory Transactions 277

The second part of the inventory transaction is the financial transaction, which
contains the cost amount referring to the invoiced quantity. An example for
posting a financial transaction is the purchase order invoice.
Posting the vendor invoice reverses the related preliminary posting of the product
receipt (physical amount) and posts the cost amount of the invoice. Quantity and
amount of the invoice are included in the financial inventory value then.

7.1.1.4 Posting Inventory Transactions

The differentiation between the physical and the financial transaction applies to
every inventory transaction, no matter in which module it is generated. The way of
posting depends on the origin, however.
For receipt transactions in purchase orders, posting the product receipt generates
the physical transaction, and posting the vendor invoice the financial transaction.
In production, reporting as finished of finished items posts the physical
transaction. The financial transaction is posted by ending the production order.
For issue transactions in sales orders, the packing slip posts the physical and the
invoice the financial transaction (similar to purchasing). In production, posting the
picking list of BOM components posts the physical transaction. As with receiving
finished items, the financial transaction of BOM components is posted by ending
and costing the production order.
Unlike the other transactions, journals in inventory management do not post
physical and financial transaction in two separate steps, but in parallel.

7.1.1.5 Inventory Closing

Receipt transaction got their final financial value when posting the invoice (except
for later manual adjustments). But for issue transactions, the financial value often is
not known and therefore not final when posting the invoice. You may for example
receive a purchase invoice after posting the related sales invoice. If the purchase
invoice shows a higher price than the preliminary amount posted with the product
receipt, the contribution margin of the sales transaction will change.
Except for items referring to a standard cost price or moving average valuation,
you need to reevaluate issue transactions through inventory closing. The main
purpose of inventory closing, usually a month-end procedure, is to recalculate the
financial value of issue transactions based on the value of receipt transactions.

7.1.1.6 Ledger Integration

Inventory journals post to ledger accounts depending on applicable settings (see
section 9.6) in the same way as inventory transactions generated in other modules.

mabenito@parcisa.com
278 7 Inventory Management

7.1.2 At a Glance: Inventory Journal Transactions

Inventory journals are used for manual changes of the quantity on hand,
independent from orders in purchasing, sales or production. For convenience, the
example below shows a manual item receipt in an inventory adjustment journal. In
regular business, such transactions are an exception, since problems or missing
end-to-end business processes are the reason for receiving an item without a
purchase, production or customer return order in most cases.
For accessing the inventory journals for manual adjustments, choose the form
Inventory management> Journals> Item transactions> Inventory adjustment. Inventory
journals are vouchers and therefore consist of a header and a lines part. Unlike
purchase or sales orders, inventory journals do not show header and lines in one
common, but in two separate forms.
In order to register a transaction, insert a record in the journal header form by
clicking the button New in the action pane strip (or by pushing the shortcut key
Ctrl+N) and select a journal name in the column Name. The journal number in the
column Journal then defaults from the number sequence.

Figure 7-2: Entering a journal header in the inventory adjustment journal form

If you want to support later analysis, enter a short text explaining the transaction in
the column Description. The column Lines shows the number of lines in the journal.
If somebody works in a particular journal currently, the journal shows a red “X” in
the column In use. You may view the user blocking the journal on the tab Blocking.
It is not possible to access the lines of the journal until the other user leaves the
journal.
The checkbox Posted contains a checkmark, if a journal has been posted already.
You may view posted journals by selecting the option “All” or “Posted” in the
lookup field Show in the upper pane of the form.
An alternative way for creating a journal is to click the button Create new in the
action pane strip, inserting a header record and immediately switching to the lines.

mabenito@parcisa.com
7.1 Principles of Inventory Transactions 279

If you do not want to apply the Create new feature, click the button Lines in order to
access the journal lines.
In the journal lines form, select the item number before registering site, warehouse
and other dimensions like batch number or location depending on the settings of
applicable dimension groups. In order to control the dimension columns displayed
in the lines, click the button Inventory/Dimensions display.

Figure 7-3: Registering a journal line

Defaults for warehouse, quantity and cost price derive from the released product.
The default for the quantity is 1.00, if the released product (default or site-specific
order settings) does not contain a default inventory quantity. You may override all
defaults in the journal line except for the cost price of a standard cost item.
If entering a positive quantity, the transaction is an item receipt. A negative
quantity creates an item issue.
Inventory journals post the physical and the financial transaction at the same time.
Unlike transactions in purchasing, inventory journal transactions do not receive a
corresponding financial transaction from an invoice. Therefore, make sure that the
journal line contains a correct cost price when posting the inventory journal –
especially in item receipts.
In order to post the journal after entering the last journal line, click the button Post
in the journal header or lines.
Before posting, optionally click the button Validation for checking potential
problems. Validation does not check all possible problems, however, which is why
you might sometimes receive an error message when posting a journal, even if the
validation does not show a problem.

mabenito@parcisa.com
280 7 Inventory Management

7.2 Product Information Management

Since all business processes related to inventory require inventoried products,
product data are the core element of master data in supply chain management.
The data structure of products in Dynamics AX includes two levels – shared
products holding basic item data common to all companies, and released products
holding company-specific item data.
Product records contain all physical items including raw materials, parts, semi-
finished products and finished products. In addition, product records also include
non-inventoried items like service or phantom items, which do not exist physically,
but are required in order management or in bills of materials.
In some areas of the application, the label “Item” refers to released products.

7.2.1 Product Master Data

Product master data have already been discussed in section 3.3, 4.3, 5.2.1 and 6.3.3
in connection with purchasing, sales, production, and master planning. Therefore,
this section does not include the topics covered there. Apart from general features
of the product and released product form, the focus in this section is on item data
in inventory and on inventory valuation.

7.2.1.1 Structure of Product Data

In order to view shared products, access the form Product information management>
Common> Products> All products and product masters showing a list of all products.
The list pages Products (for items without configurations and variants) and Product
masters (for configurable items) show a filtered view of all shared products.
Shared products are not available in the current company or any other company of
your enterprise until the product has been released to the particular company.

Figure 7-4: Main control groups of a product

Core data – common to all companies to which a product has been released – in the
shared products include product number, product type and subtype (non-
inventoried, inventoried or configurable item) and dimension groups. If applicable,

mabenito@parcisa.com
7.2 Product Information Management 281

skip the dimension groups in the shared product and enter them at company level
in the released products. Depending on number sequence settings, you might also
use independent item numbers at company level.
Most product details are specified at company level – in the released product form
(Product information management> Common> Released products). Required fields there
include the dimension groups (if not shared), the item model group, and the item
group.

7.2.1.2 Creating a Product

Depending on the requirements in your company, there are two ways for creating
a new product (see section 3.3.2):
¾ Start with the shared product – Create a shared product and release it.
¾ Start with the released product – Create a product in the released product
form, automatically generating a shared product in the background.
In order to create an item in the shared product form, click the button New/Product
in the action pane. If you want to release this product to one or more companies
then, click the button Release products in the action pane and select applicable
companies on the tab Select companies of the release product dialog. Releasing the
shared product to additional companies later can be done the same way.
The released product form is available through the appropriate menu item.
Alternatively, access a released product directly from the shared product by
clicking the link More in the FactBox Authorized by company and then applying the
table reference (View details) on the column Item number in the dialog. You might
need to refresh the shared product form (pushing the F5 key) for viewing new
released products in the FactBox.
Instead of creating a new product in the shared product form, alternatively create a
product in the released product form clicking the button New/Product in the action
pane there. The New released product dialog then contains data for the shared and
for the corresponding released product in parallel. After clicking the option Show
more fields at the bottom of the dialog, it shows all mandatory fields of the released
product. If there are templates for released products, the additional field Apply
template for choosing an appropriate template shows in the dialog.
You may also apply templates (see section 2.3.2) for released products at a later
date. For this purpose, click the button Maintain/Apply template on the action pane
tab Product overriding data of the released product with data from the template.
For creating a template for released products, click the button New/Template in the
released product detail form.

7.2.1.3 Product Number and Name

The Product number identifying shared products has to be unique across
companies. It is assigned automatically to new products, if the settings of the

mabenito@parcisa.com
282 7 Inventory Management

number sequence for product numbers (Product information management> Setup>

Product information management parameters, tab Number sequences) do not specify a
manual assignment.
The Item number identifying items at released product level is identical to the
shared product number, if there is no other setting in the number sequence for
item numbers (Inventory management> Setup> Inventory and warehouse management
parameters, tab Number sequences) of the particular company.
The Product name and Description is only editable at shared product level, but the
Search name is editable at released product level.
When creating a shared product, the default for the product name and the search
name derives from the product number. You may override this default and enter a
longer product description is the field Description. If there are different product
names and descriptions in foreign languages, enter them after clicking the button
Translations in the action pane of the shared product form.

7.2.1.4 Product Type and Subtype

The Product type controls, if a product is an inventoried item. Whereas the product
type “Item” refers to regular items, the product type “Service” specifies an item
without inventory control in any company.
The Product subtype refers to the item configuration. Whereas the product subtype
“Product” applies to a regular standard item, the product subtype “Product
master” characterizes a base item for assigned product variants.

7.2.1.5 Product Master

If a product refers to the product subtype “Product master”, the product number
alone does not uniquely identify the item in inventory. Transactions in addition
require entering the product variant in this case, distinguishing different sizes,
colors, styles or configurations of a product.
When creating a product master, the Product dimension group – one of the three
dimension groups discussed in section 7.2.2 below – is available in the Create
product dialog. The product dimension group is selected at shared product level,
determining which of the dimensions Configuration, Size, Color and/or Style apply.
The Configuration technology, which is the second mandatory field when creating a
product master, determines the way of creating product variants.
If selecting the configuration technology “Predefined variant”, click the button
Product master/Product dimensions in the shared product for entering dimension
values for product variants. The left pane of the product dimensions form then
shows the dimensions, which are applicable to the product according to the
selected product dimension group.

mabenito@parcisa.com
7.2 Product Information Management 283

After entering product dimension values for applicable dimensions in the product
dimensions form, you have to specify available variants (dimension value
combinations) by clicking the button Product master/Product variants in the shared
product. The button Variant suggestions in the product variants form facilitates
creating new variants. Managing variants in the product variants form is
applicable, if the particular product is – for example – not available in all colors for
each size. If a product only includes one active product dimension or if all
dimension combinations are available, select the checkbox Generate variants
automatically in the shared product detail form before starting to enter product
dimension values.
Before choosing a product variant in a transaction, you have to release it by
clicking the button Release products in the action pane of the shared product. In the
release product dialog, select applicable variants for releasing in the right pane.
Apart from releasing product variants in parallel to releasing the product master,
releasing variants is also possible at a later date.

7.2.1.6 Non Inventoried Items and Services

Apart from regular products, which you want to track in inventory through
transactions and the quantity on hand, there are items – e.g. services or office
supplies – which you do not want to track in inventory.
Dynamics AX provides two separate options specifying whether inventory control
applies to a product:
¾ Product type – Option “Item” or “Service”
¾ Item model group – Checkbox Stocked product
Depending on the combination of both settings, inventory control works different
(see Table 7-1).
Table 7-1: Options for inventory control of products
Product type Item Service
Item model group
Stocked product Inventory transactions, Inventory transactions,
inventory quantity no quantity

Non-stocked product No transactions No transactions

The product type “Service” applies to products, which do not show inventory
quantity in any company. But if assigned to an item model group for stocked
products, products of this type show inventory transactions. This setting is
required for intangible items and services which are used as part of a BOM.
When setting up items of the product type “Service”, you have to assign a specific
item group and item model group for granting correct inventory valuation and
ledger postings.

mabenito@parcisa.com
284 7 Inventory Management

Linking a released product to an item model group, which shows a cleared

checkbox Stocked product, does not only avoid showing inventory quantity but also
prevents inventory transactions. Since the item model group is assigned to the
released product, this setting enables deactivating inventory control for an item at
company level.

7.2.1.7 Core Settings in Released Products

Whereas the shared product form only contains a limited number of fields, the
released product form includes a wide range of detail data for characterizing a
particular item.
Only a few fields in the released product are mandatory, including the Item model
group, the Item group and – either at shared product or at released product level –
the dimension groups. The button Maintain/Validate on the action pane tab Product
of the released product form supports checking if a released product contains all
mandatory data.

Figure 7-5: Managing an item in the released product form

Other data in the released product like the item sales tax groups, the units of
measure and the cost price are not mandatory, but nevertheless crucial depending
on the specific requirements.

mabenito@parcisa.com
7.2 Product Information Management 285

7.2.1.8 Item Group

The main purpose of item groups is to pool products, which post to a common
main account in the general ledger. Therefore you need at least as many item
groups, as there are different stock and revenue accounts for inventory items in
finance. You may find more details on the inventory posting setup in section 9.6.2.
When releasing a product, you have to keep in mind that you should not change
the item group after registering the first transaction of the released product.
Dynamics AX displays a warning, saying that are possible issues in finance
regarding inventory reconciliation if you do not carefully check the consequences
of changing the group. But the warning does not prevent you from changing the
item group, if necessary.
Item groups do not only control ledger integration, they also are a filtering and
sorting criteria in many reports.

7.2.1.9 Units of Measure

The unit of measure has to be entered in the released product before you can
register an inventory transaction. When releasing a new product, Dynamics AX
applies the default unit specified in the inventory management parameters (field
Unit on the tab General). As long as no inventory transaction is recorded for the
item, it is possible to change the inventory unit of a released product.
If an item requires different units of measure in purchasing, sales, and inventory,
assign the applicable units on the tabs Purchase, Sell and Manage inventory of the
released product form. The unit in the released product defaults to transactions
entered for the item, e.g. in a sales order line. If necessary, select a different unit in
a particular transaction then. When choosing a different unit, the selected unit
requires a unit conversion to the inventory unit.
Units of measure are shared across companies. If you require a new unit of
measure, you have to set it up in the units form (Organization administration> Setup>
Units> Units) before assigning it to a released product. The Unit class (e.g.
“Quantity” or “Weight”) determines the area to which a unit of measure applies.
For one unit within each unit class, optionally select the checkbox System unit in
order to apply this unit to fields not associated to a specific unit of measure (e.g.
the net weight field in the released products).
Clicking the button Unit conversions in the action pane strip of the units form
provides access to the unit conversion calculation. Conversion factors between
units entered on the tab Standard conversion apply to all products. The tab Intra-class
conversions enables entering conversions per item number within a Unit class.

mabenito@parcisa.com
286 7 Inventory Management

7.2.1.10 Number Groups

When entering a batch or serial number in a transaction, the batches or serial
numbers table (Inventory management> Inquiries> Dimensions) has to include this
number.
If you want Dynamics AX to generate batch or serial numbers automatically, set up
appropriate groups in the number groups form (Inventory management> Setup>
Dimensions> Number groups). On the tab General of the number groups form, specify
the structure of related numbers and assign a number sequence if the structure
includes a Number sequence No. Settings on the tab Activation determine which
transactions are generating numbers.
In the released product form, the Tracking dimension group (see section 7.2.2 below)
controls, if batch or serial numbers apply to an item. If tracking dimensions apply,
optionally select a batch or serial number group on the tab Manage inventory of the
released product for automatically generating batch or serial numbers for the item.

7.2.1.11 Catch Weight Products

A catch weight product (CW product) in Dynamics AX 2012 R2/R3 is an item with
weight as primary unit of measure, and a secondary unit (catch weight unit)
showing the number of pieces in parallel. The weight per unit varies, and as a
result there is no fixed unit conversion between the weight unit and the catch
weight unit. In the order lines of purchase or sales orders, only the catch weight
quantity (the number of pieces) is entered. When registering inventory
transactions, both weight and catch weight quantity have to be entered in parallel.
The catch weight functionality originates from process industries. Typical
examples of catch weight products are animals (or parts of animals) requiring to
show the counted number and the weight in parallel. Usually, catch weight only
applies to items with batch and/or serial number control.
In Dynamics AX, the catch weight functionality is generally available in inventory,
purchasing and sales, where all applicable forms contain additional fields for the
catch weight. Usage in production is limited to batch production orders, since only
formulas – not regular bills of materials – may include catch weight items. Because
of its complexity, you should only use catch weight if you actually need to track
weight and catch weight quantity independently from each other.
For setting up a catch weight item, select the checkbox CW product when creating
the shared product. Then click the button Unit conversions in the action pane of the
shared product form and enter an Inter-class conversion between the inventory unit
(weight) and the catch weight unit (pieces). The catch weight unit has to be a unit
without decimals (Decimal precision zero in the unit).
When releasing the product, the inventory unit of the item has to be a weight unit
(the default unit in the inventory parameters usually is a weight unit in applicable
companies). On the tab Manage inventory in the released product form, select the

mabenito@parcisa.com
7.2 Product Information Management 287

catch weight unit in the field CW unit and enter the Minimum quantity and the
Maximum quantity below, determining a range for the allowed conversion factor
(weight per unit). Like for other products, enter further required data including
item model group, item group and dimension groups as applicable then.

Figure 7-6: Entering catch weight settings in the released product

When registering a purchase order line, enter the catch weight quantity (number of
pieces) in the column CW quantity. The column Quantity, which is not editable for a
catch weight item, shows the quantity according to the regular unit conversion.
The item receipt through inventory registration or an item arrival journal (see
section 3.5.3) then requires independently entering the CW quantity and the
inventory quantity in parallel, providing a default for the inventory quantity
derived from the unit conversion.
The requirement of independently entering the CW quantity and the quantity in
inventory unit applies to all inventory transactions, including sales order picking
and inventory journals. Inquiries of the current inventory then show both weight
and catch weight quantity in parallel.

7.2.1.12 New in Dynamics AX 2012 and in AX 2012 R2

In Dynamics AX 2012, product master data show in a separate module, applying
the concept of shared products and released products (former “Items”). Compared
with the initial version of Dynamics AX 2012, the R2 version in addition contains
the catch weight functionality.

mabenito@parcisa.com
288 7 Inventory Management

7.2.2 Inventory Dimension Groups

Inventory dimensions control the breakdown of inventory quantity within released
products. Applying dimensions splits inventory quantity and transactions to a
more detailed level than the item number.
Inventory dimensions in Dynamics AX therefore are a prerequisite for showing the
quantity of an item for a particular warehouse location or a particular batch.

7.2.2.1 Available Dimensions

Inventory dimensions in Dynamics AX belong to one of the following groups:
¾ Product dimensions – Configuration, size, color and style provide the option to
subdivide an item based on these characteristics (only for product masters).
¾ Storage dimensions – Site, warehouse, location and pallet apply to inventory
structures.
¾ Tracking dimensions – Batch and serial number control tracking options.
Dynamics AX 2012 R3 includes the additional storage dimensions Inventory status
and License plate for the new warehouse management module (see section 8.1.1).
If required, rename the product dimensions Size, Color and Style by clicking the
button Rename in the product dimension groups form. In the tracking dimension
groups, the dimensions Inventory profile, Owner and GTD number refer to
functionality required in Eastern European countries.
The dimension groups of an item determine which inventory dimensions have to
be entered when registering an inventory transaction. If the batch number
dimension is active in the tracking dimension group of the item for example, you
have to enter batch numbers.

7.2.2.2 Dimension Groups and Settings

In order to access dimension group management, choose the menu path Product
information management> Setup> Dimension groups and select the option Product
dimension groups, Storage dimension groups or Tracking dimension groups there. The
forms for these three types of dimension groups look similar, except for the
applicable dimensions which are specific to the particular group type.
As shown in Figure 7-7 on the example of the storage dimension group form, the
dimension group form shows the list of dimension groups in the left pane. The
right pane of the form provides access to the inventory dimension settings for the
dimension group selected on the left pane.

mabenito@parcisa.com
7.2 Product Information Management 289

Figure 7-7: Managing storage dimension groups

If you need an additional dimension group, insert a new record by clicking the
button New in the action pane strip. Then enter the inventory dimension settings of
the new dimension group selecting the checkboxes as explained in Table 7-2.
Table 7-2: Available settings for inventory dimensions in a dimension group
Parameter Explanation
Active Dimension available for transactions of the item
Active in sales process Simplified sales serial numbers (tracking dimension group)
Primary stocking Mandatory dimension for reservation; in addition displays in
the on-hand inquiry as default dimension
Blank receipt allowed Dimension value not required for receipt transactions
Blank issue allowed Dimension value not required for issue transactions
Physical inventory Item availability per dimension value (depending on the item
model group, no negative inventory e.g. per batch number)
Financial inventory Inventory value per dimension value (necessary for
calculating value and cost price, e.g. per batch number)
Coverage plan by Separate item coverage in master planning per dimension
dimension value (see section 6.3.3)
For purchase prices Dimension available for purchase price agreements (see
section 3.3.3)
For sales prices Dimension available for sales price agreements
In storage dimension groups, the dimension Site (see section 10.1.7) is always
active, which is why a site has to be entered in every inventory transaction. For the
dimension Warehouse, selecting the additional parameter Mandatory requires
registering a warehouse already when entering a transaction (if not selected, the
warehouse may remain empty until posting).
In product dimension groups, only the parameters Active, For purchase prices and
For sales prices are available.

mabenito@parcisa.com
290 7 Inventory Management

When setting up dimension groups, you should only activate dimensions actually
required in your business processes. In addition, you should apply a limited
number of dimension groups. System load, complexity and time for registration
increase with the number of dimensions in use.
On the other hand, you have to activate all dimensions required. For example, the
quantity on hand is only available per location, if the dimension Location is active
for the particular item. If you need a particular dimension for some, but not all
transactions of an item, the best way is to apply a pseudo-value for transactions
where the dimension is not applicable. If warehouse locations are not applicable to
all of your warehouses for example, insert a pseudo-location providing a default
for warehouses without locations.

7.2.2.3 Simplified Serial Numbers in Sales Processes

For managing serial numbers in Dynamics AX across the whole supply chain, the
tracking dimension Serial number has to be active. For items linked to a
corresponding tracking dimension group, inventory transactions of items are split
by serial number which causes a high number of transactions. If serial number
tracking is only required for warranty issues in sales, there is no need to split
inventory transactions by serial number in purchasing and other areas.
In order to comply with this issue, Dynamics AX 2012 R3 introduces an additional
option for tracking serial number only in sales by storing the serial number in a
separate table which is linked to the inventory transactions. Sales serial numbers
are only available for sales orders and return orders, not for other transactions (e.g.
transfer orders). Serial number labels are physically attached to the item in
inventory, but not tracked within Dynamics AX until the order is shipped to or
returned from the customer.
The sales serial number functionality is controlled by the tracking dimension
group. For using sales serial numbers, set up a dimension group and select the
checkbox Active in sales process for the serial number dimension.
Registering sales serial numbers in transactions is only possible in the packing slip
and the sales invoice posting form in the current release. After entering a sales
order including one or more lines with items linked to the sales serial number
control, access the packing slip posting form – e.g. by clicking the button
Generate/Packing slip on the action pane tab Pick and Pack in the sales order form. On
the tab Lines in the posting form, the button Update line/Register serial numbers
provides access to the sales serial number registration form.
In the serial number registration form, which supports using a scanner, enter or
scan the serial numbers one after another. If a serial number label is missing or not
readable on the physical item, click the button Not readable for the particular item.
After closing the serial number registration, you can post the packing slip.

mabenito@parcisa.com
7.2 Product Information Management 291

For return orders, registration of sales serial numbers is also required in the
packing slip posting form. If you do not post a packing slip, but ship the item
directly with the sales invoice (or receive it with the credit note), you can access the
serial number registration form from the invoice posting form.
If you want to know which serial numbers have been shipped, you can access the
serial number inquiry in the related journal inquiry. In case of a packing slip, click
the button Inquiries/Serial numbers on the Lines tab of the packing slip journal.
Tracking of sales serial numbers is also possible in the item tracing form (Inventory
management> Inquiries> Tracing> Item tracing).

7.2.2.4 Dimension Groups in the Released Product

For assigning applicable inventory dimensions to a released product, click the
button Set up/Dimension groups on the action pane tab Product of the released
product form. If a dimension group is already specified on the corresponding
shared product, it is shown in the released product and can’t be changed there.
In order to avoid invalid dimension values in posted transactions, it is not possible
to change inventory-related settings of a dimension group once a transaction refers
to the dimension group. For the same reason, it is not possible to change the
dimension group of an item, if there is an open transaction or an on-hand quantity
in inventory.
If you need to change dimension settings for an item, post transactions issuing the
complete stock physically and financially. After inventory closing, assign the new
group and then post transactions according to the actual stock on hand in the
warehouse.

7.2.2.5 Dimension Display

The default for displaying dimension columns in detail forms is available on the
tab Inventory dimensions in the parameters form of all relevant modules. For
example, the inventory dimensions in the sales order lines are controlled in the
accounts receivable parameters (Accounts receivable> Setup> Accounts receivable
parameters, tab Inventory dimensions).
Forms containing inventory dimension columns allow changing the display of
dimension columns by clicking the appropriate button in the action pane strip –
e.g. Sales order line/Display/Dimensions in the action pane strip of the sales order
lines or Inventory/Dimensions display in inventory journal lines.
When selecting inventory dimensions for displaying reports and inquiries of
inventory quantity and inventory value, you have to take into account that only
these queries show a reliable result, which comply with the dimension setup. It is
not useful for example to report inventory value and cost price per warehouse, if
the checkbox Financial inventory is not selected in the applicable storage dimension
group. The reason is, that inventory valuation according to this setting does not

mabenito@parcisa.com
292 7 Inventory Management

link item issue transactions with item receipt transactions per warehouse
separately, causing a result which is different to your expectation.

7.2.2.6 New in Dynamics AX 2012, in AX 2012 R2, and in AX 2012 R3

In Dynamics AX 2012, inventory dimension groups are split to three different
groups according to their purpose – product, storage and tracking dimensions.
Compared with the initial version of Dynamics AX 2012, the R2 version contains
the additional dimension Style and – for Eastern Europe – Inventory profile, Owner
and GTD number.
In AX 2012 R3, additional storage dimensions for the new warehouse management
and simplified serial numbers for sales are available.

7.2.3 Item Model Groups

Item model groups include settings for the valuation method on the one hand and
for item handling on the other hand. They are a core setting for inventory
valuation and ledger integration.
For editing the item model groups, choose the menu item Inventory management>
Setup> Inventory> Item model groups. The left pane of the item model group form
displays a list of available groups. The right pane of the form then provides access
to the settings for the group selected on the left pane.

Figure 7-8: Available settings in the item model group

mabenito@parcisa.com
7.2 Product Information Management 293

7.2.3.1 Item Handling

In item model groups for inventoried items, the checkbox Stocked product needs to
be selected. If this checkbox is cleared, products assigned to the group do not
generate inventory transactions. This is the right choice for non-inventoried
products like service items (except subcontracted production services).
The parameters Quarantine management and Consolidated picking method control the
automatic generation of internal orders. If selecting the checkbox Quarantine
management, Dynamics AX automatically creates a quarantine order (see section
7.4.4) when posting an item receipt. If selecting the checkbox Consolidated picking
method, output orders for shipping assigned items show the type “Consolidated
picking” (see section 4.5.4).
The checkbox Registration requirements controls, if you have to post an inventory
registration in an item arrival journal or in the registration form, before you may
post the product receipt in purchasing (see section 3.5.3). The checkbox Picking
requirements in a similar way applies to picking list posting before packing slip
posting in sales.
The checkboxes Receiving requirements and Deduction requirements control, if you
have to post a packing slip in sales or a product receipt in purchasing before
posting the invoice.

7.2.3.2 Negative Inventory

In most cases you do not allow a negative physical inventory for inventoried items,
but you do accept a negative financial inventory. A negative financial inventory
results from posting a sales invoice before posting the corresponding purchase
invoice (supposing no other stock is available for the item).
With regard to the settings for negative inventory in the item model group, respect
the dimension groups: Dynamics AX controls negative physical (or financial)
inventory at the level of the inventory dimensions, for which the checkbox Physical
inventory (or Financial inventory) is selected.

7.2.3.3 Inventory Model

Selecting an inventory model (FIFO, LIFO, average or standard cost) on the tab
Inventory model determines the inventory valuation method. The valuation method
is the way Dynamics AX links issue transactions to receipt transactions in terms of
valuation.
Details on inventory valuation methods are available in section 7.3, details on
ledger integration in section 9.6.2.

7.2.3.4 Setting Up Item Model Groups

If you change the Inventory model or Ledger integration settings of an item model
group after posting corresponding item transactions, reconciliation of inventory

mabenito@parcisa.com
294 7 Inventory Management

and finance may become difficult. Before changing any of these settings, you
should carefully plan the consequences.
The number of required item model groups depends on the requirements of your
company for processing items. In a regular Dynamics AX installation, you have to
apply at least two groups – one for inventoried items and one for service items.
The item model group for service items should allow physical and financial
negative quantity and deactivate ledger integration.

7.2.3.5 New in Dynamics AX 2012 and in AX 2012 R2

In Dynamics AX 2012, the new checkbox Stocked product enables products without
inventory transactions. Compared with the initial version of Dynamics AX 2012,
the R2 version contains additional settings for reservation and approved vendors.

7.2.4 Cost Price Settings

Core settings regarding the inventory valuation of an item are available on the tab
Inventory model of the item model group: The lookup field Inventory model controls,
if the valuation method is FIFO, LIFO, weighted average, moving average or
standard cost. For the methods FIFO, LIFO and weighted average, select the
checkbox Fixed receipt price if you want to apply a standard cost price only for item
receipts.

7.2.4.1 Item Cost Price

The tab Manage costs of the released product form includes a base cost price in the
field Price. This base cost price does not apply to the valuation method “Standard
cost”, however.
All other valuation methods apply the base price in the item record as a default for
the cost amount of item receipts in inventory journals and counting journals, if no
site-specific cost price applies. Therefore you should ensure a correct base price.

7.2.4.2 Costing Versions and Item Price Form

The cost price per site – and the site-specific standard purchase or sales price – is
available in the item price form, accessible by clicking the button Set up/Item Price
on the action pane tab Manage costs of the released product form.
Before entering a record in the item price form, the appropriate costing version
(Inventory management> Setup> Costing> Costing versions) has to be available.
Costing versions contain separate versions of prices, which may differ in
calculation. The Costing type “Standard cost” is required for versions, which apply
to standard cost prices in the item price form.
In order to register a new cost price in the item price form, switch to the tab
Pending prices there. For a cost price, choose the Price type “Cost” and select the
costing version in the column Version. If no default value for Site and From date
applies from the costing version, enter these fields manually. Apart from the Price

mabenito@parcisa.com
7.2 Product Information Management 295

itself, the item price form contains additional price details like the Price unit or
price charges in (similar to corresponding settings in the released product form, see
section 3.3.3). For finished or semi-finished items referring to a bill of materials, the
button Calculation provides the option to run a cost calculation.
Once you have finished entering the pending price, activate it by clicking the
button Activate in the action pane strip of the item price form. Active prices then
show on the tab Active prices of the form.

Figure 7-9: Entering a pending price in the item price form

For product master records, cost prices are available with applicable product
dimensions at product variant level, if the checkbox Use cost price by variant (on the
tab Manage costs in the released product) of the product master is selected.

7.2.5 Transaction and Inventory Inquiry

The transactions and the inventory quantity of an item are directly accessible from
the released product form. Both inquiries, the transaction inquiry and the on-hand
inquiry, are also available by clicking the button Inventory in the action pane strip
of various forms for registering transactions (e.g. the sales order lines).
The list page Inventory management> Common> On-hand inventory and the form
Inventory management> Inquiries> On-hand show overview of the quantity on hand
for multiple items. A complete inquiry of inventory transactions is available in the
form Inventory management> Inquiries> Transactions> Transactions.

7.2.5.1 Transactions Form

If you want to access inventory transactions from the released product form, click
the button View/Transactions on the action pane tab Manage inventory of the released
product. When accessing the inventory transactions from the released product, the
transactions form shows all transactions of the particular item. The columns
Reference and Number display the original voucher.
In addition to posted transactions, the transactions form also shows future
transactions not posted yet. These transactions include order lines in sales,
purchasing and production, for which no packing slip/product receipt or invoice
has been posted. You may recognize these lines by the empty physical and

mabenito@parcisa.com
296 7 Inventory Management

financial date. In addition, the transactions show a receipt status “Ordered” or an

issue status “On order”.

Figure 7-10: Inventory transactions of an item in the transactions form

7.2.5.2 Physical and Financial Transaction

When posting a product receipt in purchasing, a packing slip in sales, a picking list
in production, or a report as finished journal, Dynamics AX applies the posting
date to the Physical date in the inventory transaction. In parallel, the status of the
transaction changes to “Received” or “Deducted”. The field Physical cost amount on
the tab Update shows the preliminary inventory value of the transaction.
The Financial date in an inventory transaction is updated when posting the invoice
in purchasing or sales, or when ending the production order. In parallel, the status
of the transaction changes to “Purchased” or “Sold” and the inventory value of the
transaction displays in the column Cost amount.
Dynamics AX does not change the posted financial cost amount any more. If
posting an adjustment of the inventory value in the course of inventory closing or
through a manual adjustment, the posted difference shows separately in the field
Adjustment on the tab Update of the transaction.

7.2.5.3 Inventory Picking and Registration

Inventory picking in sales (see section 4.5.2) and registration in purchasing (see
section 3.5.3) are peculiar steps of an inventory transaction. When posting a
picking or registration transaction, the quantity on hand of the item and the status
of the inventory transaction are updated. Unlike product receipt and packing slip
transactions, picking and registration do not generate an unchanging voucher.
After posting the packing slip in sales (or the product receipt in purchasing), the
date of picking (or registration) shows in the field Inventory date on the tab General
of the inventory transaction. If you do not proceed the regular way – posting a
packing slip after picking, or posting a product receipt after registration – but
cancel the registration, it is not possible to view the original picking or registration
transaction in the inventory transactions any more.

mabenito@parcisa.com
7.2 Product Information Management 297

7.2.5.4 Arrived Status

If your company uses the warehouse module with pallet transports and inventory
locations, an additional receipt status “Arrived” applies. This is the status after
posting an item arrival journal with activated pallet transports.
In this status, transactions are not included in the physical quantity. After posting
the corresponding pallet transport, the posted quantity adds to the physical
inventory and the transaction status changes to “Registered”.

7.2.5.5 Voucher Data

Apart from data showing on the tab Overview, data on the tab Update contain
valuable information on inventory transactions. The fields on this tab are grouped
by the columns Physical, Financial and Settlement.
The field group Physical contains the date, number and preliminary value of the
product receipt or packing slip. Invoice data are available in the field group
Financial.
If the value of a transaction changes (according to the valuation method through
inventory closing, or through manual adjustments), the value difference shows in
the field Adjustment. The original financial Cost amount does not change any more,
all later adjustments add in the field Adjustment.

Figure 7-11: Voucher data in an inventory transaction

The field group Settlement shows if an inventory transaction is settled by inventory

closing already. If the quantity of a transaction completely settles matching item
issues or receipts, inventory closing records the closing date in the field Financially
closed and closes the transaction (the lookup Value open on the tab General then
shows “No”). But registering a manual adjustment to a closed transaction reopens
it again.

mabenito@parcisa.com
298 7 Inventory Management

7.2.5.6 Ledger Integration

The checkbox Physically posted on the tab Update of an inventory transaction shows
if the product receipt or packing slip has been posted to the general ledger. As a
prerequisite, ledger integration for physical transactions has to be activated in the
item model group of the particular item.
Assuming ledger integration for financial transactions is activated, a checkmark in
the checkbox Financially posted indicates that the invoice has been posted. For
purchase invoices, the checkbox is selected after invoice posting even if ledger
integration is not active for an item, though. The reason is that a purchase invoice
for items always posts a ledger transaction: To a stock account for the receipt
transaction if ledger integration is active or to an expense account for immediate
consumption otherwise.

7.2.5.7 Quantity on Hand

In order to view the current inventory quantity of an item, click the button View/
On-hand inventory on the action pane tab Manage inventory of the released product
form. The tab Overview of the on-hand form then displays a list of inventory
quantities, grouped by the inventory dimensions selected as primary stocking
dimensions for the item.

Figure 7-12: On-hand overview of an item

7.2.5.8 Dimensions Display

The button Dimensions display in the action pane of the on-hand inquiry opens a
dialog box, where you may select which dimension columns display in the inquiry.
This dialog box is also available in many other forms after clicking the appropriate
button in the action pane strip – e.g. Sales order line/Display/Dimensions in the sales
order lines.
If choosing to show an additional column for example containing the batch
number, the lines in the form display the quantity per batch number. In order to
view the total quantity of an item, clear all dimension checkboxes in the display
dialog.

mabenito@parcisa.com
7.2 Product Information Management 299

7.2.5.9 On Hand Details

In order to view the details of a line in the on-hand inquiry, switch to the tab On-
hand. Apart from the Physical inventory, which is the current quantity in inventory,
the form shows availability data and the current cost price (average cost price,
except for standard cost and fixed receipt price items).
The physical inventory is the total of the transactions with following status:
¾ Posted quantity – Invoiced quantity of purchasing deducting sales
¾ Received – Product receipt in purchasing, added to the posted quantity
¾ Deducted – Packing slip in sales, deducted from the posted quantity
¾ Registered – Registration and item arrival, added to the posted quantity
¾ Picked – Picking in sales, deducted from the posted quantity
Apart from purchasing and sales, the same status and calculation applies to
transactions in production.

