Microsoft Dynamics® NAV 2009 Trade

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MICROSOFT DYNAMICS® NAV 2009

TRADE

Microsoft Official Training Materials for Microsoft Dynamics ® Your use of this content is subject to your current services agreement

Last Revision: January 2009 The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property.

© 2009 Microsoft Corporation. All rights reserved. Microsoft Dynamics®, Microsoft® PowerPoint® Microsoft® SQL Server® and Microsoft Dynamics® NAV MorphX® are trademarks or registered trademarks of Microsoft Corporation. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. This course content is designed for Microsoft Dynamics® NAV 2009.


Table of Contents Introduction

0-1

Welcome ............................................................................................................ 0-1 Microsoft Dynamics Courseware Contents ........................................................ 0-2 Documentation Conventions .............................................................................. 0-3 Student Objectives ............................................................................................. 0-4

Chapter 1: Sales Order Management

1-1

Objectives ........................................................................................................... 1-1 Introduction ......................................................................................................... 1-1 Set Up Sales Order Management ...................................................................... 1-2 Manage Sales Transactions ............................................................................. 1-10 Lab 1.1 - Create and Convert a Blanket Sales Order ....................................... 1-19 Item Reservation .............................................................................................. 1-21 Lab 1.2 - Reserve an Item on a Sales Order .................................................... 1-25 Posting Orders ................................................................................................. 1-26 Lab 1.3 - Ship and Invoice a Sales Order ........................................................ 1-31 Invoice a Combined Shipment ......................................................................... 1-32 Customer Prepayments .................................................................................... 1-34 Summary .......................................................................................................... 1-40 Test Your Knowledge ....................................................................................... 1-41 Quick Interaction: Lessons Learned ................................................................. 1-43 Solutions ........................................................................................................... 1-44

Chapter 2: Sales Prices and Discounts

2-1

Objectives ........................................................................................................... 2-1 Introduction ......................................................................................................... 2-1 Sales Prices ....................................................................................................... 2-2 Lab 2.1 - Manage Alternative Sales Prices ........................................................ 2-9 Maintain Sales Prices ....................................................................................... 2-11 Lab 2.2 - Update Sales Prices .......................................................................... 2-17 Line and Invoice Discounts .............................................................................. 2-19 Lab 2.3 - Offer the Best Price Available to a Customer .................................... 2-28 Invoice Discounts ............................................................................................. 2-30 Summary .......................................................................................................... 2-32 Test Your Knowledge ....................................................................................... 2-33 Quick Interaction: Lessons Learned ................................................................. 2-35 Solutions ........................................................................................................... 2-36

Chapter 3: Customer Service Features

3-1

Objectives ........................................................................................................... 3-1 Introduction ......................................................................................................... 3-1 Item Substitutions ............................................................................................... 3-2 Lab 3.1 - Process a Sales Order with Items Substitutions ................................. 3-5 Item Cross References ....................................................................................... 3-6 Lab 3.2 - Process a Sales Order with Item Cross References ........................... 3-9 Set Up and Create Nonstock Items .................................................................. 3-11 Sell Nonstock Items .......................................................................................... 3-15 Lab 3.3 - Sell a Nonstock Item Using Special Orders ...................................... 3-19 Summary .......................................................................................................... 3-21


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Trade in Microsoft Dynamics® NAV 2009 Test Your Knowledge ....................................................................................... 3-22 Quick Interaction: Lessons Learned ................................................................. 3-24 Solutions ........................................................................................................... 3-25

Chapter 4: Purchase Order Management

4-1

Objectives ........................................................................................................... 4-1 Introduction ......................................................................................................... 4-1 Purchase Order Management Setup .................................................................. 4-2 Manage Purchase Transactions ......................................................................... 4-9 Lab 4.1 - Process a Purchase Quote to an Order ............................................ 4-18 Purchase Prices and Discounts ....................................................................... 4-20 Purchase Prices ............................................................................................... 4-20 Lab 4.2 - Manage Alternative Purchase Prices ................................................ 4-24 Invoice and Line Discounts .............................................................................. 4-27 Lab 4.3 - Manage Purchase Line Discounts..................................................... 4-32 Vendor Prepayments ........................................................................................ 4-35 Summary .......................................................................................................... 4-37 Test Your Knowledge ....................................................................................... 4-38 Quick Interaction: Lessons Learned ................................................................. 4-40 Solutions ........................................................................................................... 4-41

Chapter 5: Requisition Management

5-1

Objectives ........................................................................................................... 5-1 Introduction ......................................................................................................... 5-1 Requisition Management Setup ......................................................................... 5-2 Manage Reordering Policies .............................................................................. 5-7 Requisition Worksheet ..................................................................................... 5-13 Additional Worksheet Features ........................................................................ 5-17 Summary .......................................................................................................... 5-19 Test Your Knowledge ....................................................................................... 5-20 Quick Interaction: Lessons Learned ................................................................. 5-22 Solutions ........................................................................................................... 5-23

Chapter 6: Item Charges

6-1

Objectives ........................................................................................................... 6-1 Introduction ......................................................................................................... 6-1 Item Charges Setup ........................................................................................... 6-3 Purchase Item Charges ...................................................................................... 6-4 Lab 6.1 - Assign Freight Charges to an Open Purchase Order........................ 6-10 Sales Item Charges .......................................................................................... 6-12 Purchase and Sales Allowances ...................................................................... 6-14 Lab 6.2 - Create an Item Charge Purchase Credit Memo ................................ 6-16 Summary .......................................................................................................... 6-18 Test Your Knowledge ....................................................................................... 6-19 Quick Interaction: Lessons Learned ................................................................. 6-21 Solutions ........................................................................................................... 6-22

Chapter 7: Order Promising

7-1

Objectives ........................................................................................................... 7-1 Introduction ......................................................................................................... 7-2

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Table of Contents Date Calculation Concepts ................................................................................. 7-2 Promise Orders to Customers ............................................................................ 7-3 Date Calculation for Sales and Order Promising Setup ..................................... 7-6 Promising Sales Order Delivery ....................................................................... 7-10 Lab 7.1 - Promise Order Delivery to a Customer ............................................. 7-20 Estimate Order Receipt .................................................................................... 7-22 Date Calculation Setup for Purchase Orders ................................................... 7-24 Estimating Purchase Order Receipts ............................................................... 7-28 Lab 7.2 - Purchase Order Promising ................................................................ 7-33 Estimate Transfer Order Receipt ...................................................................... 7-35 Calendars ......................................................................................................... 7-35 Summary .......................................................................................................... 7-37 Test Your Knowledge ....................................................................................... 7-39 Quick Interaction: Lessons Learned ................................................................. 7-41 Solutions ........................................................................................................... 7-42

Chapter 8: Returns Management

8-1

Objectives ........................................................................................................... 8-1 Introduction ......................................................................................................... 8-1 Activity Diagram for Returns Management ......................................................... 8-3 Returns Management Setup .............................................................................. 8-4 Manage Customer Returns ................................................................................ 8-7 Lab 8.1 - Process a Customer Return .............................................................. 8-24 Manage Returns to Vendors ............................................................................ 8-27 Lab 8.2 - Process the Vendor Return ............................................................... 8-33 Summary .......................................................................................................... 8-36 Test Your Knowledge ....................................................................................... 8-37 Quick Interaction: Lessons Learned ................................................................. 8-39 Solutions ........................................................................................................... 8-40

Chapter 9: Analysis and Reporting

9-1

Objectives ........................................................................................................... 9-1 Introduction ......................................................................................................... 9-1 Analysis Reports ................................................................................................ 9-2 Lab 9.1 - Create an Analysis Report ................................................................ 9-15 Analysis by Dimensions ................................................................................... 9-18 Lab 9.2 - Analyze Item Sales by Area .............................................................. 9-21 Sales and Purchase Budgets ........................................................................... 9-24 Lab 9.3 - Create a Sales Budget ...................................................................... 9-29 Summary .......................................................................................................... 9-33 Test Your Knowledge ....................................................................................... 9-34 Quick Interaction: Lessons Learned ................................................................. 9-36 Solutions ........................................................................................................... 9-37


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Trade in Microsoft Dynamics® NAV 2009

iv


Introduction

INTRODUCTION Welcome We know training is a vital component of retaining the value of your Microsoft Dynamics® NAV 2009 investment. Our quality training from industry experts keeps you up-to-date on your solution and helps you develop the skills necessary for fully maximizing the value of your solution. Whether you choose Online Training, Classroom Training, or Training Materials; there is a type of training to meet everyone's needs. Choose the training type that best suits you so you can stay ahead of the competition.

Online Training Online Training delivers convenient, in-depth training to you in the comfort of your own home or office. Online training provides immediate access to training 24 hours-a-day. It is perfect for the customer who does not have the time or budget to travel. Our newest online training option, eCourses, combine the efficiency of online training with the in-depth product coverage of classroom training, with at least two weeks to complete each course.

Classroom Training Classroom Training provides serious, in-depth learning through hands-on interaction. From demonstrations to presentations to classroom activities, you receive hands-on experience with instruction from our certified staff of experts. Regularly scheduled throughout North America, you can be sure you will find a class convenient for you.

Training Materials Training Materials enable you to learn at your own pace, on your own time with information-packed training manuals. Our wide variety of training manuals feature an abundance of tips, tricks, and insights you can refer to again and again:

Microsoft Dynamics Courseware The Microsoft Dynamics Courseware consists of detailed training manuals, designed from a training perspective. These manuals include advanced topics as well as training objectives, exercises, interactions and quizzes. Look for a complete list of manuals available for purchase on the Microsoft Dynamics website: www.microsoft.com/Dynamics.


0-1


Microsoft Dynamics Courseware Contents Test Your Skills Within the Microsoft Dynamics Training Materials you find a variety of different exercises. These exercises are offered in three levels to accommodate the variety of knowledge and expertise of each student. We suggest you try the level three exercises first, if you need help completing the task look to the information in the level two exercises. If you need further assistance each step of the task is outlined in the level one exercise.

Challenge Yourself! Level 3 exercises are the most challenging. These exercises are designed for the experienced student who requires little instruction to complete the required task.

Need a Little Help? Level 2 exercises are designed to challenge students, while providing some assistance. These exercises do not provide step by step instructions, however, do provide you with helpful hints and more information to complete the exercise.

Step by Step Level 1 exercises are geared towards new users who require detailed instructions and explanations to complete the exercise. Level 1 exercises guide you through the task, step by step, including navigation.

Quick Interaction: Lessons Learned At the end of each chapter within the Microsoft Dynamics Training Material, you find a Quick Interaction: Lessons Learned page. This interaction is designed to provide the student with a moment to reflect on the material they have learned. By outlining three key points from the chapter, the student is maximizing knowledge retention, and providing themselves with an excellent resource for reviewing key points after class.

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Introduction

Documentation Conventions The following conventions and icons are used throughout this documentation to help you quickly and effectively navigate through the information. CAUTION: Cautions are found throughout the training manual and are preceded by the word CAUTION in bold. Cautions are used to remind you of a specific result of a specific action which may be undesirable. HINT: Hints are found throughout the training manual and are preceded by the word HINT in bold. Hints are used to suggest time-saving features or alternative methods for accomplishing a specific task. NOTE: Notes are found throughout the training manual and are preceded by the word NOTE in bold. Notes are used to provide information which, while not critical, may be valuable to an end user. BEYOND THE BASICS: Advanced information found throughout the training manual is preceded by the words BEYOND THE BASICS in bold. Beyond the Basics provides additional detail, outside of standard functionality, that may help you to more optimally use the application. EXAMPLE: Examples are found throughout the training manual and are preceded by the word EXAMPLE in bold. Examples bring to light business scenarios that may better explain how an application can be used to address a business problem.