Figure 7-13: On-hand details

All data shown in the on-hand form refer to the selected dimensions. The
dimensions for example selected in Figure 7-13 are the site “HQ” and the
warehouse “10”. According to this selection, Dynamics AX applies a filter showing
the quantity and cost amount for this site and warehouse. When viewing the cost

mabenito@parcisa.com
300 7 Inventory Management

price and cost amount, you have to take into account that cost figures are only
reliable for dimensions with separate financial inventory according to the
dimension group settings.

7.2.5.10 On Hand Inventory in the Past

For viewing the physical inventory on a date in the past, choose the report
Inventory management> Reports> Status> Physical inventory> Physical inventory by
inventory dimension.

7.2.5.11 New in Dynamics AX 2012 R2

Compared with the initial version of Dynamics AX 2012, the R2 version in
inventory inquiries contains additional fields showing catch weight quantity.

7.2.6 Case Study Exercises

Exercise 7.1 – Dimension Groups
In order to investigate the functionality of dimension groups, create a new storage
dimension group D-## and a tracking dimension group D-## (## = your user ID).
Set up the dimension groups in a way that the dimensions Site, Warehouse and
Batch number are required in every transaction. For the warehouse dimension,
separate financial inventory valuation should apply.
Exercise 7.2 – Item Model Group
In order to prepare the next exercise, create a new item model group T-## (## =
your user ID) with FIFO valuation, assigning the inventory model “FIFO”. The
ledger integration for physical and financial inventory should be active. The item
model group applies to stocked products and a negative financial inventory is
allowed. All other checkboxes remain cleared, approved vendors are not required.
Then you want to set up a second item model group S-## for standard cost
valuation, which got the same settings as the first group, except that the inventory
model is “Standard cost” and a negative physical inventory is possible.
Exercise 7.3 – Product Record
Enter two new items in the released product form as a preparation for examining
the consequences of settings in the dimension groups and the item model group:
¾ Item I-##-S applying standard cost valuation (item model group S-##)
¾ Item I-##-T applying FIFO valuation (item model group T-##)
For both items, the product subtype is “’Product” and the storage and the tracking
dimension group are the groups you have set up in exercise 7.1. In addition, select
an appropriate item group for merchandise and the unit of measure “Pieces”. The
item sales tax groups for purchasing and sales should refer to the standard tax rate.
The base purchase price and the base cost price are 50 pounds, the base sales price
is 100 pounds. For purchasing, inventory and sales, you should enter the main site
in the Default order settings and the main warehouse of the main site in the Site
specific order settings.

mabenito@parcisa.com
7.3 Inventory Valuation 301

For the item I-##-S you need to register and activate a standard cost price. Enter a
standard cost price of 50 pounds for the main site in the item price form.
Note: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the released products.
Exercise 7.4 – Inventory Value of Transactions
Enter a purchase order referring to your vendor of exercise 3.2, which contains a
line of 100 units of the first and 100 units of the second item entered in exercise 7.3.
Enter 60 pounds in the purchase price of both order lines and confirm the purchase
order.
Try to find out, if you may post a product receipt without inserting a batch
number. Choosing the option View details in the batch number column, create the
batch number B001 for both items in the batch table then. In the purchase order
lines, insert this batch number afterwards.
Then post the product receipt and the invoice receipt for the complete quantity. If
you look at the item transactions and the quantity on hand, can you explain the
difference of the cost amount and the cost price of the two items?
Note: If required, show the column for the dimension Batch number in the order
lines by clicking the button Inventory/Dimensions display.

7.3 Inventory Valuation

Based on the deep integration of the entire application, Dynamics AX provides a
very accurate calculation of inventory values. Apart from the valuation methods
for average costs or standard costs, an end-to-end FIFO or LIFO valuation is
available as well.
The basis of inventory valuation is a simple principle:
¾ Receipt costs – Cost amounts are provided by the receipt transaction
¾ Issue costs – Cost amounts are calculated according to the valuation model
The cost amount of the issue transaction derives from the receipt transactions,
which are linked to the issue according to the valuation model (FIFO, LIFO,
average). It is not possible to enter the cost price and cost amount in an issue
transaction.
Exceptions to this principle are the moving average valuation (for issue
transactions keeping the average cost price shown at the time of posting) and the
standard cost valuation. For the standard cost price, two different options are
available:
¾ Fixed receipt price
¾ Standard cost

mabenito@parcisa.com
302 7 Inventory Management

The option “Fixed receipt price” is available in combination with the valuation
methods FIFO, LIFO and average cost. Applying this option fixes the receipt cost
price in advance, preventing to change it when recording a transaction.
Unlike the fixed receipt price, the inventory model “Standard cost” provides true
standard costs, immediately applying the standard cost price of an item for all
issue and receipt transactions.
The difference between the methods “Standard cost” and “Fixed receipt price”
shows, when changing the standard cost price of an item. Whereas the standard
cost method immediately posts an adjustment of inventory value, the fixed receipt
price method does not adjust the value of stock on hand. For this method, the new
price only applies to new receipts – existing inventory will issue to the old price
until it is consumed completely.

7.3.1 Valuation Method

Dynamics AX provides the following valuation methods – available in the field
Inventory model of the item model group – for calculating the cost amount of issue
transactions:
¾ FIFO
¾ LIFO
¾ LIFO date
¾ Weighted average
¾ Weighted average date
¾ Standard cost
¾ Moving average

7.3.1.1 Valuation of Item Receipts

Receipt transactions receive their financial value when posting the related financial
transaction (invoice). Except for the standard cost method, the different transaction
types therefore provide the receipt cost price and amount as follows:
¾ Purchase order receipt – Amount of the invoice line including related item
charges, adding indirect costs from the costing sheet as applicable
¾ Production receipt – Actual cost amount of the production order (total cost of
consumed BOM line items and resource time, including applicable indirect
costs)
¾ Sales return – Original value of the returned item if assigned to an original
sales order; otherwise return cost price entered in the return order
¾ Other receipt – Cost amount entered in the journal line

7.3.1.2 Valuation of Item Issues

The cost price and amount of item issues always complies with the average cost
price when posting the transaction. The valuation method applies when closing

mabenito@parcisa.com
7.3 Inventory Valuation 303

inventory, determining the assignment of item receipts to item issues according to

the inventory model (FIFO, LIFO or average).
Inventory closing calculates the cost price and amount of an issue transaction
based on assigned receipts. The issue price and amount therefore is not final until
you have posted the financial transaction (invoice) of all assigned receipts and
inventory closing is finished.
As an exception, individual assignment of issue transactions to receipt transactions
does not apply to following valuation methods:
¾ Standard cost price – The standard cost price (“Standard cost” or “Fixed receipt
price”) immediately applies to issue and receipt transactions.
¾ Moving average – Keeps the posted cost price of issue transactions and does
not require inventory closing.

7.3.1.3 Standard Cost Price

For items of the inventory model “Standard cost”, inventory closing is not required
because all receipts and issues immediately post the standard cost price specified
in the item price form (see section 7.2.4).
When activating a new standard cost price, Dynamics AX immediately applies an
adjustment of inventory value for the current stock, which posts in inventory and
in the general ledger. The new standard cost price therefore applies to issues of
existing stock right away.

7.3.1.4 Fixed Receipt Price

The checkbox “Fixed receipt price” in the item model group applies in combination
with the valuation methods FIFO, LIFO or average cost. When selecting this
option, the cost price entered in the released product form or in the item price form
specifies a fixed cost price for receipt transactions.
The cost price and cost amount are calculated according to the valuation method
and – as long as you do not change the item cost price – always comply with the
standard cost price of the item.
When changing the item cost price, consumption transactions immediately apply
the new cost price. Since there is no posting of revaluation when changing a fixed
receipt price, the financial value of existing stock however still complies with the
old price. As a result, inventory closing is required for the option “Fixed receipt
price” in order to adjust the cost amount of issue transactions to the old price
according to the valuation method (until all inventory received with the old price
has been consumed).

7.3.1.5 Moving Average Price

For items of the inventory model “Moving average”, receipt transactions are
posted with the price provided by the transaction (e.g. through a vendor invoice).

mabenito@parcisa.com
304 7 Inventory Management

When posting an issue transaction, the average cost price at the time of posting
applies. This cost price does not change through inventory closing.
If a vendor invoice refers to a purchase receipt, which is not completely on stock
any more, for the quantity not on stock a difference between the physical cost
amount and the financial cost amount of the purchase transaction is posted as an
adjustment to a price difference account. For the quantity still on stock, posting the
purchase invoice posts the total amount – including possible differences – to the
financial cost amount.

7.3.1.6 Calculating Inventory Value

Following table shows an overview of the different valuation methods available in
Dynamics AX:
Table 7-3: Inventory models controlling the valuation methods in Dynamics AX

Inventory model Explanation

FIFO Item issues refer to the oldest item receipt still on stock
First In First Out
LIFO Item issues refer to the newest item receipt on stock available
Last In First Out when closing inventory
LIFO date Like LIFO, limiting the assignment of issues to receipts before the
particular issue
Weighted average The cost price of item issues in a period is the average cost price of
all receipts (including the beginning balance) in this period
(inventory closing period)
Weighted average The cost price of item issues is the average cost price calculated
date separately for each day
Standard cost The cost price of item issues and receipts is equal to the active
standard cost price of the item
Moving average The cost price of item issues is the average cost price of the
inventory quantity at the time of posting the issue

Table 7-4 shows a short example of the cost price calculation for the different
valuation methods. Basis of the example are three receipt transactions with
different cost prices and an issue transaction in between:
Table 7-4: Posted transactions for comparing valuation methods

Date Transaction Quantity Cost amount

July 1 Receipt 10 100
July 2 Receipt 10 200
July 3 Issue 10 (to be calculated)
July 4 Receipt 10 300

After inventory closing, the cost amount of the issue shows following figure
depending on the valuation method:

mabenito@parcisa.com
7.3 Inventory Valuation 305

Table 7-5: Valuation of the item issue in Table 7-4

Inventory Model Amount Explanation

FIFO 100 From the receipt on July 1
LIFO 300 From the receipt on July 4
LIFO date 200 From the receipt on July 2
Weighted average 200 Average of all receipts
Weighted average date 150 From the receipts on July 1 and July 2
Moving average 150 Current average when posting the issue

In addition to the inventory model, the inventory dimension settings have got an
impact on calculating the cost amount of an item issue. An assigning of issues and
receipts is not possible across dimensions with a separate financial inventory
according to the dimension group settings.
If separate financial inventory is activated for the dimension Warehouse for
example, issues of a warehouse “20” only assign receipts to the warehouse “20”
(including transfers). If separate financial inventory is not active for the dimension
Warehouse, assignments comply with the date sequence independent from the
warehouse in the transactions.

7.3.1.7 Inventory Marking

Marking is another option, influencing the automatic assignment according to the
inventory model. Markings work like lots for inventory valuation, assigning the
cost amount of a specific receipt to a specific issue – e.g. applicable to vendor
returns (see section 3.7.1). If you want to mark a transaction, click the button
Inventory/Marking in transactions inquiries, order lines or journal lines.

7.3.1.8 New in Dynamics AX 2012 R2

Compared with the initial version of Dynamics AX 2012, the R2 version contains
the new valuation model “Moving average”.

7.3.2 Inventory Closing and Adjustment

When posting an issue transaction, Dynamics AX always applies the average cost
price (except for the standard cost model). In order to calculate the correct cost
price and amount according to the valuation method (Inventor model) of the item,
you have to close inventory. Only items assigned to the inventory model
“Standard cost” or “Moving average” do not apply inventory closing.
You need to close inventory periodically – usually as part of the month closing
procedure in finance – in order to show correct item costs in finance and to close
inventory transactions. After closing inventory, it is not possible to post inventory
transactions in the closed period any more. If you have to post a transaction in a
closed period, cancel inventory closing.

mabenito@parcisa.com
306 7 Inventory Management

7.3.2.1 Inventory Closing

For inventory closing, access the form Inventory management> Periodic> Closing and
adjustment which shows a list of previous closings. If you want to close a period
there, click the button Close procedure.
The first and second option in the close procedure, checking open quantities and
cost prices, generate reports to assess inventory transactions. You may run these
reports to take corrective actions – e.g. in case of missing or wrong transactions –
before actually closing a period. But it is not required to perform these steps.
In order to finally close an inventory period, click the button Close procedure/3.Close
in the inventory closing form. Depending on the number of transactions, it might
be useful to run closing as a batch job not within regular business hours.

Figure 7-14: The inventory closing and adjustment form

As a prerequisite for closing a period in inventory, the accounting period in the

ledger calendar has to be open. As far as possible, you should post vendor invoices
for all item receipts in purchasing, and end all production orders which are
reported as finished. The corresponding product receipts in purchasing and
production then show the financial cost amount (instead of the physical cost
amount which shows before invoicing), minimizing the number of open
transactions as far as possible.
After closing inventory, the posted adjustment transactions are available by
clicking the button Settlements in the inventory closing form. If you have to cancel
inventory closing, click the button Cancellation. The button Recalculation calculates
and posts adjustment transactions like closing, but does not actually close a period.

7.3.2.2 Manual Adjustment of Inventory Value

If you want to adjust the inventory value of an item manually, click the button
Adjustment in the inventory closing form. Choose the option Adjustment/On-hand
for adjusting the cost price and cost amount of the current inventory quantity at
the level of inventory dimensions. The other choice, the button Adjustment/

mabenito@parcisa.com
7.4 Business Processes in Inventory 307

Transactions, provides the option to adjust the cost amount of individual receipt
transactions.
In the adjustment form, click the button Select for choosing applicable items or
transactions. In the selected records, enter a positive or negative adjustment
amount. Alternatively, retrieve a proposal for the adjustment through the
applicable option in the button Adjustment. Clicking the button Post in the
adjustment form finally posts the adjustment.

7.3.3 Case Study Exercises

Exercise 7.5 – Valuation of Purchase Orders
You want to order 100 units of the first and 100 units of the second item of exercise
7.3 from your vendor of exercise 3.2. Enter an appropriate purchase order choosing
the batch number B001 and a purchase price of GBP 80.00 in both order lines.
Once you have finished entering the order, confirm it and post the product receipt
and the vendor invoice for the entire quantity. In the Product receipt date (on the tab
Setup of the product receipt posting form) and in the Posting date (in the vendor
invoice), enter the day after the posting date of exercise 7.4 (e.g. July 2, if exercise
7.4 has been on July 1).
After posting the invoice, check the inventory transactions as well as the inventory
quantity and value (cost amount) of the two items.
Exercise 7.6 – Valuation of Sales Order
Your customer of exercise 4.1 orders 150 units of the first and 150 units of the
second item of exercise 7.3. Enter an appropriate sales order choosing the batch
number B001 in both order lines. Then post the sales invoice for the entire order
quantity. In the Invoice date on the tab Setup of the posting form, enter the day after
the posting date of exercise 7.5 (e.g. July 3, if exercise 7.5 has been on July 2).
After posting the invoice, check the inventory transactions as well as the inventory
quantity and cost amount of the two items again.
Exercise 7.7 – Closing Inventory
Run a Recalculation in the inventory closing form in order to calculate the correct
inventory value of your items according to the valuation method. In the
recalculation form, select an appropriate filter restricting calculation to your items
and set the recalculation date to the posting date of exercise 7.6 (e.g. July 3).
Then check the cost price and amount of the inventory transactions and the
inventory quantity for the two items. Which changes are a caused by recalculation,
can you explain the result?

7.4 Business Processes in Inventory

The only way for changing the inventory quantity of an item is to post an
inventory transaction. Yet most business processes changing inventory quantity do

mabenito@parcisa.com
308 7 Inventory Management

not origin in inventory management, but refer to procedures in other functional

areas like purchasing, sales or production. These procedures generate inventory
transactions automatically in the background.
Descriptions of processes in these areas are available in the corresponding chapter
of this book. The lines below therefore only cover business processes within
inventory management itself.

7.4.1 Inventory Structures and Parameters

As a prerequisite for entering inventory transactions, the setup of inventory
management has to be finished and required product records have to be available.

7.4.1.1 Warehouse and Location Structure

In order to represent the physical structure of inventory, Dynamics AX provides
three storage dimensions for grouping inventory within a company: Site, Warehouse
and Location. Depending on the applicable dimension group, you need to record
these dimensions in an inventory transaction.

Figure 7-15: Warehouse and location structure in Dynamics AX

Within one site, warehouses are the upper grouping level of inventory. Within one
warehouse, the structure of locations may include the following elements (compare
Figure 7-15):
¾ Aisle
¾ Rack
¾ Shelf
¾ Bin

mabenito@parcisa.com
7.4 Business Processes in Inventory 309

In addition, group locations by store areas and store zones if applicable. An

example for the use of store zones is the assignment of frozen products to chilled
locations by entering the applicable store zone on the tab Locations of the
warehouse items form (accessible by clicking the button Warehouse/Warehouse items
on the action pane tab Manage inventory of the released product form).
Note: In Dynamics AX 2012 R3, the new warehouse management includes other
options for flexibly setting up the warehouse structure (see section 8.1.1).

7.4.1.2 Warehouse Management

For setting up a new warehouse, access the form Inventory management> Setup>
Inventory breakdown> Warehouses. When inserting a new warehouse by clicking the
button New, enter the warehouse ID and the name. Then enter a Site in order to
link the warehouse to a site.
In the lookup field Type, specify if the warehouse is a regular warehouse
(“Default”), a quarantine warehouse, or a transit warehouse. Quarantine
warehouses are used for quarantine orders (see section 7.4.4), and transit
warehouses for transfer orders (see section 7.4.5).
The tab Master planning contains specific settings for the warehouse referring to
master planning. The tabs Warehouse management and Location names control
warehouse locations.

Figure 7-16: Managing warehouses in the warehouse form

7.4.1.3 Locations
The further organization of warehouses including aisles and locations as well as
the setup and assignment of store areas and store zones is available in the items of
the menu path Inventory management> Setup> Inventory breakdown. A detailed
description of location and pallet management in inventory is beyond the scope of
this book, however.

mabenito@parcisa.com
310 7 Inventory Management

7.4.1.4 Storage Dimensions

When setting up warehouse structures, be aware that the storage dimension group
of the individual released product controls, which inventory dimensions apply to a
particular inventory transaction. If you need locations for a particular warehouse,
the storage dimension groups of all involved items have to contain an active
dimension Location. Since this setting activates locations for all warehouses, you
need to set up at least one (pseudo-)location for each warehouse in this case.

7.4.1.5 Inventory Parameters and Journal Setup

If you want to enter a manual transaction in inventory, you have to register it in a
journal. Apart from warehouse structures, inventory journals therefore are another
required setup. They consist of two different groups:
¾ Inventory journals
¾ Warehouse management journals
Inventory journals apply to registering general transactions like item receipt, item
issue, item transfer, and inventory counting. In order to configure inventory
journals, access the form Inventory management> Setup> Journals> Journal names,
inventory. You have to set up at least one journal name for the Journal type
“Movement”, “Inventory adjustment”, “Transfer”, “BOM” and “Counting”, before
you can enter and post corresponding transactions. Assigning an appropriate
number sequence in the lookup Voucher series enables separate number sequences
for different journals.
Warehouse management journals as the other group of journals apply to
registering item receipts from vendors and – for item returns – customers in item
arrival journals, and item receipts of finished goods in production. For configuring
warehouse management journals, access the form Inventory management> Setup>
Journals> Journal names, warehouse management.
Inventory parameters are available in the form Inventory management> Setup>
Inventory and warehouse management parameters. Among others, they contain settings
for number sequences, the default unit of measure, the default calculation group,
and defaults for journal names. On the tab Inventory dimensions, choose the
dimensions which display as default per journal.

7.4.1.6 New in Dynamics AX 2012 R3

In Dynamics AX 2012 R3, you can optionally use the new warehouse management
module which includes other options for setting up the warehouse structure and
for registering transactions (see section 8.1).

7.4.2 Journal Transactions

You have to use an inventory journal, if you want to record a transaction
independent from other functional areas like purchasing, sales or production.

mabenito@parcisa.com
7.4 Business Processes in Inventory 311

7.4.2.1 Journal Structure

Since inventory transactions affect financial values, the voucher principle applies:
In a first step, the journal has to be entered, before it is possible to post it in a
second step. Every journal consists of a journal header and at least one line.
Inventory journals in Dynamics AX show a common structure with following
journal types for the different kinds of transactions:
¾ Movement
¾ Inventory adjustment
¾ Transfer
¾ Bills of materials
¾ Item arrival
¾ Production input
¾ Counting
¾ Tag counting

7.4.2.2 Movement Journals and Inventory Adjustment Journals

If you want to record manual item issues or receipts in inventory, either use a
journal of the type “Movement” or a journal of the type “Inventory adjustment”.
The difference between movement journals and inventory adjustment journals is
that movement journals show the field Offset account. The offset account contains
the expense or revenue account for the item receipt or consumption.
In inventory adjustment journals, the offset account derives from the inventory
posting setup and does not show in the journal lines. Therefore, choose a
movement journal for example if you want to post an item consumption of a
department referring to a specific main account.
Section 7.1.2 at the beginning of this chapter explains how to register and to post
an inventory adjustment journal.
For registering a movement journal, insert a new record in the form Inventory
management> Journals> Item transactions> Movement. In the field Offset account on the
tab General of the journal header, optionally enter a default for the offset account in
the journal lines. After switching to the lines, enter one or more lines with posting
date, item number, appropriate inventory dimension values, and quantity
(negative for item issues) as applicable. For item receipts, the cost price is editable
(receiving its default from the item). Finally post the movement after making sure
to apply the right main accounts in the column Offset account, and appropriate
financial dimension values on the tab Financial dimensions.

7.4.2.3 Transfer Journals

Unlike movement journals and inventory adjustment journals, which record issues
and receipts, transfer journals are used for registering the transfer of product
inventory from one dimension combination to another. In most cases, this is the

mabenito@parcisa.com
312 7 Inventory Management

transfer from one warehouse or location to another. But you may also post a
transfer to change the batch or serial number.
For registering an item transfer, open the form Inventory management> Journals>
Item transactions> Transfer. In addition to the data entered in inventory adjustment
journal lines, enter the applicable inventory dimensions to which the item should
be transferred.
Entering the Quantity with a negative sign issues the item from the “from-
dimensions” and receives it at the “to-dimensions”.

7.4.2.4 BOM Journals

Bill of materials journals, accessible through the menu item Inventory management>
Journals> Item transactions> Bills of materials, provide the option to post a receipt of a
finished items while consuming the components at the same time. Entering a
negative quantity enables posting the disassembly of a finished item.
Unlike the proceeding for other journals, you do not need to enter journal lines
manually in a bill of materials journal. In order to create journal lines, click the
button BOM/Report as finished in action pan strip of the BOM journal lines.

Figure 7-17: Report as finished form, opened from the bill of materials journal

In the report as finished form, create a line – e.g. pushing the shortcut key Ctrl+N –
and select the finished item which you want to receive in inventory. If you put a
checkmark in the column Post now, the bill of materials journal will immediately
post once you close the report as finished form by clicking the button OK. If the
checkbox Post now is cleared, the finished item and its component lines show in the
bill of materials journal lines, where you may edit them before posting.

7.4.2.5 Item Arrival Journals

Item arrival journals, accessible through the menu item Inventory management>
Journals> Item arrival> Item arrival, provide the option to post item receipts related
to purchase orders (see section 3.5.3) or customer returns (see section 4.6.4).
Production input journals, which are similar to item arrival journals, apply to
production order receipts.
Entering an item arrival journal works similar to entering an inventory journal. For
registering the reference to the purchase order, switch to the tab Default values in

mabenito@parcisa.com
7.4 Business Processes in Inventory 313

the journal header, and select the order number in the field Number after choosing
the option “Purchase order” in the lookup field Reference. For customer returns,
enter the Reference “Sales order” and the RMA number. Clicking the button
Functions/Create lines in the journal header then provides the option to default
items and open quantity from the order lines to the journal lines.
For posting the arrival journal, click the button Post after entering all lines. Unlike
inventory journals, which immediately post physical and financial transactions,
arrival journals require posting the product receipt and the vendor invoice of the
corresponding purchase order to generate physical and financial transactions.
If you want to apply warehouse transactions with locations and pallets, select
appropriate checkboxes in the arrival journal header (tab Default values, field group
Mode of handling).

7.4.3 Inventory Counting

In order to determine the actual quantity in inventory, you have to physically
execute inventory counting (stocktaking) in the warehouse. Depending on legal
and other requirements, periodical item counting might be required for making
sure that the posted quantity complies with the actually counted quantity.
In Dynamics AX, item counting is done in inventory journals for item counting.
When posting the item counting journal, the difference between the counted
quantity and the quantity in Dynamics AX posts as an item issue or receipt –
similar to the transactions in an inventory adjustment journal.
Since the counting difference is calculated as of the date entered in the counting
journal line, you do not need to stop other transactions in inventory while
counting. But if required because of organizational issues, lock inventory while
counting (Lock items during count on the tab General of the inventory parameters).
Note: In Dynamics AX 2012 R3, the new warehouse management includes other
options for inventory counting (see section 8.1.3).

7.4.3.1 Counting Journal

For registering a new counting journal, insert a journal header in the form
Inventory management> Journals> Item counting> Counting. When creating the journal
header, you have to choose the inventory dimensions which are the basis for the
counting journal. In the lines, there are two options for registering inventory
counting:
¾ Manual registration
¾ Automatically creating counting lines
If you want to enter a counting journal line manually, insert a line with counting
date, item number, warehouse and applicable dimensions like in any other
inventory journal. The counted quantity has to be entered in the column Counted.
The column On-hand then shows the corresponding current inventory quantity in

mabenito@parcisa.com
314 7 Inventory Management

Dynamics AX as of the counting date. The difference between the counted and the
on-hand quantity shows in the column Quantity, which also is the quantity of the
issue or receipt transaction posted when posting the inventory journal.

Figure 7-18: Entering the counted quantity in a counting journal line

If you want to create counting lines automatically instead of manually entering

them, click the button Create/On-hand in the action pane strip of the counting
journal lines. In the Create on-hand counting journal dialog, select a filter for the lines
– e.g. for counting on a particular warehouse. Additional parameters in the dialog
enable to restrict counting for example on items and inventory dimensions, which
show an inventory transaction after the last inventory counting.
Once you have finished creating counting journal lines manually or automatically,
print a counting list by clicking the button Print/Counting list in the counting
journal header if required (before or after entering the counted quantity).

7.4.3.2 Counting Groups

In order to support the selection of items when automatically creating counting
lines, you can filter on counting groups in the Create counting journal dialog.
Counting groups contain settings like the Counting code, which controls when to
execute counting (periodically, when equal or below minimum stock, or when
reaching zero stock). You may set up counting groups in the form Inventory
management> Setup> Inventory> Counting groups and assign items in the released
product form (tab Manage inventory) or in the warehouse items form (button
Warehouse/Warehouse items on the action pane tab Manage inventory of the released
product form).
In order to apply counting code settings when automatically creating counting
lines, select the checkbox Activate counting code in the Create counting journal dialog.

7.4.3.3 Tag Counting

Tag counting (Inventory management> Journals> Item counting> Tag counting) is an
option to pre-register counting lines. The principle of tag counting is to attach
numbered tags to the warehouse locations. When counting physically, write the
item number, the quantity, and applicable dimensions like warehouse and serial

mabenito@parcisa.com
7.4 Business Processes in Inventory 315

number on each tag. Then collect the tags and register them in the tag-counting
journal. When posting the tag-counting journal, there is no posting of inventory
transactions, but a transfer of the lines to a regular counting journal.

7.4.4 Quarantine and Inventory Blocking

If you want to exclude a particular quantity of an item from available stock – for
example because of the test results in quality control – you can alternatively use
following functionality in Dynamics AX:
¾ Quarantine Management
¾ Inventory Blocking
Inventory blocking manually or automatically generates a temporary transaction,
usually for quality inspection.
Quarantine management is based on quarantine orders, which post a transfer to a
quarantine warehouse. For this purpose, quarantine orders are generated
automatically with every item receipt, or manually when required. When working
with quarantine warehouses you have to take into account, that quarantine locks
items only by posting a quarantine order, and not by simply posting an inventory
transfer to the quarantine warehouse.
Note: In Dynamics AX 2012 R3, the new warehouse management does not use
quarantine orders but includes other options for blocking (see section 8.1.3).

7.4.4.1 Setup for Quarantine Management

As a prerequisite for working with quarantine in Dynamics AX, you have to set up
at least one warehouse of the type “Quarantine”. In the warehouse form (Inventory
management> Setup> Inventory breakdown> Warehouses), additionally assign a
quarantine warehouse to each regular warehouse with quarantine if you want to
use automatic quarantine for item receipts.
Automatic quarantine applies to released products, for which the checkbox
Quarantine management is selected in the corresponding item model group.

7.4.4.2 Manual Quarantine

For manually locking a particular quantity in inventory, open the form Inventory
management> Periodic> Quality management> Quarantine orders. The quarantine order
form shows a list of open quarantine orders, selecting the checkbox View ended you
may also view ended quarantine.

mabenito@parcisa.com
316 7 Inventory Management

Figure 7-19: Managing quarantine in the quarantine order form

For creating a quarantine order, insert a record with item number, quantity,
warehouse and applicable dimensions. The default for the quarantine warehouse
in the line derives from the quarantine warehouse of the initial warehouse in the
quarantine order. All other inventory dimensions for quarantine by default are
equal to the initial dimension values of the quarantine order. If you want to change
quarantine dimensions, display appropriate storage dimension columns by
clicking the button Inventory/Dimensions display, or switch to the tab Inventory
dimensions.
Clicking the button Start in the quarantine order form transfers the quantity to
quarantine. Transfer to quarantine includes moving the item to the quarantine
warehouse and reserving it for quarantine in order to block issue transactions. In
parallel to the quarantine transaction, Dynamics AX generates a second inventory
transaction without date for the future re-transfer to the original warehouse.
If you want to partly or completely scrap an item in quarantine later, click the
button Functions/Scrap.
In order to end quarantine with or without prior scrapping of a partial quantity,
click the button End in the quarantine order form. Ending quarantine posts the re-
transfer to the original warehouse and makes the quantity available again.
Clicking the button Report as finished in the quarantine order posts the completion
of inspections as an intermediate step. The item is not available in inventory before
ending the quarantine order, which is why you want to apply this step only if you
separately post pallet transports in warehouse management.

7.4.4.3 Automatic Quarantine

When posting item arrival journals, production input journals or product receipts,
Dynamics AX automatically creates and starts quarantine orders for items, which
are assigned to an item model group with Quarantine management selected. The
further proceeding of quarantine works similar to manual quarantine.

mabenito@parcisa.com
7.4 Business Processes in Inventory 317

7.4.4.4 Inventory Blocking

Inventory blocking usually applies in combination with quality orders in
Dynamics AX quality management. But you can also execute manual inventory
blocking without applying the quality management functionality.
In order to manually block an item, access the form Inventory management> Periodic>
Inventory blocking and insert a record registering item number, quantity and – on
the tab Inventory dimensions – applicable dimensions. If you expect the item to
become available again (like a quarantine order), select the checkbox Expected
receipts. Depending on the expected receipt, Dynamics AX generates one or two
inventory transactions showing “Inventory blocking” in the column Reference. In
order to end inventory blocking, simply delete the particular line in the inventory
blocking form.

7.4.4.5 New in Dynamics AX 2012

Inventory blocking is a new feature in Dynamics AX 2012.

7.4.5 Transfer Orders

Whereas inventory transfer journals are there for transferring items immediately
without shipping documents, transfer orders provide the option to consider
transport time and to print shipping documents.

7.4.5.1 Setup for Transfer Orders

As a prerequisite for working with transfer orders, you have to set up at least one
warehouse of the type “Transit”. This transit warehouse receives the items during
the transport time. In the warehouse form, additionally assign a transit warehouse
to each regular warehouse as a default for transits. If items apply the storage
dimension Location, you should specify a Default receipt location and a Default issue
location for the transit warehouse in the warehouse form.
Optionally, delivery date control applies to transfer orders (similar to sales orders,
see section 4.4.3).

7.4.5.2 Processing Transfer Orders

In order to enter a transfer order, access the form Inventory management> Periodic>
Transfer orders and click the button New in the action pane strip. The transfer order
consists of a header, where you have to enter the From warehouse and the To
warehouse, and transfer order lines.
After selecting the From warehouse in the header, the transfer order retrieves the
related transit warehouse. In the transfer order lines, enter one or more lines with
item number, transfer quantity and inventory dimensions as applicable then.
Similar to sales order processing, alternatively execute picking (see section 4.5.2) or
immediately post the shipment.

mabenito@parcisa.com
318 7 Inventory Management

Figure 7-20: Registering a line in a transfer order

If you want to post the shipment, click the button Posting/Ship transfer order. In the
upper pane of the Shipment posting form, choose the option “All” in the column
Update for shipping the complete quantity (or, depending on the previous steps,
choose the picked or the ship-now quantity) and then select the checkbox in the
column Edit lines. The checkbox Print transfer shipment enables printing a shipping
document. Clicking the button OK in the posting form posts a transfer to the transit
warehouse.
When receiving the item at the destination warehouse, process the receipt –
optionally posting separate inventory registration or item arrival before – similar to
a purchase order receipt.
For posting the transfer receipt, click the button Posting/Receive in the transfer order
form (similar to the product receipt in purchasing). In the Receive posting form,
choose the option “All” in the column Update (or, depending on previous steps,
choose the registered or the receive-now quantity) and select the checkbox Edit
lines. Clicking the button OK in the posting form then posts a transfer from the
transit warehouse to the final warehouse.

7.4.6 Case Study Exercises

Exercise 7.8 – Journal Transaction
In the main warehouse, you find 100 units of the item I-##, which you have set up
in exercise 3.5. Post an appropriate transaction in an inventory adjustment journal.
Exercise 7.9 – Transfer Journal
You want to transfer the quantity received in exercise 7.8 to another warehouse.
Register an appropriate inventory transfer journal and post it. After posting, check
the transactions and the quantity of your item on the selected warehouse.

mabenito@parcisa.com
7.4 Business Processes in Inventory 319

Exercise 7.10 – Inventory Counting

You want to execute inventory counting on the main warehouse for the item I-##,
which you have set up in exercise 3.5. The counted quantity is 51 units. You may
create a counting journal line either registering it manually or automatically
generating it, filtering on your item and the main warehouse. After entering the
counted quantity, post the journal and check the quantity on hand.
Exercise 7.11 – Manual Quarantine
Because of reported quality issues, you want to execute a quality check of the
quantity you have transferred in exercise 7.9. Enter a manual quarantine order,
choosing an appropriate quarantine warehouse. Check the quantity on hand of
your item and start the quarantine order. After performing quality inspection, end
quarantine and check the inventory quantity before and after ending.
Exercise 7.12 – Transfer Order
You want to transfer 60 units of the item relocated in exercise 7.9 back to the main
warehouse by processing a transfer order. Before entering the transfer order, make
sure a transit warehouse is assigned to the warehouse from where the item ships.
Then register an appropriate transfer order and post the shipment. After posting,
check the inventory transactions as well as the inventory quantity of your item on
all warehouses. Finally, receive the item transfer at the main warehouse.

mabenito@parcisa.com
8 Advanced Warehousing and Transportation

As a major change in comparison to the version R2, Dynamics AX 2012 R3 includes

the completely new warehouse and transportation management module.

8.1 Advanced Warehouse Management

The new warehouse management module in Dynamics AX 2012 R3 is based on the
WMS I functionality with inventory locations. It is an alternative to the WMS II
features (pallets and consolidated picking, see section 4.5.4). Both options – WMS II
and the new warehouse management – are optional enhancements of the core
warehouse functionality.
WMS II features are supported in AX 2012 R3, but you should not run the new
warehouse management processes and WMS II in parallel within one partition.
In the new warehouse management, transactions are to be registered on mobile
devices, which access a simple HTML-based portal. With its advanced options, the
new warehouse management module shows following features:
¾ HTML-based mobile device support
¾ Full visibility by generating regular inventory transactions
¾ Flexible setup through location directives and work templates
¾ Support of picking waves
¾ Simplified reservation through reservation hierarchies
¾ Storage dimension “Inventory status” for blocking
¾ Storage dimension “License plate” for handling units (replacing pallets in the
new warehouse management)

8.1.1 Core Setup for Warehouse Management Processes

Before starting to use warehouse management processes, you have to complete the
setup for warehouse management in following areas:
¾ Mobile device portal installation
¾ Warehouse-related settings
¾ Parameters and templates
¾ Setup for mobile devices
¾ Worker settings
¾ Product-related settings
The sections below show this required setup.

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_8, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
322 8 Advanced Warehouse and Transportation

8.1.1.1 Mobile Device Portal Installation

When installing Microsoft Dynamics AX 2012 R3, the mobile device portal has to
be installed as one of the components in Dynamics AX. For this purpose, select the
option “Warehouse Mobile Devices Portal” in the appropriate setup form for the
server to which the mobile devices should connect. In addition, the Internet
Information Server has to be installed on this server.
Take a note of the user (preferably a separate user only used for running the
portal) and the website port entered for the warehouse portal. Settings for the user
in Dynamics AX, who is linked to this Domain user, determine the data partition
and company in Dynamics AX accessed through the mobile device portal.
Note: If the mobile device portal is not installed, you can simulate the portal and
execute warehouse transactions through the class WHSWorkExecuteForm in the
development workspace (AOT> Classes> WHSWorkExecuteForm, right-click> Open).