0-3


Student Objectives What do you hope to learn by participating in this course? List three main objectives below. 1.

2.

3.

0-4



CHAPTER 1: SALES ORDER MANAGEMENT Objectives The objectives are: •

Review the setup of Sales Order Management, including customers, shipping options, reservation rules, customer posting groups, and salespeople.

•

Explain and process sales quotes and blanket orders, and review sales order information.

•

Describe how to reserve items on a sales order.

•

Explain the process of posting a sales order shipment.

•

Describe and demonstrate the process of combining shipments into one invoice.

•

Explain how to process prepayments on a sales order.

Introduction For companies to survive, they must keep customers satisfied. An instant and accurate response to inquiries, such as delivery time or the price of the product, is a key factor contributing to customer satisfaction. In addition, efficiently handling special customer requests about shipping arrangements and invoicing preferences is likely to ensure repeat orders. Typical examples of these requests include: •

Receiving shipments in parts or to different addresses

•

Receiving the orders before they are invoiced

•

Being invoiced for several shipped orders at the same time

Companies must also ensure they can register sales transaction information easily. For example, adjusting customer balance and updating inventory availability and values are tasks that a company must always perform when handling sales. Additionally, companies may want to keep a record of the salespeople performing the sale. As aspects of a future sales agreements are negotiated and agreed upon in the presales stage, it is helpful for salespeople to record relevant agreement details once and then reuse this information when creating an actual sales order.


1-1

Trade in Microsoft Dynamics® NAV 2009 The following functionality in Microsoft Dynamics® NAV supports efficient sales transaction handling: •

Sales Order Management: This functionality includes documents (quotes, blanket orders, and sales orders) that support the order processor in efficiently managing sales. The functionality supports: o o o

Partial order shipment Separation between shipping and invoicing Combined invoicing

•

Alternative Ship-Tos: This facilitates managing sales orders for customers who have several alternative shipping addresses.

•

Order processors/purchasing agents: This enables collection of sales statistics at the salesperson level.

•

Shipping agents: This facilitates the management of carriers (shipping agents) and related information.

Set Up Sales Order Management This lesson contains setup options that define the functionality of sales order management, focusing on the physical handling rather than financial aspects of a sales transaction. Setup options that support additional sales practices and tasks (for example, sales and invoice discounts and return management) are discussed in separate chapters. The sales setup consists of the following elements:

Sales & Receivables Setup Based on their established practices, companies must specify how they want the program to support them in managing different aspects of their sales transactions. These are general setup options the program applies to all sales transactions, regardless of the item or customer.

Customer Setup Basic information such as name and address, in addition to invoicing details (for example, credit limit, invoicing, discount and payment terms, currencies, shipping schemes, reservation rules, and so on) are recorded for each customer on a customer card.

Customer Posting Groups The setup of customer posting groups defines the connection between a customer and accounts in the general ledger. The user does this by assigning a customer to a posting group for which balance sheet and income statement accounts are set up.

1-2


Chapter 1: Sales Order Management Salesperson Setup Companies can set up codes to identify and describe salespeople. This is done to establish a link between a salesperson and the performance in terms of, for example, the number of sales transactions (orders, invoices, or returns) handled.

Demonstration: Review Sales & Receivables Setup Scenario: At CRONUS International Ltd., management wants to notify the order processor about a customer's credit and balance every time the customer places an order. Because management wants to ensure that orders are delivered on time, they want feedback on item availability when a sales order is entered. In regard to shipping, CRONUS wants the Qty. to Ship field on a sales order line to populate automatically with the remaining, unshipped quantity, and require the creation of shipment and return receipt documents when a user posts invoices, credit memos, or both. The business requirements listed above have led to the following Sales & Receivables setup for CRONUS. Follow these steps to confirm the setup of these business requirements in the Sales & Receivables Setup page: 1. On the navigation pane, click the Departments button and then click Sales & Marketing. 2. On the Sales & Marketing page, click Administration and then click Sales & Receivables Setup.

FIGURE 1.1 SALES & RECEIVABLES SETUP


1-3

Trade in Microsoft Dynamics® NAV 2009 The fields on the General FastTab of the Sales & Receivables Setup page that are relevant for Sales Order Management are described in the following table. Field

Description

Credit Warnings

The Credit Warnings field specifies whether the program warns about the customer's credit standing when the user creates a sales order or invoice for the customer. When it is required, the warning can be triggered by overdue balance, exceeded credit limit, or both.

Stockout Warning

The Stockout Warning check box, when selected, specifies that the program warns the user when there are not enough items on inventory to fulfill a sales order. The warning is based on a calculation that sums quantity amounts on all posted item ledger entries and unposted sales order lines, including reserved quantities.

Default Quantity to Ship

This field identifies the value to default into the Qty. to Ship field in new order documents and after an order is partially shipped. The options are Remainder and Blank.

Shipment on Invoice and Return Receipt on Credit Memo

These check boxes indicate that, when selected, the program automatically creates posted shipment and posted return receipt documents at the time of posting sales invoices and sales credit memos. If these check boxes are clear, the program only creates posted invoices, credit memos or both. Posted shipment (return receipt) documents are needed when you are using: • Item Charges functionality. •

Automatic package tracking function.

Use the fields on the Dimension FastTab to group customers and salespeople for budgeting and sales analysis purposes. Refer to "Analysis and Reporting" in this training material. The definition and setup options of all other fields on the General and Numbering FastTabs of the Sales & Receivables Setup page are available in online Help. Fields determining invoice discount setup and cost reversing options are described in "Sales Prices and Discounts" and "Returns Management" in this training material.

Customers and Shipping Options The customer card and the type of information and customer details that can be recorded are explained in other courses and are not repeated here. This topic explains additional setup options for customer data management. These options manage shipping-related information and processes and control item reservation rules.

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Chapter 1: Sales Order Management Customers often have alternative sites in addition to the main business address for shipping items. For example, a subcontractor may require deliveries to several construction sites. Companies may have warehousing and production sites that have addresses different from the main office address. The functionality of the Alternative Ship-To supports those customers that have alternative shipping sites. If a customer wants the orders shipped to different addresses, addresses can be recorded as alternative ship-to addresses and chosen by the order processor when creating an order/invoice. Enter ship-to addresses in the Ship-to Address page. This can contain an unlimited number of addresses for each customer. A code representing information such as customer number and name links to each address.

Procedure: Review Ship-to Addresses Follow these steps to review the Ship-to Addresses set up on customer 10000: 1. On the Sales & Marketing page, click Order Processing and then click Customers. 2. Open the customer card for customer 10000. 3. On the Related Information menu, point to Customer and then click Ship-to Addresses. 4. Double-click the second line to review the address details. When this code is selected in the Ship-to Code field on orders (invoices and credit memos), this ship-to information appears on document printouts. Ship-to codes are also available on purchase orders that are drop-shipped to a customer. All other shipping setup options are located on the Shipping FastTab of a customer card. 5. Close the Ship-to Address and Ship-to Address List pages.


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Trade in Microsoft Dynamics® NAV 2009 Procedure: Review Shipping Fields Follow these steps to review the shipping fields on the customer card for customer 10000: 1. On the customer card for customer 10000, expand the Shipping FastTab.

FIGURE 1.2 CUSTOMER CARD FOR CUSTOMER 10000 WITH EXPANDED SHIPPING FASTTAB

Companies may use a decentralized distribution strategy to ensure that orders are delivered fast to their customers. Such a strategy suggests that customer orders ship from local warehouses rather than from a central location. A company can link a customer to a specific location by specifying a default location in the Location Code field. The option selected in the Shipping Advice field indicates whether the customer accepts partial order shipments or only wants complete shipments. For complete shipments, the program does not allow posting of a sales order unless the Qty. to Ship field is equal to the total sales order quantity. 2. In the Shipment Method Code field, click the drop-down arrow and then click Advanced to see the entire list of shipment methods.

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Chapter 1: Sales Order Management Depending on their profile, industrial practices, and location, customers may have different preferences as to whom (a customer or a supplier) picks up the shipment, how orders must be shipped, and so on. The program can record all the terms of sale and shipment methods (often based on standard international trade definitions) that can be associated with each customer. When assigned to a customer, the shipment method code copies to sales documents for that customer. 3. Close the Shipment Methods page. The shipping setup options in the Shipping Agent Code, Shipping Agent Service Code, and Shipping Time fields, and the two calendar fields on the Shipping FastTab of the customer card calculate shipment and delivery dates for sales documents. These setup options are described in "Order Promising" in this training material. Use the Combine Shipments option when you invoice or debit a customer for several shipments or return receipts in one invoice or credit memo. If selected on the customer card, the check box is selected by default in the order header, but you can change it as needed. The Combine Shipments or Return Receipts batch job combines the posted shipment or return receipt documents into one invoice or credit memo and includes only orders that have the Combine Shipments check box selected. You can manage item reservations between sales and purchase orders based on whether reservations are made in relation to a specific customer. The user determines this by selecting one of the following options in the Reserve field: •

Never

•

Optional

•

Always

The selected option copies to the Reserve field on the header of a sales document created for the customer, where it, in combination with the contents of the Reserve field on the item card, determine the reservation option for individual sales lines in the document. Refer to online Help for more information about the fields on the Shipping FastTab.

Customer Posting Groups The financial value of a sales transaction posts to dedicated accounts in the general ledger. When companies do not want to establish accounts for each customer, they can put several customers into one posting group and specify accounts for each group. After the company decides on criteria for how its customers are grouped, it must set up the groups in the Customer Posting Group page.


1-7

Trade in Microsoft Dynamics® NAV 2009 In this page, the user can assign a code to each posting group and specify general ledger accounts for categories, such as: •

Receivables

•

Service charges

•

Payment discount amounts

•

Interest

•

Additional fees

Procedure: Review Customer Posting Groups Follow these steps to review the posting groups set up for customer 10000: 1. On the navigation pane, click Financial Management. 2. On the Financial Management page, click Administration and then click Customer Posting Groups.

FIGURE 1.3 CUSTOMER POSTING GROUPS

3. Close the Customer Posting Groups page. Entering a code in the Customer Posting Group field of the Invoicing FastTab on a customer card assigns the customer to a specific posting group. 4. Open the customer card for customer 10000 and then expand the Invoicing FastTab. 5. Confirm that DOMESTIC has been selected in the Customer Posting Group field. Each customer can only be assigned one customer posting group.

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Chapter 1: Sales Order Management When a sales transaction (orders, invoices, and credit memos) for this customer posts, the accounts for the posting group where the customer belongs is used. NOTE: You must also assign general business posting groups to customers. Use the business group code in combination with a general product posting group code in the general posting setup to specify the posting accounts to which certain transactions post. You can also assign the VAT Business Posting Group code. It is used in combination with a VAT Product Posting Group code to find the VAT %, VAT calculation type, and VAT accounts to which the program posts VAT amounts. For more information about general setup rules, refer to the "Application Setup in Microsoft Dynamics® NAV 2009" training material. Each customer posting group can have different general ledger accounts or the same accounts set up for it. An advantage of having different groups that have the same accounts is that it gives accountants flexibility in grouping customers for reporting and analysis purposes. For example, you can present and analyze a total receivables amount with two groups representing domestic and foreign customers.

Procedure: Set Up Salespeople When companies want to monitor sales performance, they can record volume achieved by salespeople and produce statistics. To set up salespeople, a company assigns a code to each salesperson. Follow these steps to set up a salesperson: 1. On the Sales & Marketing page, click Sales and then click Salespeople. 2. Click New to create a new salesperson. 3. Enter a code and name and then other details such as job title, commission percent, and dimensions. NOTE: Apart from two default dimensions (department and project) selected on the Invoicing FastTab of the salesperson card, companies can also assign additional default dimensions. This can be done for a single salesperson or the whole group. This setup option is found on either the Salespeople list page or the Salesperson/Purchaser Card by clicking the Related Information menu, pointing to Salesperson, and then selecting the relevant Dimensions menu item. Selecting a salesperson code as the default on a customer card or directly in the sales documents ensures that sales statistics are created at the salesperson level. Based on this, the overall performance of salespeople can be calculated and presented in a report.


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Manage Sales Transactions Managing Sales Transactions elaborates on the program's facilities that support common tasks in sales transaction management. The workflow includes the following steps: •

Registering a sales quote or blanket agreement with a customer.

•

Converting the agreement into a sales order.

In some environments, goods sold to a customer are delivered directly from the vendor, bypassing the company's own inventory. You can achieve this special business purpose by using drop shipment functionality or creating special orders that link the purchase to the sale. Refer to "Customer Service Features" in this training material for more information about drop shipments and special orders. Reserving the ordered quantity for a sales order line and posting sales orders are explained in the next lessons.

Sales Quotes Contacts, potential customers, or existing customers may submit a request for quote either due to the nature of the product, because they have not traded with the company before, or because they wish to negotiate a better price. A sales quote can be used as a preliminary draft for an order that specifies price, the terms of sale, and item descriptions. The sales quote document in Microsoft Dynamics NAV is a flexible quoting tool because it does not require existing customer information and it can be converted into a sales order or archived for future transactions with that business partner.

Demonstration: Create and Convert a Sales Quote Scenario: A representative from customer 10000 calls Susan, the order processor at CRONUS, for a quote for 100 units each of items 70010 and 70011, respectively. A few days later, the representative calls to place the order, but increases the quantity of item 70010 to 200 because the price is the lowest he or she has been able to find. Follow these steps to create the sales quote for customer 10000: 1. On the Sales & Marketing page, click Order Processing and then click Sales Quotes. 2. Click New and then press ENTER or TAB to assign a number. 3. In the Sell-to Customer No. field, enter 10000.

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Chapter 1: Sales Order Management The Salesperson Code field contains the default code for the salesperson assigned to the customer 10000. This code, and the other customer details, are retrieved from the customer card. 4. 5. 6. 7. 8.

On the Lines FastTab, in the Type field, select Item. In the No. field, enter 70010. In the Quantity field, type 100. On the next line, in the No. field, enter 70011. In the Quantity field, type 100.

Follow these steps to update and then convert the quote to a sales order: 1. On the first line, change the Quantity to 200. 2. On the Action Pane, click Make Order.

FIGURE 1.4 SALES QUOTE FOR CUSTOMER 10000

3. Click Yes to convert the quote to an order. 4. Click OK to close the message stating that the quote has been changed to an order.


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Trade in Microsoft Dynamics® NAV 2009 Procedure: Archive Sales Quotes Archive a sales quote that did not result in a sales order to quickly restore it if the customer returns to make the purchase. Follow these steps to archive the quote rather than convert it to an order: 1. On the Actions menu, point to Functions, and then click Archive Document. 2. Click Yes to archive the quote.

Blanket Sales Orders A blanket sales order represents a framework for a long-term agreement between the company and a customer. The order processor makes a blanket order when the customer has committed to buying large quantities to be delivered in several shipments over a period of time. Often, blanket orders cover only one item with predetermined delivery dates. Quantities on a blanket order do not affect item availability and can be used as a worksheet for monitoring, forecasting, and planning. On the blanket order, each shipment can be set up as an order line. This can then be converted into a sales order at the time of shipping.

Procedure: Create a Blanket Sales Order Follow these steps to create a blanket order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Blanket Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter the relevant customer number. 4. Leave the Order Date field blank. When separate sales orders are created from the blanket order, the order date of the sales order is equal to the actual work date. On the Lines FastTab, create separate lines for each shipment. For instance, to split out 1000 units equally between four months, enter four separate lines of 250 units each. 5. In the Type field for each line, select Item and in the No. field, enter the relevant item number. 6. In the Quantity field for each line, type the amount to order for this line. 7. In the Shipment Date field for each line, enter the date this item must ship.

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Chapter 1: Sales Order Management The Qty. to Ship field fills in automatically to indicate the quantity to be listed on the sales orders for the respective shipment dates. Follow these steps to convert the blanket order into a sales order: 1. To create an order for any of the lines, remove the quantity in the Qty. to Ship field on all the lines that you DO NOT want to ship at this time. 2. On the Action Pane, click Make Order. 3. Click Yes to make the order. 4. Click OK to close the message stating that the blanket order has been assigned an order number. Note that the blanket order has not been deleted. The program retains the link between the blanket order and the sales order, enabling the order processor to view unposted and posted sales order (invoice) lines. Follow these steps to open the sales order: 1. On the Lines FastTab, click Actions (lightning bolt icon), point to Line, then to Unposted Lines, and then click Orders. 2. On the Sales Line page, click Show Document. The following details apply to converted blanket orders: •

After the blanket order converts into a sales order, the sales order contains all the lines from the blanket order. The lines where the quantity in the Qty. to Ship field was deleted appear, but with blank Quantity fields. Leave, edit, or delete the lines.

•

The sales order line quantity must not exceed the quantity of the associated blanket order line. Otherwise, posting of the sales order will be impossible.

•

When the sales order posts as shipped and/or invoiced, the program updates the Quantity Shipped and Quantity Invoiced fields on the related blanket order.

•

The program records she blanket order number and line number as properties of the sales lines when created from a blanket order.

•

When sales orders are not created directly from the blanket order but still relate to it, you can establish a link between a sales order and a blanket order by entering the associated blanket order number in the Blanket Order No. field on the sales order line. Display the Blanket Order No. field using the Choose Column function.


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Trade in Microsoft Dynamics® NAV 2009 •

After the sales order(s) has been created for the total quantity of a blanket order line, the program ensures that no other sales order(s) is created for the same line by preventing users from entering a quantity in the Qty. to Ship field. If, however, additional quantities need to be added to a Blanket Order, the value in the Quantity field can be increased and additional orders can then be created.

•

The invoiced Blanket Sales Order remains in the system until it is deleted, either by deleting individual Blanket Orders or by running the Delete Invd Blnkt Sales Orders batch job.

Sales Orders Sales orders can be created manually or, as previously demonstrated, generated from Sales Quotes and Blanket Sales Orders. Creating a sales order manually is the same as creating a quote or blanket order except the Make Order function is not necessary. This topic provides an overview of the relevant fields on the General, Shipping, and Lines FastTabs on the sales order. Refer to online Help for more information about these or other fields on the sales order. This topic also includes information about item tracking and warehousing.

General FastTab The General FastTab contains general details about the customer, that are copied from the customer card. The following table describes additional trade-related fields.

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Field

Description

Posting Date

Date the order will post to G/L, customer, and item ledger entries.

Document Date

Date the document is created. This date is used to calculate the customer's payment due date and finance charges.

Order Date, Requested Delivery Date, and Promised Delivery Date

Shipping-related dates. Refer to "Order Promising" in this training material for more information.


Chapter 1: Sales Order Management Field

Description

Status

Indicates whether the document is still open or released: • Open - Implies that it is still undergoing changes and has not been released to the next stage of processing, for example, the warehouse handling. Batch posting can be set up to post only released orders, which enables separate order entry and posting tasks. •

Released - Indicates that order is ready for the next stage of processing. Information (price, currency, quantity, and so on) in the released order cannot be changed without reopening the order.

An order can be released in two ways: • Automatically, when a single shipment has been posted for the order. •

Manually, by using the release function.

Typically, releasing manually is relevant for companies with a separate warehousing environment. NOTE: The order document status is not connected to the availability calculations for the item on the order. Although an order has not been released, it is included in overall availability calculations.

Shipping FastTab The fields on the Shipping FastTab provide detailed shipping-related information, for example, the customer's alternative shipping address, shipment terms, agents, advice, ship-from location, and so on. The values in these fields copy from the customer card. The following table describes various fields on the Shipping FastTab. Field

Description

Ship-to Code

Alternative ship-to address for the customer.

Shipping Agent Code and Package Tracking No.

External shipping carrier service. When the carrier picks up the shipment, the assigned package tracking number can be entered in the Package Tracking No. field. The Internet Address specified on the shipping agent can access the agent's package tracking scheme.

Outbound Whse. Handling Time, Shipping Time, and Late Order Shipping

Shipping-related calculations and notices. Refer to "Order Promising" in this training material for more information.


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Trade in Microsoft Dynamics® NAV 2009 Field

Description

Location Code

Indication of whether a company has a default location (that is, a site where inventory is physically stored, such as a warehouse, service car, showroom, and so on). If it does, the appropriate code copies to this field. Depending on the company, a default location for the order can be defined, for example, as their central warehouse, or as a local warehouse. This serves customers within a nearby geographical area.

Lines FastTab The Lines FastTab contains the detail of what is being sold/charged to the customer. The following table describes various fields on the Lines FastTab. Field

Description

Type

The choice of financial transaction, which is defined by one of the following line type options: • G/L Account •

Item

•

Resource

•

Fixed Asset

•

Charge (Item)

The line type Item represents a sale of physical goods. Sales defined by G/L Account, Resource, and Fixed Asset type are addressed in the "Finance in Microsoft Dynamics® NAV 2009" training material. Transactions of a Charge (Item) type are explained in "Item Charges" in this training material.

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Chapter 1: Sales Order Management Field

Description

Location Code

A selection on the order line that starts the features that support an employee's tasks. • Order Processors can:

•

o

Check the item availability in a specified location (including the blank location).

o

Obtain an overview of item availability for each specified location or on other locations at the same time.

Inventory management employees and planners can: o

Use the requisition planning facility when considering replenishment and planning parameters set up on the item stockkeeping units.

o

Perform transfers of inventory between locations.

o

Create inventory statistics for each location.

•

Accountants can calculate inventory value and cost of goods sold for each location.

•

Warehouse managers can use the bin management functionality associated with a location.

Quantity

An amount that causes the program to check for sufficient inventory in the location to fulfill the sales order. If this is not the case, the program gives a stockout warning if the Stockout Warning check box is selected in Sales & Receivables Setup. The program's method of calculating item availability is explained in the "Inventory Management in Microsoft Dynamics® NAV 2009" training material. NOTE: The program supports the practice of creating sales lines with negative quantity. A negative sales line implies a reverse transaction to the sales document. A negative line in a sales order means a sales return. Handling sales lines with negative quantity is supported throughout all functional areas.

Unit of Measure Code

A field that the program automatically fills in when the sales line is created. The value copies from the Sales Unit of Measure field on the item card. The unit of measure code is used: • When the user checks item availability. •

To determine the unit price amount.

•

To validate if any alternative prices, line discounts, or both, exist for the sale based on the unit of measure.


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Description

Unit Price

A field that the program automatically fills in if the item in the No. field is selected. The unit price calculates and copies from the item card or the alternative sales prices applicable to the item and customer. The setup options and the alternative sale prices functionality are addressed in "Sales Prices and Discounts" in this training material. When companies sell to retail consumers, they may want sales document prices to include VAT information when printed. To enable this option, the Prices Including VAT check box must be selected on the Invoicing FastTab on the sales document. If the check box is clear, Unit Price and Line Amount exclude VAT amounts, and the field names reflect this choice. Refer to the "Finance in Microsoft Dynamics® NAV 2009" training material for more information about VAT functionality.

Item Tracking and Warehousing For many companies, registration of a sales order must also include inventorymanagement-related information. These are the records of item serial/lot numbers and item physical placement (bin code) in a warehouse. These aspects of a sales transaction are not directly associated with customer interactions but characterize the company's internal processes, and are addressed in the "Inventory Management in Microsoft Dynamics® NAV 2009" and "Warehouse Management in Microsoft Dynamics® NAV 2009" training material.