8.1.1.2 Warehouse-Related Settings

For using the new warehouse management functionality, following setup is
required in relation to warehouses:
¾ Inventory status
¾ Location formats
¾ Location types
¾ Location profiles
¾ Warehouses and locations
Settings in the warehouse (and in the storage dimension group) control whether
the new warehouse management functionality applies.
Inventory Status
The new storage dimension “Inventory status” enables blocking of inventory and
eliminates the need for quarantine warehouses.
In the inventory status form (Warehouse management> Setup> Inventory> Inventory
status), create at least one status for available inventory. This status is required
even if you do not want to use the blocking feature. The column Inventory blocking
in the inventory status controls whether the status is blocking items.
You can set a default for the inventory status of transactions on multiple levels: On
company level (warehouse management parameters), on site level (site form), on
warehouse level (warehouse form), and in the default item status form (Warehouse
management> Setup> Inventory> Default item status). Section 8.1.3 describes how to
change the inventory status for blocking or unblocking an item then.
Blocking through the inventory status applies the regular blocking feature in
inventory (see section 7.4.4). The dimension “Inventory status” and the related
blocking functionality is only available when using a storage dimension group
which has the new warehouse management processes functionality enabled.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 323

Location Formats
Location formats provide a flexible setup for the structure of location IDs. Since it
is a required setup, create at least one format with its segments in the location
formats (Warehouse management> Setup> Warehouse setup> Location formats).
Location Types
Location types (Warehouse management> Setup> Warehouse setup> Location types) are
available for filtering and grouping purposes. As a minimum, one location type for
staging and one location type for shipping is required. After setting up location
types, enter the location types for staging and for shipping in the warehouse
management parameters.
Putting an item to the shipping location as the last step in processing a picking
wave (see section 8.1.2) sets the status of the inventory transaction to “Picked”.
Location Profiles
Location profiles group locations based on common characteristics for settings like
location format, license-plate tracking, mixed items, mixed inventory status, or
cycle counting.
For setting up the location profiles, access the menu item Warehouse management>
Setup> Warehouse setup> Location profiles and create a new record selecting the
appropriate location format. In location profiles for regular location, the checkbox
Allow cycle counting should be selected in order to enable counting.
In the location profiles for shipping and for staging locations, select the proper
location type for shipping or staging. The location profile for user locations needs
to be selected in the warehouse management parameters (Warehouse management>
Setup> Warehouse management parameters, tab General).

Figure 8-1: Setting up a location profile

mabenito@parcisa.com
324 8 Advanced Warehouse and Transportation

Warehouses and Locations

In addition to general settings in the warehouse form (Warehouse management>
Setup> Warehouse setup> Warehouses) as described in section 7.4.1, the tab Warehouse
management of the warehouse contains settings for the new warehouse
management module.
When setting up a warehouse, select the checkbox Use warehouse management
processes for applying the new warehouse management functionality. For accessing
the warehouse locations, click the button Inquiries/Inventory locations in the
warehouse form.
In the locations form, optionally click the button Location setup wizard for setting up
multiple locations. For each location, the assigned location profile controls the
characteristics of the location (e.g. the location ID format, the location type, or
settings whether to allow different items on one location).
In a typical warehouse, you may find following locations:
¾ Receiving location
¾ Shipping location (bay door)
¾ Staging location
¾ Buffer locations (bulk locations)
¾ Floor locations
User locations – used as intermediate locations for the time between picking from
one location and putting to the other location (e.g. transport with forklift) – are
generated automatically when setting up a warehouse user.
After setting up the locations, close the locations form and select a default receipt
location for the warehouse in the warehouse form (tab Inventory and warehouse
management).

8.1.1.3 Parameters and Templates

In the area of parameters and templates, following settings are required:
¾ Warehouse management parameters
¾ Work classes
¾ Work templates
¾ Location directives
¾ Wave process methods
¾ Wave templates
The warehouse management parameters (Warehouse management> Setup> Warehouse
management parameters) contain basic settings like number sequences in the
warehouse management module.
Work Classes
Work classes (Warehouse management> Setup> Work> Work classes) represent the
different kinds of work which are processed on mobile devices.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 325

The work class is a mandatory field in work template lines. In the mobile device
menu items, the work class determines which work you can execute through the
individual menu item. Work templates and mobile device menu items are
therefore connected through selecting a common work class.
Work Templates
Work templates (Warehouse management> Setup> Work> Work templates) control the
warehouse work (= which work is created) in pairs of pick and put.

Figure 8-2: Setting up a work template

Work templates are managed separately per source document type (“Work order
type”). If you want to edit the work templates related to a specific source
document type, for example “Purchase orders”, select the appropriate option in the
lookup field Work order type. In the work template lines, enter one line with the
Work type “Pick” and one line with the Work type “Put”. If required, you can enter
additional lines – for example with the Work type “Print”.
The button Edit query provides access to filtering criteria which control the
selection of a work template when automatically creating warehouse work. Since
Dynamics AX searches an appropriate template in the order of the Sequence
number, templates with more specific filter criteria should be first in the sequence.
Location Directives
Location directives (Warehouse management> Setup> Location directives) control the
way of material per Work order type for the generated warehouse work.
For example, the location directives for the Work order type “Purchase orders” and
the Work type “Put” determine to which location to put an item after receiving a
purchase order in the warehouse.

mabenito@parcisa.com
326 8 Advanced Warehouse and Transportation

Figure 8-3: Setting up a location directive

Like for work templates, Dynamics AX allows multiple location directives per
Work order type. In the location directives form, the upper pane (Location
directives) contains filter criteria on the source which triggers generating warehouse
work (e.g. a purchase order line with its warehouse and item). The button Edit
query provides access to filtering criteria based on item details and other relevant
data. The Warehouse is a mandatory field in the location directive and therefore
always applies as a filter.
In the Lines pane, you can additionally filter on quantity and units. The column
Unit refers to the from/to quantity columns. If you want to apply a directive based
on the unit, select the checkbox Restrict by unit and enter the unit after clicking the
button Restrict by unit (e.g. for moving full pallets of an item to buffer locations and
individual units to floor locations).
Since Dynamics AX searches an appropriate location directive in the order of the
Sequence number, directives (and directive lines within a directive) with more
specific filter criteria should be first in the sequence.
The Location Directive Actions pane specifies the location to which to put (if the
Work type selected on the tab Location directive is “Put”) or from which to pick (if the
Work type selected on the tab Location directive is “Pick”). Enter appropriate filter
criteria for this location after clicking the button Edit query in this pane. In the filter

mabenito@parcisa.com
8.1 Advanced Warehouse Management 327

dialog, you can switch to the tab Sorting to specify sorting criteria (e.g. referring to
the column Sort code in the warehouse locations).
If there are products with batch numbers, select the checkbox Batch enabled in the
location directive action for the work type “Pick” (as additional line if you got
some items with and other items without batch control).
Load Templates
Load templates (Warehouse management> Setup> Load> Load templates) represent the
different inbound and outbound transportation units (e.g. standard containers).
They are based on the different options for the physical dimensions of load.
When generating a load for an outbound shipment (see section 8.1.2), the load
refers to a load template. Loads then are the basis for planning and executing
transports in the transportation management module.
Wave Process Methods
Wave process methods (Warehouse management> Setup> Waves> Wave process
methods) are predefined steps used in wave processing. If the methods are not
initialized yet, click the button Regenerate methods for initializing.
Wave Templates
Wave templates (Warehouse management> Setup> Waves> Wave templates) control the
picking work referring to characteristics like grouping of work, automated steps,
and applicable methods.

Figure 8-4: Setting up a wave template

mabenito@parcisa.com
328 8 Advanced Warehouse and Transportation

In wave templates applying automatic wave creation, you can click the button Edit
query in order to specify filter criteria.

8.1.1.4 Setup for Mobile Devices

In the new warehouse management module, you can flexibly set up multiple menu
structures and items. The required settings include following items:
¾ Work user mobile device display settings
¾ Mobile device menu items
¾ Mobile device menus
Settings in the warehouse user control, which menu shows for a specific worker on
the mobile device.
Work User Mobile Device Display Settings
Work user mobile device display settings (Warehouse management> Setup> Mobile
device> Work user mobile device display settings) determine a default for the mobile
device display settings and refer to a style sheet on the Internet Information Server.
Mobile Device Menu Items
Mobile device menu items contain the forms which are available on mobile
devices.
For setting up a new menu item, access the form Warehouse management> Setup>
Mobile device> Mobile device menu items and create a new record. The Mode “Work”
refers to warehouse work (executing transactions), the Mode “Indirect” includes
inquiries and general features like logging off. For work items, the checkbox Use
existing work controls whether the menu item refers to work generated through a
work template before.

Figure 8-5: Setting up a mobile device menu item

mabenito@parcisa.com
8.1 Advanced Warehouse Management 329

If creating a menu item for creating work, deselect the checkbox Use existing work
and choose the applicable work item – for example “Purchase order item
receiving” – in the field Work creation process.
In menu items for existing work (checkbox Use existing work selected), the field
Directed by controls whether the system (“System-directed”) or if the user (“User-
directed”) determines which work to execute. For User-directed work, the
warehouse user has to enter or scan the work ID of the work he wants to execute,
whereas Dynamics AX shows which work to do next in case of System-directed
work. In case the option “User grouping” or “System grouping” is selected in the
field Directed by, the worker may register multiple work lines (pick lines) on the
mobile device, then push the button Done, and finally register one common or
multiple individual put transactions (controlled by checkbox Group put away).
The pane Work classes (in menu items for existing work) determines which work
you can execute through the menu item. The work class of warehouse work
derives from the related work template line.
Mobile Device Menus
Mobile device menus (Warehouse management> Setup> Mobile device> Mobile device
menu) determine the menu structure for the menu items on mobile devices. You
can set up multiple menus and submenus.

8.1.1.5 Work User Settings

The workers using mobile devices are workers in the human resources module.
For setting up a new worker, access the form Human resources> Common> Workers>
Workers and create a new record (see section 10.2.2).

Figure 8-6: Setting up a warehouse worker

mabenito@parcisa.com
330 8 Advanced Warehouse and Transportation

Based on the worker record in the human resources module, create company-
specific warehouse workers in the form Warehouse management> Setup> Work users>
Worker. For each worker, you can enter one or more work users on the tab Users.
User ID and password for the work users apply for logging on to the mobile
device.
Multiple work users for one worker provide the option to display different menus
for one worker depending on the warehouse. If a work user may switch between
warehouses, click the button Warehouses in the work users form and enter
applicable warehouses.
Creating a work user automatically creates a related location which is used as
intermediate location when executing warehouse work.
Note: If you do not want to set up warehouse workers as workers in human
resources, you can create one “dummy” worker in human resources and enter
multiple different warehouse work users referring to this common worker record.

8.1.1.6 Product-Related Settings

Related to products, following setup is required for using the new warehouse
management functionality:
¾ Storage dimension groups
¾ Reservation hierarchy
¾ Unit sequence groups
¾ Released products
The storage dimension group as core setting controls whether the new warehouse
management functionality applies to a released product.
Storage Dimension Groups
In the storage dimension groups (Product information management> Setup>
Dimension groups> Storage dimension groups), set up at least one storage dimension
group with the checkbox Use warehouse management processes selected. This setting
activates the inventory dimensions Inventory status and License plate.
Reservation Hierarchy
In the reservation hierarchies (Warehouse management> Setup> Inventory> Reservation
hierarchy), set up at least one reservation hierarchy. Reservation hierarchies
determine, which inventory dimensions are available for reservation in sales
orders and other outbound transactions:
¾ Dimensions above the dimension Location are available for reservation in the
order line.
¾ The location itself and the dimensions below are reserved when generating
warehouse work.
For batch controlled items applying FEFO date control, the hierarchy should show
the batch number above the location for enabling batch reservation from the order.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 331

Figure 8-7: Setting up a reservation hierarchy

Unit Sequence Groups
Unit sequence groups (Warehouse management> Setup> Warehouse setup> Unit
sequence group) determine which units of measurement you can use for registering
warehouse work.
The checkboxes Default unit for purchase and transfer and Default unit for production
in the unit sequence group control which unit applies as default for receiving
assigned items (e.g. pallets for purchase receipts). The checkbox License plate
grouping controls whether Dynamics AX generates a separate license plate per unit
(e.g. pallet) or one common license plate for all pallets when receiving an item.
In the released product form, each item is assigned to a unit sequence group.
Settings in the Released Products
Apart from general settings in the released products (Product information
management> Common> Released products) as described in section 7.2, following
settings are required for the new warehouse management functionality:
¾ A storage dimension group with enabled warehouse management processes
¾ A reservation hierarchy
¾ A unit sequence group
For assigning the Reservation hierarchy, click the appropriate button in the group Set
up of the action pane tab Product. The inventory dimensions in the reservation
hierarchy have to match the active dimensions in the dimension groups of the
item.
The Unit sequence group of the item is available on the tab Warehouse management of
the released product form. Depending on the units in the selected unit sequence
group, enter appropriate unit conversions for the item.

mabenito@parcisa.com
332 8 Advanced Warehouse and Transportation

8.1.2 Inbound and Outbound Transactions

Core warehouse transactions include inbound and outbound processes. These
processes are triggered by source documents like purchase or sales orders, which
are entered in the Dynamics AX Windows client. For registering the actual
transaction in the warehouse then, a mobile device connected to the warehouse
portal is required.
The figure below gives an overview of the warehouse layout and the structure of
warehouse work, which is the basis for warehouse transactions.

Figure 8-8: Warehouse layout and the structure of warehouse work

8.1.2.1 Core Inbound Processes

As an example for an inbound process, the lines below describe receiving a
purchase order. Inbound processes based on other source documents – e.g.
receiving a finished product from a production order – work similar.
Starting point for this inbound process is a confirmed purchase order with an order
line in which the product and the warehouse are enabled for the new warehouse
management processes.
When receiving the item in the warehouse, open a menu item for purchase order
receiving in the warehouse portal on the mobile device. After registering
(scanning) the purchase order number and the line or the item in the portal page,

mabenito@parcisa.com
8.1 Advanced Warehouse Management 333

Dynamics AX receives the item on the default receipt location of the warehouse
and generates warehouse work for putting the item to the bulk or floor location.
Putting the item to the bulk/floor location is a second step based on warehouse
work automatically generated in the first step. You can view this work in the menu
item Warehouse management> Common> Work> All work.
Location directives determine the applicable put location of the warehouse work,
but depending on settings in the work user you can override this location. Register
the put transaction in the appropriate separate menu item on the mobile device.

Figure 8-9: Registering the receive and the put transaction on the mobile device

If the menu item selected for registering the receipt transaction refers to the
creation process “Purchase order item receiving and put away” or “Purchase order
line receiving and put away” (option in the field Work creation process of the Mobile
device menu item setup form), receiving and putting away is done in one common
transaction. Separately registering the put transaction is not required in this case.

8.1.2.2 Core Outbound Processes

As an example for an outbound process, the lines below describe shipping a sales
order. Outbound processes based on other source documents – e.g. picking raw
material for a production order – work similar.

Figure 8-10: Overview of the outbound process

Starting point for this outbound process is a sales order with an order line in which
the product and the warehouse are enabled for the new warehouse management
processes.

mabenito@parcisa.com
334 8 Advanced Warehouse and Transportation

Click the button Inventory/Reservation in the order line and reserve the item
through the new reservation functionality with reservation hierarchies. This
manual reservation is not required if automatic reservation applies.
Creating Shipments
Shipments (Warehouse management> Common> Shipments> All shipments) represent
separate deliveries. The shipments in the new warehouse management module are
independent from the shipment menu item (WMS II-shipments) in the inventory
module (described in section 4.5.4) – do not confuse these forms.
For shipping a complete sales order, you can create the shipment directly in the
sales order form by clicking the button Release to warehouse on the action pane tab
Warehouse management. After creating the shipment, the order header shows the
status “Released” (column Release status in the sales order list page).
Alternatively, you can create shipments automatically through the batch job
Warehouse management> Periodic> Auto release to warehouse. This batch job applies
related warehouse management parameter settings as minimum criteria for
releasing.
If the load is already created before creating the shipment (e.g. for transportation
planning purposes), generate the shipment from the load in the load planning
workbench (see section 8.2.2).
Creating Loads
A load (Warehouse management> Common> Loads> All loads) represents an inbound
or outbound transportation unit. One load contains one or more shipments.

Figure 8-11: Creating the load in the shipment form

One order line (source document line) may split into multiple shipments and
loads, for example if the transportation unit is too small for the order line. In this

mabenito@parcisa.com
8.1 Advanced Warehouse Management 335

case, reduce the quantity when creating the first load and then create a second
load.
For creating a load manually, click the button Transfer shipment to new load in the
shipment form. If you want to ship multiple orders together, add them to one
common load (button Transfer the shipment to an existing load).
Depending on settings in the warehouse management parameters, loads are
created automatically at order entry. If the load is not created before processing the
wave, it is generated automatically at this step.
Creating and Releasing Waves
A wave (Warehouse management> Common> Waves> Shipment waves> All waves) is a
group of shipments to be processed together. For creating a wave, click the button
New in the wave form and add one or more shipments to the wave by clicking the
button Maintain shipments in the wave form.

Figure 8-12: Creating a wave

Then process the wave by clicking the button Process in the wave form. Processing
a wave generates the warehouse work. You can view this work by clicking the
button Work in the action pane of the wave form or through the menu item
Warehouse management> Common> Work> All work.
Before you can actually start executing the warehouse work linked to a wave, the
work has to be unblocked by releasing the wave (button Release in the wave form).
Depending on settings in the wave template, waves are created and processed
automatically. If automatic wave processing applies, settings in the warehouse
management parameters determine whether wave processing runs online or in a
batch job.

mabenito@parcisa.com
336 8 Advanced Warehouse and Transportation

Executing Picking Work on the Mobile Device

Work is the instruction of what to do where and how. Dynamics AX creates work
based on the applicable work template in pairs of two or more pick/put steps
(work lines), which are processed on mobile devices.
For processing the wave in the warehouse, access a menu item for sales order
picking on the mobile device. Depending on settings in the menu item (options in
the field Directed by), Dynamics AX shows the picking work to be executed
(“System-directed”) or you have to enter or scan (usually scanning from a printed
picking list) the work ID of the work created from the wave. Then confirm picking
the item from the location determined by the applicable location directive for the
work type “Pick”. Finally put the item to the outbound location given by the
location directive for the work type “Put”.

Figure 8-13: Registering the receive and the put transaction on the mobile device

Depending on settings in the work user you can override the pick- and the put-
location. Settings in the wave template control whether there are additional steps
for staging and replenishment.
Confirming Shipments
As the last step in the outbound warehouse process, confirming closes the
shipment and the load. There are two options for confirming a shipment manually:
¾ In the shipment form – Click the button Confirm shipment (only available if the
load does not contain multiple shipments).
¾ In the load form – Click the button Confirm/Outbound shipment on the action
pane tab Ship and receive.
Alternatively, automatic confirmation is possible through appropriate work audit
templates.
After confirming the shipment, you can post the packing slip by clicking the button
Print/Packing slip in the shipment form (select the checkbox Display closed shipments
if the shipment does not show). Alternatively, you can post the packing slip in the
sales order as usual.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 337

8.1.2.3 Task Automation

Instead of manually executing activities or reporting transactions, there is the
option to automatically perform specific tasks. Depending on the setup, Dynamics
AX provides following options:
¾ Automatically reporting warehouse work:
o Checkbox Automatically process in work templates (for automatically
executing the work when releasing a wave)
o Button Work confirmation setup in mobile device menu items (e.g. auto
confirm put work in order to enable registering pick work only)
¾ Automating tasks in the picking process:
o Automatically releasing to warehouse (batch job)
o Automatically creating waves
o Automatically processing waves (in a batch or online)
o Automatically releasing waves
o Automatically generating loads
Primary settings for automatically creating and processing waves are available in
the wave template and in the warehouse management parameters.

8.1.2.4 Location Directive Codes

Location directive codes provide the option to link work templates with location
directives. For using location directive codes, following setup is required:
¾ Create directive codes (Warehouse management> Setup> Directive codes)
¾ Select the directive code in applicable work template lines
(available for put-instructions of outbound processes)
¾ Select the directive code in location directives as needed
When creating work with a location directive, Dynamics AX does not
independently select the work template and location directive, but selects the work
template and applies the location directive with the same directive code.

8.1.2.5 Staging
Staging is used to collect and prepare picked items before loading the truck.
Following setup is required if you want to apply staging:
¾ Create a work template for the work order type “Sales orders” with work lines
for staging and for loading
¾ Create related location directives for the work order type “Sales orders”
For executing outbound processes with staging, create the shipment, the load, and
the wave for sales order picking (the work template for staging and loading has to
apply), and release the wave.

mabenito@parcisa.com
338 8 Advanced Warehouse and Transportation

Figure 8-14: Location directives and work template for staging

On the mobile device, the warehouse work for picking and for loading has to be
registered in separate steps then.

8.1.2.6 Replenishment
The target of replenishment within the warehouse is to move required items from
buffer locations to picking locations in order to achieve short ways in the picking
process.
Dynamics AX supports two basic strategies for replenishing warehouse locations:
¾ Based on minimum/maximum quantities
(using minimum and maximum stocking limits)
¾ Based on demand
(replenishment for outbound orders if inventory is not available)
As a prerequisite for using replenishment, following setup is required:
¾ Replenishment templates
¾ Work templates and location directives for replenishment
¾ Mobile device menu items for replenishment
¾ Fixed locations (optional)
After setting up replenishment, there are following options for creating
replenishment work:
¾ Batch job for replenishment (for minimum/maximum replenishment)
¾ Batch job for load demand replenishment (for load demand templates)
¾ Additional wave step in wave processing (for wave demand templates)
The difference between wave demand replenishment and load demand
replenishment is that wave demand is processed automatically through the wave
template whereas load demand has to be calculated through the batch job.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 339

Minimum/Maximum Replenishment
Minimum/maximum replenishment applies if you want to fill a location to the
maximum once the current quantity is below minimum. For using minimum/
maximum replenishment, following setup is required:
¾ Create a replenishment template with the Replenishment type “Minimum or
maximum” (Warehouse management> Setup> Replenishment> Replenishment
templates)
¾ Create a work template and location directives for the work order type
“Replenishment”
¾ Create fixed locations for items (Warehouse management> Setup> Warehouse setup>
Fixed locations) – required if you want to refill empty locations
¾ Create a mobile device menu item for replenishment and include it in the menu

Figure 8-15: Setting up a minimum/maximum replenishment template

For processing minimum/maximum replenishment, run the replenishment batch

job (Warehouse management> Periodic> Replenishments) which generates the
replenishment work. In the warehouse, execute the replenishment on the mobile
device then (menu item for replenishment).
Wave Demand Replenishment
Wave demand replenishment applies if you want to refill a location in the course
of processing a wave. In this case, a replenishment is only created if there is no
quantity available on the location selected by the location directive for picking.
For using wave demand replenishment, following setup is required:
¾ Create a replenishment template with the Replenishment type “Wave demand”
and a Wave step code
¾ Create a wave template with the additional method “replenish” and the wave
step code of the replenishment template
¾ Create a work template and location directives for the work order type
“Replenishment” (Match put locations in this directive with pick locations in
the sales order directive)

mabenito@parcisa.com
340 8 Advanced Warehouse and Transportation

¾ If you want settings which are different from regular picking, create a work
template and location directives for the work order type “Sales orders”
¾ If missing, create a mobile device menu item for replenishment and include it in
the menu
If selecting automatic wave release in the wave template, also select the checkbox
Automate replenishment (Replenishment has to be released and executed before sales
picking).
For executing the wave replenishment, create the shipment, the load, and the wave
(applying the wave template for replenishment) for sales order picking, and release
the wave. If no quantity is available on the picking location, a replenishment wave
and replenishment work is created when processing the sales order wave.
In the warehouse, first execute the replenishment work on the mobile device. Then
execute picking and loading on the mobile device.

8.1.2.7 Work Pools

Work pools support grouping of work, for example for collecting work in a
particular warehouse zone. For using work pools, following setup is required:
¾ Create work pools (Warehouse management> Setup> Work> Work pools)
¾ Select the work pool in applicable work templates
¾ Create or adjust mobile device menu items for using work pools
(Directed by = “System grouping”, System grouping field = “workpoolid”)
In the work records, the work pool is an editable field receiving the default from
work template.
On the mobile device, the work pool displays instead of the work ID when
accessing a menu item configured for using work pools. The work is grouped by
the work pool then.

8.1.2.8 Cluster Picking

Cluster picking supports grouping of work as specified by the warehouse worker,
for example for picking multiple work orders from one location. Assigning work
orders to a cluster is done on the mobile device. If you want to apply cluster
picking, following setup is required:
¾ Create cluster profiles (Warehouse management> Setup> Mobile device> Cluster
profiles) for creating clusters and for continuing on clusters
¾ Create mobile device menu items for the cluster profiles with the option
Directed by = “Cluster picking” and the appropriate cluster in the field Cluster
profile ID and include them in the mobile device menu
¾ Create or adjust work templates and location directives (if using settings
different from regular picking)

mabenito@parcisa.com
8.1 Advanced Warehouse Management 341

At least one cluster profile and menu item is required for creating clusters
(checkbox Generate cluster ID selected), and one profile and menu item without
generating clusters. This second menu item is used for continuing to work on a
cluster passed from somebody else.
For processing cluster picking, create the shipment, the load, and the wave for
sales order picking, and release the wave. On the mobile device, select the menu
item for generating a cluster. Registering pick and put work is not different to
regular picking, but you can pick multiple work orders within one cluster. For
transferring a started cluster to another worker, click the button Pass on the mobile
device. The other worker can resume the cluster through the menu item for picking
a cluster.

Figure 8-16: Setting up a cluster profile

In the Dynamics AX Windows client, you can view clusters in the form Warehouse
management> Inquiries> Work clusters.

8.1.3 Operations within the Warehouse

Apart from inbound and outbound transactions, operations in the warehouse
include internal transactions like counting and movements between locations. In
addition, warehouse responsibilities comprise other tasks like inventory blocking.

8.1.3.1 Inventory Blocking

Blocking in inventory is used to prevent transactions, for example selling an item
quantity which has got quality issues. In the new warehouse management,
blocking is possible by changing the storage dimension Inventory status. This
blocking applies the standard inventory blocking feature in the inventory module
(see section 7.4.4).
When blocking a quantity in inventory, it cannot be used in outbound transactions.
Receiving a purchase line with the status “Blocked” blocks the received quantity.
Following setup is required in order to use the inventory status for blocking:

mabenito@parcisa.com
342 8 Advanced Warehouse and Transportation

¾ Inventory status values (see section 8.1.1)

¾ Disposition codes (required for changing the status on mobile devices)
¾ Mobile device menu items
Once the setup is done, there are several options for changing the inventory status:
¾ On the mobile device:
o In a separate transaction
o In parallel when registering a movement or an inbound arrival
¾ In the Dynamics AX Windows client
o In a periodic activity
o In the on-hand inquiry by location
o Automatically from a quality order
Setup for Blocking Inventory on Mobile Devices
Forms for blocking inventory on the mobile device do not directly show the
inventory status, but the disposition code. Each disposition code (Warehouse
management> Setup> Mobile device> Disposition codes) is linked to an inventory status.
You can create multiple disposition codes linked to the same inventory status.
If you want to be able to change the inventory status through the disposition code
in a separate transaction on the mobile device, create a mobile device menu item
with the option Work creation process = “Quarantine” and include it in the mobile
device menu.

Figure 8-17: Setting up a mobile device menu item for changing the inventory status

For the additional or alternative option to change the status when registering an
inbound arrival or a put-away movement, select the checkbox Display disposition
code in applicable mobile device menu items for these transactions. If the location
selected for the put away of the received items should depend on the disposition
code, additionally create a location directive with the applicable disposition code.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 343

Changing the Inventory Status

Changing the inventory status for blocking or unblocking inventory generates an
inventory transaction. You can execute inventory status changes on the mobile
device or in the Dynamics AX Windows client.
On the mobile device, you have got following options:
¾ If you want to change the inventory status in a separate transaction, select the
appropriate menu item on the mobile device.
¾ If you want to change the inventory status in parallel when registering an
arrival or a put-away, the checkbox Display disposition code has to be selected in
the applicable menu item. On the mobile device, select the required code in the
Disposition code field which displays then.
In the Dynamics AX Windows client, you got following options
¾ Menu item Warehouse management> Periodic> Inventory status change with
detailed filtering options
¾ Menu item Warehouse management> Periodic> Warehouse status change for
blocking/unblocking based on a warehouse selection
¾ Clicking the button Quarantine in the on-hand inquiry by location (Warehouse
management> Inquiries> On hand by location)
¾ Changing the inventory status automatically from a quality order if the
applicable test group is set up accordingly (Inventory management> Setup>
Quality control> Test groups, checkbox Update inventory status on the tab General)
On a license plate, a mixed inventory status with one part of the quantity blocked
and another part unblocked is not possible. For blocking a partial quantity of a
license plate, move the required quantity to another license plate and block it there.
For locations, you can specify in the location profile whether a mixed inventory
status is allowed.

8.1.3.2 Movements and Adjustments

Movements and adjustments are manual transaction in inventory. Apart from
registering these transactions on a mobile device as shown below, you can also use
regular inventory journals (see section 7.4.2) and enter all required inventory
dimensions manually.
Warehouse Movements
Movements are used for manual transactions between the locations within one
warehouse.
As a prerequisite for registering movements on a mobile device, set up a mobile
device menu item with the option Work creation process = “Movement” and include
it in the mobile device menu. On the mobile device, you can execute movements
choosing this menu item then.
If you want to use movements with location directives, the following setup applies:

mabenito@parcisa.com
344 8 Advanced Warehouse and Transportation

¾ A mobile device menu item with the option Work creation process = “Movement
by template” and the checkbox Create movement selected
¾ A second menu item with the checkbox Use existing work selected
¾ A work template and location directives for the work order type “Inventory
movement”
Positive and Negative Adjustments
Adjustments are used for manually increasing or reducing the quantity on hand. If
you want to register manual adjustments on the mobile device, following setup is
required:
¾ Adjustment types (Warehouse management> Setup> Inventory> Adjustment types)
¾ A mobile device menu item with the option Work creation process = “Adjustment
in” (and/or “Adjustment out”) which is included in the mobile device menu
Adjustments generate inventory transactions through inventory counting journals.
The journal name used for this transaction is specified in the adjustment type.

Figure 8-18: Recording an adjustment on the mobile device

For recording an adjustment on the mobile device, select the menu item for
“Adjustment in” or “Adjustment out” and enter the transaction quantity by which
you want to change inventory. The quantity is always a positive number, for
increasing the inventory quantity select “Adjustment in” and for reducing
“Adjustment out”.

8.1.3.3 Inventory Counting

Counting is used to audit the on-hand quantity of items, generating inventory
transactions for discrepancies.
The new warehouse management supports following strategies for counting:
¾ Planned counting
¾ Threshold counting
¾ Spot counting

mabenito@parcisa.com
8.1 Advanced Warehouse Management 345

Following setup is required for executing all kinds of inventory counting on

mobile devices:
¾ In the location profile of relevant locations, select the checkbox Allow cycle
counting
¾ Enter a default adjustment type and a default work class for cycle counting in
the warehouse management parameters
¾ The unit sequence group controls the units available for counting
In the warehouse management parameters, an adjustment type is specified as
default adjustment type for cycle counting. If the checkbox Remove reservations is
selected in this adjustment type, reservations for sales orders (and other issue
transactions) do not block counting.
Planned Counting
Planned counting is used to create and execute counting work periodically. An
example for this is the annual stocktaking process.
In addition to the general setup for counting on the mobile device, following setup
is required for planned counting:
¾ Create a mobile device menu item for cycle counting
o Select the checkbox Use existing work and select the work class for counting
in the work classes pane.
o Click the button Cycle counting for specifying additional parameters (e.g.
how often you have to count again if there is a discrepancy).
¾ In the work user records, select if the worker is a supervisor or which counting
discrepancy is allowed without approval.
¾ For automatically creating planned cycle counting, set up a cycle count plan
(Warehouse management> Setup> Cycle counting> Cycle count plans).
Executing planned counting includes three steps:
¾ Generate counting work:
o For creating work based on cycle count plans, click the button Process cycle
counting plan in the cycle count plan. Alternatively choose the menu item
Warehouse management> Common> Cycle count scheduling.
o For creating counting work independently from cycle count plans, choose
the periodic activity Warehouse management> Periodic Cycle count work by
location or Warehouse management> Periodic Cycle count work by item.
¾ Execute counting on the mobile device:
o Execute counting in the appropriate menu item. In case of discrepancies, the
location has to be recounted depending on the settings for the menu item.
o Depending on work user settings, discrepancies are posted immediately in
inventory.

mabenito@parcisa.com
346 8 Advanced Warehouse and Transportation

¾ Resolve discrepancies:
o The work form (Warehouse management> Common> Work> Cycle count work
pending review) shows discrepancies which are not posted. Click the button
Cycle counting for accessing the cycle counting review form and click the
button Accept error there.
Threshold Counting
Threshold counting is a strategy to execute counting automatically when inventory
reaches the threshold limit.
As a prerequisite for threshold counting, you have to set up a cycle counting
threshold (Warehouse management> Setup> Cycle counting> Cycle count threshold). The
buttons Select items and Select locations provide the option to specify filter criteria
for the threshold.

Figure 8-19: Setting up a cycle counting threshold

After finishing the setup, registering an outbound transaction on the mobile device
(e.g. picking) triggers threshold counting if the quantity on the location reaches the
cycle counting threshold.
If the checkbox Process cycle counting immediately in the cycle counting threshold is
selected, a form for counting displays immediately when registering the outbound
transaction.
If the checkbox Process cycle counting immediately is not selected, work for cycle
counting is generated. This work has to be executed on the mobile device later in
line with the regular planned counting work.
Spot Counting
Spot counting is an ad-hoc counting on the mobile device.
As a prerequisite for spot counting, create a mobile device menu item for spot
counting with the option Work creation process = “Spot cycle counting”. In the
mobile device menu item, click the button Cycle counting for specifying additional
parameters. Then include the menu item in the mobile device menu.
After finishing the setup, you can execute counting in the menu item for spot
counting (similar to periodic cycle counting, but you are free to choose the
location). Posting and resolving discrepancies works like for periodic counting.

mabenito@parcisa.com
8.1 Advanced Warehouse Management 347

8.1.3.4 Warehouse Inquiries

Inquiries on the mobile device enable warehouse workers to view the posted
inventory quantity. In order to provide such an inquiry, create a mobile device
menu item with the Mode “Indirect”. If you want to create an inquiry of the item
quantity for example, select the Activity code “Item inquiry” in the mobile device
menu item.
On the mobile device, you can access the inquiry in the appropriate menu item
then. In case of an item inquiry, enter/scan the item number for viewing the
quantity on the different locations.
In the Dynamics AX Windows client, the on-hand inquiry by location (Warehouse
management> Inquiries> On hand by location) is one of the main inquiries for viewing
the current inventory in the new warehouse management module. After selecting a
warehouse, the inquiry shows the locations with the item quantities. The button
Quarantine provides the option to change the inventory status.