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Lab 1.1 - Create and Convert a Blanket Sales Order Scenario You are the order processor at CRONUS. Customer 20000 orders 1200 units of item 70003. The customer requests that the order be delivered with 300 units every week during the month of February (starting on 02/01/10). The delivery is shipped to the customer's subsidiary in Manchester. This item is to be shipped from the BLUE location. After converting the first blanket order line, open the sales order and assign FEDEX as the shipping carrier. NOTE: Line discounts may be set to default into the Line Discount % field on the order lines. This does not affect the processing of the lab.

Challenge Yourself! 1. Create the sales order from the blanket order for the first shipment of item 70003. 2. Update the sales order with the FEDEX shipping carrier.

Need a Little Help? 1. Create the blanket order for customer 20000 for 1200 units of item 70003, to be shipped as specified in the scenario. 2. Create the sales order for the first shipment and delete the extra lines. 3. Update the shipping information on the sales order to indicate the alternate ship-to address and FEDEX as the shipping agent.

Step by Step Follow these steps to create the blanket sales order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Blanket Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 20000. 4. Leave the Order Date field blank. 5. Expand the Shipping FastTab. 6. In the Ship-to Code field, enter Manchester.


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Trade in Microsoft Dynamics® NAV 2009 7. Enter four sales lines on the Lines FastTab using the following information: a. In the Type field, select Item and in the No. field, enter 70003. b. In the Quantity field, type 300. c. In the Shipment Date field, enter the shipment dates of 02/01/10, 02/08/10, 02/15/10, and 02/22/10. 8. In the Qty. to Ship field, leave the quantity of 300 for the first line, and delete the quantity to ship in the three other lines. Follow these steps to create and prepare the sales order: 1. On the Action Pane, click Make Order, and then click Yes in the information message and accept any other warnings. 2. Select the first line in the blanket order, and then on the Lines FastTab, click Actions, point to Line, then to Unposted Lines, and then click Orders. 3. In the Sales Lines page, click Show Document. 4. Delete the last three lines in the sales order. 5. Expand the Shipping FastTab. 6. In the Shipping Agent Code field, enter FEDEX. 7. Click Yes to update the lines.

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Item Reservation In sales situations, for example, those with a high volume of transactions, there may be a need to ensure that the required item quantity for a sales order is available to be shipped on the agreed date. In this situation, users must be able to allocate existing or future inventory to the sale until the order shipment date so that it is not used to fill other orders in the meantime. In Microsoft Dynamics NAV, this allocation is performed through reservations. The user assigns the reservation because it is considered a conscious and intentional decision. By reserving quantities, the user gains full ownership of and responsibility for these items. Reserved quantities are not included during planning routines.

Demonstration: Reserve Items This demonstration is a continuation of the "Create and Convert a Sales Quote" demonstration. Scenario: The representative for customer 10000 calls Susan, the order processor, to add 250 units of item 80100 to his or her current order. The representative stresses the importance of receiving the order on 02/08/10. Since there is a risk of running out of stock, Susan reserves 250 items for this order. Follow these steps to reserve items on a sales order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Locate the order for customer 10000 created in the "Create and Convert a Sales Quote" demonstration. 3. On the Lines FastTab, click the third line and in the No. field, enter 80100. 4. In the Location Code field, enter GREEN (the location where the item is stocked). 5. In the Quantity field, type 250. 6. In the Shipment Date field, enter 02/08/10. The Sales Line Details FactBox shows the availability for the item on the selected line. This is the availability for the Shipping Date indicated and the Location Code selected, in this case, for the Green Warehouse on 02/08/10.


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Trade in Microsoft Dynamics® NAV 2009 NOTE: The Availability quantity shown in the FactBox is in the Base Unit of Measure. This may not be the same as the Sales Unit of Measure. This is found on the Sales Order line. To view the Base, Sales, and Purchase units of measure for this item, click the Item No. to open the item card. Immediately after you enter a quantity for the item on the selected line, the Availability amount is reduced by that quantity. The Availability is the amount remaining after the quantity on the line is filled. Follow these steps to open the Reservation page: 1. Ensure that the line for item 80100 is selected. 2. On the Lines FastTab, click Actions, point to Functions, and then click Reserve.

FIGURE 1.5 RESERVATION LINES FOR ITEM 80100

This page shows the quantities of item 80100 available to reserve. Items can be reserved either from: •

Existing stock (represented as item ledger entries on the line).

•

Open purchase orders.

•

Other inbound orders, such as transfer orders or production orders.

In the Reservation page, each option is represented by the corresponding line, summarizing the total unreserved and reserved quantities of all item ledger entries and all open purchase order lines respectively.

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Chapter 1: Sales Order Management Follow these steps to view the list of individual entries that make up the total quantity available for reservation: 1. Select the line representing purchase orders and then on the Action Pane, click Available to Reserve. The Available - Purchase Lines page displays. This page contains general information about the purchase line and quantity details on unposted line quantity and existing reservations made for the purchase line. The Current Reserved Quantity field contains the quantity currently reserved. 2. Close the Available - Purchase Lines page to return to the Reservation page. The Quantity to Reserve field on the header contains the quantity copied from the Quantity field on the line for the reservation. If a partial shipment has occurred, the Quantity to Reserve field corresponds with the Outstanding Quantity field on the sales order line. NOTE: The Quantity to Reserve field contains 50 units instead of the 250 specified on the sales line. For reservations, the program operates with the base unit of measure - which are boxes in this situation - and not the sales unit of measure (packs), specified on the sales order. Recalculation is based on one box that contains five packs. Three options exist for reserving items: •

Auto Reserve - Automatically reserve items in the Reservation page.

•

Reserve from Current Line - Reserve the items from the selected reservation line. This is a manual reservation option.

•

Cancel Reservation from Current Line - Cancel reservation of the items from the selected reservation line.

For this order, Susan decides to automatically reserve the items. Follow these steps to reserve the items: 1. On the Action Pane, click Auto Reserve. The various Reserved and Available Quantity fields in the header and lines update to reflect the reservation. When the automatic reservation function is used, the program reserves items from item ledger entries before it reserves items from the purchase order lines. NOTE: For better inventory control, select the items using the Reserve from Current Line option instead of using the Auto Reserve option. 2. Click OK to close the Reservation page.


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Trade in Microsoft Dynamics® NAV 2009 When a reservation is made, a reservation entry is created. On the sales line, the Reserved Quantity field indicates the reservation. 3. Click the Reserved Quantity field on the line for item 80100.

FIGURE 1.6 RESERVATION ENTRIES FOR ITEM 80100

The Reservation Entries page shows that the quantity has been reserved from the specified location. HINT: You can also access the Reservation Entries page by clicking Actions on the Lines FastTab, pointing to Line, and then clicking Reservation Entries.

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Lab 1.2 - Reserve an Item on a Sales Order Scenario This lab is a continuation of the "Create and Convert a Blanket Sales Order" lab. At the time of shipping the first delivery of item 70003, the representative from customer 20000 calls you to add 50 units of item 80100 to the order. This item must be shipped from the GREEN location. Because of several considerations, you confirm that the 50 units of item 80100 are reserved for this sales order.

Challenge Yourself! Add and reserve item 80100 on the sales order created from the sales blanket order.

Need a Little Help? 1. Open the sales order for customer 20000 for 300 units of item 70003. 2. Add 50 units of item 80100 to the sales order and reserve this item using the Auto Reserve function.

Step by Step 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Locate the order for customer 20000 created in the "Create and Convert a Blanket Sales Order" demonstration. 3. Enter a new line for item 80100. 4. In the Location Code field, enter GREEN. 5. In the Quantity field, type 50. 6. On the Lines FastTab, click Actions, point to Functions, and then click Reserve. 7. On the Action Pane, click Auto Reserve. 8. Click OK to close the Reservation page. NOTE: The Quantity to Reserve field on the Reservation page contains 10 units instead of the 50 specified on the sales line. For reservations, the program operates with the base unit of measure - which are boxes in this situation - and not the sales unit of measure (packs), specified on the sales order. Recalculation is based on one box that contains five packs.


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Posting Orders Posting an order implies forwarding the financial value of a transaction to dedicated accounts in the general ledger. Additionally, quantity and financial information about the transaction is forwarded to subsidiary ledgers, such as customer and item entry ledgers (with associated value entries) that calculate various sales and inventory statistics. Because all sales transactions involving selling items to a customer include quantity and value (price and cost) information, the posting function is divided into two parts: shipment (quantity change) and invoice (value change) posting. When you post an invoice, the two parts occur at the same time, without an option of separation. You can post an order, however, by registering the order shipment first, while the order invoicing can occur later. This gives companies operational flexibility and enables them to benefit from the functionality that supports this process. This functionality includes: •

Undoing a quantity record for a posted but not yet invoiced shipment.

•

Combining several shipments in one invoice.

Shipping The Qty. to Ship and the Qty. to Invoice fields on a sales order represent the posting quantities. The values in these fields fill in automatically at the time when the quantity is entered in the Quantity field for a sales line. NOTE: When a location for a sales line uses the warehouse management functionality (such as, inventory/warehouse pick and put-away documents), the Qty. to Ship and the Qty. to Invoice fields are blank and posting is impossible. This relates to shipping and invoicing tasks performed in the warehouse, and it is from there that the order posting occurs. To continue with posting from the sales order, enter the quantities manually. If necessary, the order processor can reduce the quantities in the Qty. to Ship and Qty. to Invoice fields before posting, and thereby shipping and invoicing the order partially. To post a partial shipment (invoicing), the Shipping Advice field on the order must contain Partial. An order can have as many shipments and invoices as necessary. In partial order posting, the Quantity Shipped and Quantity Invoiced fields indicate the completed part of the order.

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Chapter 1: Sales Order Management Demonstration: Post a Partial Shipment This demonstration is a continuation of the "Create and Convert a Sales Quote" and "Reserve Items" demonstrations. Scenario: Susan, the order processor, is processing the sales order for 200 units of item 70010, 100 units of item 70011, and 250 units of item 80100. The shipment needs to be delivered to the customer's subsidiary address instead of to the main address. The shipping agent is DHL, who provides the option of package tracking. At the last minute, the representative for the customer calls Susan to say that they only want half of the shipment of item 70010 delivered now. Susan must now perform a partial shipment of the line. The other order lines are shipped as arranged. While in the process of changing the quantity to ship for item 70010, she accidentally changes the quantity to 10 instead of 100, thus requiring her to undo the shipment and then re-ship the items. Follow these steps to update the sales order for shipping to an alternate location and shipping agent: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Locate the order for customer 10000 created in the "Create and Convert a Sales Quote" demonstration. 3. Expand the Shipping FastTab. 4. In the Ship-to Code field, enter DUDLEY. 5. Click OK to accept all information messages that appear. 6. In the Shipping Agent Code field, enter DHL. 7. Click Yes to update the lines. Follow these steps to update the sales lines for shipping: 1. In the Qty. to Ship field for the first line on the Lines FastTab, change the quantity from 200 to 10. 2. Do not change the Qty. to Ship field on the second line. 3. In the Qty. to Ship field for the third line, type 250 (to enable posting from the order instead of through a warehouse). Click OK to accept the warning message that appears. Follow these steps to post the sales order as shipped, not invoiced: 1. On the Action Pane, click Post. 2. Click Ship and then click OK.


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Trade in Microsoft Dynamics® NAV 2009 Upon posting, the sales lines update as follows: •

On the first line: o o o o

•

Qty. to Ship field shows the unshipped quantity of 190 Quantity Shipped field shows the shipped quantity of 10 Qty. to Invoice field shows the uninvoiced quantity of 200 Quantity Invoiced field is empty because no invoicing has occurred

On the second and third lines: o o o o

Qty. to Ship fields are empty because all item have been shipped Quantity Shipped fields shows the shipped quantities of 100 and 250, respectively Qty. to Invoice fields shows the uninvoiced quantities of 100 and 250, respectively Quantity Invoiced fields are empty because no invoicing has occurred

NOTE: The quantity that appears in the Qty. to Ship field after a partial shipment has been posted is determined by the selection in the Default Quantity to Ship field in Sales & Receivables Setup. The program also creates a posted shipment document that contains all the shipping details of the sales order. Follow these steps to view the posted sales shipment document: 1. On the Related Information menu, point to Order and then click Shipments. 2. On the Actions menu, click View. 3. Note that the Quantity fields match the shipped quantities and that the Quantity Invoiced fields are blank. The Quantity Invoiced fields are updated when the order is invoiced. HINT: You also can access a list of all posted sales shipments for a customer from the sales order by clicking Pstd. Shipments in the Customer Sales History Sell-to Customer FactBox. Realizing the mistake of entering and posting the incorrect quantity for the first sales line, Susan can undo the posted quantity.

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Chapter 1: Sales Order Management Follow these steps to undo the incorrect posted shipment line: 1. On the Posted Sales Shipment page, select the line for item 70010. 2. On the Lines FastTab, click Actions, point to Functions, and then click Undo Shipment. Click Yes to confirm the action.

FIGURE 1.7 POSTED SALES SHIPMENT WITH SHIPMENT CORRECTIONS

The program inserts a corrective line with the same negative quantity as the one being corrected in the posted shipment document and selects both lines as corrective using the Correction field. (Use the Choose Column function to add the Correction field.) At the same time, the quantity in the Quantity Shipped field on the related sales order is removed, while the Qty. to Ship field contains the same value as the Quantity field. This implies that the posting process for this line can be repeated. 3. Close the Posted Sales Shipment pages to return to the sales order. Follow these steps to re-ship item 70010: 1. On the first line, in the Qty. to Ship field, change the quantity from 200 to 100. 2. On the Action Pane, click Post. 3. Click Ship and then click OK.


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Trade in Microsoft Dynamics® NAV 2009 The Qty. to Ship field updates for the partially shipped line to indicate the remaining quantity. Posting a shipment recognizes that a certain item quantity has left the company's inventory. The financial value of the corresponding transaction is not registered until the sales order is posted as invoiced. This implies that no G/L and customer ledger entries have yet been created, and the cost and price amounts on the created item ledger entries equal zero. Learn more about inventory costing in the "Inventory Costing in Microsoft Dynamics® NAV 2009" training material.

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Lab 1.3 - Ship and Invoice a Sales Order Scenario This lab is a continuation of the "Reserve an Item on the Sales Order" lab. When the representative from customer 20000 placed the additional order, he or she informed you that only half of the ordered quantity of item 70003 is to be shipped at this time. He or she also needs an invoice for this partial shipment. NOTE: You do not ship and invoice the remaining quantity in this lab.

Challenge Yourself! Update shipping quantities and then ship and invoice the order.

Need a Little Help? 1. Update the shipping quantities on the lines based on the scenario. 2. Ship and invoice the order.

Step by Step 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Locate the order for customer 20000 created in the "Reserve an Item on a Sales Order" demonstration. 3. In the Qty. to Ship field for the first line, change the quantity from 300 to 150. 4. In the Qty. to Ship field for the second line, type 50 to allow for posting from the order instead of through a warehouse. Click OK to accept the warning message that appears. 5. On the Action Pane, click Post. 6. Click OK to ship and invoice the order.


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Invoice a Combined Shipment In some cases, it is most efficient to combine several shipments into one invoice. Sometimes the customer requires this procedure. Posting orders as invoiced follows the same principles as posting order shipments: •

An order can be invoiced completely or partially.

•

When posted as invoiced, order information transfers to a separate document - a posted invoice.

Additionally: •

G/L, customer, and VAT entries are created.

•

When completely invoiced (no outstanding quantity to invoice on any of the order lines) the order is deleted automatically. This is with the exception of when an order is invoiced through a combined shipment.

•

Several shipments can be combined into one invoice.

The following demonstration shows how several shipments for one customer are combined into one invoice.

Demonstration: Combine Shipments on an Invoice Scenario: Annie, the bookkeeper at CRONUS, wants to invoice all the orders recently shipped to customer 10000. The shipments are combined into one invoice. Follow these steps to create the combined shipment invoice for customer 10000: 1. On the Sales & Marketing page, click Order Processing and then click Sales Invoices. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. On the Lines FastTab, click Actions, point to Functions, and then click Get Shipment Lines.

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Chapter 1: Sales Order Management 5. Select all the lines and then click OK. The program copies the shipment lines to the invoice.

FIGURE 1.8 SALES INVOICE TO CUSTOMER 10000 WITH COMBINED SHIPMENT LINES.

6. On the Action Pane, click Post. 7. Click Yes to post the invoice. The Quantity Invoiced fields on the lines of related sales orders and posted sales shipments are updated. When an order is completely invoiced using a combined shipment function, it is not deleted automatically. This is done manually or with the Delete Invoiced Sales Order batch job. If a large number of sales documents needs to be posted, consider batch posting the documents instead of posting the documents individually. Access the Batch Post Sales Orders batch job on the sales document by clicking the Actions menu, pointing to Post and then clicking Post Batch. Refer to online Help for more information.


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Customer Prepayments Prepayments enable a company to require customers to pay a part of the total amount of their order, specified as an amount or a percentage, in advance of the final invoice.

Prepayment Setup Prepayment functionality requires that special G/L accounts, posting groups, payment terms, and number series are set up for this purpose. In addition, the prepayment percentages for selected customers in combination with special items need to be defined. Refer to the "Finance in Microsoft Dynamics® NAV 2009" training material for information about setting up prepayments.

Prepayment Process Flows Prepayment invoices are created from a sales order using the prepayment invoice option. The prepayment amount on the order calculates based on the prepayment percentage populated from item or customer cards. Users can edit the prepayment percentage or amount. Instead of using a percentage, a specific amount can be defined for the entire sales order. Prepayment amounts are set on the Prepayment FastTab on the Sales Order Statistics page. For prepayment sales orders, the following steps list the typical process flow: 1. Create a sales order with a prepayment requirement. 2. Send a prepayment invoice for the prepayment amount to the customer. 3. Receive the prepayment amount from the customer. 4. Apply the prepayment amount to the sales order. 5. Ship the order to the customer. 6. Create a sales invoice for the total amount of the sales order minus the prepayment amount. 7. Receive payment from the customer and post the payment to the sales order.

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Chapter 1: Sales Order Management Sales Order Prepayment Fields The values in the fields on the Prepayment FastTab of the sales order are populated from various setup fields.

FIGURE 1.9 SALES ORDER WITH THE PREPAYMENT FASTTAB EXPANDED AND PREPAYMENT FIELDS ADDED TO THE LINES FASTTAB

The Prepayment % field on the Prepayment FastTab of the sales order fills in automatically if there is a default prepayment percent on the customer card. The contents of this field and the other fields on this FastTab can be edited as needed. For information about the other fields on the Prepayment FastTab, refer to the "Finance in Microsoft Dynamics® NAV 2009" training material. The prepayment percent from the customer card only applies to lines that do not have a default prepayment percent set up for the customer-item combination. You must add the prepayment fields on the Lines FastTab using the Choose Column feature. These fields include: •

Prepayment %

•

Prepmt. Line Amount Excl. VAT

•

Prepmt. Amt. Inv. Excl. VAT


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Trade in Microsoft Dynamics® NAV 2009 For each order line, the contents of the Prepayment % field are determined as follows: •

If a default prepayment percent is set up for the item on the line, it is automatically copied into the Prepayment % field.

•

If no default prepayment percent is set up for the item, the prepayment percent from the customer or vendor card copies from the order header.

•

The Prepayment % field can be entered or changed manually on a line-by-line basis.

The Prepmt. Line Amount Excl. VAT field contains the prepayment amount of the line The Prepmt. Amt. Inv. Excl. VAT field displays the prepayment amount that has already been invoiced to the customer for this sales line. Although there can be different prepayment percents for each of the order lines, a single prepayment percent can be applied to the whole order. Do this after you complete all the order lines by setting the percentage in the Prepayment % field on the Prepayment FastTab. NOTE: Immediately after a number is entered into the Prepayment % field on the Prepayment FastTab and the lines are updated, users cannot revert to the individual prepayment percents that existed for each line. To return to the individual prepayment percents, either delete and re-enter the lines or manually type the prepayment percent on the lines.

Demonstration: Set Up a Customer and Item with Prepayment Percentages Scenario: Phyllis, the accounting manager at CRONUS, sets up the following prepayment requirements for the customer 20000 Selangorian Ltd., based on their credit history: •

By default, a 30-percent down payment is required on all orders.

•

A 40-percent prepayment is required for item 1100.

This setup is performed on the customer card and item card. Follow these steps to assign the default prepayment percentage to customer 20000 and item 1100: 1. On the Sales & Marketing page, click Order Processing and then click Customers. 2. Open the customer card for customer 20000 (Selangorian Ltd.). 3. Expand the Invoicing FastTab. 4. In the Prepayment % field, type 30.

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Chapter 1: Sales Order Management 5. Click OK to close the customer card. 6. On the Sales & Marketing page, click Inventory & Pricing and then click Items. 7. Select the line for item 1100. 8. On the Related Information menu, point to Sales, and then click Prepayment Percentages. 9. Leave the Sales Type field set to Customer. 10. In the Sales Code field, enter 20000. 11. In the Prepayment % field, type 40. 12. Click OK to close the Sales Prepayment Percentages page and the item card.

Demonstration: Create a Sales Order with Prepayments Scenario: Susan, the order processor at CRONUS, creates an order while talking to a representative from customer 20000. The items that the customer orders require a prepayment because the customer has made some late payments in the past, so Susan has been instructed to require a fixed amount of 2,000.00 as a prepayment on the order. The customer requests to be allowed to pay 35 percent, which Susan can agree to and, therefore, she changes the order accordingly. Follow these steps to create the sales order with a prepayment: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 20000. 4. Click Yes to accept the overdue balance warning. 5. On the Lines FastTab, in the Type field, select Item. 6. In the No. field, enter 1000. 7. In the Quantity field, type 1. 8. On the next line, in the No. field, enter 1100.


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Trade in Microsoft Dynamics® NAV 2009 9. In the Quantity field, type 1. 10. Add the Prepayment % and Prepmt. Line Amount Excl. VAT fields to the lines using the Choose Column feature.

FIGURE 1.10 SALES ORDER WITH PREPAYMENT PERCENTAGES FROM THE CUSTOMER AND ITEM

11. Verify the following prepayment information: a. The Prepayment % field on the line with item 1000 contains 30. This default was taken from the sales header, which was populated from the customer card. b. The Prepayment % field on the line with item 1100 contains 40. This is the percentage entered in the Sales Prepayment Percentages page for item 1100 and customer 20000. 12. On the Action Pane, click Statistics. 13. Expand the Prepayment FastTab. The Prepmt. Amount Excl. VAT field contains 1,560.00. If a prepayment invoice was created for the order now, then this is the amount that will appear on the invoice. As stated in the scenario, Susan has been instructed to suggest a total prepayment of 2000 for the order.