8.1.4 Case Study Exercises

Exercise 8.1 – Warehouse Setup
In order to investigate the options for warehouse setup, create a new location
format L-## (## = your user ID) with two segments: A segment with a length of one
digit, followed by the separator “-” and a 3-digit segment.
Then set up a location profile F-## for floor locations, and a location profile B-## for
bulk locations. Both location profiles refer to the new location format L-## and
allow cycle counting, but only the floor locations use license plate tracking. The
other options in the location profile form remain empty.
In the next step, set up a new warehouse WH-## which applies warehouse
management processes. This warehouse got one receiving location “RECV”, one
shipping location “SHIP”, three floor locations (“F-001” to “F-003”), and six bulk
locations (“1-001” to “2-003). Floor locations and bulk locations refer to the
appropriate location profiles created before. The location “RECV” is the Default
receipt location in your warehouse.
Exercise 8.2 – Work Template, Location Directive and Wave Template
You want to keep the purchase put-away work for your new warehouse WH-##
separately. Create a new work class PO-## (## = your user ID) for this purpose.
Then create a new work template for purchase orders, which only refers to your
warehouse and this work class. In addition, you need a sales order work template
which only applies to your warehouse and includes one pair of pick and put work
(no staging). This work template refers to an existing sales order work class.
In order to use a warehouse in purchasing and sales, related location directives are
required. Create a location directive for your warehouse WH-##, which specifies to
move purchase order receipts to bulk locations in case of full pallets and to floor

mabenito@parcisa.com
348 8 Advanced Warehouse and Transportation

locations otherwise. Then enter another location directive for sales picking which
should pick full pallets from bulk locations. Other units should be picked from
floor locations first, and in second line from bulk locations (if floor locations are
empty). The sales order put location directive should direct to the location “SHIP”.
Finally set up a wave template “T-##” for your warehouse WH-## which does not
apply any automatic action.
Exercise 8.3 – Mobile Device Menu and Work User
A new mobile device menu for executing warehouse work in the following
exercises is required. Create following mobile device menu items for this purpose
(select to generate license plates automatically):
¾ Menu item ##-PO-Receive with the Work creation process “Purchase order line
receiving”
¾ Menu item ##-PO-Move (referring to the work class created in exercise 8.2 and
Directed by = “User directed”) for moving the purchase receipt from the receipt
location to floor or bulk locations
¾ Menu item ##-SO-Direct (referring to the sales order work class selected in
exercise 8.2 and Directed by = “User grouping”) for sales order picking
Then set up a new mobile device menu “##-Main” containing these menu items. In
addition, this menu should include a menu item “About” and a menu item for
logging off.
In the warehouse work users, create a new worker record referring to your worker
“W-##” of exercise 2.8. On the tab Work users, enter a user with the User ID U##.
Select the Menu name created before and the warehouse WH-## (created in exercise
8.1) for this user.
Exercise 8.4 – Released Product for Advanced Warehousing
In order to apply the new warehouse management in AX 2012 R3 for a product,
you need an appropriate storage dimensions group, reservation hierarchy, and
unit sequence group. You can use an existing storage dimension group, but you
want to create a new reservation hierarchy R-##, which does not contain tracking
dimensions, and a unit sequence group U-##, which include pieces and pallets
(pallets as default unit for purchase).
Create an item I-##-W with the name “##-NewWarehousing” in the released
product form. It should be a regular stocked product without variants or batch
numbers, but you want to use the new warehouse processes. The item group
should be appropriate for merchandise, and the item model group should refer to
FIFO-valuation. The item does not require approved vendors. The item sales tax
groups for sales and for purchasing should refer to the standard tax rate. The base
purchase price and the base cost price are 50 pounds, the base sales price is 100
pounds. The unit of measure for the item is “Pieces” in all areas except purchasing.
For purchasing, you want to apply pallets (1 pallet = 10 pieces) as default. Make

mabenito@parcisa.com
8.1 Advanced Warehouse Management 349

sure to choose the same units of measurement which you have selected when
creating the unit sequence before. Then assign the new item to the unit sequence
group U-## and the reservation hierarchy R## created before.
Note: If a Balancing financial dimension applies, enter a default value for this
dimension on the tab Financial dimensions of the released products.
Exercise 8.5 – Advanced Warehousing in Purchasing Processes
You want to order 34 units of the item I-##-W (created in exercise 8.4) from any
vendor (e.g. the vendor of exercise 3.2) to be received on your warehouse WH-##
(created in exercise 8.1). Enter an appropriate purchase order and confirm it. Check
the inventory transaction related to the purchase order line afterwards.
Then log on to the mobile device portal using the credentials of the work user U-##
(created in exercise 8.3). Access the menu item for receiving the purchase order and
post the receipt for the complete quantity of your purchase order. Which status do
the inventory transactions of your item show? Access the inquiry “On hand by
location” in the warehouse management menu, filter on your warehouse WH-##
and take a note of the license plate shown for the posted quantity.
In the next step, access the mobile device menu item for moving the purchase
receipt. Post the transaction there (refer to the license plate shown in the previous
inquiry). Review the inventory transactions and the inquiry “On hand by location”
for your warehouse WH-## again. What is different now? Finally, post the product
receipt for the purchase order based on the mobile device transactions registered
before.
Exercise 8.6 – Advanced Warehousing in Sales and Distribution
A customer (e.g. your customer of exercise 4.1) orders 12 units of your item I-##-W,
which you have purchased in the previous exercise. Enter an appropriate sales
order to be shipped from your warehouse WH-##, reserve the quantity, and create
the shipment. Which status do the inventory transactions of your item show?
Then create a load for the shipment, and create a wave choosing the wave template
T-## created in exercise 8.2. Take a note of the Work ID generated when processing
the wave and release the wave. Check the inventory transactions of your item,
what is different now? Then review the inquiry “On hand by location” for your
warehouse WH-## and take a note of the license plate shown for the floor location.
In the next step, access the mobile device menu item for sales order picking (logged
on as the work user U-## created in exercise 8.3). Post the picking transaction
entering the work ID and – when picking from the floor location – the license plate
as reviewed before.
Check the inventory transactions and the inquiry “On hand by location” for your
warehouse WH-## again. What is different now? Finally, post the packing slip for
the sales order based on the mobile device transactions registered before.

mabenito@parcisa.com
350 8 Advanced Warehouse and Transportation

8.2 Transportation Management

The transportation management module in Dynamics AX 2012 R3 is based on the
new warehouse management in AX 2012 R3. The primary purpose of
transportation management in Dynamics AX is to select external freight carriers for
inbound and outbound shipments and to manage these shipments.

Figure 8-20: Overview of the transportation management functionality in Dynamics AX

Based on the load (e.g. a truck load), the origin address, and the destination
address, Dynamics AX calculates possible transportation routes with their costs.
After creating a route based on the rate calculation (or manually independent from
calculated rates), you can record the agreement as a transportation tender.
Managing dock appointments for loading the truck and reconciling the freight
invoice with the route are additional options in the transportation management
module.

8.2.1 Core Setup for Transportation Management

Before starting to use transportation management processes, you have to complete
following setup for transportation management:
¾ Transportation management parameters
¾ Transportation methods
¾ Shipping carriers
¾ Rate base types
¾ Rate engines
¾ Transit time engines
¾ Break masters
¾ Rate masters
¾ Rating profiles
¾ Settings in the released products

mabenito@parcisa.com
8.2 Transportation Management 351

Transportation management parameters (Transportation management> Setup>

Transportation management parameters) contain basic settings like number sequences
in the transportation management module. The button Initialize base engine data on
the tab General of the parameters provides the option to initialize engine setup data
from the available base engines.

8.2.1.1 Transportation Methods and Shipping Carriers

Transportation methods (Transportation management> Setup> General> Transportation
method) represent the different kinds of transport. The transportation method is a
required field in the shipping carrier service.
For setting up shipping carriers, access the menu item Transportation management>
Setup> General> Shipping carrier. On the tab Service in the shipping carrier form,
enter the carrier service.

Figure 8-21: Entering a carrier with his service

8.2.1.2 Rate Base Types and Rate Engines

Rate base types and engine data are core settings for the rate calculation in the
transportation management module
Rate Base Types
Rate base types (Transportation management> Setup> General> Rate base type)
determine the lookup criteria for calculating the rates of a shipping carrier. These
lookup criteria are fields which are relevant for the transport – for example the
postal code of the destination address. They are used as parameters for the rate
engines and have to match the internal requirements of the rate engine.
Primary rate base types are generated when initializing the base engine data in the
parameters.

mabenito@parcisa.com
352 8 Advanced Warehouse and Transportation

Rate Engines
Engines provide the calculation routines for transportation routes in Dynamics AX.
Rate engines (Transportation management> Setup> Engines> Rate engine) are the basic
engines for calculating transportation costs. They can refer to sub-engines like the
mileage engines.

Figure 8-22: Entering distances in the mileage engine

Mileage engines (Transportation management> Setup> Engines> Mileage engine)

determine the distance between origin and destination addresses, usually based on
postal codes. Enter the distance between the postal codes of the relevant origin and
destination locations on the tab Details of the mileage engines. The button Define
mileage engine provides access to the definition of available or mandatory fields for
entering distances. By adding or removing fields you can control the columns
shown in the mileage engines. The field selection has to match the requirements of
the engine.
Transit Time Engines
Transit time engines (Transportation management> Setup> Engines> Transit time
engine) determine the time required for the transport between addresses. The setup
is similar to the mileage engine, except that it specifies days instead of miles and
that the transit time is depending on the carrier service.

8.2.1.3 Break Masters, Rate Masters and Rating Profiles

Break masters, rate masters and rating profiles determine the price of a transport.
Break Masters
Break masters (Transportation management> Setup> Rating> Break master) determine
the steps (intervals) and the unit (e.g. miles) for different rate prices.

mabenito@parcisa.com
8.2 Transportation Management 353

Figure 8-23: Setting up a break master

Figure 8-24: Setting up a rate master

Figure 8-25: Setting up a rate base

Rate Masters
Rate masters (Transportation management> Setup> Rating> Rate master) give the
pricing structure of the carriers. When creating a rate master, select the Rate base

mabenito@parcisa.com
354 8 Advanced Warehouse and Transportation

type determining the columns for assigning the rate master on the tab Rate base
assignment. The button Rate base grants access to the rate bases.
Rate bases contain the pricing of the rate master. They apply the steps (intervals)
for prices specified in the selected Break master.
After entering the rate base, access the tab Rate base assignment in the rate master
for entering the validity of the rate master based on columns like postal codes
(determined by the rate base type).
Rating Profiles
Rating profiles (Transportation management> Setup> Rating> Rating profile) link the
shipping carrier with the rate engine, the rate master, and the transit time engine.
The rating profile therefore controls the pricing and the transport times.

Figure 8-26: Setting up a rating profile

As an alternative to creating rating profiles from the menu, you can also enter the
rating profile of a carrier on the tab Rating profile in the shipping carrier
(Transportation management> Setup> General> Shipping carrier).

8.2.1.4 Settings in the Released Products

In the released products (Product information management> Common> Released
products), the checkbox Use transportation management processes controls whether
transportation management applies. This checkbox is always selected, if the new
warehouse management applies to the item.
If activating transportation management for a product not applying the new
warehouse management, loads are not available for the item.

8.2.2 Managing Transportation Processes

Transportation management in Dynamics AX applies to inbound and to outbound
processes. It is not only based on sales orders, but also covers purchase and
transfer orders.

8.2.2.1 Core Transportation Process

The transportation process in Dynamics AX covers inbound and outbound
processes. It supports transportation related to sales orders, purchase orders, and
transfer orders.

mabenito@parcisa.com
8.2 Transportation Management 355

Load Planning
Starting point for the transportation process is a sales (or purchase or transfer)
order with an order line in which the product is enabled for the transportation
management processes.
The next step is planning the transport. For this purpose, access the load planning
workbench from the menu (Transportation management> Inquiries> Load planning
workbench) or alternatively by clicking the button Load planning workbench in the
action pane of the sales order (or purchase order or transfer order) form.
In the load planning workbench, select the appropriate order line on the tab Supply
and demand and add it to a new load (button To new load in the action pane) or to an
existing load. The load then shows on the tab Loads of the load planning
workbench.

Figure 8-27: Adding a sales order line to a new load in the load planning workbench
Rate Calculation and Route Assignment
For calculating the price of the transport, select the appropriate load in the load
planning workbench and click the button Rating and routing/Rate route workbench
for accessing the rate route workbench.
In the rate route workbench, click the button Rate shop to view available options for
the transport with their price. Once you have decided on the transport, select the
appropriate line and click the button Assign on the tab Route results. Assigning
creates a route and assigns the route to the load. You can view this route in the
form Transportation Management> Inquiries> Routes.
If you want to create a route with a manual price (instead of calculating the price in
the rate route workbench), click the button Rating and routing/Manual rating in the
load planning workbench.

mabenito@parcisa.com
356 8 Advanced Warehouse and Transportation

Figure 8-28: Selecting a route in the rate route workbench

Confirming the Load
After all warehouse processes are finished and the items are on the shipping
location in the warehouse, you can confirm the shipment and the load (compare
section 8.1.2). The confirmation tells the carrier that the load has been shipped.
There are two options for confirming a load:
¾ In the load planning workbench – Click the button Ship and receive/Outbound
shipment on the tab Loads.
¾ In the load form – Click the button Confirm/Outbound shipment on the action
pane tab Ship and receive.
If the load contains only one shipment, you can alternatively confirm the shipment
and the load by clicking the button Confirm shipment in the shipment form.
The load status then switches to “Shipped” and by default the load does not show
in the load planning workbench any more.

8.2.2.2 Additional Options in Transportation Management

Apart from the core process, Dynamics AX provides additional options including
transportation tenders, segmented transports, transportation constraints,
warehouse appointments, freight discounts and charges, and freight invoice
matching.
Transportation Tenders
A transportation tender is an agreement with a carrier on a specific transport. It
includes the transportation date and the rate.

mabenito@parcisa.com
8.2 Transportation Management 357

In the shipping carrier form (Transportation management> Setup> General> Shipping

carrier), the lookup field Transportation tenders on the tab Overview controls whether
transportation tenders are updated manually or through EDI.

Figure 8-29: Registering a transportation tender

For creating a transportation tender, click the button Create transportation tender
after selecting the appropriate route in the route form (Transportation Management>
Inquiries> Routes) or the appropriate load in the load form (Transportation
Management> Common> Loads> All loads, action pane tab Transportation). Once the
transportation tender is submitted to the carrier or confirmed by the carrier,
update it by clicking the button Update.
Existing transportation tenders show in the form Transportation management>
Inquiries> Transportation tenders.
Segmented Transports
Segmented transports apply if you change the carrier within a transport. For this
purpose, hub masters represent the hubs where you can switch carrier.
Following setup is required to use segmented transports:
¾ Create hub types (Transportation management> Setup> Routing> Hub type).
¾ Create hub masters (Transportation management> Setup> Routing> Hub masters).
¾ Create route plans (Transportation management> Setup> Routing> Route plan) with
the sequence of transports from the origin to the first destination hub, from the
first hub to the next hub, and between all following hubs. Enter the rate per
segment in spot rates as applicable (button Create spot rates).
¾ Create a routing guide (Transportation management> Setup> Routing> Routing
guide) with the origin/final destination, and select the route plan on the tab
Results there.
For calculating the rates using segmented transports, click the button Route with
rate in the rate route workbench (Transportation management> Inquiries> Rate route

mabenito@parcisa.com
358 8 Advanced Warehouse and Transportation

workbench). After selecting a route on the tab Route results, switch to the tab
Segments for viewing the transport segments with their rate.
Transportation Constraints
Transportation constraints restrict available options for transportation, for example
preventing the transportation of a specific item by a specific carrier.
For setting up constraints based on specific items or carriers, access the menu item
Transportation management> Setup> Routing> Constraints and enter the disallowed
combinations of items, shipments and carriers on the tab Conditions. The field
Constraint action controls whether to create a warning or an error.
When calculating routes in the rate route workbench, transports with a constraint
show an appropriate icon in the column Constraints.
Warehouse Appointments
Warehouse appointments ensure an organized handling of trucks at the dock by
scheduling the date and time for loading the truck.
As a prerequisite for using warehouse appointments, you have to create
appointment types (Transportation management> Setup> Appointment scheduling>
Appointment types). An appointment types represents a warehouse dock.
For scheduling an appointment with start/end time, click the button Transportation/
Appointment scheduling in the load planning workbench after selecting the
appropriate load. Then confirm the appointment by clicking the button
Appointment status/Firm the appointment in the appointment scheduling form.
Existing appointments show in the form Transportation management> Inquiries>
Appointment scheduling.
When the truck arrives, register the driver check-in and check-out in the form
Transportation management> Common> Driver check-in and check-out. Alternatively,
register the check-in and check-out from the appointment form or on a warehouse
mobile device (appropriate mobile device menu item).

8.2.2.3 Freight Cost Invoicing

Features related to freight cost invoicing include freight discounts, options for
charging freight to the customer, and freight invoice matching.
Freight Discounts
Rating engines calculate a base rate for transportation as described above. Freight
discounts (Transportation management> Setup> General> Discounts) allow adjusting
this base rate. They available for both directions, the rate paid to the carrier
(Discount type “Shipper”) and the rate charged to the customer (Discount type
“Customer”).
When setting up a freight discount, select the discount type and the start/end date.
Additional fields in the discounts form are available for restricting the discount on

mabenito@parcisa.com
8.2 Transportation Management 359

specific details, e.g. on a specific Shipper carrier. For entering the discount value,
switch to the tab Result, select the Result type (“Percentage” or “Amount”) and
enter the percentage or fee. Positive discount amounts reduce the freight rate,
negative discount amounts increase the rate.
When calculating a rate in the rate route workbench then, the amounts in the
columns Customer rate and Shipper rate deduct the discount from the base rate
shown in the Total rate.
Charging Freight to the Customer
If you want to charge the customer a freight rate which is different to the actual
base rate calculated by the rating engine, there are following options:
¾ Freight discount for the customer (as described before)
¾ Override charges
Override charges (Transportation management> Setup> General> Override charges)
provide the option to enter a fixed price or to apply the charges of a fixed carrier,
independent from the selected route. For a fixed price, select the checkbox Manual
on the tab Results of the override charges form and enter the price on the tab
Charges. For always applying charges of a fixed carrier, no matter which carrier
does the actual transport (e.g. the customer pays only truck charges), select the
carrier on the tab Results. When calculating the freight rate for the customer in the
rate route workbench then, the Customer rate shows the rate as specified in the
override charges.
If you want to include transportation costs in the sales order, following setup is
required:
¾ Set up a miscellaneous charges code (Accounts receivable> Setup> Charges>
Charges code) with the posting type combination Customer – Ledger (for
adding charges to the order total) or Ledger – Ledger (for internal posting).
¾ Create a miscellaneous charge assignment (Transportation management>
Setup> General> Miscellaneous charges) with a start date, linking the
miscellaneous charges code in the accounts receivables to freight charges
in transportation management.

Figure 8-30: Creating a miscellaneous charges assignment

For generating charges in the sales order with this setup, enter a sales order, create
the load, calculate the rate, and create/assign the route. Then create the shipment
(“Release to warehouse”) and execute the warehouse processes.

mabenito@parcisa.com
360 8 Advanced Warehouse and Transportation

When confirming the shipment then, the freight charges are added as
miscellaneous charges to the sales order line.
Freight Invoice Matching
Whereas invoice matching in purchasing compares vendor invoices with purchase
orders and product receipts (see section 3.6.2), freight invoice matching server the
purpose to compare freight invoices with transportation routes.
As a prerequisite for freight invoice matching, following setup is required:
¾ Bill types (Transportation management> Setup> Freight reconciliation> Freight bill
type) – Basic types are generated when initializing the base engine data in the
parameters.
¾ Bill type assignments (Transportation management> Setup> Freight reconciliation>
Freight bill type assignments) for assigning carriers to bill types
¾ Reconciliation reasons (Transportation management> Setup> Freight reconciliation>
Reconciliation reasons) for the possible results of invoice matching
¾ Audit masters (Transportation management> Setup> Freight reconciliation> Audit
master) which contain tolerances and reconciliation results
¾ Billing groups (Transportation management> Setup> Freight reconciliation> Billing
groups)
¾ Transportation management parameters – Settings for vendor invoices
In order to use freight invoice matching, enter a sales order, create the load,
calculate the rate, and create/assign the route. Then create the shipment (“Release
to warehouse”) and execute the warehouse processes. Freight invoice matching is
possible once you have confirmed the shipment.
You can create the freight invoice from the load planning workbench then.
Deselect the checkbox Hide shipped in the filter pane and select the appropriate load
in the Loads pane. Click the button Related information/Freight bill details for
accessing the freight bill details, where you want to select the freight bill and click
the button Generate an invoice. In the freight invoice details form, which opens then,
you only got to enter the invoice number.
Alternatively, you can enter the invoice with all header and line details in the
freight invoice form (Transportation management> Inquiries> Freight invoice details).
For matching and approving the freight invoice, click the button Match freight bills
and invoices in the freight invoice detail form. Then click the button Match in the
match freight bills form, which opens next. Back in the freight invoice detail form,
click the button Submit for approval.
After approval, you can access the generated invoice journal (depending on
transportation management parameter settings) by clicking the button Vendor
invoice journals.

mabenito@parcisa.com
9 Finance Administration

The primary responsibility of finance administration is to control and to analyze all

value-based transactions of an enterprise. These transactions occur in business
processes all over the organization, including both transactions only within the
enterprise and transactions with external parties.
Finance management therefore is the core area of business management solutions.
In Dynamics AX, a deep integration of the application supporting business proces-
ses in all departments grants accurate financial figures, available immediately.

9.3 Principles of Ledger Transactions

Before we start to go into details, the lines below show the principles of ledger
transactions.

9.3.1 Basic Approach

The core task of finance is to manage accounts in the general ledger, constituting
the basis for balance sheet and income statement (profit and loss statement). In
addition to the general ledger, accounting keeps subledgers like accounts
receivables, accounts payables, fixed assets, projects and inventory. These
subledgers contain detailed data supporting particular parts of the general ledger.
In inventory as example of a subledger, inventory transactions show details of
changes in stock account balances.
When posting to subledgers, every value-based transaction in Dynamics AX – an
invoice in sales as well as a counting difference in inventory – also generates a
transaction in the general ledger. Posting a sales order invoice for example affects
following areas:
¾ Inventory – Item transaction
¾ Accounts receivable – Customer debt
¾ General ledger – Stock account, revenue account, account for COGS, customer
summary account
Ledger integration, which is a core characteristic of Dynamics AX, provides
traceability of all financial vouchers back to the origin in other modules.
Depending on settings for transfer, subledger transactions are immediately posted
to the general ledger, keeping the general ledger always up-to-date.
As a basis for ledger integration, Dynamics AX comprehensively applies the
voucher principle to transactions: Throughout the whole application, you have to
register a voucher before you can post it. After posting, it is not possible to modify
the voucher any more.
A. Luszczak, Using Microsoft Dynamics AX 2012,
DOI 10.1007/978-3-658-08295-6_9, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
362 9 Finance Administration

9.3.2 At a glance: Ledger Journal Transactions

In order to record manual ledger transactions in Dynamics AX, you have to
register a journal. The lines below show how to post a single-line transaction,
similar to processing an inventory journal (see section 7.1.2).
After accessing the form General ledger> Journals> General journal, you have to
register a voucher header before you may enter journal lines. For this purpose,
insert a new record by clicking the button New or pushing the shortcut key Ctrl+N
in the journal header and select a journal name in the column Name. In the column
Description, optionally enter a text explaining the transaction. If sales tax (VAT)
applies, the corresponding checkbox on the tab Setup of the journal header controls
whether the amount in the debit or credit column of journal lines includes tax.
Then click the button Lines in the journal header in order to switch to the journal
lines. For registering a simple ledger transaction in the journal lines, leave the
default option “Ledger” in the column Account type and select the account number
– according to segmented entry control including applicable financial dimensions –
in the column Account. If you want to post to a subledger, choose the appropriate
account type and corresponding account number – e.g. “Vendor” in the Account
type and the vendor number in the Account for accounts payable.
In a single-line transaction, enter the offset account (including applicable financial
dimensions) directly in the journal line.
Once you have finished registering the line, post the journal by clicking the button
Post/Post in the journal header or lines.

Figure 9-1: Registering a general journal line (referring to an account structure without
dimensions)

mabenito@parcisa.com
9.4 Setting up Finance 363

9.4 Setting up Finance

Since finance in Dynamics AX contains core settings of the application, you have to
complete the basic finance configuration before setting up other modules and
before posting a transaction in any part of the application.
This basic configuration includes the following elements:
¾ Fiscal and ledger calendar
¾ Currencies and exchange rates
¾ Chart of accounts
In Dynamics AX 2012, charts of accounts (including applicable main accounts),
fiscal calendars, and currencies/exchange rates can be shared across multiple
companies.
For this purpose, assign the appropriate shared chart of accounts, fiscal calendar,
and accounting currency to your company in the ledger form. But if applicable,
you can keep a separate chart of accounts or fiscal calendar at company level by
choosing a different assignment per company.

9.4.1 Fiscal and Ledger Calendars

The primary purpose of fiscal calendars is to determine the fiscal year, providing
the start date and the end date for financial periods. The ledger calendar – based
on the fiscal calendar – then controls at company level which financial periods are
open for transactions.

9.4.1.1 Fiscal Calendar

Fiscal calendars are shared across all companies within a common Dynamics AX
database and partition. For assigning the applicable fiscal calendar to the current
company, enter it in the field Fiscal calendar of the ledger form (General ledger>
Setup> Ledger) in the course of the initial setup of the company.
Accounting periods within the fiscal years of a fiscal calendar are limited by their
start date and end date. When setting up a period, you are free to choose any
period length according to your specific requirements.
For editing fiscal calendars, access the form General ledger> Setup> Fiscal calendars.
In order to create a new fiscal calendar there, click the button New fiscal calendar
and enter a calendar identification as well as applicable settings for the first fiscal
year. If you want to add a fiscal year to an existing fiscal calendar, select the
particular calendar and click the button New fiscal year. A dialog box then provides
the option to enter start date, end date, period length, and unit – be sure to select
the unit “Months” if you want to create monthly periods. Clicking the button OK
in the dialog box then creates the accounting periods.

mabenito@parcisa.com
364 9 Finance Administration

9.4.1.2 Closing and Opening Periods

Apart from regular operating periods showing the Type “Operating”, there are two
specific period types not available for posting regular transactions: Closing periods
and Opening periods. Dynamics AX 2012 provides the option to attach multiple
closing periods to each regular operating period if required.
Closing periods contain period-end or year-end transactions. Registration and
posting of these transactions is only possible in closing sheets (General ledger>
Periodic> Fiscal year close> Closing sheet).
Opening periods contain the opening transactions for a fiscal year, which are
transferred in the form General ledger> Periodic> Fiscal year close> Opening
transactions after closing a year.

9.4.1.3 Ledger Calendar

As a prerequisite for posting a transaction in Dynamics AX, the posting date of the
transaction has to be included in an applicable ledger period with the period status
“Open”. The required period status is controlled at company level in the ledger
calendar, not in the shared fiscal calendar.
The ledger calendar itself is based on the accounting periods of the fiscal calendar,
which is assigned to your company in the ledger form. In order to access the ledger
calendar, open the ledger form (General ledger> Setup> Ledger) and click the button
Ledger calendar in the action pane there.

Figure 9-2: Managing the period status in the ledger calendar

After selecting a fiscal year in the left pane of the ledger calendar form, open or
close corresponding periods in the column Period status as applicable (scroll to the
rightmost column on the tab Periods).

mabenito@parcisa.com
9.4 Setting up Finance 365

The period status “Open” enables posting of transactions in the period, whereas
the period status “On hold” blocks posting. The status “Closed” also blocks
posting – but unlike periods on hold, closed periods are not available for
reopening. Therefore, the status “Closed” should only apply if a period is
definitely closed in accounting after reporting to the authorities.
The tab Module access level provides the option to set blocking per module and to
except user groups from blocking.

9.4.1.4 New in Dynamics AX 2012

Items new in Dynamics AX 2012 referring to ledger periods include shared fiscal
calendars and the option of multiple closing periods.

9.4.2 Currencies and Exchange Rates

Every value-based transaction refers to currencies – general ledger transactions just
the same as subledger transactions like inventory or customer transactions. A
transaction is always recorded in the accounting currency of your company, and
sometimes additionally in a foreign currency. Currencies therefore are a main
requirement before you can post any transaction in Dynamics AX.

9.4.2.1 Currencies
In order to facilitate currency management in multi-company organizations, the
currency table is shared across all companies within a common Dynamics AX
database and partition. In addition, Dynamics AX by default contains present
major currencies.
For accessing the currencies form, choose the menu item General ledger> Setup>
Currency> Currencies. Apart from currency code and name, major settings for a
currency include the definition of the rounding precision on the tab Rounding rules.
The tab Currency converter contains the setting for including the particular currency
in the online currency conversion tool (see below).

9.4.2.2 Exchange Rates

Exchange rate types (General ledger> Setup> Currency> Exchange rate types) in
Dynamics AX 2012 provide the option to manage multiple exchange rates per
currency in parallel. Different exchange rates are for example required, if you want
to use other rates for budget entries than for current transactions.
For accessing the Currency exchange rates form, choose the menu item General
ledger> Setup> Currency> Currency exchange rates or click the button Exchange rates in
the Exchange rate types form.
After selecting an Exchange rate type at the top of the currency exchange rates form
(see Figure 9-3), view or add appropriate currency relations in the left pane. The
Quotation unit specifies the applicable factor for exchange rate calculation.

mabenito@parcisa.com
366 9 Finance Administration

After selecting a currency relation in the left pane, the right pane shows the
exchange rates in chronological order. The filter From date and To date determines
the date range for displaying exchange rates. The bottom line of the right pane
shows the conversion result, providing the option to check if exchange rates are
entered the right way.
In daily business, you have to continuously enter or import new exchange rates in
order to ensure correct currency conversion. Usually, the exchange rates include a
line without a start date applicable for currency conversion of transactions before
the start date of data entry for currency conversion.

Figure 9-3: Managing exchange rates in the currency exchange rates form

Currency exchange rates and exchange rate types are shared across all companies.
But if required, you can keep exchange rates at company level by choosing a
different exchange rate type per company in the ledger form.

9.4.2.3 Currency Settings in the Ledger Form

The ledger form (General ledger> Setup> Ledger) determines the Accounting currency
of your company. All financial transactions are posted in this currency, which may
not be modified once transactions are registered in the particular company. If you
need to change the local currency later (e.g. converting to a new currency in your
country), specific conversion tools are required.
Concerning exchange rate conversion, the ledger form contains the Default exchange
rate type determining the exchange rate type for regular transactions. In addition, a
separate default for budget transactions is available.
The lower part of the ledger form contains the main accounts for posting exchange
rate gains and losses in your company.

9.4.2.4 Currency Converter

Transaction forms in Dynamics AX, which may contain transactions in foreign
currencies (e.g. purchase orders or bank transactions), apart from fields for the

mabenito@parcisa.com
9.4 Setting up Finance 367

transaction amount always contain a corresponding field for entering the currency
code of the transaction.
Fields for entering or viewing amounts in the accounting currency do not show a
corresponding currency code field. For these fields, the currency converter enables
viewing the amount in a different currency (e.g. in the currency of a parent
company).
The currency converter dialog is accessible by double-clicking the currency field in
the status bar. In the dialog, select the applicable currency with a second double-
click. Figure 9-4 for example shows the Credit limit in the preview pane at the
bottom in US-dollars after selecting “USD” in the currency converter.

Figure 9-4: Applying the online currency conversion feature

The currency field in the status bar shows, which currency presently applies to
displaying amounts. The currency converter is limited to displaying amounts – if
selecting a particular field with a mouse-click for editing, the amount in this field
shows in accounting currency. Therefore, all amounts entered in applicable fields
are in accounting currency.
In order to reset currency conversion, open the currency converter dialog again
and click the button Reset. The currency converter only shows currencies, for which
the currency converter has been enabled in the currencies form (see above).

9.4.2.5 New in Dynamics AX 2012

In Dynamics AX 2012, currencies are shared across legal entities. Exchange rate
types enable maintaining different exchange rates in parallel.

mabenito@parcisa.com
368 9 Finance Administration

9.4.3 Financial Dimensions

In addition to the main accounts specified in the chart of accounts, financial
dimensions provide further levels for structuring financial transactions. Depending
on the account structures assigned to your company, you are required to enter
dimension values for financial dimensions – e.g. recording the cost center – when
posting transactions.
Based on the posted dimension values, financial analysis and reports are not only
available at company level, but also at the level of financial dimensions. This is also
important for the multisite functionality: Assigning a financial dimension to the
inventory dimension “Site” (see section 10.1.7) for example enables reporting the
income statement for subsidiaries within a legal entity.

9.4.3.1 Managing Financial Dimensions

In Dynamics AX 2012, financial dimensions and dimension values are shared
across all companies within a common Dynamics AX database and partition.
Financial dimensions are not limited to standard dimensions like department, cost
center and purpose. You may easily set up as many financial dimensions as
required. Taking into account practical consequences like structural clearness,
probability of wrong entries and effort for registration, you should not set up and
apply more dimensions as needed, however.
For setting up a new financial dimension, access the menu item General ledger>
Setup> Financial dimensions> Financial dimensions and insert a record by clicking the
button New. The lookup field Use values from then specifies the origin of related
financial dimension values:
¾ <Custom dimension> – Creating a dimension not referring to other areas of the
application.
¾ One of the other options – Linking the dimension to other entities of the
application like customers, item groups or operating units.
If selecting the option “Departments” in the lookup field Use values from for
example, the financial dimension is linked to operating units of the type
“Department”. In this case, all departments entered in the organization
management (Organization administration> Setup> Organization> Operating units) are
automatically financial dimension values for the dimension.
If selecting the option “<Custom dimension>” in the lookup field Use values from,
the financial dimension values have to be entered manually after clicking the
button Financial dimension values.

9.4.3.2 Financial Dimension Values

For custom dimensions, new records with dimension value and description are
entered in the financial dimension values form. The lookup field Select level of
dimension value to display determines whether data on the other tabs apply to all

mabenito@parcisa.com
9.4 Setting up Finance 369

companies (“Shared value”). If selecting the option “Companies”, click the button
near the field Companies for applying a particular company.
If you want to prevent future transactions referring to a particular dimension value
at the selected level, select the checkbox Suspended or enter an appropriate Active
from or Active to date.
In the financial dimension values form, it is not possible to create records for
financial dimensions which are not custom dimensions. But for all dimensions, it is
possible to edit dimension value settings like suspending a value at shared or at
company level.

Figure 9-5: Managing financial dimension values for a custom dimension

9.4.3.3 Applying Financial Dimensions

Once a financial dimension is created, it has to be included in account structures or
advanced rule structures applying to your company before you can use it in
transactions and inquiries. In addition, the account structures and applicable
advanced rule structures specify if and which dimension value is optional or
required when posting to a particular account.
On forms for editing master data like main accounts, customers or items (released
products), the tab Financial dimensions shows all financial dimensions included in
account structures and advanced rule structures applying to your company.
Dimension values entered there apply as default dimension value when registering
an order or a journal line.
When registering a transaction in a ledger journal line or any other form containing
a ledger account field, financial dimensions are not available as separate fields.
According to segmented entry control (see section 9.5.2), you have to enter
financial dimensions together with the main account in one – segmented – field.

mabenito@parcisa.com
370 9 Finance Administration

9.4.3.4 Balancing Financial Dimension and Interunit Accounting

Interunit accounting, an optional feature in Dynamics AX 2012 R2/R3, ensures a
balanced balance sheet for a selected financial dimension – the balancing
dimension. If you want to use interunit accounting, provide following settings:
¾ Accounts for automatic transactions – Enter appropriate main accounts for the
Posting type “Interunit-debit” and “Interunit-credit” in the accounts for
automatic transactions (see section 9.4.4 below).
¾ Balancing financial dimension – Select the balancing dimension in the ledger
form.
If the field Balancing financial dimension in the ledger form is not empty, you have to
provide a dimension value for this dimension when posting any transaction. If the
from-value and the to-value for the balancing dimension are different in a
transaction, Dynamics AX posts additional balancing transactions to the main
accounts “Interunit-debit” and “Interunit-credit”. This applies for example in a
transaction from one department to another, if departments are the balancing
dimension.

9.4.3.5 New in Dynamics AX 2012 and in AX 2012 R2

In Dynamics AX 2012, financial dimensions are shared across legal entities and
provide the option to easily add dimensions as well as to populate dimension
values from other tables. Account structures specify which financial dimensions
apply and segmented entry control changes the way to enter dimension values.
Compared with the initial version of Dynamics AX 2012, the R2 version
additionally contains the balancing financial dimension for interunit accounting.

9.4.4 Account Structures and Charts of Accounts

Account structures and charts of accounts are basic master data for structuring
financial transactions in Dynamics AX.
In Dynamics AX 2012, charts of accounts and main accounts are shared across
companies. Choosing a specific chart of accounts in the ledger form determines
applicable main accounts for the current company. The assignment of account
structures controls applicable financial dimensions.

9.4.4.1 Ledger Account and Main Account

When entering a financial transaction, the ledger account is composed of the main
account and financial dimensions. The applicable account structure controls which
financial dimensions are included in the ledger account.

9.4.4.2 Charts of Accounts

For accessing all charts of accounts in your enterprise, choose the menu item
General ledger> Setup> Chart of Accounts> Chart of Accounts. Depending on the
structure of your organization and the number of legal entities, the left pane of the

mabenito@parcisa.com
9.4 Setting up Finance 371

carts of accounts form shows one or more charts of accounts. The right pane of the
form contains the main accounts of the chart of accounts selected in the left pane.

Figure 9-6: Managing charts of accounts in the chart of accounts form

Clicking the button New or Edit on the tab Main accounts of the chart of accounts
form opens the main accounts form, where you can insert or modify the main
accounts of the selected chart of accounts as described further below.
Note: The charts of accounts form in the original release of Dynamics AX 2012 also
contains a tab for assigning account structures. In Dynamics AX 2012 R2/R3, this
assignment is replaced by the assignment at company level in the ledger form.

9.4.4.3 Settings in the Ledger Form

Settings in the ledger form (General ledger> Setup> Ledger) determine the chart of
accounts and the account structures applicable to your company. These settings are
required before registering the first transaction.
You may share a chart of accounts, assigning several companies to one common
chart of accounts. After posting the first transaction in a company, it is not possible
to change the chart of accounts assignment any more.
The Account structures pane of the ledger form in Dynamics AX 2012 R2/R3
contains the account structures for the current company. In order to add an
account structure, click the button in the action pane of this pane. Since
account structures determine the available financial dimensions when posting to a
main account, each main account included in the chart of accounts has to be
assigned to exactly one account structure without overlapping or missing
assignments.
If applying interunit accounting in a company, the balancing financials dimension
has to be included in all account structures of this company.

mabenito@parcisa.com
372 9 Finance Administration

9.4.4.4 Account Structures

For accessing the account structure configuration form, choose the menu item
General ledger> Setup> Chart of Accounts> Configure account structures or click the
button Configure account structures in the Account structures pane of the ledger form.