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Chapter 1: Sales Order Management Follow these steps to change the prepayment amount for the entire order: 1. Change the amount in the Prepmt. Amount Excl. VAT field to 2000. The customer must now pay 2,000.00, or 2,500.00 including VAT. 2. Click OK to close the Sales Order Statistics page. The Prepayment % field on the sales lines has been recalculated to 40.81625 and 40.81667. The recalculation includes all lines that have a prepayment percentage greater than 0. The customer asks if the prepayment percentage can be set to 35 percent and Susan's supervisor approves the change. Follow these steps to change the prepayment percentage for the entire order: 1. Expand the Prepayment FastTab. 2. In the Prepayment % field, type 35. 3. Click Yes to accept the warning that appears and 35% will be applied as the payment percentage for the entire order. 4. On the Action Pane, click Statistics.

FIGURE 1.11 SALES ORDER STATISTICS SHOWING THE AGREED UPON PREPAYMENT AMOUNT

The customer must now pay 1,715.00, or 2,143.75 including VAT.


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Summary Sales Order Management involves all the steps from creating a quotation or blanket order to shipping and invoicing the sales order. Processes such as reserving items ensure that customers receive their orders in a timely manner and combining shipments provide customers with a single invoice for multiple shipments. Prepayment functionality allows companies to retain deposits from customers for orders, based on different setup criteria. The accurate management of the sales transaction flow can help companies to ensure a high level of customer service. "Sales Prices and Discounts" and "Customer Service Features" in this training material continue the sales order management processing with information about establishing pricing and discounts, and other important aspects of customer service such as using item substitutes, cross-references, and nonstock items.

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Test Your Knowledge Test your knowledge with the following questions. 1. What is the purpose of selecting the Stockout Warning check box in Sales & Receivables Setup?

2. Which of the following functions do you use to change a sales quote or blanket order into an order? ( ) Generate Order ( ) Create Order ( ) Convert Order ( ) Make Order 3. Which of the following are posting options on a sales order? (Select all that apply) ( ) Invoice ( ) Ship ( ) Partial Ship ( ) Ship and Invoice 4. Explain how to apply a single prepayment percentage to a whole order.


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Trade in Microsoft Dynamics® NAV 2009 Fill in the blanks to test your knowledge of this section. 5. Item ____________ allow you to allocate existing or future inventory to an open sales order line. 6. An order status of _____________ indicates that an order is ready for other processing, such as warehousing. 7. To post a partial shipment, the Shipping ________ field on an order must be set to Partial. 8. ______ Shipment functionality reverses an incorrectly posted, but invoiced, shipment. 9. Combined Shipment functionality allows several shipments to be combined into one ____________.

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Quick Interaction: Lessons Learned Take a moment and write down three Key Points you have learned from this chapter: 1.

2.

3.


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Solutions Test Your Knowledge 1. What is the purpose of selecting the Stockout Warning check box in Sales & Receivables Setup? MODEL ANSWER: Triggers the program to warn the user when there are not enough items on inventory to fulfill a sales order line. 2. Which of the following functions do you use to change a sales quote or blanket order into an order? ( ) Generate Order ( ) Create Order ( ) Convert Order (•) Make Order 3. Which of the following are posting options on a sales order? (Select all that apply) (√) Invoice (√) Ship ( ) Partial Ship (√) Ship and Invoice 4. Explain how to apply a single prepayment percentage to a whole order. MODEL ANSWER: After the order lines are complete, click the Prepayment FastTab. In the Prepayment % field, type the prepayment percentage for the whole order. When you exit the Prepayment % field, the order lines update with the prepayment percentage in the header. Fill in the blanks to test your knowledge of this section. 5. Item reservations allow you to allocate existing or future inventory to an open sales order line. 6. An order status of Released indicates that an order is ready for other processing, such as warehousing.

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Chapter 1: Sales Order Management 7. To post a partial shipment, the Shipping Advice field on an order must be set to Partial. 8.

Undo Shipment functionality reverses an incorrectly posted, but invoiced, shipment.

9. Combined Shipment functionality allows several shipments to be combined into one invoice .


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CHAPTER 2: SALES PRICES AND DISCOUNTS Objectives The objectives are: •

Define sales prices and set up sales prices and customer price groups.

•

Explain how to maintain sales prices using the Sales Price Worksheet.

•

Describe and set up line discounts.

•

Explain the use of invoice discounts and how to allow or disallow discounts.

Introduction Companies, both producers and distributors, that are operating in price-sensitive markets with diverse customer bases, often need pricing strategies that enable them to differentiate, attract, and maintain customers. One of the typical strategies is based on having several individual price agreements with large customers and offering standard prices and discounts to other customers within a specific market segment or across the segments. One agreement may cover more than one individual customer if an agreement is made with a chain headquarters, where items can be sold to customers of an individual chain member. These strategies imply that companies' sales and marketing departments develop and maintain comprehensive and complex price and discount structures. The complexity of price and discount structures increase when companies do internally driven initiatives, such as special campaigns aimed at removing soonto-be-obsolete items or as a way to introduce new items to the market. Maintaining flexible price and discount structures can appear to be a tedious and resource-demanding task. Without suitable price-management tools, price agreements, and special sales, prices are stored in private folders, spread sheets, binders, and so on. This frequently creates problems related to price consistency when the customer is faced with price confusion or even billed the wrong price. Companies that use pricing strategies often have more satisfied customers and can avoid lost sales or unnecessary rework for themselves. Sales Line Pricing and Sales Line Discounting offer comprehensive pricing functionality to companies with flexible price structures. Specifically, the application provides a functionality characterized by the following key features: •

Targeted specific customer segments

•

Consistent and transparent pricing

•

Minimized maintenance costs


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Sales Prices The ability to specify price information for each item on the item card significantly improves sales price management. The program automatically retrieves price information that is stored on an item card to copy it to the sales order line for an item. This price information is universal in nature; it is the same in all sales situations regardless of individual price agreements or different pricing policies applied toward customer profiles. These agreements and policies may be based on several conditions: •

Item variant

•

Quantity purchased

•

Currency paid

•

Order date

To manage and maintain alternative sales prices, sales representatives need extended pricing functionality that goes beyond the standard item card. In Microsoft Dynamics® NAV, Sales Line Pricing offers comprehensive pricing functionality.

Procedure: Review Alternative Sales Prices Salespeople must use the Sales Prices page to record the alternative sales prices a company has established by using their customers/group of customers to strategically segment their customer base. Access the Sales Prices page from either the customer card or the item card. Follow these steps to review sales prices for customer 10000: 1. On the navigation pane, click Sales & Marketing and then click Sales. 2. On the Sales page, click Customers.

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Chapter 2: Sales Prices and Discounts 3. Select the line for customer 10000. 4. On the Related Information menu, point to Sales and then click Prices.

FIGURE 2.1 SALES PRICES FOR CUSTOMER 10000

On this page, a sales representative can specify the conditions that must be met before a customer is offered a unit price for an item. For example, the conditions can require that the customer belongs to a particular customer price group or a purchase is made within a certain period. Special sales prices can also depend on: •

Unit of measure

•

Item variant

•

Minimum quantity

•

Currency

The Sales Prices page provides the option for defining whether alternative prices combine with line and invoice discounts when a sales price is offered. (Controlling the combination of sales prices and discounts is described in more detail in the "Allow/Disallow Discounts" topic of the "Invoice Discounts" lesson) Because this page was accessed through the customer card, the Sales Type is set to Customer and the Sales Code is set to the customer number on the customer card. These default settings can be edited. The Sales Type options are: •

Customer

•

Customer Price Group

•

All Customers

•

Campaign


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Trade in Microsoft Dynamics® NAV 2009 The Sales Code options depend on the selection in the Sales Type field. The following demonstration illustrates a situation where a company needs to set up individual prices based on both: •

A price agreement reached with one of its key customers about some selected items

•

A pricing decision targeting a specific customer segment

Demonstration: Set Up Sales Prices Scenario: CRONUS International Ltd.'s sales to customer 40000 have been increasing lately. Until now, the customer has made purchases based on CRONUS’ ordinary price rates, but now wants to purchase items at more favorable prices. Based on an agreement, Nancy, the sales representative at CRONUS, decides that the customer can save 50 LCY for any purchase of item 1976-W if the quantity is at least ten units. This agreement takes effect starting 01/28/10 and has no expiration date. Nancy must now set up this pricing agreement in the program. Follow these steps to set up alternative sales prices: 1. On the Customers list page, select customer 40000. 2. On the Related Information menu, point to Sales and then click Prices. 3. In the Item No. field, enter 1976-W. 4. In the Minimum Quantity field, type 10. 5. In the Unit Price field, type 206.10. This is the reduced unit price. 6. In the Starting Date field, enter 01/28/10. 7. Click OK to close the Sales Prices page. Nancy does not need to enter an ending date as a condition in the price agreement. If an agreement is renegotiated at a later date, a new sales price line is entered with a new starting date, which replaces the previous agreement.

Demonstration: Set Up Customer Price Groups Scenario: As part of a long-term marketing strategy, Kevin, the sales manager at CRONUS, decides that the company's high-performing wholesale customers are granted, as a group, a favorable price of 800 LCY when buying item 1972-W during the month of February 2010. To implement the pricing decision for the company's wholesalers, Kevin must consider grouping the wholesalers together and applying the price reduction to the whole group. Such an approach is an efficient a way to manage the sales prices compared to recording individual prices for each customer.

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Chapter 2: Sales Prices and Discounts After Kevin decided how customers are categorized related to price rates, he sets up the groups in the Customer Price Groups page. Follow these steps to set up customer price groups: 1. On the Sales & Marketing page, click Administration and then click Customer Price Groups. 2. In the Code field, type Wholesale1, and in the Description field, type Wholesalers, Top Performers. When the price group code is entered in the Sales Prices page, the program copies the information from this page to the corresponding fields in the Sales Prices page. The Allow Line Disc. and Allow Invoice Disc. fields offer the possibility to combine the alternative price rate set up for a customer group with two other discount types that may apply to customers in this group in certain sales situations. 3. Ensure that the Allow Line Disc. and Allow Invoice Disc. check boxes are selected. The status of these two discount-related fields copies to the corresponding fields on the line with the customer price group code selected in the Sales Prices page. The user can always change the enabled discount combinations. Follow these steps to set up the Wholesale1 group with the price of 800 LCY when buying item 1972-W: 1. On the Related Information menu, point to Cust. Price Group and then click Sales Prices. 2. In the Item No. field, enter 1972-W, and in the Unit Price field, type 800. In the Starting Date and the Ending Date fields, enter 02/01/10 and 02/28/10 respectively. Because customers are offered a regular price of 850 LCY both before and after the period, you can reflect that in the program by creating a separate line in the Sales Prices page. 3. On the next line, enter item 1972-W in the Item No. field. 4. In the Unit Price field, type 850. 5. Leave the starting and ending dates blank.


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Trade in Microsoft Dynamics® NAV 2009 NOTE: Using the Sales Line Pricing functionality assumes customers maintain price-related information in the Sales Prices page without using the standard pricing functionality on the item card. For customers moving from standard pricing to Sales Line Pricing, this may require transferring all the item price information from item cards to the sales prices tables. You can transfer the information using the Suggest Item Price on Worksheet batch job, described in the "Maintain Sales Prices" lesson. Assume that customer 40000 is a CRONUS top wholesaler. Follow these steps to assign this customer to the new price group: 1. 2. 3. 4.

Open the customer card for customer 40000. Expand the Invoicing FastTab. In the Customer Price Group field, enter Wholesale1. Click OK to close the customer card.

Pricing Functionality Setting up alternative prices in the program supports sales representatives who always offer customers the best prices. The best price is defined as the lowest possible price with the highest possible line discount on the order date. When an order processor creates an order for a customer, the program checks whether: •

Alternative sales prices are set up for the customer.

•

The sales header and line details meet the conditions for applying an alternative price.

If all the conditions are met, the program copies the applicable price from the Sales Prices page to the Unit Price (Excl./Incl. VAT) field on the sales line. Refer to the "Best Price" topic in online Help for more information about how the program selects the best price when more than one alternative price is set up. If there are no alternative sales prices or the conditions for applying an alternative price are not satisfied, the program uses the regular unit price specified on the item card as a suggestion on the sales document. NOTE: The principles of including/excluding VAT in the unit price calculations are explained in the "Finance in Microsoft Dynamics® NAV 2009" training material.

Demonstration: Create a Sales Order with Sales Pricing Scenario: On 01/28/10, customer 40000 orders eight units of item 1976-W and five units of item 1972-W. The customer inquires about the unit price of the purchase.

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Chapter 2: Sales Prices and Discounts Susan, the order processor at CRONUS, must create a sales order and inform the customer about the price. In addition, Susan may investigate if there are other conditions the customer may want to accept to obtain a better price. Follow these steps to create a sales order for customer 40000: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 40000. 4. Accept any warning messages. 5. On the Lines FastTab, in the Type field, select Item. 6. In the No. field, enter 1976-W. 7. In the Quantity field, type 8. 8. On the next line, in the No. field, enter 1972-W. 9. In the Quantity field, type 5. The Sales Prices field in the Sales Line Details FactBox indicates whether alternative prices exist for the item on the line applicable to the customer. If the field contains a number, the order processor may want to investigate the conditions on which more favorable prices can be offered to the customer. 10. Select the first sales line and then click the Sales Prices link in the Sales Line Details FactBox. The Get Sales Price page contains the pricing details of item 1976-W that customer 40000 is allowed to obtain under different conditions. HINT: You can also access the Get Sales Price page by selecting the line, clicking Actions on the Lines FastTab, pointing to Functions, and then clicking Get Price. In this situation, if the customer agreed to buy two more units of the item, then the customer receives a quantity break. After the quantity break, the purchase is based on a reduced unit price. 11. Click Cancel to close the Get Sales Price page. 12. Select the second sales line and then click the Sales Prices link. The details for all the prices and conditions for item 1972-W display. Susan notifies the customer that he or she can obtain a better price for the item if he or she postpones the order until February 1. Assume the customer accepted the new conditions to obtain better prices for both products.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to modify the sales lines: 1. Close the Get Sales Price page. 2. Change the Order Date to 02/01/10 and then click OK to close the message. 3. On the first line, in the Quantity field, type 10. 4. Select the second sales line, and then click the Sales Prices link. 5. Select the line in the Get Sales Price page that shows the discount for buying in February. Click OK to update the price on the line. Review the discounted price for each line in the Unit Price Excl. VAT field.

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Lab 2.1 - Manage Alternative Sales Prices Scenario You are the order processor at CRONUS responsible for restructuring prices for item 70200 and item 1928-S according to the following conditions: •

Item 70200: As of 01/25/10, if any CRONUS customers buy this item in boxes (which contain 100 pieces) instead of pieces, offer 30 LCY off the regular price (1.30 for each piece).

•

Item 1928-S: As of 01/25/10, when the CRONUS overseas customer 31505050 buys this item and pays in local currency (EUR), you offer a 1 LCY discount of the item's regular price (35.60 for each piece).

HINT: Add a new unit of measure BOX that contains 100 pieces to the item's units of measure list. Add the currency code field to the Sales Prices page using the Choose Columns feature.

Challenge Yourself! Set up each item with alternative sales prices as specified in the scenario.

Need a Little Help? 1. Open the item card for item 70200 and set up the Box unit of measure as indicated in the scenario. 2. Open the Sales Prices page and set up all customers to receive the 100 sales price when boxes of this item are purchased starting 01/25/10. 3. Close the Sales Prices page. 4. Open the customer card for customer 31505050. 5. Open the Sales Prices page and add the Currency Code field. 6. Set up this customer to receive the 1 LCY discount of item 1928-S starting 01/25/10.

Step by Step Follow these steps to set up sales prices on item 70200: 1. On the Sales & Marketing page, click Inventory & Pricing and then click Items. 2. Open the item card for item 70200. 3. On the Related Information menu, point to Item and then click Units of Measure. 4. Click New.


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Trade in Microsoft Dynamics® NAV 2009 5. In the Code field, enter BOX and in the Qty. per Unit of Measure field, type 100. 6. Click OK to close the Item Units of Measure page. 7. On the Related Information menu, point to Sales and then click Prices. 8. In the Sales Type field, enter All Customers. 9. In the Unit of Measure field, enter BOX. 10. In the Unit Price field, type 100. 11. In the Starting Date field, enter 01/25/10. 12. Click OK to close the Sales Prices page. 13. Click OK to close the Item Card. Follow these steps to set up sales prices for item 1928-S on customer 31505050: 1. On the navigation pane, under Sales & Marketing, click Sales and then click Customers. 2. Open the customer card for customer 31505050. 3. On the Related Information menu, point to Sales and then click Prices. 4. Add the Currency Code field using the Choose Columns function. 5. Reopen the Sales Prices page to activate changes if necessary. 6. Ensure that the Currency Code field is set to EUR. 7. In the Item No. field, select 1928-S. 8. In the Unit Price field, type 34.60, which is the reduced unit price. 9. In the Starting Date field, enter 01/25/10. 10. Click OK to close the Sales Prices page.

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Maintain Sales Prices Adjusting and changing item prices is a task sales managers and sales representatives perform periodically because of changing market conditions, new agreements with customers, and new sales initiatives. Depending on the scope of a pricing policy, companies typically store price information about item cards where the price structure is simple. For more complex structures, individual sales prices are specified and stored in the sales prices table. Using a combination of the two is also commonplace. In the program, sales representatives have two tools that help them in preparing and adjusting sales prices. Which one they use depends on the preferred pricing setup. The Sales Price Worksheet is used to enter changes to the alternative sales prices recorded in the Sales Prices page. It is also used to apply those changes to an individual customer, a group of customers, or all customers under specified conditions. The Adjust Item Costs/Prices batch job is used to update the cost-related and price-related values in the corresponding fields on the Invoicing FastTab of the item card. The outcome of this batch job does not affect the alternative sales prices.

Sales Price Worksheet The main function of the sales price worksheet is to enable sales representatives to work with sales prices in a similar manner as they do in a Microsoft® Office Excel® spreadsheet or other means. By providing an overview of the existing pricing structure (either based on item prices or alternative sales prices), the worksheet is a convenient space where a sales representative can simulate, rearrange, and update price information in a consistent and efficient way. Sales prices entered in the worksheet are only the suggested prices, which do not take effect until they are implemented (by running the Implement Price Change batch job). Generally, suggestions in the worksheet for changing the existing sales prices can be created in two ways: •

Manually

•

Automatically

To fill in the worksheet automatically, run one of the following batch jobs: •

Suggest Sales Price on Wksh. With this batch job, sales representatives can suggest unit sales prices based on sales prices specified in the Sales Prices page. They can change sales prices already set up or create new ones.


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Suggest Item Price on Wksh. With this batch job, sales representatives can suggest unit sales prices based on the prices in the Unit Price field on the item cards, for example, giving a particular customer group a unit price that is lower than the regular price. The price in the Unit Price field on the item card is not changed by this batch job.

Both batch jobs end by displaying the newly calculated unit prices in the Sales Price Worksheet. Users can change unsatisfactory unit prices or delete unnecessary lines.

Demonstration: Create Sales Prices and Customer Groups This demonstration explains how sales prices valid for one customer group are also applicable for another customer group under an additional condition. Scenario: Currently, CRONUS offers top wholesale customers reduced prices on item 1972-W. In the program, these customers are categorized into a price group and the reduced price is applied to the whole group. Nancy, the sales representative, wants to grant other wholesalers the same price offer, however, on the condition that the quantity of their purchase exceeds 15 units. Nancy's task is to create new sales prices for the specified customers. The most efficient way of performing the task is to copy existing sales prices from one customer group to another and make necessary modifications.

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Chapter 2: Sales Prices and Discounts Follow these steps to create sales prices and customer groups using the Sales Price Worksheet: 1. On the Sales & Marketing page, click Inventory & Pricing and then click Sales Price Worksheet. 2. On the Action Pane, click Suggest Sales Price on Wksh.

FIGURE 2.2 SUGGEST SALES PRICE ON WKSH. BATCH JOB REQUEST FORM

In the request form for the batch job, define what is included in the batch job by setting filters. •

Entering filters on the Options FastTab determines the suggestion of whom (a customer, customer group, or all customers) and on what conditions the sales prices (as specified on the Sales Price FastTab) apply.

•

Filling in the Sales Price FastTab determines the filtering of existing sales prices when you copy them to the worksheet.

Refer to online Help for more information about the request form. 3. On the Options FastTab, in the Sales Type field, enter Customer Price Group and in the Sales Code field, click the drop-down arrow.


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Trade in Microsoft Dynamics® NAV 2009 4. Click New to create a new customer group. 5. In the Code field, type Wholesale2 and then in the Description field type Wholesalers, others. 6. Ensure that the Allow Line Disc. and Allow Invoice Disc. check boxes are selected. 7. With the new customer group selected, click OK. Since this new customer price group does not have alternative sales prices set up, when you copy prices valid for the Wholesale1 group to the worksheet, indicate that the prices must be created. 8. Select the Create New Prices check box. 9. On the Sales Price FastTab, set the filter for the Sales Type field to Customer Price Group and the Sales Code filter to Wholesale1. 10. Click OK to start the batch job. The Sales Price Worksheet page populates with price suggestions based on the specifications of the batch job.

FIGURE 2.3 SALES PRICE WORKSHEET FILLED IN WITH PRICE SUGGESTIONS FROM THE BATCH JOB

The reduced prices in the period of 02/01/10 through 02/28/10 for the customers in this group are valid on the condition that they buy at least 15 units of the item. 11. For the line in the worksheet that has the starting and ending dates, in the Minimum Quantity field, type 15. The contents of the fields in the worksheet are temporary until they are deleted or transferred to the Sales Prices page. 12. On the Action Pane, click Implement Price Change. 13. Click Yes to rename the record.

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Chapter 2: Sales Prices and Discounts 14. In the Implement Price Change request form, click OK to start the batch job. 15. Click Yes to delete the suggested price changes. The batch job creates alternative sales prices for the new customer group in the Sale Prices page and deletes the suggestion lines in the price worksheet. 16. Click OK to close the Sales Price Worksheet. Follow these steps to verify that the new sales prices have been created for the customer group Wholesale2: 1. On the Sales & Marketing page, click Administration and then click Customer Price Groups. 2. Select the line for Wholesale2 and on the Related Information menu, point to Cust. Price Group, and then click Sales Prices.

FIGURE 2.4 SALES PRICES CREATED FOR CUSTOMER GROUP WHOLESALE2 USING THE SALES PRICE WORKSHEET

The options that are provided for the Suggest Item Price on Worksheet batch job, also available from the sales prices worksheet, are identical to the Suggest Sales Price on Worksheet batch job. The only difference is that the suggested unit sales prices are retrieved from the Unit Price field on the item cards, instead of the Sales Prices page. This batch job does not change the amounts in the Unit Price field on the item card. This is the function of another batch job called Adjust Item Costs/Prices.


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Trade in Microsoft Dynamics® NAV 2009 Adjust Item Costs/Prices When sales representatives update pricing information about item cards, they can use the Adjust Item Costs/Prices batch job. There is no worksheet associated with the Adjust Item Costs/Prices batch job. This means that changes specified for the batch job are implemented directly on the item cards upon completion of the batch job. This also implies that the price information about the item card is replaced; no historic records of the original information are kept. NOTE: Verify that the information in the request form of the batch job is correct before you run the job.