Figure 9-7: Configuring an account structure

If you want to create a new account structure in order to specify a new segment
combination of main account and applicable financial dimensions, click the button
New/Account structure in the account structures configuration form.
In the create dialog, the checkbox Add main account usually remains selected for
including the main account as the first segment. You may clear this option in case
you want to use a financial dimension, and not the main account, as first segment –
e.g. if divisions apply and should be the first segment when entering transactions.
When creating a new account structure or editing an existing structure, it shows in
Draft mode. You may add dimensions to the account structure by clicking the
button Add segment. The filter button in the segment fields provides the option to
restrict available dimension values. When selecting the checkbox Allow blanks for
financial dimensions in the filter dialog, entering a dimension value is optional and
you are not required to select a dimension value when registering a transaction for
a main account referring to the account structure.
The example in Figure 9-7 shows a simple account structure applying to main
accounts starting with account 40000, containing the financial dimension
“Department” without restricting available dimension values on this dimension.
If applicable to your account structure, you can add one or more lines (nodes) for a
segment – with appropriate filters in the specific nodes – in order to specify
multiple applicable dimension value combinations.
Once you have finished the setup of account structure segments, click the button
Activate to make the account structure available. If you want to edit an existing

mabenito@parcisa.com
9.4 Setting up Finance 373

account structure later, click the button Edit in the action pane. The account
structure then is in draft mode, which also allows deleting it.

9.4.4.5 Advanced Rule Structures

In addition to the account structures, advanced rules and advanced rule structures
provide the option to add dimension segments only applying to a limited number
of specific accounts. A typical example is tracking marketing campaigns applying a
financial dimension “Campaigns” only for a particular marketing main account.
For setting up a new advanced rule structure, create it in the form General ledger>
Setup> Chart of Accounts> Advanced rule structures and enter applicable financial
dimensions (similar to setting up account structures as described above).
In order to apply the advanced rule structure, access the account structures form
and click the button Advanced rule when editing the appropriate account structure.
In the advanced rules form, click the button New and enter an advanced rule ID
and name in the create dialog. In order to specify the main accounts applicable to
the new advanced rule, click the button in the middle of the right pane of
the advanced rules form.
Clicking the button on the tab Advanced rule structures links advanced rule
structures to the advanced rule as applicable. Activating the account structure, to
which the advanced rule applies, activates the advanced rule in parallel.

9.4.4.6 Main Accounts

The structure and the format of the main accounts in the chart of accounts are
depending only on the internal requirements of your company. In order to comply
with the different reporting structures for balance sheet, income statement and
other reports in finance, apply financial statements with a structure which is
independent from the chart of accounts.
If you want to edit the main accounts, open the list page General ledger> Common>
Main accounts and click the button Edit there. Alternatively, access the chart of
accounts form (General ledger> Setup> Chart of Accounts> Chart of Accounts) and edit
the main accounts by clicking the button Edit on the tab Main accounts after
selecting the appropriate chart of accounts there.
The main accounts list page – and the main accounts form accessed from the list
page – contains the chart of accounts applying to the current company. In the main
accounts form, the form header shows the name of the applicable chart of accounts.
If other companies are also assigned to this chart of accounts, you have to keep in
mind that changes on main accounts also affect the other companies.
If you want to enter a new account, click the button New in the action pane strip for
inserting a record including a unique account number, an account name and an
account type. Clicking the button Translations in the action pane strip provides
access to the translation form for entering the account name in multiple languages.

mabenito@parcisa.com
374 9 Finance Administration

Figure 9-8: Editing a main account

In the lookup field Select level of main account to display of the main accounts form,
choose the option “Chart of accounts” for editing data (e.g. active dates) applying
to all companies assigned to the current chart of account. If selecting the option
“Companies” for editing data specific to a particular company, you have to click
the button near the field Companies to select the applicable company.
In the structure of the main accounts, you have to distinguish between transaction
accounts and auxiliary accounts. The Main account type, a lookup field in the main
accounts form, groups main accounts as shown in to table 8-1 below.
Table 9-1: Structure of main accounts
Type Main account type in Dynamics AX
Transaction Balance accounts ¾ Balance sheet
accounts ¾ Asset
¾ Liability
¾ Equity
Nominal accounts ¾ Profit and loss
¾ Expense
¾ Revenue
Auxiliary ¾ Reporting
accounts (Choose Reporting type “Header”,
“Empty header” or “Page header”)
¾ Total
¾ Common (only required in China)
The core difference between transaction accounts and auxiliary accounts is that
financial transactions only include transaction accounts. Auxiliary accounts
support a clear structure of the chart of accounts. They are not necessarily required.

mabenito@parcisa.com
9.4 Setting up Finance 375

Transaction accounts include balance accounts on the one hand and nominal
accounts (income statement accounts) on the other hand. In Dynamics AX, these
two types are different when closing a fiscal year: Whereas the balance of nominal
accounts is zero in the opening transactions of the next year, balance accounts
transfer their balance.
Distinguishing between asset accounts and liability accounts supports grouping
and selecting balance accounts in reports. But if you do not want to apply this
grouping, only use the account type “Balance sheet”.
As with balance accounts, you are free to split nominal accounts (type “Profit and
loss”) into cost accounts and revenue accounts.
In addition to the Main account type, the lookup field Main account category on the
tab General of the main account form provides another classification of main
accounts. For setting up the main account types – which are a basis for calculating
performance indicators (KPIs) included in some cubes and role centers – access the
form General ledger> Setup> Chart of accounts> Main accounts categories.
In main accounts receiving transactions from other modules based on ledger
integration settings (e.g. summary accounts for vendor liabilities), you should
select the checkbox Do not allow manual entry blocking manual transactions.
On the tabs General, Setup and – at company level – Financial statement and Financial
dimensions of the main account form, optionally enter default data and settings for
allowed transactions.
In the main accounts list page, the FactBox Balance shows the account balance of
the period select through clicking the button Balances/Parameters in the action pane.
Clicking the button Journal entries/Posted in the main accounts list page provides
direct access to the ledger transactions of the selected main account. The
transaction form itself contains following buttons in the action pane strip for
accessing further information:
¾ Voucher – Shows all transactions of the voucher in the general ledger
¾ Transaction origin – Shows related transactions in all modules
¾ Original document – Provides the option of reprinting the document
Note: For initializing and updating balances, click the appropriate buttons in the
financial dimension sets (General ledger> Setup> Financial dimensions> Financial
dimension sets).

9.4.4.7 Financial Statements

In order to comply with different regulations for various internal and external
reports, alternative groupings of ledger accounts for showing business data –
independent from the account structure in the chart of accounts – are required
frequently.

mabenito@parcisa.com
376 9 Finance Administration

For this purpose, you can set up multiple different financial statements. These
financial statements for example may include a revenue report and different
versions of balance sheet and income statement.
For running a financial statement, choose the menu item General ledger> Reports>
Transactions> Financial statement and export it to different file types like XBRL and
Excel. Before starting a financial statement, you need to complete the setup of the
particular financial statement in following menu items:
¾ General ledger> Setup> Financial dimensions> Financial dimension sets
¾ General ledger> Setup> Financial statement> Row definition
¾ General ledger> Setup> Financial statement> Financial statement (setting up
columns)

9.4.4.8 Accounts for Automatic Transactions

Settings in the Accounts for automatic transactions apply to ledger transactions,
which are posted automatically through ledger integration and for which other
settings are missing or – as with invoice discounts – are not available.
If you want to enter a new setting for automatic transactions, access the form
General ledger> Setup> Posting> Accounts for automatic transactions and insert a record
selecting the posting type and the assigned main account. Clicking the button
Create default types generates a basic set of posting types for which you may enter
default accounts.
Essential settings in the accounts for automatic transactions are as follows:
¾ Error account – Applying in case of missing account settings
¾ Penny difference in accounting currency – For small payment differences
¾ Year-end result – Account for profit/loss when closing the fiscal year
¾ Sales tax rounding
¾ Order invoice rounding – Sales invoice rounding
¾ Purchase invoice rounding-off – Purchase invoice rounding
¾ Vendor invoice discount
¾ Customer invoice discount
If the checkbox Interrupt in case or error account in the general ledger parameters is
selected, Dynamics AX displays an error message instead of posting to the error
account when trying to post a transaction for which no main account is specified in
the integration settings.

9.4.4.9 New in Dynamics AX 2012 and in AX 2012 R2

In Dynamics AX 2012, set up charts of accounts with corresponding main accounts
independent from companies – sharing them across legal entities as required.
Account structures specify combinations of main accounts and financial
dimensions required for registering transactions.

mabenito@parcisa.com
9.4 Setting up Finance 377

Compared with the initial version of Dynamics AX 2012, the R2 version assigns
account structures in the ledger form (and not in the chart of accounts), which
means that companies may use a common chart of accounts while applying
different financial dimensions. In addition, main account translations are available.

9.4.5 Customer, Vendor and Bank Accounts

When entering a ledger journal line, there is the option to select customers,
vendors, bank accounts or fixed assets instead of ledger accounts.

9.4.5.1 Bank Accounts

Before selecting a particular bank account, you have to set it up in the menu item
Cash and Bank management> Common> Bank accounts. When creating a new bank
account by clicking the button New/Bank account, enter the bank account ID, the
Routing number identifying the bank, your Bank account number as specified by the
bank, and a Name for the bank account.
On the tab Currency management of the bank account form, enter the main account
referring to the particular bank account in the Main account field. The Currency field
specifies the currency of the bank account. If you want to enable transactions in
other currencies additionally, select the checkbox More currencies.
If your company has got multiple bank accounts at a particular bank, optionally
enter a bank group (Cash and Bank management> Setup> Bank groups) containing
default values for data like address, routing number and contact data, which are
common to these bank accounts.

9.4.5.2 Vendors
As shown in section 3.2.1, vendor records are available in the list page Accounts
payable> Common> Vendors> All vendors. If you want to view vendor transactions
(invoices and payments) there, click the button Transactions on the action pane tab
Vendor after selecting the particular vendor. Apart from the invoice or payment
amount, the vendor transaction form shows the open, not yet settled amount in the
column Balance.

9.4.5.3 Settlement of Vendor Transactions

In order to apply a payment to an invoice, access the open vendor transactions by
clicking the button Settle/Settle open transaction on the action pane tab Invoice of the
vendor form. In the open transactions form, select the checkbox Mark in the
transaction lines which you want to settle – only one or multiple invoices on the
one hand and only one or multiple payments or credit notes on the other. For
transactions in foreign currencies, choose the settlement date (for calculating
exchange rate gains or losses) in the lookup field Settlement posting date on the
upper part of the form.

mabenito@parcisa.com
378 9 Finance Administration

The lookup field Date used for calculating discounts determines the date for cash
discount calculation. It includes following options:
¾ Transaction date – Select the transaction line containing the date for discount
calculation and click the button Mark payment in the action pane strip.
¾ Selected date – Manually enter the discount calculation date.
You may check the balance of marked transactions in the field Marked total in the
upper pane of the form. Clicking the button Update posts the settlement.
If you do not want to post settlements separately from the original transaction, you
can register the settlement already when entering a payment (see section 9.5.4).
If you want to cancel a posted settlement, access the closed transaction form by
clicking the button Settle/Closed transaction editing on the action pane tab Invoice of
the vendor form and reverse the settlement there.

9.4.5.4 Customers
Explanations on the customer record (Accounts receivable> Common> Customers> All
Customers) are available in section 4.2.1. The way to execute transaction inquiries
and to settle transactions (on the action pane tab Collect) is similar to the
procedures in vendor management.

9.4.6 VAT / Sales Tax Settings

The sales tax/VAT functionality in Dynamics AX supports different tax regulations
– e.g. the sales tax in the United States or the value added tax in Europe.
Sales tax codes, determining the tax rate, are the basis for sales tax calculation. In
an invoice line, the applicable sales tax code is depending on both, the item sales
tax group of the item and the sales tax group of the customer or vendor.
A primary setting for tax calculation is whether US sales tax applies: If it does,
select the checkbox Apply U.S. taxation rules on the tab Sales tax of the general
ledger parameters. With this setting, sales tax jurisdictions are an additional
grouping in tax calculation. More information on the specific requirements of US
sales tax is available in the Dynamics AX online help.
Apart from common settings in the general ledger parameters, the setup of sales
tax / VAT calculation includes following items:
¾ Sales tax authorities
¾ Sales tax settlement periods
¾ Ledger posting groups
¾ Sales tax codes
¾ Item sales tax groups
¾ Sales tax groups

mabenito@parcisa.com
9.4 Setting up Finance 379

9.4.6.1 Sales Tax Authorities

The first step when setting up sales tax calculation is to enter the competent
authorities in the form General ledger> Setup> Sales tax> Sales tax authorities with
their authority ID, name and report layout for tax reporting.

9.4.6.2 Sales Tax Settlement Periods

Applicable periods for tax reporting – usually monthly periods – are specified in
the form General ledger> Setup> Sales tax> Sales tax settlement periods.
When creating a new settlement period definition with ID and description, you
have to assign the applicable Authority and – through Period interval and Number of
units – the period length on the tab General. After specifying the period length,
switch to the tab Periods in order to enter the first period manually (e.g. Jan 1 – Jan
31). In order to create further periods automatically, click the button New period in
the action pane strip at the top of the form.

9.4.6.3 Ledger Posting Groups

Sales tax ledger posting groups control the main accounts in sales tax transactions
(depending on the sales tax code of the original invoice transaction).
For setting up a sales tax ledger posting group, access the form General ledger>
Setup> Sales tax> Ledger posting groups. After entering the group ID and description,
select the main account for sales tax payable (input tax), for sales tax receivable,
and – if applicable – for use tax. The Settlement account field contains the balance
account for the amount to be paid to the tax authorities.

9.4.6.4 Sales Tax Codes

Sales tax codes control the tax rate and the calculation base.
For setting up a sales tax code, access the form General ledger> Setup> Sales tax> Sales
tax codes and insert a record with code and name. On the tab General, assign the
settlement period and the ledger posting group.
Detailed calculation parameters are available on the tab Calculation. For specifying
the tax rate, click the button Values in the action pane strip of the sales tax codes
form and enter the applicable rate in the column Value of the values form.
After creating a sales tax code, assign it to applicable sales tax groups and item
sales tax groups. Dynamics AX determines the sales tax code of an invoice line
from the sales tax code, which is included in the settings of both – the item sales tax
group of the item, and the sales tax group of the customer (or vendor).
In order to apply a tax code “V175” in a sales invoice line for example, the line has
to comply with both of the following conditions:

mabenito@parcisa.com
380 9 Finance Administration

¾ Item sales tax group – The item sales tax group (e.g. ”STD“ for a standard rate)
of the item contains the sales tax code “V175”
¾ Sales tax group – The sales tax group of the customer (e.g. “CDO” for domestic
customers) contains the sales tax code “V175”

Figure 9-9: Managing sales tax codes

9.4.6.5 Item Sales Tax Groups

For setting up an item sales tax group, access the form General ledger> Setup> Sales
tax> Item sales tax groups. After entering the tax group identification and description
on the tab Overview, switch to the tab Setup and register applicable sales tax codes
for the items belonging to the group.
In order to assign item sales tax groups to items, access the released product form
(Product information management> Common> Released products). In the corresponding
detail form, select the Item sales tax group for sales (on the tab Sell) and for
purchasing (on the tab Purchase) – usually when creating an item.
For assigning item sales tax groups to product categories, access the procurement
categories form (Procurement and sourcing> Setup> Categories> Procurement categories)
and the sales categories form (Sales and marketing> Setup> Categories> Sales
categories) and select the Item sales tax group on the appropriate tab.

9.4.6.6 Sales Tax Groups

The menu item General ledger> Setup> Sales tax> Sales tax groups provides access to
the sales tax groups, which apply to customers and vendors. Setting up sales tax
groups is similar to setting up item sales tax groups.
In order to assign the sales tax groups to customers and vendors, access the
customer or vendor form and switch to the tab Invoice and delivery there.

mabenito@parcisa.com
9.4 Setting up Finance 381

9.4.6.7 Sales Tax Transactions

When registering a transaction in a journal or order line, Dynamics AX defaults the
sales tax code according to the combination of item and customer/vendor. For
viewing the calculated tax before posting, click the button Sales tax on the
appropriate tab of the action pane (or action pane strip) in journal lines, sales and
purchase order headers or lines, or in the posting form when posting a transaction
(e.g. a sales invoice).
If necessary, change the sales tax groups or the sales tax code in a journal or order
line before posting. When posting an invoice, Dynamics AX generates a transaction
for sales tax in the general ledger (according to the ledger posting group assigned
to the sales tax code) as well as a sales tax transaction in the appropriate subledger.

9.4.6.8 Sales Tax Payment

In order to calculate the sales tax, which is payable to the authorities for a
particular period, execute the periodic activity General ledger> Periodic> Sales tax
payments> Sales tax payments. As a prerequisite, the reporting codes for the report
layout assigned to the sales tax authority have to be set up in the form General
ledger> Setup> Sales tax> External> Sales tax reporting codes.

9.4.7 Case Study Exercises

Exercise 9.1 – Financial Dimensions
Your organization introduces business areas for reporting purposes. In order to
support this requirement, create a new financial dimension “##Areas” (custom
dimension) with the shared values “Area ## 1” and “Area ## 2” (## = your user ID).
Note: Numbers are not allowed in the dimension name.
Exercise 9.2 – Main Accounts
Following new main accounts are required in your company (## = your user ID):
¾ Main account “111C-##”, Name “Petty cash”, account type “Balance Sheet”
¾ Main account “111B-##”, Name “##-Bank”, account type “Balance Sheet”
¾ Main account “6060##”, Name “## - Consulting”, account type “Expense”
¾ Main account “ZZ##”, Name “## account structure test”, account type “Balance
Sheet”
Create these accounts making sure to apply the right chart of accounts.
Exercise 9.3 – Account structures
Unlike the other main accounts created in Exercise 9.2, your main account “ZZ##”
is not included in an account number range referring to existing account structures.
For this reason, set up a new account structure only applying to this main account.
Create and activate a new account structure “ZS##”, with the main accounts and
the financial dimension “##Areas” (and additionally the balancing dimension, if
interunit accounting applies) as segments. Your main account “ZZ##” is the only

mabenito@parcisa.com
382 9 Finance Administration

applicable main account in this account structure. Then assign the account
structure to your test company.
Note: If you are sharing the Dynamics AX training database, remove your account
structure once you have finished all exercises in order to avoid confusing other
people with too many applicable financial dimensions.
Exercise 9.4 – Bank Accounts
Your company opens a new bank account at you preferred bank. Create an
appropriate bank account “B-##” with any routing number and bank account
number. On the tab Currency management, select the main account “111B-##”.

9.5 Business Processes in Finance

Every business process related to monetary amounts in Dynamics AX generates
financial transactions for ledger accounts. Most of the transactions do not origin in
accounting, but refer to transactions in other areas like purchasing, sales, or
production. Transactions in these areas automatically generate ledger transactions
in the background.
Some ledger transactions directly derive from activities in accounting. In order to
record these transactions, register and post a journal in the general ledger module.

9.5.1 Basics Setup for Journal Transactions

In addition to the basic setup of finance described in the previous section, you have
to configure journal names before registering a journal transaction in the general
ledger.

9.5.1.1 Journal Names

Journal names in Dynamics AX classify transactions by subject matters. For setting
up journal names, access the form General ledger> Setup> Journals> Journal names. In
the journal names, the lookup field Journal type of a journal name controls, to which
journals is applies. The most common journal types are:
¾ Daily – General journal
¾ Periodic – Periodic journal
¾ Post fixed assets – Fixed asset transactions
¾ Vendor invoice recording – Invoice journal in accounts payable
¾ Vendor disbursement – Vendor payment
¾ Customer payment – Payment of customers
If your company applies invoice register and invoice approval journals in purchas-
ing, the journal types “Invoice register” and “Approval” are required in addition.
Ledger journals show a common structure independent from the journal type. As a
difference between different journal types, different fields show in the particular
journal registration forms. In addition, some journals show additional functionality
– e.g. the payment proposal feature in the vendor payment journal.

mabenito@parcisa.com
9.5 Business Processes in Finance 383

Selecting different number sequences in the Voucher series field of journal names,
supports distinguishing the voucher numbers of different journals.
The default for the offset account in journal lines is available in the fields Account
type and Offset account of the journal names form. The example in Figure 9-10
shows the bank account “E001” provided as default for the offset account in
journal lines applying the journal name “GEB”.

Figure 9-10: Managing journal names

Another important setting on journal names is the checkbox Amount include sales
tax. If this checkbox is selected, an amount entered in the journal lines includes
sales tax (or input tax) if applicable. Otherwise, the line amount entered is a net
amount, to which sales tax is added.

9.5.1.2 Journal Approval

There are two options for ensuring that a registered journal is approved before
posting:
¾ Journal approval system – Enabled in the field group Approval
¾ Approval workflow – Enabled in the field group Approval workflow
If you want to activate the journal approval system for a journal name, select the
checkbox Active in the field group Approval. Then choose the user group being
responsible for approval in the corresponding lookup field Approve.
If you want to apply the approval workflow, an appropriate general ledger
workflow has to be specified in the form General ledger> Setup> General ledger
workflows. The template “Ledger daily journal workflow” (Type “LedgerDaily

mabenito@parcisa.com
384 9 Finance Administration

Template”) for example applies to approval workflows linked to daily journals.

More information on workflows is available in section 10.4.

9.5.1.3 Posting Layer

The Posting layer on journal names usually is “Current”. If you need to cut off
particular ledger transaction (for example because of local tax regulations), there is
the option to create separate journal names for the posting layers “Operations” and
“Tax”. Selecting the appropriate posting layer – through the journal name when
posting a journal transaction or in the closing sheet when executing the fiscal year
closing – enables printing of different finance statements based on postings in these
layers.

9.5.1.4 General Ledger Parameters

The general ledger parameters form (General ledger> Setup> General ledger
parameters) contains further basic settings for journal transactions. As an example,
you should reject duplicate vouchers in order to avoid confusion when looking at
posted documents.

9.5.2 General Journals

For posting a manual ledger transaction, register a general journal in the form
General ledger> Journals> General journal. Depending on the particular transaction,
alternatively choose a specific journal like a fixed assets journal in the fixed assets
menu, or an invoice journal in the accounts payable menu, or a payment journal in
the accounts payable and the accounts receivable menu.
If you do not need the advanced functionality – like payment proposals – available
in the specific journals, it does not matter if you register a transaction in the specific
journal or in the general journal.

9.5.2.1 Journal Header

Journals are vouchers and therefore consist of a header and at least one line. The
header contains common settings and defaults for the corresponding lines.

Figure 9-11: Selecting a journal name when inserting a general journal header

mabenito@parcisa.com
9.5 Business Processes in Finance 385

You can override the header defaults in each line, for example choosing other
posting dates. Before you can post a journal, the balance of the individual vouchers
(lines with the same voucher number) and the balance of the complete journal
(shown in the header pane of the lines form) have to be zero.
The option selected in the lookup field Show at the top of the general journal form
determines whether open or posted journals display. In order to register a new
journal, click the button New and choose a journal name. In a general journal,
journal names of the journal type “Daily” are available.
On the tab Setup of the journal header, optionally change defaults like the offset
account and the currency deriving from the journal name. If somebody works in
the lines of a particular journal while you are viewing the journal header, the
journal shows a red “X” in the column In use. The user ID of the user, who blocks
the journal, shows on the tab Blocking.

9.5.2.2 Journal Lines

For accessing the journal lines, click the button Lines in the journal header. The
default for the posting date when entering a new line is the current session date.
Dynamics AX retrieves the voucher number from the number sequence of the
journal name which you have selected in the header. Depending on the option
selected in the column Account type of the lines, you have to enter a ledger account,
vendor, customer, bank account or fixed asset number in the column Account.

Figure 9-12: Registering a voucher with multiple offsetting lines

If entering a ledger account in the Account field, segmented entry control applies
(see below). The main account usually has to be entered in the first segment of the
ledger account field in this case. If and which financial dimension segments are
available and need to be entered depends on the applicable account structure for
the selected main account. Depending on the currently active segment in the ledger
account field, the value lookup shows available values for that segment.

mabenito@parcisa.com
386 9 Finance Administration

Depending on the transaction, enter the applicable amount in the column Debit or
Credit. In a single-line transaction, which shows the same amount for the debit and
the credit account, enter the offset account type and the offset account (including
segments for financial dimensions as applicable) in the appropriate columns of the
journal line.
If a transaction splits to more than one offsetting account, register the voucher in
multiple lines. In this case, do not enter an offset account in the first line, but in one
or more separate offsetting journal lines. As long as the balance of the voucher is
not zero, Dynamics AX retrieves the same voucher number as in the previous line.
Once the voucher balance is zero, the next line shows a new voucher number
(supposing the selection for New voucher in the journal name settings is “In
connection with balance”).
In order to support data entry, a separate pane at the top of the lines form shows
the balance of the voucher of the selected line and the balance of the complete
journal.

9.5.2.3 Segmented Entry Control

Segmented entry control supports entering the ledger account in account fields
across all areas of the application. Since Microsoft Dynamics AX 2012 merges the
main account and all applicable financial dimensions (like department and cost
center) into one single ledger account field, entering this field – by selecting main
account and financial dimension values one after the other – provides the complete
posting information according to the account structure.

Figure 9-13: Segmented entry for main account and financial dimensions

When entering the ledger account, the value lookup refers to the currently active
segment of the account field. In order to search a segment value, directly enter the
search content – the first characters of the identification or name – in the
appropriate segment of the account field before or after opening the value lookup
by clicking the lookup button or by pushing the shortcut key Alt + Down Arrow.

mabenito@parcisa.com
9.5 Business Processes in Finance 387

Unlike the value lookup in other fields, the value lookup related to segmented
entry control does not offer the option to open a filter/search form for searching
within the lookup. At the bottom of the value lookup for segments, the buttons
and provide additional filtering options.
The example in Figure 9-13 shows the segment value lookup after entering an “S”
in the second segment of the ledger account field. The lookup in this case shows
the departments list filtered on departments beginning with “S” in the ID or the
name.
The order and the number of segments are depending on the account structure
applicable to the selected main account (see section 9.4.4). If the account structure
does not apply financial dimensions or allows blanks for a particular segment, it is
not required to enter a corresponding segment value.

9.5.2.4 Posting Financial Journals

Once you have finished entering voucher lines, post the journal by clicking the
button Post/Post in the action pane strip of the journal header or lines. In case of
incorrect data, Dynamics AX shows an error message and does not post the
transaction.
Alternatively clicking the button Post/Post and transfer in the journal also posts
correct vouchers, but transfers incorrect vouchers to a new journal.

9.5.2.5 Applying the Journal Approval System

If journal approval – applying either the journal approval system or the approval
workflow – is activated for the applicable journal name, you can’t post the journal
before receiving the required approval.
In case of the journal approval system, request approval by clicking the button
Approval/Report as ready in the journal header. The person responsible for approval
then clicks the button Approval/Approve for releasing the journal to be posted.

9.5.2.6 Periodic Journals

If a particular transaction has to be registered and posted repeatedly, optionally
apply one of the two options supporting recurrent registration:
¾ Periodic journals
¾ Voucher templates
Periodic journals support registering transactions like office rent or monthly
installments, which recur periodically. For creating a periodic journal, access the
form General ledger> Periodic> Journals> Periodic journals and enter a journal header
and journal lines (similar to registering a general journal). An alternative way for
creating a periodic journal is to copy a general journal to a periodic journal by
clicking the button Period journal/Save journal in the lines of a general journal.

mabenito@parcisa.com
388 9 Finance Administration

The column Date in the periodic journal lines specifies the start date for the
periodic transactions. In the columns Units and Number of units, which are also
available on the tab Periodic, enter the frequency of the transaction (e.g. once a
month).
In order to post the periodic journal, you have to register a corresponding general
journal in each period. In the lines of this general journal, retrieve the periodic
journal by clicking the button Period journal/Retrieve journal. Once the journal has
received the periodic journal lines, edit and post the general journal lines as
required.
The option of retrieving a periodic journal is not only available in general journals,
but also in invoice journals in the accounts payable.

Figure 9-14: Retrieving a periodic journal for posting

The column Date in the lines of a periodic journal then shows the next date for
posting the journal, which is calculated by adding the frequency period to the date
shown before retrieving the periodic journal. The date, when the periodic journal
has been retrieved the last time, shows in the column Last date.

9.5.2.7 Voucher Templates

Unlike periodic journals, voucher templates are templates for copying journals
without managing a periodic interval.
For creating a voucher template, click the button Functions/Save voucher template in
the journal lines of a general journal (or an invoice journal). The option “Percent”
for the Template type in the dialog when saving the template then applies a
proportional distribution of line amounts.
If selecting such a template later in a journal after clicking the button Functions/
Select voucher template, a separate dialog pops up for entering the amount which
should be distributed to the lines according to the proportion in the template.

9.5.2.8 New in Dynamics AX 2012

In Dynamics AX 2012, items new to general journal functionality are related to
account structures and the segmented entry control.

mabenito@parcisa.com
9.5 Business Processes in Finance 389

9.5.3 Invoice Journals

Depending on the particular invoice, there are different ways for registering and
posting an invoice. Dynamics AX provides following options for this purpose:
¾ Sales order invoice – for items shipped to customers (see section 4.6.1)
¾ Free text invoice – for sales invoices not related to items (see section 4.6.3)
¾ Vendor invoice – for items and procurement categories received from vendors
(with or without reference to a purchase order, see section 3.6.2)
¾ General journal – for manual purchase or sales invoices (not to be printed)
¾ Invoice journal – for purchase invoices not referring to items and procurement
categories

9.5.3.1 Registering Invoices in the General Journal

For registering a vendor invoice directly related to a ledger account, the usual
option is the vendor invoice journal. For corresponding customer invoices, a free
text invoice applies in most cases.
Alternatively, it is possible to register an invoice in the general journal (General
ledger> Journals> General journal). This might for example be useful, if you want to
record sales invoices which are not printed in Dynamics AX (e.g. invoices written
manually or printed in a separate upstream application like a POS solution).
When entering a sales invoice in a general journal, select the Account type
“Customer” and enter the customer number in the column Account of the journal
lines. In the column Offset account, enter an appropriate revenue account. On the
tab Invoice, you have to enter the invoice number and the terms of payment or the
applicable cash discount. Before posting, you should check whether correct sales
tax groups apply on the tab Overview (or General). Optionally check the sales tax
calculation by clicking the button Sales tax in the action pane strip.
Registering a vendor invoice in a general journal works similar to the sales invoice
(for a vendor invoice, choose the Account type “Vendor”).

9.5.3.2 Accounts Payable Invoices

Whereas sales and accounts receivables have got a specific form – the free text
invoice – for registering an invoice directly referring to ledger accounts, there is no
such form in purchasing or accounts payables.
You may register a vendor invoice – with or without reference to a purchase order
– in the vendor invoice form (Accounts payable> Common> Vendor invoices> Pending
vendor invoices, see section 3.6.2), but this form requires entering item numbers or
procurement categories and does not contain a field for entering ledger accounts.
In order to register a vendor invoice not referring to an item number or a
procurement category, but directly to a ledger account (usually for subjects like
office rent), you have to enter a journal transaction. In accounts payable, following
journals are available for registering and approving invoices:

mabenito@parcisa.com
390 9 Finance Administration

¾ Invoice register – in conjunction with the Invoice approval journal

¾ Vendor invoice pool excluding posting details – in conjunction with the
Invoice journal
¾ Invoice journal – alternatively without pre-registration in the vendor invoice
pool
¾ General journal – as described in the section above
If you want to apply an approval workflow to invoice journals, set up an
appropriate workflow with a template referring to the particular journal type in
the form Accounts payable> Setup> Accounts payable workflows and assign it to the
particular journal name.
The list page Accounts payable> Common> Vendor invoices> Open vendor invoices
shows all invoices not yet paid, irrespective of the way of posting the invoice. The
button New/Invoice in the action pane of this list page provides an alternative access
to the different vendor invoice journals and the vendor invoice form. Similar
options are available on the action pane tab Invoice of the vendor form.

9.5.3.3 Invoice Journal

The invoice journal, accessible through the menu item Accounts payable> Journals>
Invoices> Invoice journal, is the main journal form for registering invoices. In the
invoice journal, alternatively enter a new invoice or retrieve an invoice from the
Vendor invoice pool excluding posting details.

Figure 9-15: Registering invoice journal lines

As with every voucher, you have to insert a header record in the invoice journal
before switching to the lines. Once you have finished registering the invoice lines –
manually entering or transferring from the Vendor invoice pool excluding posting

mabenito@parcisa.com
9.5 Business Processes in Finance 391

details – including vendor number (Account), vendor invoice number (Invoice),

transaction text, amount, offset account, terms of payment, approver (Approved by
on the tab Invoice) and other data like sales tax and cash discount as applicable,
post the invoice by clicking the button Post/Post in the action pane strip of the
header or lines.

9.5.3.4 Vendor Invoice Pool Excluding Posting Details

The form Accounts payable> Journals> Invoices> Vendor invoice pool excluding posting
details provides an option for pre-registering purchase invoices. It is a way for
storing a vendor invoice without posting any financial transaction. The vendor
invoice pool does not apply the regular journal structure (header and lines).
In order to register an invoice in the vendor invoice pool, simply create a new
record by pushing the shortcut Ctrl+N or choosing the command File/New in the
jewel menu. Once you have finished entering the invoice pool lines including
posting date, vendor number, amount, vendor invoice number and other data as
applicable, close the form.
In the Invoice journal, start the transfer of the invoice from the vendor invoice pool
by clicking the button Functions/Invoice pool excl. posting in the journal lines. After
selecting the appropriate invoice in the invoice pool selection dialog, click the
button Accept there to transfer it to the invoice journal lines.

9.5.3.5 Invoice Register

Apart from the vendor invoice pool, the invoice register (Accounts payable>
Journals> Invoices> Invoice register) provides another option for pre-registering
vendor invoices. Unlike the vendor invoice pool, the invoice register functionality
includes actually posting a vendor transaction, applicable sales tax transactions,
and ledger transactions (to interim accounts). Depending on your requirements,
assign a purchase order to the particular invoices in the invoice register.
The structure of the invoice register with journal header and lines is similar to the
structure of the general journal, restricting the account type to “Vendor”. In the
journal lines, you have to enter the employee responsible for approval (Approved by
on the lower pane of the tab Overview) as well as terms of payment, cash discount
and sales tax groups.
If the invoice refers to a purchase order, select the purchase order number in the
appropriate field on the tab Overview or General of the journal in order to facilitate
later approval. In order to post a journal in the invoice register, click the button
Post/ Post in the action pane strip of the header or lines.
Posting a journal in the invoice register creates a regular vendor transaction,
accessible from the vendor list page (Accounts payable> Common> Vendors> All
vendors) by clicking the button Transactions after selecting the particular vendor.

mabenito@parcisa.com
392 9 Finance Administration

The checkbox Approved on the tab General of this transaction is not selected, which
is why the invoice is not included in payment proposals.
The ledger transactions of the invoice register are posted to interim accounts. These
interim accounts are specified in the posting profile (columns Arrival and Offset
account on the tab Setup of the form Accounts payable> Setup> Vendor posting profiles).
Sales tax posting of invoice register transactions is controlled by the accounts
payable parameters, where the lookup field Time of sales tax posting on the tab
Ledger and sales tax determines if sales tax is already posted with the invoice
register or later with the invoice approval.

9.5.3.6 Invoice Approval Journal

After posting a journal in the invoice register, the employee responsible for
approval may approve it in the invoice approval journal.
Invoice approval starts with inserting a new header in the invoice approval journal
(Accounts payable> Journals> Invoices> Invoice approval journal). After switching to the
approval journal lines, click the button Find vouchers in order to retrieve the posted
invoice register.
The find vouchers form shows available invoice registers in the upper pane. The
button Select there provides the option to choose one or more invoices for
approval. Closing the find vouchers form then by clicking the button OK transfers
the selected invoice or invoices to the approval journal lines.

Figure 9-16: The invoice approval journal lines after fetching an invoice register

The next steps depend on whether the approved invoice refers to a purchase order:

mabenito@parcisa.com
9.5 Business Processes in Finance 393

¾ Not related to a purchase order – In this case, select a ledger account – e.g. an
expense account – in the lower pane of the invoice approval journal lines (first
line in the lower pane of Figure 9-16). The expense amount does not include
sales tax. If multiple expense accounts apply, enter several lines sharing the
total amount. In order to finally post the approval, click the button Post/Post.
¾ Referring to a purchase order – In this case, click the button Functions/Purchase
order in order to access the posting form for the related purchase order invoice.
In the posting form, post the invoice as described in section 3.6.2.

9.5.3.7 Rejecting Invoice Approval

If you do not want to approve a vendor invoice, which has been posted in the
invoice register (because it does not comply with applicable purchase orders or
because of other reasons), you have to post a cancellation.
For this purpose, access the invoice approval journal lines, retrieve the applicable
invoice register and click the button Functions/Cancel. Clicking the button Post/Post
in the invoice approval journal posts the cancellation.

9.5.3.8 Invoice Pool Inquiry

All open invoice register approvals show in the form Accounts payable> Inquiries>
Invoice pool.
For invoice register journals referring to a purchase order, the invoice pool inquiry
provides an alternative to the invoice approval journal for posting the approval.
For this purpose, click the button Purchase order in the invoice pool inquiry opening
the posting form for the related purchase order invoice (like the corresponding
button in the approval journal lines).

9.5.4 Payments
Posting an invoice creates an open transaction for the vendor liability or the
customer debt.

9.5.4.1 Open Transactions

For viewing the open transactions, click the button Settle/Settle open transactions on
the action pane tab Collect of the customer page (Accounts receivable> Common>
Customers> All Customers) or on the action pane tab Invoice of the vendor form
(Accounts payable> Common> Vendors> All vendors).
The button Transactions in the customer or vendor form opens the transactions
form showing all transactions. Selecting the checkbox Show open only there applies
a filter showing only open transactions.
In order to print open transactions, choose the report Accounts receivable> Reports>
Transactions> Customer> Open transactions for customers and the report Accounts
payable> Reports> Transactions> Invoice> Vendor invoice transactions for vendors.

mabenito@parcisa.com
394 9 Finance Administration

9.5.4.2 Customer Payment

For registering and posting a customer payment, open the general journal or the
customer payment journal (Accounts receivable> Journals> Payments> Payment
journal).
If choosing the customer payment journal, insert a record in the journal header
there and switch to the lines. In a new journal line, enter the payment with
customer number, transaction text, payment amount, and offset account. If the
customer has paid to your bank account, choose “Bank” for the offset account type.
If you want to apply an invoice when entering a payment line, select the
appropriate invoice number in the column Invoice of the journal line (automatically
inserting the invoice amount for payment).
Alternatively apply one – or more – invoice numbers to a payment line by clicking
the button Functions/Settlement. In the settlement form, choose paid invoices by
selecting the checkbox in the column Mark. After closing the settlement form (there
is no separate button OK), recorded marking applies to the payment journal line.
As an alternative to manually entering payment lines, click the button Enter
customer payment in the payment journal header in order to create and settle
payment lines by selecting paid invoices. An option applying to direct debiting is
the customer payment proposal in the payment journal lines (similar to the vendor
payment proposal, see below).
Once you have finished recording payment lines, post the customer payment
journal by clicking the button Post/Post in the header or lines.

9.5.4.3 Vendor Payment

Like customer payments, payments to vendors may be entered in a general journal
or in a specific payment journal. The payment journal for vendors is available in
the menu item Accounts payable> Journals> Payments> Payment journal.
Manually registering a vendor payment works similar to registering a customer
payment – including the options for settlement. But in most cases, you need
additional support and control of outgoing payments. In Dynamics AX, the
payment proposal and the payment status are available for this purpose.
If you want to prevent paying a particular invoice, clear the checkbox Approved or
enter an Invoice payment release date on the tab General of the vendor transaction.
The payment proposal does not include the invoice until you mark the approval-
checkmark in the transaction again or the release date has passed.

9.5.4.4 Vendor Payment Proposal

The payment proposal supports selecting vendor invoices for payment. In order to
run a payment proposal, click the button Payment proposal/Create payment proposal
in the journal lines of a vendor payment journal.

mabenito@parcisa.com
9.5 Business Processes in Finance 395

In the dialog box of the payment proposal, choose the Proposal type (due date or
cash discount) and a date range for including invoices (From date, To date). Clicking
the button Select allows entering a filter on vendor and transaction data. In order to
actually generate a proposal, the checkbox Generate has to be selected.
Depending on the proposal type, the proposal defaults the invoice due date or the
cash discount date in the posting date for payment. If this date is in the past or
before a future date entered in the Minimum date, today (or the Minimum date)
applies as default.
After closing the dialog box by clicking the button OK, the payment proposal form
displays for checking and editing the payment proposal. The lower pane of the
payment proposal form for this purpose shows suggested payments. After
selecting a payment line in the lower pane, edit related invoices in the upper pane
as necessary (removing invoices from payment or editing the payment amount).
The tab Cash discount in the upper pane enables editing the cash discount date.
Finally clicking the button Transfer in the action pane strip of the payment proposal
form transfers the proposal to the payment journal.
The payment proposal marks a settlement for the selected invoices. Depending on
the method of payment in the particular invoices, there is one payment line for
several invoices or a separate payment line per invoice.

Figure 9-17: Registering lines in a vendor payment journal

Before posting the vendor payment, you can still edit the transferred proposal by
clicking the button Payment proposal/Edit payment proposal in the journal lines.

9.5.4.5 Method of Payment

Methods of payment in the form Accounts payable> Setup> Payment> Methods of
payment are an important setting for processing vendor payments.

mabenito@parcisa.com
396 9 Finance Administration

Usually there are at least two methods of payment: One for manual transfers and
one for electronic banking. In the field group Posting on the tab General of the
methods of payment, optionally enter a bank (or ledger) account from which you
want to pay. This account is the default for the offset account when selecting the
method in a payment. If you want to support bank reconciliation by posting to a
bridging account (see below), select the checkbox Bridging posting and enter the
bridging account number.
For methods of payment related to electronic payment, you should select the status
“Sent” or “Approved” for the Payment status in order to prevent posting a payment
before generating a related payment export file. Further settings for electronic
payments like the file formats are available on the other tabs.
In order to assign a default payment method to a vendor, enter it on the tab
Payment in the vendor form. The Method of payment selected in the vendor record
defaults to purchase orders, vendor transactions and the payment journal.

9.5.4.6 Generating and Posting Payments

Before generating and posting a payment, optionally print the payment journal for
control purposes by clicking the button Print/Journal in the header or lines.
In order to generate an export file for electronic payment, click the button
Functions/Generate payments in the payment journal lines once the lines contain the
appropriate method of payment. If you need an export file, make sure to generate
it before posting the payment.
When generating the payment, Dynamics AX sets the payment status of the journal
lines to “Sent”. If required, change the payment status manually by clicking the
button Payment status.
In order to finish the payment procedure, click the button Post/Post in the payment
journal for posting the payment from the selected bank or ledger account.

9.5.4.7 Applying Bridging Accounts

If the payment does not directly post to a bank account, but to a bridging account
as specified in the payment method, you need to post a transfer from the bridging
account to the bank account when receiving the appropriate bank statement later.
For registering and posting this transfer, create a new journal in the general
journals (General ledger> Journals> General journal). In the general journal lines, click
the button Functions/Select bridged transactions in order to access the form for
selecting and accepting the transaction concerned.

9.5.4.8 Centralized Payment

The functionality of centralized payments supports a company structure with a
central company processing payments of an affiliated group. As a prerequisite for
using centralized payments, set up intercompany accounting (General ledger>

mabenito@parcisa.com
9.5 Business Processes in Finance 397

Setup> Posting> Intercompany accounting) for the legal entities concerned. In

addition, appropriate permission settings applying an organization hierarchy with
the purpose “Centralized payment” are required.
Payment journals and payment proposals show the company in the column
Company accounts. When posting a payment applying centralized payments, settle
invoices in other companies as applicable.

9.5.4.9 New in Dynamics AX 2012

Payment features new in Dynamics AX 2012 include changes in the setup of
centralized payments referring to organization hierarchies and shared data.

9.5.5 Reversing Transactions

In Dynamics AX, there are two different types of transaction reversals: Manually
entered reversals (for corrections) and automatic reversals (for accruals).

9.5.5.1 Transaction Reversal

The transaction reversal, which is available for ledger, vendor and customer
transactions (e.g. free text invoices), provides a simple way for correcting wrong
vouchers in finance. It is not available for transactions referring to inventory,
purchase orders or sales orders, however. In order to reverse these kinds of
transactions, register an appropriate document in the original menu – for example
a customer return order in the Sales and marketing menu.
If you want to reverse a financial transaction, access the transaction inquiry by
clicking the button Transactions in the vendor page (Accounts payable> Common>
Vendors> All vendors) or customer page (Accounts receivable> Common> Customers>
All Customers). For ledger transactions, click the button Journal entries/Posted in the
main accounts page (General ledger> Common> Main accounts).

Figure 9-18: Reversing a ledger transaction

After selecting the particular transaction, click the button Reverse transaction
showing a dialog for entering the posting date for reversal. If you want to reverse a
settled vendor or customer transaction (e.g. a paid invoice), you have to cancel the
settlement of the transaction (see section 9.4.5) for making it available for reversal.

mabenito@parcisa.com
398 9 Finance Administration

Transaction reversal posts a new transaction, offsetting the original transaction. If

required, reverse a reversal.

9.5.5.2 Automatic Reversal with Reversing Entries

Unlike manual transaction reversals, which apply to adjust incorrect transactions,
reversing entries are transactions generated automatically in order to reverse
accruals in a later period.
Reversing entries are available in general journals (General ledger> Journals> General
journal). In order to generate a reversing entry, select the checkbox Reversing entry
and enter a Reversing date in the rightmost columns on the tab Overview of the
journal lines when entering the original transaction. In the general journal header,
the checkbox Reversing entry and the reversing date are available providing a
default for the lines.
When posting a general journal with automatic reversal, Dynamics AX in parallel
posts a second transaction reversing the original transaction.

9.5.6 Case Study Exercises

Exercise 9.5 – Journal Names
You want to register the transactions of the exercises below in your own journals.
For this purpose, create a journal name “G-##” (## = your user ID) with the type
“Daily”, a journal name “I-##” with the type “Vendor invoice recording”, and a
journal name “P-##” with the type “Vendor disbursement”. Choose an existing
number sequence for all of the journal names.
Exercise 9.6 – Segmented Entry in General Journals
You want to transfer GBP 50.00 from your main account “ZZ##” in “Area ## 1” to
your petty cash account “111C-##” (both accounts entered in Exercise 9.2).
Register an appropriate transaction in a general journal, choosing your journal
name “G-##”. Which segments apply to your main account “ZZ##”? Check the
value lookup for the main account and the financial dimension.
Then post the journal and check the balance and the transactions on both accounts
of the journal line.
Note: If a Balancing financial dimension applies, enter an appropriate value for this
dimension in the applicable segment of the ledger account and the offset account.
Exercise 9.7 – General Journal
You want to withdraw GBP 100.00 from the bank account “B-##” entered in
Exercise 9.4 and put it to your petty cash account “111C-##” entered in Exercise 9.2.
Register the appropriate transaction in a general journal, choosing your journal
name “G-##”.

mabenito@parcisa.com
9.6 Ledger Integration 399

Check the balance and transactions of the bank account and of the petty cash
account before posting. Then post the journal and check the balance and the posted
transactions again.
Note: If a Balancing financial dimension applies, enter an appropriate value for this
dimension in the applicable segment of the ledger account and – after clicking the
button Financial dimensions in the journal lines – for the bank account.
Exercise 9.8 – Purchase Invoice
The vendor, which you have entered in exercise 3.2, submits the invoice “VI808”
showing a total of GBP 50.00 to your company. The invoice refers to expenses, for
which you have entered the main account “6060##” in Exercise 9.2.
Record this invoice in an invoice journal with your journal name “I-##”. The terms
of payment and the cash discount entered in exercise 3.1 apply to this invoice.
Check the vendor balance, the vendor transactions, the ledger balance of your
expense account, and the corresponding ledger transactions before posting. Then
post the invoice and check the balances and the transactions again.
Note: If a Balancing financial dimension applies, enter an appropriate value for this
dimension in the applicable segment of the expense account.
Exercise 9.9 – Vendor Payment
You want to pay the invoice “VI808” which you have posted in the previous
exercise. Register the payment in a vendor payment journal applying your journal
name “P-##”. Pay from your bank account “B-##” entered in Exercise 9.4 and
withdraw applicable cash discount.
Check the vendor balance and the bank account balance before posting. Then post
the payment and check the balances again, in addition controlling the voucher
transaction and the transaction origin of the payment transaction.
Exercise 9.10 – Transaction Reversal
Your vendor of exercise 3.2 now submits the invoice “VI810” with a total of GBP
30.00 to your company. Register and post the invoice like you did in Exercise 9.8.
Noticing that the invoice is incorrect afterwards, you want to reverse it. Check the
vendor balance, the vendor transactions, the ledger balance of your expense
account, and the corresponding ledger transactions before reversing. Then reverse
the invoice and check the balance and the transactions again.

9.6 Ledger Integration

One of the main advantages of an integrated business solution like Dynamics AX
is, that business transactions registered anywhere in the application are then
available in all areas. For example, posting a sales order invoice does not only
generate the required document, it also affects other areas generating following
transactions:

mabenito@parcisa.com
400 9 Finance Administration

¾ Inventory transactions – Reducing inventory value

¾ General ledger transactions – To revenue, COGS, stock and customer debt
accounts
¾ Customer transaction – For the open invoice in accounts receivable
¾ Sales tax transactions – As applicable
Depending on the particular transaction, the invoice additionally for example posts
transactions for commission, discount or cash payment.

9.6.1 Basics of Ledger Integration

Ledger integration – the integration of the general ledger in finance with the other
areas of the application – is one of the core characteristics of an integrated business
solution (ERP solution).
In Dynamics AX, transactions in all areas relevant to finance – like sales,
purchasing, inventory, or production – automatically post transactions to the
general ledger.

9.6.1.1 Basic Settings

A number of settings control, whether and which main accounts apply to the
different transactions in business. For the areas of purchasing, sales, inventory, and
production covered in this book, following settings are relevant:
¾ Summary accounts for vendor liabilities and customer debts – In the posting
profiles for accounts payable/receivable
¾ Main accounts for inventory transactions – In the inventory posting setup
¾ Main accounts for production transactions – In resources, cost categories and
production groups
In addition, specific settings are available for particular transactions like sales tax,
cash discount, indirect costs, or miscellaneous charges.

9.6.1.2 Vendors and Customers

Vendor posting profiles control the assignment of vendor transactions to summary
accounts in the general ledger. Customer posting profiles for customer transactions
work similar.
More details on posting profiles are available in section 3.2.3 of this book.

9.6.1.3 Subledger Accounting

Subledger accounting in Dynamics AX provides the option to decouple posting to
subledgers – like accounts receivables – from posting to the general ledger.
Applying the subledger journal entry functionality, it is possible to run the transfer
to the general ledger either synchronous or asynchronous, and either detailed or
summarized.
Subledger accounting does not apply to all subledger transactions, but to specific
document types including:

mabenito@parcisa.com
9.6 Ledger Integration 401

¾ Free text invoice – See section 4.6.3

¾ Product receipt – Purchase order receipt, see section 3.5.4
¾ Vendor invoice – Purchase order invoice, see section 3.6.2
In the general ledger parameters (General ledger> Setup> General ledger parameters,
tab Batch transfer rules), settings for the subledger transfer are available at company
level and per document type. The Transfer mode in the particular batch transfer rule
controls, when a subledger transaction is posted to the general ledger:
¾ Synchronous – Immediately posting to the general ledger
¾ Asynchronous – Posting as soon as sever capacity is available
¾ Scheduled batch – In a separate batch job (e.g. in the nighttime), providing the
option to view subledger transactions before transferring to the general ledger
For documents applying scheduled batch transfer, posted subledger transactions
show in the form General ledger> Inquiries> Subledger journal entries not yet transferred
before transfer. Clicking the button Transfer entry (for immediate transfer) or Batch
transfer (for scheduled transfer) in this form posts the subledger transaction to the
general ledger.
The button Subledger journal in the subledger transfer form and in applicable source
documents (e.g. free text invoices) provides access to the complete accounting
information including all applicable financial segments.

9.6.1.4 New in Dynamics AX 2012

In Dynamics AX 2012, the financial framework includes subledger accounting.

9.6.2 Ledger Integration in Inventory

When posting inventory receipts and issues to the general ledger, Dynamics AX
distinguished two different types of transactions (see section 7.1.1):
¾ Physical transaction – Packing slip
¾ Financial transaction – Invoice
Physical and financial transactions refer to different main accounts.

9.6.2.1 Physical Transaction

Posting of physical transactions to the general ledger is optional, not compulsory.
Relevant settings on this subject include following checkboxes:
¾ Post physical inventory (in the item model group)
¾ Post product receipt in ledger (Accounts payable parameters, tab Updates) or
Post packing slip in ledger (Accounts receivable parameters).
In the production menu, a similar checkbox in the production control parameters
applies. Physical transactions in production are picking list and report as finished
transactions.

mabenito@parcisa.com
402 9 Finance Administration

9.6.2.2 Financial Transaction

For financial transactions, the checkbox Post financial value in the item model group
determines whether inventory transactions post to the general ledger.
If this checkbox is cleared for an item model group, ledger integration is not active
for the assigned items. This is the appropriate setting for service items. Posting a
purchase invoice in this case directly posts to the expense account for
consumption. Inventory issues do not post ledger transactions.

9.6.2.3 Assignment of Main Accounts

In order to check the main accounts applying automatically when posting an
inventory transaction, access the inventory posting setup (Inventory management>
Setup> Posting> Posting). The inventory posting setup form includes account
settings for following transactions:
¾ Sales order tab – Packing slips and invoices in sales
¾ Purchase order tab – Product receipts and invoices in purchasing
¾ Inventory tab – Journal transactions in inventory
¾ Production tab – Picking lists, reporting as finished and costing of production
orders
¾ Standard cost variance tab – Standard cost variances
Each of these tabs shows a list of available transaction types in the left pane. After
selecting a transaction type in the left pane, the right pane shows the main
accounts for this transaction type.

Figure 9-19: The inventory posting setup, showing account settings for revenue

mabenito@parcisa.com
9.6 Ledger Integration 403

9.6.2.4 Transaction Combinations

The inventory posting setup primarily depends on the combination of two
dimensions:
¾ Items or categories
¾ Customers or vendors
In addition, main account settings optionally are depending on the sales tax group
and – for standard cost variance transactions – on the cost group.
For the item dimension and for the customer (tab Sales order) – or the vendor (tab
Purchase order) – dimension, main account settings are available at three levels:
¾ Table – Individual item, customer or vendor
¾ Group – Item group, customer group or vendor group
¾ All
The Item code “Category” – an additional option for the item dimension in sales and
purchasing – enables settings depending on product categories. The last line of the
revenue settings in Figure 9-19 shows an example for such a setting.
When posting a transaction, Dynamics AX always searches for the specific setting
(“Table”) first, then for the group setting, and finally for the general setting (“All”).
For example in a sales invoice transaction, settings for the customer and item
number have the highest priority, followed by group settings. Settings in the field
group Posting on the tab Ledger and sales tax of the accounts receivable parameters
control, whether the search should prioritize the item or the customer dimension.
A similar setting for purchasing is available in the accounts payable parameters.
Main account assignment is not only available in the inventory posting setup form.
Alternatively access these settings by clicking the button Posting in the item group
form, or the button Setup/Item posting in the customer group or vendor group form.
When accessing the posting setup from a group form, it shows the ledger settings
filtered on the selected group. In the item group form itself, the right-hand pane
shows the main account settings filtered of the selected item group.

9.6.2.5 Available Combinations and Ledger Reconciliation

The transaction combinations form (Inventory management> Setup> Posting>
Transaction combinations) determines the dimension levels, which are available in
the inventory posting setup.
Since reports for the reconciliation between inventory and the general ledger like
the report Inventory management> Reports> Status> Inventory value> Inventory value
usually refer to the item group, the item group relation is active in a common setup
scenario. The setup for the inventory value report is available in the form Inventory
management> Setup> Costing> Inventory value reports.

mabenito@parcisa.com
404 9 Finance Administration

9.6.2.6 Example – Transactions Referring to Sales Order Processing

As an example for automatic ledger transactions, the lines below show the
transactions in sales order processing with activated ledger integration for packing
slip and invoice posting (physical and financial transactions).
When posting the packing slip for the sales order, Dynamics AX posts a ledger
transaction to the main accounts specified for Packing slip and Packing slip offset in
the inventory posting setup. When posting the invoice, Dynamics AX reverses the
ledger transactions of packing slip posting, and posts a ledger transaction to the
account Issue against Consumption. In parallel, a customer debt to the summary
account (specified in the posting profile) posts against the account Revenue and – if
applicable – the sales tax account.
If the inventory posting setup includes settings in the option Discount for the line
discount, the discount posts to this account. Otherwise, the discount does not post
separately, but reduces the revenue amount.

9.6.2.7 Standard Cost Price and Moving Average

For items assigned to an inventory model “Standard cost” (see section 7.3.1), there
are important settings on the tab Standard cost variance of the inventory posting
setup. This tab contains the main accounts applicable for posting differences
between the actual cost price of the purchase invoice (or production costing) and
the standard cost price, broken down by different posting types like Purchase price
variance.
For items assigned to an inventory model with a fixed receipt price, settings for
posting the price difference are available on the tabs Purchase order and Inventory.
For items assigned to an inventory model “Moving average”, settings for posting
the price difference (for quantities not on stock any more when receiving the
invoice) and for revaluation are available on the tab Inventory.

9.6.2.8 Service Items and Non-stocked Items

Items like office supplies or consumables may be linked to the product type
“Service“, applying a specific item group and item model group. In the item model
group, ledger integration for physical and financial transactions should be
deselected. In sales orders, only a ledger transaction of the revenue account against
the customer summary account is posted for these items. There is no transaction to
an issue or consumption account.
Non-stocked items, which are not part of a bill of materials, may alternatively or
additionally refer to an item model group with a cleared checkbox Stocked product
(see section 7.2.1). This setting prevents inventory transactions and ensures that
ledger integration for physical and financial transactions is deselected.

mabenito@parcisa.com
9.6 Ledger Integration 405

9.6.2.9 Change of Settings

In order to avoid issues when reconciling inventory and general ledger, you
should not change integration settings in the item model group, in parameters and
in the inventory posting setup for items, which are on stock or show open
inventory transactions. This includes both, changing the setup itself, and changing
the assignment of active items to item groups.

9.6.2.10 New in Dynamics AX 2012

In Dynamics AX 2012, settings for product categories enhance the posting setup for
the item dimension.

9.6.3 Ledger Integration in Production

Unlike ledger transactions in purchasing, sales and inventory, ledger transactions
in production have to include the cost of resource operations for calculating the
inventory value of finished items.

9.6.3.1 Production Control Parameters

In order to comply with this requirement, production parameters (Production
control> Setup> Production control parameters) controlling ledger integration contain
following options in the lookup field Ledger posting:
¾ Item and resource
¾ Item and category
¾ Production groups
The setting in the general production parameters, which is not available in the
production parameters by site, is the default for production orders. It is possible to
override this default in particular production orders, for example if applying
specific settings for prototype production.

9.6.3.2 Item and Resource

If choosing the option “Item and resource” in the Ledger posting parameter, the
main accounts specified in the inventory posting setup apply to item transactions.
For resource operations, the main account settings on the tab Ledger of the resource
(Organization administration> Common> Resources> Resources) apply.

9.6.3.3 Item and Category

If choosing the option “Item and category” in the Ledger posting parameter, the
main accounts specified in the inventory posting setup apply to item transactions
again. But for resource operations, settings of the applicable cost category
(Production control> Setup> Routes> Cost categories, tab Ledger-resources) apply.

mabenito@parcisa.com
406 9 Finance Administration

9.6.3.4 Production Group

If choosing the option “Production group” in the Ledger posting parameter, main
account settings in the posting group (Production control> Setup> Production>
Production groups) apply.
Production orders show the applicable production group on the tab General in the
detail form. In the released product form, a default for this production group of a
finished product is available on the tab Engineer.

9.6.3.5 Ledger Transactions for Production

When processing a production order, following ledger transactions are posted to
the main accounts (depending on the Ledger posting parameter, see above):
¾ Picking list – Account Picking list against Picking list offset account
¾ Resource operation – Account WIP issue against WIP account (WIP = “Work In
Process”)
¾ Report as finished – Account Report as finished against Report as finished offset
account
When costing the production order, Dynamics AX reverses all these transactions
and posts the final finished item receipt, component issue and resource issue
transactions to the main accounts as specified in the Ledger posting parameter.

mabenito@parcisa.com
10 Core Setup and Essential Features

The organization of an enterprise determines the setup of the ERP system. Before
starting to work in Dynamics AX, there needs to be an implementation project
setting up the enterprise organization and other core parameters.

10.1 Organizational Structures

An instance is an independent installation of Dynamics AX, which contains its own
database and application. Since instances are independent from each other,
modifying configuration settings and programmable objects in one instance does
not affect other instances. You may physically install one Dynamics AX instance on
one or more database and application servers. But it is also possible to install
several instances on one server.
In a business environment, there is usually at least one instance for development
and tests, which is separate from the operational ERP system in order to avoid
affecting daily business.
Within one Dynamics AX instance, data partitions in Dynamics AX 2012 R2/R3
enable independent data for enterprises working in a common Dynamics AX
database without sharing business data.
Within a data partition, the organization model shows the structure of the
enterprise and its business processes. The organization model therefore has to be
configured according the specific operational and statutory structure.
Depending on the type and the size of an enterprise, there may be different
organizational structures. These organizational structures show following types:
¾ Statutory organization structures for legal reporting – Hierarchies according
to regulations of public authorities (e.g. for tax purposes)
¾ Operating organization structures for management reporting – Hierarchies
according to requirements of the internal management for controlling and
improving business processes (e.g. divisional structures)
¾ Informal structures – Not showing organizational hierarchies
In order to comply with the different reporting requirements, large enterprises
may show different organizational structures and hierarchies in parallel. Applying
parallel hierarchies, one of the hierarchies for example matches the structure and
purpose of legal entities, another hierarchy supports the divisional structure, and a
third hierarchy complies with regional structures.
For other enterprises, one simple hierarchy without the need for different
organizational structures may be adequate.

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6_10, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
408 10 Core Setup and Essential Features

10.1.1 Data Partitions

Dynamics AX 2012 contains multiple areas of shared application data – e.g. parties,
addresses, products, currencies, resource capabilities, or employees. Depending on
the specific requirements, enterprises either want to share these data across
multiple or all companies, or to keep company data isolated.
Data partitions in Dynamics AX 2012 R2/R3 enable independent data for
enterprises working in a common Dynamics AX instance.

10.1.1.1 Architecture of Data Partitions

In each relevant table, the column Partition is a key field containing the applicable
partition of the records. Within a partition, the key field DataAreaId in tables with
company-specific data determines the company of the particular record.
Companies working in different partitions only share the application code –
therefore using the same program functionality and customizations – and basic
shared system data including database settings, AIF ports and batch jobs.
Dynamics AX users, permissions, and shared application data like parties or
currencies are not shared across partitions.
When deciding on the setup of data partitions, keep in mind that some features in
Dynamics AX like the intercompany functionality (for automatic purchase and
sales processes between companies) require working in a common partition.

10.1.1.2 Creating and Using Partitions

Installing Microsoft Dynamics AX creates the default partition “Initial”. If you do
not need multiple partitions for separating data, you can set up all companies in
this partition then.
In case you want to create an additional partition, access the menu item System
administration> Setup> Partitions and create a new partition as required. Once saved,
you cannot delete a partition. The system administrator creating a partition must
then create the users and permissions in this partition. Next you can create
companies, organization units and hierarchies, and other setup data as applicable.
When logging on to Dynamics AX, you are accessing a particular data partition
and company. This partition usually is the default partition as specified for your
user in the user administration (System administration> Common> Users> Users,
checkbox Current partition is default partition in the detail form). You cannot switch
partition in a client session. If you want to access another partition, create or
choose a client configuration with the appropriate partition for starting the client.
Depending on your user options, the status bar and the title bar of forms show the
current partition.

10.1.1.3 New in Dynamics AX 2012 R2

Data partitions are new in Dynamics AX 2012 R2.

mabenito@parcisa.com
10.1 Organizational Structures 409

10.1.2 Organization Model Architecture

The flexible organization model in Microsoft Dynamics AX supports the
requirements of different organization types. Depending on these requirements,
the organization setup alternatively includes multiple organization hierarchies in
parallel, decoupling the operating organization from the statutory organization, or
only one simple hierarchy used for all purposes at the same time.

10.1.2.1 Organization Types

The organization model in Dynamics AX includes following organization types:
¾ Legal entities – Showing the statutory organization
¾ Operating units – Showing the operating organization
¾ Teams – Showing informal structures
Only organization units of the type “Legal entity” and “Operating unit” are
applicable elements for setting up organization hierarchies in Dynamics AX.
Since organization units of the type “Team” are an informal type of organizations,
they are not included in hierarchies. Teams apply to several areas of Dynamics AX,
for example as a basis for restricting access to the global address book.

10.1.2.2 Using the Organization Model within Dynamics AX

Following areas apply the organization model within Dynamics AX:
¾ Company structure – Legal entities are linked to companies in Dynamics AX,
which is why you have to set up legal entities for creating companies.
¾ Financial dimensions – Since legal entities and operating units are available as
financial dimension, they may be used for financial reporting.
¾ Data security – Based on the organization hierarchy purpose Security, access of
users to organizations may be configured independently from the structure of
legal entities.
¾ Business policies – Business rules for areas like approval processes and
centralized payments may apply to a structure which is different to the
hierarchy of legal entities.
Legal entities and operating units are not only part of organizational hierarchies,
but they are also included in the global address book (see section 2.4). Therefore,
features of the global address book like address and contact administration apply
to these elements of the internal organization.

10.1.3 Organization Units

The organization model includes organization units of the type “Legal entity”,
“Operating unit” and “Team”. Legal entities and operating units are the basic
elements in the organizational hierarchies of an enterprise.
The list page Organization administration> Common> Organization> Internal
organizations shows an overview of all organizations with their type. Forms

mabenito@parcisa.com
410 10 Core Setup and Essential Features

tailored to the specific requirements of the different organization types are

available in the folder Organization administration> Setup> Organization.

Figure 10-1: Organization units in the organization model

10.1.3.1 Legal Entities

Legal entities (Organization administration> Setup> Organization> Legal entities) are
company accounts in Dynamics AX (see section 10.1.5 below), constituting the
basic level for legal reporting. Tax reports and financial statements like balance
sheets and income statements are based on legal entities.
Since a data partition in Dynamics AX may contain several legal entities, you can
manage the relations between these legal entities. Depending on your
requirements, following features are available:
¾ Financial consolidation – Managing financial consolidation of companies in an
affiliated group
¾ Intercompany – Automating business processes between the legal entities of a
multi-company organization
¾ Organization hierarchies – Applying legal entities in the organization model
(e.g. for setting up data security or approval processes)

10.1.3.2 Operating Units

Operating units (Organization administration> Setup> Organization> Operating units)
are there for management reporting, supporting internal control of business
processes. Depending on the enterprise, it includes different types of operating
units like divisions or regions.
A standard Dynamics AX implementation contains following operating unit types:
¾ Department – Representing functional categories, also used in human resources
¾ Cost center – For budgeting and expenditure control
¾ Value stream – Referring to production flows (lean manufacturing)
¾ Business unit – Controlling strategic business objectives (e.g. divisions)
¾ Retail channel – Referring to retail management

mabenito@parcisa.com
10.1 Organizational Structures 411

When setting up a new operating unit by clicking the button New in the action
pane strip of the operating unit form, select the Operating unit type first. Then enter
additional data like name, addresses and contact data in the detail form.

Figure 10-2: Creating a cost center in the operating unit form

Once an operating unit is assigned to one or more hierarchies, clicking the button
View in hierarchy enables checking the positioning within organizational structures.
Linking operating units to financial dimensions (see section 9.4.3) allows reporting
on their performance.

10.1.3.3 Teams
Teams (Organization administration> Setup> Organization> Teams) represent the
informal organization of an enterprise. Teams are groups of people, without a
hierarchical organization structure between different teams.
Team types, accessible by clicking the button Team types in the action pane of the
teams form, may restrict team membership to different kinds of people – e.g.
Dynamics AX users, employees, or sales contacts.
When creating a new team, you have to select the team type first. Then click the
button Add team members on the tab Team members of the teams form for assigning
persons to the team. Depending on the team type, available members are for
example Dynamics AX users, or vendors, or employees.
Teams are applicable to different areas of the application, e.g. collections (select the
responsible team in the accounts receivable parameters) or access restriction to the
global address book (see section 10.2.4).

10.1.3.4 New in Dynamics AX 2012 and in AX 2012 R2

The organization model is a new element in Dynamics AX 2012. Compared with
the initial version of Dynamics AX 2012, the R2 version additionally contains the
operating unit type “Retail channel”.

mabenito@parcisa.com
412 10 Core Setup and Essential Features

10.1.4 Organization Hierarchy Structures

Organization hierarchies show the relationship between different organization
units in a particular perspective towards your enterprise. An organizational
hierarchy of legal entities for example shows the legal structure.
Depending on the requirements of your enterprise, there are several hierarchies in
parallel. The purposes of a hierarchy determine its functional areas. Hierarchies of
the type Security for example apply to data security.

10.1.4.1 Organization Hierarchies

For accessing organization hierarchies, choose the form Organization
administration> Setup> Organization> Organization hierarchies. If creating a new
hierarchy by clicking the button New, you have to enter the hierarchy name first.
Then click the button Assign purpose on the tab Purposes of the hierarchies form for
assigning one or more hierarchy purposes to the hierarchy.

Figure 10-3: Editing an organization hierarchy in the hierarchy designer

Clicking the button View in the action pane strip provides access to the hierarchy
designer for viewing the hierarchy. In the hierarchy designer, navigate within the
hierarchy, or switch the focus by clicking the icon on the right of the nodes.
After switching to the edit mode by clicking the button Edit in the action pane of
the hierarchy designer, insert or remove organization units from the hierarchy as
applicable by clicking the appropriate button in the action pane or choosing the

mabenito@parcisa.com
10.1 Organizational Structures 413

pop-up menu (right-hand click on an organization unit). The buttons Cut and Paste
provide the option to move a unit including subunits within the whole
organization hierarchy.
The organization structure applies validity periods, which is why you have to
enter an effective date when publishing the hierarchy after editing.

10.1.4.2 Organization Hierarchy Purposes

The organization hierarchy form may include several hierarchies in parallel,
applying different perspectives – or purposes – to the individual hierarchies.
Organization hierarchy purposes are available in the form Organization
administration> Setup> Organization> Organization hierarchy purposes. Since hierarchy
purposes refer to functional features, available purposes – like Centralized payments
or Security – and the allowed organization types per purpose are determined by
the Dynamics AX standard application.
Clicking the button Add on the tab Assigned hierarchies of the hierarchy purposes
form enables assigning organization hierarchies to purposes. Depending on the
requirements, assign several hierarchies to one purpose or one hierarchy to several
purposes.

10.1.5 Legal Entities (Company Accounts)

When logging on to Dynamics AX, you are accessing a particular company account
(legal entity) which is the current company for the session. The default company
applicable when starting the client is specified in your user options or in the client
configuration.
Depending on your user options, the status bar and the title bar of forms show the
current company. If you want to switch from one current company to another,
choose the command File/Tools/Select company accounts or click the company field in
the status bar.

10.1.5.1 Managing a Company

The company management (legal entity administration) in Dynamics AX is
available in the form Organization administration> Setup> Organization> Legal entities.
If you want to create a new company, click the button New or push the shortcut
Ctrl+N and enter the company name, the company ID (with up to 4 digits), and the
country/region (specifying applicable country-specific Dynamics AX features) in
the Create new legal entity dialog.
Before you can start entering and posting transactions in the new company, the
setup of the company has to be done in all applicable areas and modules (like
general ledger, accounts payable and accounts receivable). A checklist of basic
settings is available in the appendix of this book.

mabenito@parcisa.com
414 10 Core Setup and Essential Features

Figure 10-4: Creating a company in the legal entity form

In the legal entity form, setup data include the company name (which prints on all
documents and reports) and further settings like the primary address of the
company on the tab Addresses. If the company has got additional addresses for
purposes like invoicing or delivery, add them by clicking the button Add on tab
Addresses. An example of an additional address is a default delivery address which
is different to the primary company address. This delivery address is the default
for purchase orders then (if no address from a site or warehouse applies).
Contact data of the company are available on the tab Contact information. Legal
entities in Dynamics AX apply to the global address book, which is why company
addresses and contact data are included there.
Further important settings in the legal entity form include the primary bank
account and registration numbers (like the Routing number for tax reporting) on the
tab Bank account information. Companies located in the European Union enter their
VAT registration number (exempt number) on the tab Foreign trade and logistics.

10.1.5.2 Companies in the Data Structure

One data partition may include multiple company accounts. Except for shared
application data (like parties or and products), company accounts hold their
separate set of data within the partition. The key field DataAreaId in all relevant
Dynamics AX tables then determines the company of the particular record.
A specific company included in all data partitions is the company “DAT”.
Dynamics AX automatically generates this company, which holds system data,
when installing the system. You cannot delete it and you should not use it for a test
or operational company in order to clearly distinguish company data from non-
company specific data.

mabenito@parcisa.com
10.1 Organizational Structures 415

10.1.5.3 New in Dynamics AX 2012

In Dynamics AX 2012, the concept of legal entities replaces the structure of
company account settings in former releases. The legal entity form now includes
the former company information, moving the company currency to the ledger
form (see section 9.4.2).

10.1.6 Virtual Company Accounts

Dynamics AX 2012 contains several functional areas sharing data across legal
entities – e.g. parties, address books, charts of accounts, or shared products.
In addition, virtual company accounts enable a joint management of data, which
are not included in these areas, but nevertheless are common to several companies
within one partition. Depending on the requirements, applicable areas of common
data include delivery terms, tax setup, bills of material, or any other table.

10.1.6.1 Setup of Virtual Companies

Virtual companies are available in the form System administration> Setup> Virtual
company accounts. For creating a virtual company account, insert a new record on
the tab Virtual company accounts with an ID and a name there. Dynamics AX
internally applies the virtual company account ID instead of the regular company
account in the key field DataAreaId for all tables of the table collections assigned to
the virtual company. Therefore, it is not possible to choose a code which already
exists for a regular company in Dynamics AX.
Once the new virtual company account record is saved, switch to the tab Company
accounts and assign companies to the virtual company as applicable by moving
them from the right pane to the left pane (either dragging and dropping with your
mouse or by clicking the arrow buttons and ).
For specifying the tables which are common to these companies, switch to the tab
Table collections. You cannot specify individual tables on this tab, but only table
collections representing a group of tables. Creating and editing table collections is
only possible in the development environment.
Virtual company accounts are a basic setup, which needs to be configured at the
very beginning of an implementation project. If adding virtual companies or
shared tables once data are already stored in the tables concerned, you have to
manage data consolidation directly in the database. Without data consolidation,
these tables do not show former data of the companies concerned.

10.1.6.2 Working in Virtual Companies

Unlike regular company accounts, virtual companies do not provide a direct
access. In order to access virtual company data, log on to a regular company and
insert, modify and delete records of shared tables like you do in tables with
company-specific data. Changes of data in tables of a shared table collection are
immediately available in all companies of the virtual company account.

mabenito@parcisa.com
416 10 Core Setup and Essential Features

10.1.7 Sites
Unlike company accounts, which comply with legal entities, sites represent
subsidiaries within a company. Being an inventory dimension (storage dimension),
sites are available in all areas of supply chain management within Dynamics AX.
In order to distinguish subsidiaries in finance and cost accounting, optionally link
the inventory dimension “Site” to a financial dimension. Applying a filter on the
financial dimension allows for example printing an income statement per
subsidiary.

10.1.7.1 Multisite Functionality

The multisite functionality for managing subsidiaries in Dynamics AX includes the
following options:
¾ Operations planning (master scheduling) – Per site or for the entire company
¾ Bills of materials and Routes – Per site or for the entire company
¾ Production control parameters – Per site or for the entire company
¾ Item data (Released products) for order management and planning – Per site or
for the entire company
¾ Transactions – Sites in all inventory transactions, sales orders, purchase orders
and production orders
¾ Financial reports – Optionally for sites (if linked to a financial dimension)

10.1.7.2 Setup of Sites

Sites are available in the form Inventory management> Setup> Inventory breakdown>
Sites. Apart from the ID, the name and the address, a site includes the assigned
financial dimension on the tab Financial Dimensions. This setting is mandatory if the
dimension link is activated.
The dimension link between the inventory dimension “Site” and a financial
dimension is specified in the form Inventory management> Setup> Posting> Dimension
link. If applicable to your enterprise structure, activate and lock the link there.
Figure 10-5 for example shows the site form in a company linking the financial
dimension “Department” to sites.
Since sites are a mandatory storage dimension, they are automatically activated in
all storage dimension groups. Appropriate dimension values therefore have to be
entered in every inventory transaction. In addition, each warehouse has to be
linked to a site.
If sites do not apply to the organization of your enterprise, set up Dynamics AX in
a way that a single site defaults to all transactions (e.g. applying appropriate
defaults in the Default order settings of released products). More information on
inventory dimensions is available in section 7.2.2.

mabenito@parcisa.com
10.1 Organizational Structures 417

Figure 10-5: Sites in a company (linked to the financial dimension “Department”)

10.1.7.3 Production Units

Whereas material management applies Sites as a storage dimension for establishing
a structure level below legal entities, capacity management applies Production units
for structuring resources and resource groups. Each production unit is linked to a
site and represents a plant in operations planning.

10.1.7.4 Linking Sites to the Organization Model

It is not possible to directly include sites in the organization model. But you can
link sites to a financial dimension and financial dimensions to organization units,
which in the end provides the option to use sites in the organization model.
In order to apply sites to Dynamics AX finance and organization administration,
perform following implementation steps:
¾ Set up operating units for the individual sites choosing a common operating
unit type (e.g. Department or Business unit)
¾ Set up a financial dimension linked to this organization unit type
¾ Apply an account structure in the company containing this financial dimension
¾ Link the storage dimension Site to this financial dimension
Choosing the same name for the organization unit and the related site visualizes
sites in the organization hierarchy. Through the organization model, security
settings are available at site level. If the link between site and financial dimension
is activated in the dimension link, financial reporting is available at site level.

mabenito@parcisa.com
418 10 Core Setup and Essential Features

10.1.7.5 New in Dynamics AX 2012

In Dynamics AX 2012, sites are mandatory.

10.2 Security and Information Access

Business applications like Microsoft Dynamics AX contain confidential data. In
order to protect sensitive information, access to the application has to be limited
depending on the needs of the specific enterprise.

10.2.1 Access Control

Access control in Dynamics AX is based on two elements:
¾ Authentication – Identification of users
¾ Authorization – User permissions

10.2.1.1 Authentication
As a prerequisite for authenticating you in Dynamics AX, system administration
has to create and enable a Dynamics AX user linked to your Windows user ID.
Usually you do not notice the authentication and logon procedure, since it happens
automatically in the background applying your Windows user ID. But if you are
not set up as a valid Dynamics AX user, Dynamics AX rejects to grant access.
User authentication is not only required for permission control. It is also the basis
for logging your transactions and for tracking your editing of table data. Further
settings linked to your Dynamics AX user include the favorites, the user options,
and the usage data, which enable a personalized workspace in Dynamics AX.

10.2.1.2 Authorization
According to the role-based security concept in Dynamics AX, information access
within Dynamics AX depends on the permission settings of the roles attached to
your Dynamics AX user.
Your roles are linked to duties and privileges, limiting data access to read or write
permission. Access control in this functional context is based on menu items,
forms, tables and fields.
Extensible data security policies in addition enable limiting access to table records
depending on record data – for example setting a restriction, that a particular user
may only access customers of a particular customer group.

10.2.2 User Management

As mentioned above, each person accessing Dynamics AX has to be set up as a
Dynamics AX user.
Apart from Active Directory authorization, Dynamics AX user management may
also include users with claims-based authentication – especially for users only

mabenito@parcisa.com
10.2 Security and Information Access 419

accessing the Enterprise Portal. Claims-based authentication refers to a trusted

identity provider in SharePoint for authenticating the user

10.2.2.1 User Accounts

For manually creating a Dynamics AX user, access the list page System
administration> Common> Users> Users and click the button New/User. After
inserting the User ID for a Dynamics AX user with the Account type “Active
Directory user”, enter the Windows user ID in the field Alias and the Active
Directory domain in the field Network domain. In addition, the checkbox Enabled has
to be selected for enabling the user to log on to Dynamics AX.
As an alternative to manually inserting, import Dynamics AX users from the
Active Directory through the import wizard, which is accessible by clicking the
button New/Import in the action pane of the users form.

Figure 10-6: Managing a user in the user detail form

10.2.2.2 Assigning Security Roles

If you want to specify the permissions of a particular user, access the tab User’s
roles in the user detail form and assign appropriate security roles. Alternatively
choose the form System administration> Setup> Security> Assign users to roles for
linking users to roles.
Security roles of a particular user also display in the appropriate FactBox of the
users list page. If a user is assigned to multiple roles, the permissions of all selected
roles are effective. In case permission settings for an object overlap, the higher
access level applies.

mabenito@parcisa.com
420 10 Core Setup and Essential Features

10.2.2.3 Assigning Permissions on Organization Level

After assigning a security role to a user in the user detail form, access of this user
applying this role may be restricted at organization level.
For this purpose, select the particular role on the tab User’s roles of the user detail
form and click the button Assign organizations in the action pane strip. In the Assign
organizations form, grant access to the user in the selected role either in all
organizations or only in specific organizations. If selecting specific organizations,
choose either legal entities or elements of organization hierarchies with the
purpose Security. After selecting an organization in the upper pane of the Assign
organizations form, click the button Grant in the action pane strip of the lower pane
for actually assigning the permission.

10.2.2.4 User Options

Clicking the button Options in the action pane of the users form provides access to
the user options of the selected user. In case the user got appropriate permissions,
he may also access his user options by selecting the command File/Tools/Options.
Accessing the user options from the user management may be useful, if the
administrator wants to predefine settings like the language or the start company.

10.2.2.5 User Profiles

Clicking the button Profiles in the action pane of the users form provides access to
the user profiles for assigning the user to a role center (see section 2.1.4).
Profiles and role centers are independent from security roles. In order to ensure
that data access required in a particular role center is granted to the users
concerned, assign the users to appropriate security roles.

10.2.2.6 User Relations

Apart from being a user, persons who are accessing Dynamics AX may be
employees, contractors or external parties (e.g. customers). Master data for workers
(employees and contractors) on the one hand, and for external parties on the other,
are stored in separate tables within Dynamics AX.
In order to assign a Dynamics AX user to his worker record or external relation,
Dynamics AX requires a link. This link is available in the form System
administration> Common> Users> User relations, alternatively accessible by clicking
the button Relations after selecting the appropriate user in the users list page.
For linking a user to a worker record (or an external party), click the button New in
the user relations form and select the person from the global address book in the
lookup field Person. For searching a person in the value lookup of this field, apply
an appropriate filter (e.g. a filter by field right-clicking the appropriate column in
the lookup).

mabenito@parcisa.com
10.2 Security and Information Access 421

Worker records are required throughout the whole application of Dynamics AX.
Examples of applicable areas are purchase requisitions, pallet transports, sales
commissions, project accounting, human resources, case management, and sales
prospect management. After linking a user to a worker record, the worker ID
applies to all areas concerned – e.g. automatically inserting it in the field Employee
responsible when entering a new prospect (Sales and marketing> Common> Prospects>
All prospects).

10.2.2.7 Workers (Employees)

The user form contains general user settings for persons accessing Dynamics AX.
Independent from the user administration, the worker form is there to manage
data of the enterprise personnel.
Workers include internal employees and contractors, Dynamics AX users as well
as personnel not accessing Dynamics AX. Worker records are shared and included
in the global address book. The employment of a worker determines his
assignment to one or more companies.
For accessing worker records, open the list page Human resources> Common>
Workers> Workers. In order to create a new worker, click the button Hire new worker
in the action pane then. In the Create new worker dialog, enter the name, employing
company (Legal entity), personnel number (if not deriving from a number
sequence), worker type (employee or contractor), and employment start date.

Figure 10-7: Managing employment data in the worker detail form

mabenito@parcisa.com
422 10 Core Setup and Essential Features

The default for the employing company is the current company. If you want to
change the employment later to another company or hire the worker in parallel in
another company, access the tab Employment in the worker detail form and edit the
existing or add a new employment.
Numerous data in the worker record are company-specific. If the employee got a
current employment in more than one company, click the button showing the
company name on the tab Employment (“Anso Technologies Ltd.” in Figure 10-7) in
order to switch the applicable company for company-specific data. In the worker
list page, apply an advanced filter on the legal entity of employment if you want to
view only workers employed in a particular company.
Required detail data in the worker record are primarily depending on the
Dynamics AX modules used in your organization. If applicable, specific details are
necessary for project accounting, human resources, and expense management.
Note: Employment and particular data in the worker record are date-effective. By
default, the worker list page and detail form only show current data.

10.2.2.8 Online Users

If you want to know the users currently accessing Dynamics AX, open the form
System administration> Common> Users> Online users. The inquiry shows all client
sessions connected to the application. If you got appropriate administrator
permissions, log off a user by clicking the button End sessions there if required.

10.2.2.9 User Groups

User group administration (including the assignment of users) is available in the
form System administration> Common> Users> User groups. User groups do not refer
to the role-based security concept, but they apply to specific settings.
You may for example open ledger periods, which are on hold, for a specific user
group. In workflows or financial journals, optionally apply user groups for
assigning workflow tasks and for approval and posting restrictions.

10.2.2.10 New in Dynamics AX 2012

Items new in Dynamics AX 2012 refer to the role-based security concept, assigning
users to security roles (instead of user groups). Direct assignment of security roles
to companies replaces the security domains available in Dynamics AX 2009.
Shared data for employees (workers) refer to changes in human resource
management and the global address book.

10.2.3 Role-based Security

According to the role-based security concept, permissions are not directly granted
to users, but to security roles.

mabenito@parcisa.com
10.2 Security and Information Access 423

10.2.3.1 Security Concept

The role-based security model in Dynamics AX contains the following elements:
¾ Role – Group of duties required for a job function (e.g. sales manager)
¾ Duty – Group of privileges to perform a task (e.g. approving product prices)
¾ Privilege – Contains permissions for individual objects (e.g. post price journal)
¾ Permission – Basic access restriction to data and features (e.g. tables, fields)

Figure 10-8: Grouping levels for assigning users to permissions

These elements represent a hierarchical structure for assigning permissions to a

user. As shown in Figure 10-8, a user may be assigned to one or more roles
depending on his job functions.
Roles are linked to privileges preferably through duties, but it is also possible to
directly assign a privilege to a role.
Usually, assigning one or more roles to a user – including the assignment of
applicable companies – in the user form is the only task required for specifying
permissions when setting up a new user.

10.2.3.2 Security Roles

A role is a set of access permissions required to perform a job function. In a
Dynamics AX standard application, there are about 100 reference roles. Roles,
which are depending on factors like size, culture, and industry, show different role
types:
¾ Functional roles – e.g. buying agent
¾ Organizational roles – e.g. employee
¾ Application roles – e.g. system user
The role System administrator has access to all areas of the application. The access
settings of this role are not editable.
For accessing role management, open the form System administration> Setup>
Security> Security roles. The left part of the form shows the roles available in your
application. After selecting a role, assigned duties and privileges are available on

mabenito@parcisa.com
424 10 Core Setup and Essential Features

the tab Role content. The icon next to the individual elements shows, whether it is a
duty ( ) or a privilege ( ). For adding duties and privileges to a role, click the
button Add in the role content pane.

Figure 10-9: Security roles, showing duties and directly assigned privileges

For a duty selected on the tab Role content, the FactBox Roles with the selected duty on
the right of the form shows all roles containing the particular duty.

10.2.3.3 Duties and Process Cycles

Duties represent a group of privileges required for a particular task, e.g.
maintaining customer invoice transactions. A Dynamics AX standard application
comprises about 1000 reference duties which are updated when hotfixes and
releases cause changes to data structure, functionality and permissions.
For accessing duties, click the button Edit duty in the role content pane of the
security roles form. Duties are alternatively accessible through the menu item
System administration> Setup> Security> Security privileges.
The security privileges form shows a tree structure applying process cycles. A
process cycle in this context is a grouping according to high level processes like the
revenue cycle.
In order to access a particular duty, expand the process cycle tree or search for the
duty using the search field located above the process cycle section. Expanding a
duty as shown in Figure 10-10 (example: “Approve BOMs”) shows assigned
privileges.

mabenito@parcisa.com
10.2 Security and Information Access 425

Figure 10-10: Managing duties and privileges in the security privileges form

For editing an element or for assigning privileges and permissions, click the
buttons New, Delete, Cut, Copy or Paste in the action pane strip at the top of the form
(or drag and drop elements with your mouse). Depending on the hierarchy level of
the element selected in the privileges tree, you are managing a duty or a privilege.

10.2.3.4 Privileges and Permissions

A privilege contains all permissions required for an individual application object.
The example in Figure 10-10 shows the privilege “View BOMs” with assigned
permissions on the tab Permissions. If required, add or remove permissions from a
privilege by clicking the appropriate button in the action pane strip of this tab.
Clicking the button Modify access level enables changing the access level of an
assigned permission.
Permissions set access restrictions at the lowest level, based on individual features
and record data (like tables and fields). The permissions available in the security
privileges are determined by application development.

10.2.3.5 Adjusting Security Settings

Setting access restrictions usually starts by assigning users to roles of the reference
model. If required, adjust existing or create new roles, removing duties or adding
additional duties.
Since reference duties in Dynamics AX are updated with hotfixes and new releases,
it is preferable to adjust existing duties for grouping standard features rather than
creating new duties. New duties are applicable to individual functionality
developed additionally.

mabenito@parcisa.com
426 10 Core Setup and Essential Features

Although it is possible to directly assign privileges to roles (see Figure 10-8),

maintenance of permissions is easier if privileges are only assigned to roles.

10.2.3.6 Segregation of Duties

If your organization requires ensuring segregation of duties, manage the rules
applicable for the segregation of duties in the form System administration> Setup>
Security> Segregation of duties> Segregation of duties rules. Creating one or more sets
of duties, which may not be assigned together to the same user, supports
compliance with segregation of duties policies by logging conflicts for approval or
rejection.
Compliance with the segregation of duties in business processes is supported by
business policies and workflow management (see section 10.4).

10.2.3.7 New in Dynamics AX 2012

Roles in the role-based security concept of Dynamics AX 2012 replace the user
groups of Dynamics AX 2009. Instead of directly assigning user groups to
permissions, permission settings for roles in AX 2012 involve duties and privileges.

10.2.4 Securing the Global Address Book

The core usage of the role-based security framework is to restrict access to
functional roles. But the global address book, containing all parties within a
Dynamics AX partition, is required by nearly all roles.
In order to control access to different party and address data depending on address
associations, there are security options for the global address book. These options
refer to two groupings:
¾ Address books – Grouping different parties
¾ Teams – Grouping different people

10.2.4.1 Security Setup

Address books (see section 2.4.2) are available for assigning a party when entering
the party record. A party may be assigned to one or more address books. Since
address books are a basis for security settings, keep required access restrictions in
mind when setting up address books (e.g. creating a separate address book holding
employee records).
Teams (see section 10.1.3) are a flexible option for setting up organization units
independently from a hierarchical structure. Referring to the global address book,
set up specific teams according to the requirements for access restriction to the
global address book (e.g. a separate team for users accessing employee addresses).

10.2.4.2 Security Options

On the tab Security policy options of the global address book parameters
(Organization administration> Setup> Global address book> Global address book

mabenito@parcisa.com
10.3 General Settings 427

parameters), select the checkbox Secure by address book if you want to control access
at address book level.
After clicking the button Assign teams, select one applicable address book after the
other in the lookup field Address book of the assign teams form. Then select the
teams which can access the selected address book. Another option for assigning
teams is to click the button Assign teams in the address books form (Organization
administration> Setup> Global address book> Address books).
The checkbox Secure by legal entity in the global address book parameters restricts
access to parties depending on party roles (e.g. vendor or customer). If this
checkbox is selected, users may only access parties assigned to a role in the current
company.

10.2.4.3 Applying Address Book Security

If the global address book parameter Secure by address book is selected, only users
belonging to a team, which is assigned to a particular address book, may access
parties of that address book.
A party in the global address book assigned to several address books is available to
all users, who have the permission to access any of the address books concerned.
Access restriction does not only apply to the global address book list page itself,
but also to other list pages and forms containing party data (like vendors or
customers). In addition, the restriction includes related information such as orders
or invoices.

10.2.4.4 New in Dynamics AX 2012

Global address book security options are new in Dynamics AX 2012.

10.3 General Settings

There are a number of settings, which are required before an enterprise can start to
use Dynamics AX operationally. These settings include:
¾ Organization management – See section 10.1
¾ Security management – See section 10.2
¾ Finance settings – See section 9.4
Each module used by your enterprise also needs to be configured according to the
specific requirements (e.g. setting up effective terms of payment in purchasing and
sales). In addition, some basic general settings apply to all areas of the application.
You can find a short description on core general settings below.
Explanations regarding the setup of individual modules are available in the
chapter referring to the particular module. An overview of the basic settings for a
Dynamics AX installation is included in the appendix of this book.

mabenito@parcisa.com
428 10 Core Setup and Essential Features

10.3.1 Number Sequences

Number sequences control the allocation of numbers throughout the whole
application. They are in particular used for following kinds of data:
¾ Master data – For example assigning vendor numbers
¾ Journals (including orders) – For example assigning purchase order numbers
¾ Posted transactions – For example assigning invoice numbers
Dynamics AX 2012 provides number sequences common to all companies within a
partition. The scope parameters of a number sequence then control whether it is
shared or specific to a company (or other organization unit). In addition, number
sequences optionally refer to a fiscal calendar period.

10.3.1.1 Creating and Editing

For editing number sequences, open the list page Organization administration>
Common> Number sequences> Number sequences. In the number sequences list page,
the FactBox Segments immediately shows the company and other segments of the
selected number sequence as applicable.
For creating a number sequence, click the button New/Number sequence or push the
shortcut Ctrl+N in the number sequence form. After entering a unique Number
sequence code and a Name, expand the tab Scope parameters of the detail form in
order to specify whether the number sequence is shared or restricted to a company
or organization unit.

Figure 10-11: The number sequences list page

10.3.1.2 Segments
On the tab Segments of the detail form, specify the format of numbers referring to
the number sequence. Segments of a number may show different types:

mabenito@parcisa.com
10.3 General Settings 429

¾ Alphanumeric – Number increasing every time the number sequence is used

by replacing the number signs (#) in the format with the next number. The
length of the alphanumeric segment has to comply with the largest number.
¾ Constant – Segments for prefixes (e.g. for a format “INV#####” or “12#####”)
and for suffixes (e.g. a format “#####-INV”). In general, prefixes are preferable
since they are easier to use (e.g. for filtering).
¾ Other types – Segments of the type Company, Legal entity, Operating unit or
Fiscal calendar are available, if included in the Scope of the number sequence.

10.3.1.3 Number Sequence References

After setting up the number sequence itself, the number sequence references
determine the assignment of a particular number sequence to master data or
transactions. For editing number sequence references, switch to the tab References
in the number sequence detail form. Alternatively, access the number sequence
references on the tab Number sequences of the parameters form in each module.
In order to ensure easy tracking of transactions within the whole application, it is
preferable to use unique document and transaction numbers without overlapping.
A single number sequence may be assigned to several number sequence references
at the same time – for example if you want to apply a common number sequence to
invoices and credit notes. This setting does not generate duplicate number, but
alternately assigns numbers to invoices and credit notes depending on the
chronological order of the transactions.

10.3.1.4 General Settings of a Number Sequence

The numeric first (Smallest) and last (Largest) number of the number sequence are
specified on the tab General of the number sequence detail form. The field Next
there shows the number, which the number sequence applies to the next number.
You can change the next number, but you have to make sure to avoid duplicate
keys and gaps in continuous numbers.
Another option controls if users can change a number automatically assigned from
the number sequence to a higher or lower number. Selecting the checkbox Manual
determines a purely manual entry of numbers.
The checkbox Continuous prevents gaps in a number sequence. Considering server
performance, select this checkbox only in number sequences actually requiring
continuous numbers. Continuous numbering frequently applies to voucher
numbers, since it is a statutory requirement in many countries.

10.3.1.5 New in Dynamics AX 2012

In Dynamics AX 2012, number sequences are shared across legal entities.

mabenito@parcisa.com
430 10 Core Setup and Essential Features

10.3.2 Calendars
As a prerequisite for posting any transaction in Dynamics AX, an open ledger
period covering the posting is required.

10.3.2.1 Ledger Calendar

Ledger calendars (General ledger> Setup> Ledger, button Ledger calendar), which refer
to the fiscal calendar associated with your company, determine the periods open
for posting transactions (see section 9.4.1).

10.3.2.2 Other Calendars

Apart from calendars in finance, additional period and calendar definitions apply
to other areas within Dynamics AX.
The form Organization administration> Common> Calendars> Working time templates
contains default settings for the weekly working times, which is a basis for setting
up calendars in the form Organization administration> Common> Calendars> Calendars
(see section 5.3.1). These calendars apply to supply chain management – including
operations planning, production, purchasing, sales and inventory management.
The project accounting module has a separate calendar in the form Organization
administration> Common> Calendars> Period types, required for estimates, invoice
subscriptions and employees. This calendar is a basis for project invoicing.

10.3.2.3 New in Dynamics AX 2012

In Dynamics AX 2012, the concept of accounting periods has changed, now
providing shared fiscal calendars also replacing fixed asset calendars.

10.3.3 Address Setup

Address setup is a prerequisite for entering and printing addresses correctly. For
accessing the address setup, open in the form Organization administration> Setup>
Addresses> Address setup.

10.3.3.1 Address Parameters

On the tab Parameters of the address setup, checkboxes provide the option to
determine whether ZIP/postal code, District or City are validated when entering an
address. If selected, you cannot enter an address with – for example – a new ZIP
code before inserting the new ZIP code in the ZIP code main table.

10.3.3.2 Address Format

The address format on the tab Address format determines how street, ZIP/postal
code, city and country display in the address field of addresses. In order to comply
with the regulations in different countries, an individual format per country is
possible. For this purpose, the column Address format in the country management
(tab Country/region in the address setup) controls the address format per country.

mabenito@parcisa.com
10.3 General Settings 431

If you want to set up a new format, click the button New in the upper section of the
address formats. In the lower section, enter the way address components
(including Street and City) should show on printed documents. The component
selection also applies to editing addresses: When entering an address, only address
fields included in the address format of the particular country are available.
When setting up address formats, take into account that Dynamics AX stores the
formatted address in addition to the individual fields of the address. If you change
the format after entering addresses, update the existing addresses by clicking the
button Update addresses in the address format setup.

10.3.3.3 Country/Region
Microsoft Dynamics AX provides a standard list of countries, which you may view
on the tab Country/region of the address setup. For entering additional countries,
click the button New there.

10.3.3.4 New in Dynamics AX 2012

In order to support the global address book, components like address formats and
countries are shared across all companies in Dynamics AX 2012.

10.3.4 Parameters
Parameters are basic settings, enabling to select the business process version,
which fit best to your organization, from the options available in Dynamics AX.
Setting parameters is a core task when implementing Dynamics AX. Depending on
the individual parameter, later changes are – or are not – easily possible in a
working environment. Before changing any basic setting in an operational
environment, be sure you are aware of all consequences. Depending on the
circumstances, read the online help or ask an expert to avoid data inconsistency or
other problems.

10.3.4.1 System Parameters

The system parameters in the form System administration> Setup> System parameters
contain global parameters like the system language (default language for language
texts in shared data, e.g. product descriptions), or the default basic currency.

10.3.4.2 Module Parameters

In addition, a parameters form controlling company-specific settings is available in
each module of Dynamics AX. For accessing the parameters of an individual
module, open the menu item Setup> Parameters – for example the accounts payable
parameters in Accounts payable> Setup> Accounts payable parameters.

mabenito@parcisa.com
432 10 Core Setup and Essential Features

10.4 Alerts and Workflow Management

A workflow is a sequence of operations in a routine business process, containing
necessary activities to be performed on a document. Typical examples of
workflows are approval processes, e.g. for purchase requisitions.
Microsoft Dynamics AX provides functionality for configuring and processing
workflows, including the option of automated processes. You can apply this
functionality for example for automatically approving low-value purchase
requisitions while requiring manual approval for high-value requisitions. If you
need a workflow not included in standard Dynamics AX, a workflow development
wizard in the development environment enables creating additional workflows.
Alerts within Dynamics AX are automatic notifications based on alert rules, which
are triggered by selected events (e.g. inserting a record). Compared to workflows,
which support a sequence of activities including automatic actions, alerts are
simple notifications without further options.

10.4.1 Alert Rules and Notifications

Alerts do not require a complex setup, but only creating an alert rule in any
Dynamics AX form in order to automatically notify users.

10.4.1.1 Alert Rules

Depending on your permission settings, create alert rules as required. You can for
example set up a rule to notify the responsible person when an agreed delivery
date passes, or when a new vendor is entered.

Figure 10-12: The dialog box for creating an alert rule

For setting up alert rules, choose the option Create alert rule in the pop-up menu
(doing a right-hand click) or the command File/Command/Create alert rule in every

mabenito@parcisa.com
10.4 Alerts and Workflow Management 433

detail form or list page (in case of a field-based rule after selecting the appropriate
field). Dynamics AX then shows a dialog box for editing the alert rule.
In the field Event of the alert rule dialog, select the trigger for the alert – e.g.
creating or deleting a record, or modifying the content of a particular field. If the
basis of an alert rule is a date field, the field Event in addition provides the option
to generate alerts when the date is due.
Figure 10-12 shows the example of entering an alert rule which applies when a
new vendor record is created. In order to limit alerts, optionally enter a filter by
clicking the button Select in the alert rule dialog (for example if you only want
alerts for vendors of a particular vendor group).

10.4.1.2 Settings for Alert Management

If you want to edit existing alert rules, choose the command File/Tools/Manage alert
rules in the jewel menu, or access the menu item Organization administration> Setup>
Alerts> Alert rules. Apart from editing existing rules on the tab General, the alert
rule administration form also provides the option to create new alert rules (based
on alert templates). Alert templates are regular record templates (see section 2.3.2),
which are created in the alert rule administration form.
Alert notifications only show after executing the periodic activity System
administration> Periodic> Alerts> Change based alerts and/or System administration>
Periodic> Alerts> Due date alerts. These activities are usually periodic batch jobs, but
you can run them online for testing purposes manually.
On the tab Alerts of the system parameters (System administration> Setup> System
parameters), specify the period which Dynamics AX should process for due date
alerts like exceeding an agreed delivery date.

10.4.1.3 User Options

In your user options, the tab Notifications contains a setting specifying the period
for receiving notifications. Optionally select there in addition, if you want alert
notifications as email message or in a pop-up window.
In parallel to the notification settings for alerts, the user options also include
settings for workflow notifications.

10.4.1.4 Working with Notifications

Once an event triggers an alert, the appropriate notification will show. Depending
on alert rule settings and your user options, alert notifications and workflow
notifications display in the status bar, in a pop-up, or in an e-mail message.
When receiving an alert notification, display the alert in the notification list by
double-clicking the alert icon in the status bar, or by selecting the command
File/View/Notifications. In the notification line, click the button Go to origin in the
action pane strip for accessing the alert origin.

mabenito@parcisa.com
434 10 Core Setup and Essential Features

For deleting alert notifications not required any more, push the shortcut key Alt+F9
or choose the command File/Delete Record in the notification list. Alternatively, set
the alert notification status to “Read” by switching to the tab General or by clicking
the button Change status.

10.4.2 Configuring Workflows

Workflows are available in many areas of Microsoft Dynamics AX, including but
not limited to:
¾ Financial journals
¾ Purchase requisitions
¾ Purchase orders
¾ Invoice posting
¾ Time and attendance

10.4.2.1 Workflow List Page

In each applicable menu, the setup folder contains a menu item for the workflows
in the particular module. When selecting this menu item, the workflow list page
displays the workflows configured in the particular module. The list page
Procurement and sourcing> Setup> Procurement and sourcing workflows for example
allows editing workflows in the procurement module.

10.4.2.2 Graphical Workflow Editor

After selecting a particular workflow in a workflow list page, double-click the
workflow line or click the button Edit in the action pane for accessing the graphical
workflow editor.
By default, the graphical workflow editor shows three panes:
¾ Canvas – Space for designing workflows (drag and drop elements and
connections)
¾ Toolbox – On the left, containing available workflow elements
¾ Error pane – Displays error messages and warnings below the canvas (not
shown in Figure 10-13, display by clicking the button Error pane in the action
pane)
In the toolbox, workflow elements are grouped by different types like Approvals
and Tasks. Depending on the selected workflow, different elements are available. In
order to hide or show the toolbox, click the button Toolbox in the action pane.
If you want to add a workflow element to the workflow, click it in the toolbox and
drag it to the canvas. For editing the properties of the element, choose the option
Properties in the pop-up menu (right-hand click on the element) or click the
appropriate button in the action pane group Modify element.
Apart from basic settings like the element name, enter responsible persons –
belonging to different assignment types – for Notifications and for Assignment.

mabenito@parcisa.com
10.4 Alerts and Workflow Management 435

Applicable assignment types include participants (referring to user roles and user
groups), hierarchies (referring to the position hierarchy in human resources),
workflow users (user starting or owning a workflow), or specific user names.

Figure 10-13: Graphical workflow editor showing the purchase requisition workflow

In the Escalation settings, set up automatic reassignment of a work item once the
time limit for the assigned user is exceeded. On the tab End action in the escalation
settings, an automatic action is specified in case the escalation path fails.
Settings for Automatic actions provide the option to automatically take an action if
the condition entered for the automatic action is met – e.g. approving a requisition
if the invoice amount is below a particular value.
The Advanced settings determine allowed actions for the workflow element.
Workflow elements of the type “Approval” contain a lower workflow level with
the approval steps. For accessing the approval steps, double-click the particular
approval element or click the button Level down in the workflow editor. In order to
view the upper level again, click the button Level up or click the link Workflow in the
path shown in the header line of the canvas.

10.4.2.3 Workflow Properties

For accessing the properties of the workflow itself, do a right-hand click or click an
appropriate button in the action pane group Modify workflow after selecting an

mabenito@parcisa.com
436 10 Core Setup and Essential Features

empty space in the canvas. Important settings include the Owner of the selected
workflow.

10.4.2.4 Work Item Queues

A specific option for assigning workflow elements is “Queue” (e.g. applicable for
tasks). The assignment to queues refers to work item queues entered in the form
Organization administration> Setup> Workflow> Work item queues.
Work item queues are there to pool activities originating from a workflow,
assigning an activity to a group of people instead of a single person. If a work item
is assigned to a work item queue, all members of the queue may claim the work
item and work on it.
When setting up a new work item queue, select the workflow type in the lookup
field Document determining the workflows in which the work item queue is
available. After setting the status of the work item queue to Active, it is available
for assignment in the appropriate workflows.
As an alternative to manually adding users to a work item queue, choose an
automatic assignment based on filter criteria through clicking the button Work item
queue assignment or selecting the menu item Organization administration> Setup>
Workflow> Work item queue assignment rules.

10.4.2.5 Workflow Versions

When saving a workflow by clicking the button Save and close in the workflow
editor, Dynamics AX creates a new version. A dialog box asks whether to activate
the new version or to keep the previous version activated.
If you want to check and edit the versions of a workflow, click the button Versions
in the workflow list page. In the workflow versions form, optionally set a new or
old version as active if applicable.
The active version applies to workflows submitted after activation. Work items of
workflows in progress finish on their original version.

10.4.2.6 Create Workflows

The button New in the workflow list page for creating a workflow opens a form,
where you have to select the applicable workflow Type – e.g. “Purchase requisition
review”. Clicking the button Create workflow after selecting the type then opens the
graphical workflow editor as described above.
If there are two workflows of the same type in the workflow list page, specify a
default by clicking the button Set as default in the action pane of the list page.

10.4.2.7 Basic Settings for Batch Processing

Processing of workflows is an asynchronous batch job, which is why the next step
in a workflow is not available immediately, but only after batch processing of the

mabenito@parcisa.com
10.4 Alerts and Workflow Management 437

specific workflow element has been completed. Depending on the batch

configuration, this may last some time.
In order to initially set up the workflow infrastructure, a wizard is available in the
menu item System administration> Setup> Workflow> Workflow infrastructure
configuration. This wizard generates three batch jobs, which show in the form
System administration> Inquiries> Batch jobs> Batch jobs (see section 2.2.1). As a
prerequisite for using workflows, these batch jobs have to be processed repeatedly.
In the system service accounts (System administration> Setup> System> System service
accounts), an account for workflow execution has to be specified.

10.4.3 Working with Workflows

If workflow processing is required in a particular Dynamics AX form, a yellow
workflow message bar shows at the top of the form. This message bar reminds the
user entering a transaction that workflow processing is necessary, providing the
option of submitting the workflow immediately.
When working with workflows, keep in mind that the workflow system processes
workflow tasks in a batch process. Work items therefore are not available before
the batch process has processed the submitted workflow.

10.4.3.1 Submitting a Workflow

After creating a record which requires workflow processing, submit the workflow
clicking the button Submit in the yellow workflow message bar (see Figure 10-14).

Figure 10-14: Submitting a workflow for a purchase requisition

Submitting a workflow actually starts it, generating work items for processing
corresponding workflow elements.

mabenito@parcisa.com
438 10 Core Setup and Essential Features

Once the workflow is submitted, the workflow message bar shows the button
Actions instead of Submit. Depending on workflow settings and the current status,
there are different options in the Actions button.
For checking the current status of workflow processing, click the button
Action/View history in the workflow message bar.

10.4.3.2 Approving Work Items

Depending on the settings of the related workflow element, work items are either
assigned to a work item queue, or to individual users (including assignments by
definitions like participant or workflow user). The work items assigned to a user
show in his work item list (Home> Common> Work Items> Work items assigned to me).
The options available in the workflow message bar at the top of the work item list
are depending on the workflow element (Actions allowed in Properties/Advanced
settings). If applicable, approve a work item by clicking the button Actions/Approve.

Figure 10-15: Approving a work item

Depending on the settings for workflow notifications in your user options, a

notification shows in case a new work item is assigned to you.

10.4.3.3 Working with Work Item Queues

If a work item is assigned to a work item queue, it shows in the list page Home>
Common> Work Items> Work items assigned to my queues. As a prerequisite, you have
to be member of the work item queue referring to the work item.
In the work item queue, claim a work item by clicking the button Actions/Accept in
the yellow workflow message bar for working on it. This prevents other queue
members to work on the same item. After claiming a work item, it shows in the
work item list among the work items directly assigned to you as described above.
In the work item list, execute applicable workflow actions like approving or
rejecting like you do for directly assigned work items. In addition, the option

mabenito@parcisa.com
10.5 Other Features 439

Reassign is available for reassigning the work item to other persons and the option
Release for releasing it back to the queue.

10.4.3.4 New in Dynamics AX 2012

In Dynamics AX 2012, the workflow framework has been significantly enhanced
including the graphical workflow editor resembling Microsoft Visio, line-item
workflows, work item queues and a simplified installation architecture (avoiding
workflow server components on an IIS server).

10.5 Other Features

Advanced features, available across the whole application, include document
management, case management and the task recorder.

10.5.1 Document Management

In daily business, you are working with structured data available as records in
your business application (e.g. customers). In parallel, important data referring to
these records are available only in an unstructured format (e.g. files or mails).
Document management in Microsoft Dynamics AX supports solving this issue by
assigning as many files as required to any table record. The files attached are
accessible directly within Dynamics AX.
If you use document management to attach all notes and files referring to a
particular customer in the customer form for example, Dynamics AX provides
access to all relevant data on this customer – business data within Dynamics AX as
well as related files – directly from the customer form.

10.5.1.1 Document Handling Form

The document handling form, accessible in any list page or form by clicking the
button in the status bar or in the action pane (called Attachments there), provides
the option to manage notes and documents in Dynamics AX. In the document
handling form, edit existing or add new documents as applicable. These
documents are attached to the record selected in the original form when opening
document handling.
If you want to create a new document in the document handling form, insert a new
line clicking the button New in the action pane strip or pushing the shortcut key
Ctrl+N. The Type selected in this line determines if the document is a note, a file
attachment, a URL, or a new Word document/Excel worksheet.
If you want to view an attached document in an existing line, click the button Open
showing the attachment in a separate form. Alternatively, select the checkbox Show
file in the document handling form displaying the file in the lower pane of the
form.

mabenito@parcisa.com
440 10 Core Setup and Essential Features

Figure 10-16: Document handling form showing attachments to a particular customer

As an alternative to the access from the individual tables, the document handling
form is also available in the home menu (Home> Common> Document management>
Documents). The document form there shows all documents which comply with the
filter entered in the header pane, regardless of the table to which a document refers
to.

10.5.1.2 User Options

As a prerequisite for accessing the document handling form through the document
handling button, the checkbox Document handling active in your user options has to
be selected. The checkbox Show attachment status in the user options controls,
whether the document handling button is highlighted for records holding attached
documents.

10.5.1.3 Document Types

Document management distinguishes between several types of documents:
¾ Simple notes – Not including an attached file. In the lower pane of the
document handling form, optionally enter multiple lines of text.
¾ File attachments – Available for attaching any files.
¾ Word documents and Excel worksheets – Available for creating documents
directly in the document handling form.
¾ URLs – Available for entering web links in the lower pane of the document
handling form.
In order set up available document types, open the form Organization
administration> Setup> Document management> Document types. Each document type
refers to a particular class and group (fields Class and Group), specifying if assigned
documents are simple notes, attachments or new documents. If entered, the setting
in the fields Location and Archive directory overrides settings from the document

mabenito@parcisa.com
10.5 Other Features 441

management parameters. If selecting “Database” for the file location, Dynamics AX

stores the files inside the database.
Note: The menu item Document content types in document management setup refers
to unattached documents (Home> Common> Document management> Unattached
documents).

10.5.1.4 Document Management Setup

Parameters for document management are available in the form Organization
administration> Setup> Document management> Document management parameters.
Basic parameters include the Archive directory (usually a separate shared directory
on a file server) and a number sequence for documents. The archive directory in
the parameters is not applicable for document types with a specific file location
entered in the particular document type. Make sure to include the archive
directories in backup procedures.
The tab File types in the document management parameters controls, which file
types are available in document management – enabling to exclude possibly
malicious file types like EXE-files.
If the checkbox Use active document tables in the parameters is selected, document
handling is only available for tables included in the active document tables
(Organization administration> Setup> Document management> Active document tables).
The document data sources (Organization administration> Setup> Document
management> Document data sources) specify data sources available for the Microsoft
Office Add-ins (see section 2.2.2).

10.5.1.5 New in Dynamics AX 2012

Items new in Dynamics AX 2012 document management include the document
form in the home menu, the document type URL and the support of Office add-ins.

10.5.2 Case Management

Case management is available to centrally manage questions and issues. It does not
only support customer service, but also applies to collections, purchase
management, and human resources.

10.5.2.1 Case Configuration

There are two main items relevant for configuring case management:
¾ Case categories
¾ Case processes
Case categories (Organization management> Setup> Cases> Case categories) group
cases by functional areas in a hierarchical structure. For setting up a case category,
click the button New in the action pane there. On the tab General, choose defaults
for the owner and the Case process of cases linked to the category.

mabenito@parcisa.com
442 10 Core Setup and Essential Features

Case processes (Organization management> Setup> Cases> Case processes) support

performing necessary steps when processing a case. Depending on the different
types of cases in your enterprise set up one or multiple case processes.
When setting up a new case process with Name and Description, assign steps
(stages) for processing related cases by clicking the button Actions/Create level in the
action pane strip of the right pane. In the field Purpose, enter the name of the stage.
If required, you can create a multi-level hierarchy of stages.
For simple case processes, setting up stages may be sufficient. But if applicable,
enter activities (including Appointments or Tasks) assigned to the stages by clicking
the button Actions (or through a right-hand click on the appropriate element in the
Actions area of the form). Activities referring to cases are in common with the
activities in Sales and marketing (former CRM activities), also available in the Home
menu (see section 2.1.4).
If you want to ensure, that particular activities are executed when working on a
case, select the checkbox Required on these activities, and the checkbox Check for
required activities on the tab Exit criteria of the related stage.

10.5.2.2 Processing Cases

For creating a new case, click the appropriate button in the action pane of any list
page or detail form applying case management – e.g. in sales orders (Sales and
marketing> Common> Sales orders> All sales orders, button Cases/Create case on the
action pane tab General), customers, collections, vendors, or released products.
Cases created in a sales order are assigned to the order and to the customer. When
creating such a case, enter the Case category and a Description in the Create dialog.
Defaults for Owner, Service level agreement and Case process on the tab Other of the
dialog are retrieved from the selected Case category. Clicking the button Create in
the dialog then creates the case.
If you want to follow up on a case, open the list page Home> Common> Cases> All
cases and switch to the detail form for editing the case. Assignments of the case
(e.g. to a sales order) show on the tab Associations. If additional associations apply
later, add them in the case form (e.g. assigning a return order in addition to the
original sales order). The FactBox Process shows the planned case process stages
and activities according to the configuration. The current status of the stages shows
in the case process form (next to the Name field on the right after selecting a stage
in the left pane), which you can access by clicking the button Case process in the
action pane of the case form.
When starting to work on a case, click the button Change status/In process in the
action pane (if this status has not been already selected when creating the case).
When proceeding with the case later, click the button Case/Change stage and select
the next stage of the case.

mabenito@parcisa.com
10.5 Other Features 443

Figure 10-17: Editing details of a case

The tab Case log shows all interactions (e.g. receiving a product) referring to the
case. Using the case log, other persons looking at a specific case may easily know
the status of a case.
If the case is attached to a Case process enabling Activities, access the related
activities through the menu item Home> Common> Activities> All activities (or by
clicking the button Activities/View activities on the action pane tab General of the
case form). Required activities of a case have to be completed by the responsible
person.
If the case refers to a Service level agreement (tab Service level agreement), time
recordings are enabled. Time recording starts when the case status changes (button
Case/Change status in the action pane) or when clicking the button Case/Start or
Case/Stop. For viewing the recorded time, click the button Time recording in the
action pane of the case form. Time recordings in case management do not refer to
time recordings in project management or manufacturing execution.
In order to close a case, click the button Change status/Closed in the action pane of
the case form.

mabenito@parcisa.com
444 10 Core Setup and Essential Features

10.5.2.3 New in Dynamics AX 2012

Case management is a new feature in Dynamics AX 2012.

10.5.3 Task Recorder

The task recorder in Dynamics AX provides an easy option for automatically
generating click-through instructions of procedures in Dynamics AX. After
recording, you can directly publish the instructions in Microsoft Word.
The task recorder opens by choosing the option File/Tools/Task recorder in the jewel
menu. For starting to record a sequence of activities, click the button in the task
recorder dialog. Then execute the recorded steps in the Dynamics AX client. In
order to stop recording, switch to the task recorder dialog and click the button
there. In a separate dialog, enter a name for the recording then.
In order to access recorded tasks, click the button in the task recorder dialog.
The recorded tasks form then shows all recording. For generating a Microsoft
Word document or a PowerPoint presentation, click the button Generate document
in the recorded tasks.

Figure 10-18: Recorded tasks in the task recorder

mabenito@parcisa.com
Appendix

Setup Checklist
The checklists below show the most essential steps for setting up a new
Dynamics AX database. You can use these checklists as a guideline for a basic
setup of Dynamics AX.
The section “Basic Setup” contains necessary configuration steps for all functional
areas covered by the book. They have to be finished before you can start to use any
module. Master data and other essential settings of particular modules are shown
in the section afterwards. Depending on the specific requirements of an
implementation, additional setup is required in most cases.

Basic Setup
Table A-1: Basic setup of a Dynamics AX database
No. Name Menu Item Section
1.1 Partitions System administration> Setup> Partitions 10.1.1
1.2 Configuration System administration> Setup> Licensing> License
configuration
1.3 Parameters System administration> Setup> System parameters
1.4 Legal entities Organization administration> Setup> Organization> 10.1.5
Legal entities
1.5 Users System administration> Common> Users> Users 10.2.2
1.6 Virtual company System administration> Setup> Virtual Company 10.1.6
accounts accounts

Table A-2: Basic setup of a legal entity

No. Name Menu Item Section
2.1 Operating units Organization administration> Setup> Organization> 10.1.3
Operating units
2.2 Dimensions General ledger> Setup> Financial dimensions> 9.4.3
Financial dimensions
2.3 Sites Inventory management> Setup> Inventory breakdown> 10.1.7
Sites
2.4 Dimension link Inventory management> Setup> Posting> Dimension 10.1.7
link
2.5 Warehouses Inventory management> Setup> Inventory breakdown> 7.4.1
Warehouses
2.6 Fiscal calendars General ledger> Setup> Fiscal Calendars 9.4.1
2.7 Currencies General ledger> Setup> Currency> Currencies 9.4.2
2.8 Rate types General ledger> Setup> Currency> Exchange rate types 9.4.2
2.9 Exchange rates General ledger> Setup> Currency> Currency exchange 9.4.2
rates

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
446 Appendix

No. Name Menu Item Section

2.10 Chart of Accounts General ledger> Setup> Chart of accounts> Chart of 9.4.4
accounts
2.11 Account structure General ledger> Setup> Chart of accounts> Configure 9.4.4
account structures
2.12 Ledger General ledger> Setup> Ledger 9.4
2.13 Bank accounts Cash and bank management> Common> Bank 9.4.5
Accounts
2.14 Address setup Organization administration> Setup> Addresses> 10.3.3
Address setup
2.15 Address book Organization administration> Setup> Global address 2.4.2
parameters book> Global address book parameters
2.16 Number Organization administration> Common> Number 10.3.1
sequences sequences> Number sequences
2.17 Units Organization administration> Setup> Units> Units 7.2.1
2.18 Unit conversion Organization administration> Setup> Units> Unit 7.2.1
conversions

Table A-3: Basic setup for the general ledger

No. Name Menu Item Section
3.1 Default Organization administration> Setup> Default
descriptions descriptions
3.2 Accounts for aut. General ledger> Setup> Posting> Accounts for 9.4.4
transactions automatic transactions
3.3 Ledger posting General ledger> Setup> Sales tax> Ledger posting 9.4.6
groups groups
3.4 Sales tax General ledger> Setup> Sales tax> Sales tax authorities 9.4.6
authorities
3.5 Sales tax General ledger> Setup> Sales tax> Sales tax settlement 9.4.6
settlement periods periods
3.6 Sales tax codes General ledger> Setup> Sales tax> Sales tax codes 9.4.6
3.7 Sales tax groups General ledger> Setup> Sales tax> Sales tax groups 9.4.6
3.8 Item sales tax General ledger> Setup> Sales tax> Item sales tax 9.4.6
groups groups
3.9 Journal names General ledger> Setup> Journals> Journal names 9.5.1
3.10 Parameters General ledger> Setup> General ledger parameters

Table A-4: Basic setup for procurement and accounts payable

No. Name Menu Item Section
4.1 Terms of payment Accounts payable> Setup> Payment>Terms of payment 3.2.2
4.2 Vendor groups Accounts payable> Setup> Vendors> Vendor groups 3.2.3
4.3 Posting profiles Accounts payable> Setup> Vendor posting profiles 3.2.3
4.4 Accounts payable Accounts payable> Setup> Accounts payable
parameters parameters
4.5 Procurement Procurement and sourcing> Setup> Procurement and
parameters sourcing parameters

mabenito@parcisa.com
Appendix 447

Table A-5: Basic setup for sales and accounts receivable

No. Name Menu Item Section
5.1 Terms of payment Accounts receivable> Setup> Payment>Terms of payment 3.2.2
5.2 Customer groups Accounts receivable> Setup> Customers> Customer 4.2.1
groups
5.3 Posting profiles Accounts receivable> Setup> Customer posting profiles 4.2.1
5.4 Form setup Accounts receivable> Setup> Forms> Form setup 4.2.1
5.5 Accounts receiv. Accounts receivable> Setup> Accounts receivable
parameters parameters

Table A-6: Basic setup for product and inventory management

No. Name Menu Item Section
6.1 Storage Product information management> Setup> Dimension 7.2.2
dimension groups groups> Storage dimension groups
6.2 Tracking Product information management> Setup> Dimension 7.2.2
dimension groups groups> Tracking dimension groups
6.3 Item groups Inventory management> Setup> Inventory> Item 7.2.1
groups
6.4 Transaction Inventory management> Setup> Posting> Transaction 9.6.2
combinations combinations
6.5 Posting Inventory management> Setup> Posting> Posting 9.6.2
6.6 Item model Inventory management> Setup> Inventory> Item 7.2.3
groups model groups
6.7 Costing versions Inventory management> Setup> Costing> Costing 7.2.4
versions
6.8 Journal names Inventory management> Setup> Journals> Journal 7.4.1
names, inventory
6.9 Warehouse Inventory management> Setup> Journals> Journal 7.4.1
journals names, warehouse management
6.10 Parameters Inventory management> Setup> Inventory and
warehouse management parameters

Table A-7: Basic setup for production control

No. Name Menu Item Section
7.1 Production units Production control> Setup> Production> Production 5.3.1
units
7.2 Working time Organization administration> Common> Calendars> 5.3.1
templates Working time templates
7.3 Calendars Organization administration> Common> Calendars> 5.3.1
Calendar
7.4 Resource Organization administration> Common> Resources> 5.3.2
capabilities Resource capabilities
7.5 Resource groups Organization administration> Common> Resources> 5.3.1
Resource groups

mabenito@parcisa.com
448 Appendix

No. Name Menu Item Section

7.6 Resources Organization administration> Common> Resources> 5.3.2
Resources
7.7 Journal names Production control> Setup> Production journal names 5.4.1
7.8 Route groups Production control> Setup> Routes> Route groups 5.3.3
7.9 Cost groups Production control> Setup> Routes> Cost groups 5.4.1
7.10 Shared categories Production control> Setup> Routes> Shared categories 5.3.3
7.11 Cost categories Production control> Setup> Routes> Cost categories 5.3.3
7.12 Calculation Inventory management> Setup> Costing> Calculation 5.2.1
groups groups
7.13 Costing sheets Inventory management> Setup> Costing> Costing 5.4.1
sheets
7.14 Parameters Production control> Setup> Production control
parameters
7.15 Parameters by site Production control> Setup> Production control
parameters by site

Table A-8: Basic setup for master planning

No. Name Menu Item Section
8.1 Coverage groups Master planning> Setup> Coverage> Coverage groups 6.3.3
8.2 Master plans Master planning> Setup> Plans> Master plans 6.3.2
8.3. Forecast models Inventory management> Setup> Forecast> Forecast 6.2.2
models
8.4 Forecast plans Master planning> Setup> Plans> Forecast plans 6.2.2
8.5 Parameters Master planning> Setup> Master planning parameters

Other Key Settings and Master Data

Table A-9: Other key settings
No. Name Menu Item Section
9.1 Workers Human resources> Common> Workers> Workers 10.2.2
9.2 User relations System administration> Common> Users> User 10.2.2
relations
9.3 Terms of delivery Sales and marketing> Setup> Distribution> Terms of 3.2.1
delivery
9.4 Modes of delivery Sales and marketing> Setup> Distribution> Modes of 4.2.1
delivery
9.5 Cash discounts Accounts payable> Setup> Payment> Cash discounts 3.2.2
9.6 Payment methods Accounts payable> Setup> Payment> Methods of 9.5.4
(Purchasing) payment
9.7 Activate trade Procurement and sourcing> Setup> Price/discount> 3.3.3
agreements Activate price/discount
(Purchasing)
9.8 Vendor price/ Procurement and sourcing> Setup> Price/discount> 3.3.3
discount groups Vendor price/discount groups

mabenito@parcisa.com
Appendix 449

No. Name Menu Item Section

9.9 Item discount Procurement and sourcing> Setup> Price/discount> 4.3.2
groups Item discount groups
9.10 Trade agreement Procurement and sourcing> Setup> Price/discount> 3.3.3
journal names Trade agreement journal names
9.11 Price tolerance Accounts payable> Setup> Invoice matching> Price 3.6.2
setup tolerances
9.12 Activate trade Sales and marketing> Setup> Price/discount> Activate 4.3.2
agreements price/discount
(Sales)
9.13 Customer price/ Sales and marketing> Setup> Price/discount> 4.3.2
discount groups Customer price/discount groups
9.14 Charges codes Accounts payable> Setup> Charges> Charges code 4.4.5
(Purchasing)
9.15 Charges codes Accounts receivable> Setup> Charges> Charges code 4.4.5
(Sales)
9.16 Return action Procurement and sourcing> Setup> Purchase orders> 3.7.1
(Purchasing) Return action
9.17 Disposition codes Sales and marketing> Setup> Sales orders> Returns> 4.6.4
Disposition codes
9.18 Category Product information management> Setup> 3.3.1
hierarchies Categories> Category hierarchies
9.19 Procurement Procurement and sourcing> Setup> Categories> 3.3.1
categories Procurement categories
9.20 Sales categories Sales and marketing> Setup> Categories> Sales 4.3.1
categories
9.21 Carrier interface Inventory management> Setup> Sipping carrier> 4.2.1
Carrier interface
9.22 Document Organization administration> Setup> Document 10.5.1
management management> Document management parameters
parameters
9.23 Document types Organization administration> Setup> Document 10.5.1
management> Document types
9.24 Workflow System administration> Setup> Workflow> Workflow 10.4.2
configuration infrastructure configuration
9.25 Batch-Server System administration> Setup> System> Server 2.2.1
configuration

mabenito@parcisa.com
450 Appendix

Table A-10: Master data

No. Name Menu Item Section
10.1 Vendors Accounts payable> Common> Vendors> All vendors 3.2.1
10.2 Customers Accounts receivable> Common> Customers> All 4.2.1
customers
10.3 Products Product information management> Common> 7.2.1
Products> All products and product masters
10.4 Released products Product information management> Common> 7.2.1
Released products
10.5 Bills of material Inventory management> Common> Bills of materials 5.2.2
10.6 Operations Production control> Setup> Routes> Operations 5.3.3
10.7 Routes Production control> Common> Routes> All routes 5.3.3

Commands and Shortcut Keys

Table A-11: Basic commands and shortcut keys
Shortcut Key Command Description
Ctrl+N File/New Create a record
Alt+F9 File/Delete Record Delete a record
Alt+F4 File/Exit Close form or workspace
Esc Close form (optionally without saving)
Ctrl+F5 File/Command/Restore Restore record (Undo pending changes)
F5 File/Command/Refresh Refresh (Save and synchronize record)
Ctrl+P File/Print/Print Print auto-report
File/View/Show Favorites in Show/hide favorites pane
Navigation Pane
Ctrl+W Windows/New workspace Open an additional workspace
Ctrl+X File/Edit/Cut Cut (content of one field)
Ctrl+C File/Edit/Copy Copy (field or record)
Ctrl+V File/Edit/Paste Paste (content of one field)
Ctrl+F File/Edit/Find Find (opens the field filter window)
Ctrl+F3 File/Edit/Filter/ Open the window for advanced filtering
Advanced Filter/Sort
Alt+F3 File/Edit/Filter/ Set a filter applying the content of the
Filter by selection selected field
Ctrl+G File/Edit/Filter/ Show the filter line
Filter By Grid
Shift+ Ctrl+F3 File/Edit/Remove Filter/Sort Clear filter
File/Command/Document Document management
handling
File/View/Notifications Show notifications
F1 Help/Help Help on forms

mabenito@parcisa.com
Bibliography

Literature
Keith Dunkinson, Andrew Birch: Implementing Microsoft Dynamics AX 2012 with
Sure Step 2012, Packt Publishing (2013)
Murray Fife: 50 Tips & Tricks for Dynamics AX 2012, CreateSpace Independent
Publishing (2014)
Mindaugas Pocius: Microsoft Dynamics AX 2012 Development Cookbook, Packt
Publishing (2012)
The Microsoft Dynamics AX Team: Inside Microsoft Dynamics AX 2012 R3,
Microsoft Press (2014)
Scott Hamilton: Discrete Manufacturing Using Microsoft Dynamics AX 2012,
Visions Inc. (2012)
Marco Carvalho: Microsoft Dynamics AX 2009 Administration, Packt Publishing
(2011)
Microsoft Corporation [Ed.]: Help system in Microsoft Dynamics AX 2012 (2013)
Microsoft Corporation [Ed.]: Course 80300 – Introduction to Microsoft Dynamics
AX 2012, MOC Courseware (2011)

Other Sources
www.microsoft.com

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
Index

A Bill back agreement 195, 197

Account (General ledger) 370, 373 Bill of materials (BOM) 210
Account structure 369, 372 Activation 213
Accounts for automatic transactions 152, Approval 210, 213
370, 376 Version 211
Action message 265, 267, 270, 271 Blanket order 109, 154
Action pane 16, 18 Block
Action pane strip 18 Inventory blocking 317, 322, 341
Active Directory 11 Item (Product) 81
Activities 442 Payment 391, 394
Address 50, 68, 144 Period 364
Delivery address 101, 144, 162 Product 147
Invoice address 162 Vendor 67
Address bar 13, 22 BOM designer 214
Address book 57, 58, 427 BOM line 212, 214, 251
Address setup 60, 430 Breadcrumb bar 13
Adjustment (Cost price) 306 Bridging posting 396
Advanced rule structures 373 Broker contract 200
AIF (Application Integration Framew.) 4 Business Intelligence 4
Alert rules 432 Business unit 410
Allowed time (Route) 230 C
Approval Calendar 219, 430
Bill of materials 210, 213 Cancel
Invoice register 392 Inventory registration 115
Journal transaction 383, 387 Order 105, 158
Payment 128, 394 Packing slip 179
Purchase order 103 Picking List 173
Purchase requisition 93 Product receipt 117
Approval workflow 125, 383, 390 Capability (Resource) 220, 230
Approved vendor 81 Capacity
Area page 15, 22 Available capacity 221
Arrival overview 115 Capacity unit 223, 230
Authentication 11, 418 Finite capacity 222
Authorization 418 Case management 441
Auto-report 43, 46 Cash discount 72, 378, 395
B Cash on delivery 72
Balance sheet 361 Catch weight 79, 286
Balancing dimension 370, 371 Category 76, 79, 146, 403
Bank account 377 Centralized payment 396
Batch number 286, 288, 327 Change management 88, 103
Batch processing 46, 436 Charge 101, 136, 165, 359

A. Luszczak, Using Microsoft Dynamics AX 2012,

DOI 10.1007/978-3-658-08295-6, © Springer Fachmedien Wiesbaden 2015
mabenito@parcisa.com
454 Index

Charges code 165 Delete 28

Price charge 83 Order 106, 158
Chart of accounts 370 Deliver remainder 105, 119
Checkbox 29 Delivery date 158, 317
Cluster picking 340 Delivery note 177
Collective invoice 128, 182 Delivery terms 68
Color (Product) 288 Department 368
Command bar 13, 18 Detail form 17, 26
Common tasks 22 Development environment 5
Company account 23, 50, 410, 413 Dimension (Financial) 185, 368
Configuration (Product) 288 Dimension group 79, 288, 310, 330
Confirmation dialog 51 Dimensions display 291, 298
Consolidated picking 169, 171, 175, 293 Direct delivery 191
Consumption (Production) 241, 242, 247 Discount 149, 163
Contact information 58, 69 Freight 358
Content pane 15 Line discount 149
Copy Multiline discount 151
Bill of materials 213 Discount group 148
Copy-Paste 47 Document data sources 49, 441
Purchase order 102 Document handling 439
Cost category 229, 234, 405 Due date 71
Cost center 368 Duplicate address 58, 60, 67, 142
Cost group 229, 234 Duty 423, 424
Cost price 81, 209, 294 Dynamic master plan 90
Costing 248
E
Costing sheet 235, 239, 249, 302
Edit mode 18, 26, 28, 51
Costing version 229, 236, 294
Efficiency percentage 222
Counting (Inventory) 313, 344
Employee 329, 421
Coverage code 266
Enterprise Portal 4
Coverage group 82, 265
Enterprise search 13, 39
Create dialog 27, 79, 142
Error account 376
Credit limit 145
Error message 32
Credit note
Estimation (production order) 238
Purchasing 133
Exchange rate 149, 365
Sales 186
Explosion (BOM) 161, 213, 273
Cue 26, 37
Export to Excel 48
Currency 14, 365
Currency converter 366 F
Customer 142, 378 FactBox 17, 18
Customer classification 170 Fast tab 18
Favorites 15, 22
D
Field group 29
DAT company 414
Auto-report 54
Data partition 11, 14, 408
FIFO 294, 302
Database 7
Fill utility 54
Database log 54
Filter 33
Decoupling point 262, 267
Advanced 35
Default order type 81, 82, 208

mabenito@parcisa.com
Index 455

Clear 36 Intercompany 4, 396, 408, 410

Save 37 Interunit accounting 370, 371
Filter by field 38 Inventory closing 297, 305
Filter by grid 35, 50 Inventory dimension 288, 308, 322, 330,
Filter by selection 34 416
Filter pane 16, 33 Coverage 268
Financial dimension 185, 368, 386, 409, Financial inventory 305
416 Pricing 84, 151, 289
Financial statement 375 Inventory forecast 259
Financial transaction 277, 296, 402 Inventory model 293, 294, 302, 305
Find dialog 38 Inventory picking 171, 293, 296
Firming time fence 267 Inventory posting setup 73, 77, 122, 285,
Fiscal calendar 363, 430 400, 402
Fiscal year 363 Inventory registration 89, 113, 188, 293,
Fixed receipt price 294, 302, 303, 404 296, 318
Flushing principle 209, 213, 242, 247 Inventory status 322, 341
Forecast 255 Inventory transaction 100, 114, 121, 295
Forecast model 255, 256 Inventory unit 80, 331
Forecast plan 257 Inventory valuation 135, 189, 301
Form (Detail form) 17, 26 Invoice 389
Form configuration 51 Free text invoice 184, 397, 401
Free text invoice 184, 397, 401 General journal 389
Freight discount 358 Purchase invoice 124, 377, 389, 401
Freight invoice 360 Sales invoice 180, 389
Futures message 265, 268, 270, 271 Invoice account 143
Invoice approval 392
G
Invoice discount 148, 151
General journal 384
Invoice inquiry 131, 181
General ledger 361
Invoice journal 389, 390
Global address book 57, 67, 68, 101, 142,
Invoice matching 129, 360
144, 409, 426
Invoice pool 125, 391, 393
Go to main table 33
Invoice register 125, 391
Grid check box 16, 47
Item (Product) 78, 147, 208, 280
Grid view 18
Item allocation key 258
Gross requirement 260
Item arrival journal 114, 116, 188, 312
H Item coverage 82, 90, 209, 268
Help 39 Item group 285, 403
Customize 40 Item model group 208, 284, 292
Hierarchy designer 412 Inventory model 293, 294, 302, 305
Home menu 24 Ledger integration 401
Picking requirements 171
I
Valuation method 294
Income statement 361
Item price form 294
Indirect costs 235
Item receipt 275, 302
Infolog 32, 50
Item return 117, 133, 186
Input tax 68, 74, 102, 378
Instance 407 J
Intangible item 76, 79, 100 Jewel menu 13, 18

mabenito@parcisa.com
456 Index

Job (Route) 240 Material where-used 215

Job card 245 Minimum quantity 90, 266, 268
Job scheduling 222, 239 Mobile device 322, 328, 333, 336
Journal 22 Mode of delivery 145
Bill of materials 312 Module 21, 24
General ledger 382, 384 MorphX 5
Inventory 310, 311 Moving average 294, 303, 404
Invoice 389 Multisite functionality 416
Payment 394
N
Production 234, 243, 248
Navigation pane 15, 20
Journal type 382
Negative inventory 293
K Net requirement 90, 270, 272
Keyword search 162 Notification 14, 433, 438
Number sequence 428
L
Language 50 O
Layer structure 6 Office add-in 47
Lean manufacturing 203 One plan strategy 262, 265
Ledger account 31, 370, 386 One-time vendor 70
Ledger calendar 306, 364, 430 Open transaction 71, 135, 377, 393
Ledger form 363, 366, 371 Operating unit 410
Ledger integration 73, 152, 165, 243, 399 Operation 212, 224
Legal entity 23, 410, 413 Operation relation 224, 226, 227, 228
LIFO 294, 302 Operations planning 89, 253
Line number 100 Operations scheduling 217, 221, 239
Line type (BOM) 213 Order type 157
List page 15, 26 Organization hierarchy 412
Load 327, 334, 336, 355, 356 Origin (Transaction) 123, 132, 181, 375
Location 288, 308, 309, 324 Output order 168, 176, 293
Location directive 325, 333, 336, 337 Over delivery 120
Location profile 323, 343, 345 Overhead margin 235
Logon 11
P
Lookup field 30
Packing slip 177
Lump sum agreement 196
Packing slip inquiry 178
M Pallet 115, 288, 321
Main account 31, 370, 373, 386 Parameters
Main account category 375 General 431
Main vendor 82 Production 233, 405
Make-to-stock 262 Partial delivery 118
Marking 135, 189, 305 Partition 408
Master data 8, 61, 137, 203, 275 Party 57, 67, 142, 409
Master plan 263 Payment 393
Master planning 89, 253, 261 Approval 128, 394
Dynamic plan 262 Payment method 395
Static plan 262, 265 Payment proposal 394
Master Scheduling 269 Payment terms 71
Material requirements 62, 204 Period 363, 430

mabenito@parcisa.com
Index 457

Periodic journal 387 Sales 147

Permission 418, 423, 425 Product category 76, 79, 146, 403
Personalization 52 Product master 79, 208, 282, 295
Phantom item 209, 213, 239 Product receipt 111, 116, 276, 401
Physical transaction 276, 296, 401 Product receipt inquiry 122
Picking 171, 293, 296, 327, 336 Product type 282, 404
Picking list 172 Production group 406
Production 242, 243 Production journal 242
Sales 168 Production order 232
Picking workbench 173 End 248
Planned order 62, 271 Release 241
Planned production order 232 Start 241
Planned purchase order 89 Status 232
Pop-up menu 32 Production order processing 203
Post and print 43, 106 Production papers 241
Postal address 58, 68, 101, 144 Production type 80, 208, 214, 236
Postal code 69 Production unit 217, 417
Posting form 106 Prospect 155
Direct delivery 191 Purchase agreement 109
Invoice 180 Purchase order 87, 96
Order confirmation 167 Purchase order status 120, 130
Packing slip 177 Purchase requisition 62, 92
Product receipt 116 Purchase type 96
Vendor invoice 126 Purchasing policy 92, 93
Posting layer 384 Purchasing process 61
Posting profile 74, 142, 400
Q
Price calculation 239, 249
Quantity on hand 298
Calculation group 210
Quarantine 293, 315, 322, 342
Price group 163
Queue (Work item) 436, 438
Price unit 82
Quotation 155
Price variance 128
Pricing 82, 163 R
Print 42 Rate engine (Transportation) 352
Destination 44 Receipt
Filter 44 Invoice 124
Print preview 45 Product 111
Print archive 45 Receipts list 112
Print management 107, 109, 145, 167 Receive now 118
Privilege 423, 425 Record template 54, 281
Pro forma document 107 Reduction key 264, 267
Process cycle 424 Refund 136, 189
Process manufacturing 203, 208, 214, 236 Registration (Inventory) 89, 113, 188, 293,
Procurement category 76, 77, 100, 389 296
Product Release order 110
Inventory 280, 330 Release picking 169, 172
Production 208 Released product 80, 281, 330, 354
Purchasing 78 Rename 53

mabenito@parcisa.com
458 Index

Replacement (Credit note) 134 Service item 208, 251, 283, 404
Replenishment (Location) 338 Session date 14, 29
Report as finished 246, 247 Settlement
Report form 43 Customer transaction 378, 394
Reporting 4 Inventory transaction 297
Reprint 109 Vendor transaction 71, 135, 377
Request for quotation 62, 92, 93, 94, 272 Setup time 230
Requirement (Material) 90, 272 Shipment 176, 334, 336, 356
Requirements (Material) 62, 204 Shipping carrier 145, 351
Resource 220, 405 Simulation 262
Resource group 217, 220 Site 81, 288, 368, 416
Returned order 134, 186 Size (Product) 288
Reversal (Transaction) 397 Sort records 38
RFQ (Request for quotation) 94 Standard cost price 301, 303, 404
Role (Party role) 59, 427 Status bar 14, 18, 51
Role (Security) 419, 423 Stocktaking 313, 344
Role center 15, 25, 420 Storage dimension 416
Role-based security 422 Subcontracting 250
Route 223 Subledger accounting 400
Complex sequence 225 Sub-production 213, 239
Simple sequence 225 Subsidiary 416
Route card 245 Summary account 74, 400
Route group 228, 240, 245 Summary update
Route network 225, 227 Invoice 182
Royalty agreement 201 Product receipt 117
Run as 11 Purchase order 108
Run time (Route) 230 Supplier 66
Supply forecast 259
S
Sure Step 5
Sales agreement 154
Sales category 76, 146 T
Sales forecast 255, 258 Table reference 30
Sales order 154 Tag counting 314
Sales order processing 137 Task recorder 444
Sales price 148 Team 411, 426
Sales quotation 155 Template 54, 281, 388
Sales tax 378, 383 Terms of payment 71
Save record 28 Three-tier architecture 7
Scenario 256, 261 Title bar 12, 18
Scheduling parameter 221, 233 Total amount 128
Scroll bar 16 Total discount 148, 151
Search functionality 38 Trade agreement 83, 148
Secondary operation 220, 225, 227 Trade allowance 192
Security role 25, 419, 423 Transaction
Segmented entry control 31, 369, 386 Inventory transaction 295
Segregation of duties 426 Ledger transaction 375, 384
Serial number 286, 288 Transaction combination 403
Active in sales 290 Transaction data 8

mabenito@parcisa.com
Index 459

Transaction origin 123, 132, 181, 375 Vendor group 74

Transaction settlement 71, 377, 394 Vendor invoice 124, 377, 389, 401
Transfer journal 311 Vendor rebate 200
Transfer order 317 View details 31
Transportation 350 Virtual company account 415
Transportation constraint 358 Voucher principle 8, 63, 205
Transportation tender 356 Voucher template 388
Travel button 13
W
Two plan strategy 262, 265
Warehouse 288, 308, 324
U Wave 327, 335, 337, 339
Under delivery 119 Web interface 4
Undo 28 Weighted average 294, 302
Unit conversion 285 WIP (Work in progress) 205, 243, 248
Unit of measure 80, 285, 331 Work (Warehouse) 325, 328, 333, 335, 336
Unit of time 223 Work item 437
Usage data 37, 51 Work item queue 436, 438
User 408, 418 Worker 329, 421
User groups 422 Workflow 3, 434
User options 11, 27, 50, 420 Workflow editor 434
User profile 25, 420 Working time registration 245
User relation 420 Working time template 219
User template 55 Workspace 15, 23

V X
Valuation method 294, 302, 305 X++ 6
Value lookup 30
Z
VAT (Value added tax) 68, 378
ZIP code 69
VAT Reg No 68, 414
Vendor 66, 377

mabenito@parcisa.com