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Lab 2.2 - Update Sales Prices Scenario As the sales manager at CRONUS, you have decided to make the modifications to current prices as follows: •

Because of changed market conditions, increase the prices offered to all customers for selected items (from 70100 to 70104) by 10%. The new prices take effect on 02/01/10. You also consider rounding the new prices to the nearest whole LCY.

•

As the CRONUS overseas-customer base expands, extend the offer of a reduced price for item 1928-S (if the purchase is paid in EUR) valid for customer 31505050 to all international customers.

HINT: Consider grouping overseas customers.

Challenge Yourself! Implement the price-change modifications specified in the scenario using the appropriate batch jobs.

Need a Little Help? 1. Open the Sales Price Worksheet and run the Suggest Item Price on Wksh. batch job for items 70100 through 70104 for all customers. 2. Set filters as specified in the scenario. 3. Run the Implement Price Change batch job. 4. Run the Suggest Sales Price on Wksh. batch job for item 1928-S for all international customers. 5. Set filters as specified in the scenario. 6. Create a new customer group for Foreign customers. 7. Run the Implement Price Change batch job.

Step by Step Follow these steps to update pricing for items 70100 through 70104 for all customers using the Sales Price Worksheet: 1. On the Sales & Marketing page, click Inventory & Pricing and then click Sales Price Worksheet. 2. On the Action Pane, click Suggest Item Price on Wksh. 3. On the Options FastTab, in the Sales Type field, enter All Customers. 4. In the Starting Date field, enter 02/01/10. 5. In the Adjustment Factor field, type 1.1.


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Trade in Microsoft Dynamics® NAV 2009 6. In the Rounding Method field, enter WHOLE. 7. Select the Create New Prices check box. 8. On the Item FastTab, in the No. field, set a filter for the range 70100..70104. 9. Click OK to start the batch job. 10. On the Action Pane, click Implement Price Change. 11. Click OK on the request form to start the batch job. 12. Click Yes to delete the suggested price changes. Follow these steps to update pricing for item 1928-S for all overseas customers using the Sales Price Worksheet: 1. On the Action Pane, click Suggest Sales Price on Wksh. 2. On the Options FastTab, in the Sales Type field, enter Customer Price Group. 3. In the Sales Code field, click the drop-down arrow to open the Customer Price Group page. 4. Click New to create a new customer group. 5. In the Code field, type Foreign and in the Description field, type Foreign Customers. 6. Ensure that the Allow Line Disc. and Allow Invoice Disc. check boxes are selected. 7. With the Foreign group selected, click OK. 8. In the Currency Code field, enter EUR and in the Starting Date field, press the W key for the work date. 9. Select the Create New Prices check box. 10. On the Sales Price FastTab, set the filter for the Sales Type field to Customer and the Sales Code filter to 31505050. 11. Set the filter for the Item No. field to 1928-S. 12. Click OK to start the batch job. 13. On the Action Pane, click Implement Price Change. 14. Click OK on the request form to start the batch job. 15. Click Yes to delete the suggested price changes. 16. Click OK to close the Sales Price Worksheet. NOTE: For customers to receive the reduced price, assign them to the Foreign customer price group. Do this on the Invoicing FastTab of the customer card.

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Line and Invoice Discounts Companies' pricing policies may include different kinds of discounts offered to the customers. It is common to distinguish three discount types: •

Item-related

•

Invoice

•

Payment

Item-Related Discounts In Microsoft Dynamics NAV, item-related discounts are referred to as line discounts and managed by using the Sales Line Discounting functionality. As with alternative sales prices, line discounts can be granted to customers on the basis of predefined conditions, such as minimum quantity of a purchase, unit of measure, currency paid, and so on. Companies can offer discounts to individual customers, groups of customers, or all customers. In addition, discounts can apply to both individual items and group of items.

Invoice Discounts Invoice discounts are granted on the basis of the total invoice amount independent of the item(s) being sold. Line and invoice discounts can be combined.

Payment Discounts Payment discounts are only granted to a customer if the customer pays the total invoice amount within a specified time period. More information about payment discounts is in the "Finance in Microsoft Dynamics® NAV 2009" training material.

General Discount Setup Before a company uses the line and invoice discount functionality, it must decide how it wants discounts posted and whether invoice discounts calculate automatically when the sales document is created or the user must apply the calculating function to calculate discounts. These decisions are implemented in the Sales & Receivables Setup page. You can find this page on the Sales & Marketing page by clicking Administration and then clicking Sales & Receivables Setup.


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Trade in Microsoft Dynamics® NAV 2009 The Discount Posting field on the General FastTab offers four options for defining the way invoice and line discounts post to the general ledger: •

No Discounts

•

Invoice Discounts

•

Line Discounts

•

All Discounts

The user can specify whether and what type of sales discounts post to the G/L separately. For a detailed definition of each option, refer to the online Help for the field. If the option is selected that determines whether a specific (line or invoice) discount or both discounts post separately, the user must ensure that: •

A dedicated account(s) is (for example, Sales Invoice Discount account) created in the chart of accounts.

•

The option is set up in the General Posting Setup page.

When posting sales documents, the program uses the general business posting group of the customer and the general product posting group of the item to retrieve the account set up in the General Posting Setup page. If discounts are not set up to post separately, they become part of a sales amount posted to the Sales account.

Line Discount Setup Sales representatives use the Sales Line Discounts page to record price discounts agreed upon with their individual or group of customers. They can also use this page to help strategically segment their customer base and can access the page from both the customer card and the item card. The Sales Line Discounts page enables a sales representative to specify the conditions that must be met before a customer is offered a discount price. For example, the conditions can require that the customer buys a certain quantity or that a purchase is invoiced in a specified currency before a discount can be granted. Similar to alternative sales prices, line discounts can apply to an individual customer, customer group, and all customers. Unlike sales prices, discounts can extend from a single item to several items grouped by common characteristics. The following demonstration illustrates a situation where a company has set up price discounts for certain item categories based on a pricing decision that targets a specific customer segment.

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Chapter 2: Sales Prices and Discounts Demonstration: Review and Set Up Customer Discounts Scenario: To manage the company's discount structure, Kevin, the sales manager, has categorized customers in two major groups: •

Large account

•

Retail customers

Because the purchase volume differs from one customer group to another, the price discount offered to customers must differ. Price discounts are also offered depending on what item category the customer is purchasing: •

Bigger discounts for raw materials

•

Reduced discounts for finished and retail items

Review how this discount structure was set up in the program. Follow these steps to review the discount groups for customers: 1. On the Sales & Marketing page, click Administration and then click Customer Disc. Groups. A code identifying a customer discount group can be assigned to a customer to indicate that this customer is allowed to receive the discount price specified for the group. This is done by selecting an appropriate code in the Customer Disc. Group field on the customer card. 2. Close the Customer Disc. Groups page. 3. Open the customer card for customer 30000. 4. Expand the Invoicing FastTab. Customer 30000 belongs to the discount group of large accounts.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to review the sales conditions that must be fulfilled before the group of large accounts can receive a discount: 1. In the Customer Disc. Group field, click the drop-down arrow to open the customer discount groups list. With the Large Account group selected, click Advanced. 2. On the Related Information menu, point to Cust. Disc. Groups and then click Sales Line Discounts.

FIGURE 2.5 SALES LINE DISCOUNTS FOR THE LARGE ACCOUNT CUSTOMER DISCOUNT GROUP

Customers that belong to the discount group can receive three different discounts depending on the item group: •

FINISHED

•

RAW MAT

•

RESALE

Categorizing items into discount groups is based on the same principles as categorizing customers. T he user must set up an item discount group by giving it a code. The user then assigns this code to the individual item for which the user wants to apply a discount. At CRONUS, there are five item discount groups. When you use the line discount functionality, it is not mandatory to assign customers and items to discount groups; you can set up discounts for a combination of individual customers and items. Follow these steps to review the item discount groups: 1. On any of the lines in the Sales Line Discounts page, click the Code field, click the drop-down arrow, and then click Advanced. 2. Close the Item Disc. Groups page.

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Chapter 2: Sales Prices and Discounts Follow these steps to create a line discount for customer 30000 offering a 20 percent discount when it buys at least 15 units of item 1972-W: 1. Close the Sales Line Discounts and Customer Disc. Groups pages to return to the customer card for customer 30000. 2. On the Related Information menu, point to Sales and then click Line Discounts. 3. On the line with the Sales Type set to Customer and Sales Code set to 30000, in the Type field, enter Item and then enter 1972-W in the Code field. 4. In the Minimum Quantity field, type 15. 5. In the Line Discount % field, type 20. 6. Click OK to close the Sales Line Discounts page.

Line Discount Functionality Setting up a line discount supports the sales representatives in their task of always offering the customers the best prices. After the line discounts and terms are set up, when an an order/invoice is created for a specific customer, the program checks whether: •

Line discounts are set up for the customer in question.

•

The sales header and line details meet the conditions for applying a discount price.

If all these conditions are met, the program copies the applicable discount percentage from the Sales Line Discounts page to the Line Discount % field on the sales line and enters the calculated discount price in the Line Amount Excl./Incl. VAT field. When more than one discount percentage is set up for a customer, the program selects the highest discount to comply with "the best price" rule (described in the online Help topic "Best Price"). If no discounts are recorded, or the conditions for applying a discount are not satisfied, the program uses the regular unit price specified on the item card as a suggestion on the sales document (unless there is a special sales price set up for the customer). The Sales Line Discounts field in the Sales Line Details FactBox shows the number of discounts available. Click this link to see the available line discounts. The best price is defined as the lowest possible price with the highest possible line discount on the order date. This functionality is illustrated in the "Set Up Sales Line Discounts" demonstration.


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Trade in Microsoft Dynamics® NAV 2009 Demonstration: Set Up Sales Line Discounts Scenario: A representative of customer 30000 calls Susan, the order processor, to order 20 units of item 1972-W. The order date is 01/25/10. The customer also inquires about the total price of the purchase, as well as the granted discount (if any). Susan must create a sales order and inform the customer about the price. She may also investigate whether there are other conditions that the customer may want to accept to obtain a better price. Before beginning this demonstration, Susan assigns this customer to the customer price group Wholesale1 as instructed by Kevin, the sales manager. Follow these steps to assign customer 30000 to the Wholesale1 customer price group: 1. On the Sales & Marketing page, click Order Processing and then click Customers. 2. Open the customer card for customer 30000. 3. Expand the Invoicing FastTab. 4. In the Customer Price Group field, enter WHOLESALE1. 5. Click OK to close the customer card. Follow these steps to create the sales order and review the sales pricing: 1. On the Customers list page, with customer 30000 selected, click Sales Order on the Action Pane. 2. Press ENTER or TAB. 3. Accept any messages. 4. On the Lines FastTab, in the Type field, select Item.

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Chapter 2: Sales Prices and Discounts 5. In the No. field, enter 1972-W. 6. In the Quantity field, type 20.

FIGURE 2.6 SALES ORDER TO CUSTOMER 30000 FOR ITEM 1972-W WITH A 20% LINE DISCOUNT

By looking at the values in relevant fields, Susan informs the customer that the total price for the 20 pieces of the item is 13,600 LCY (based on the unit price of 850 LCY and a discount of 20 percent). This is the best price the customer can receive considering the terms of this sale. At the same time, as indicated by the numbers next to the Sales Prices and the Sales Line Discounts fields in the Sales Line Details FactBox, Susan may check the terms that determine whether the customer is allowed to receive an even better price/discount.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to check the customer's sales terms: 1. On the Sales Line Details FactBox, click the Sales Prices link. 2. Add the Currency Code field using the Choose Columns feature. Reopen the Get Sales Price page to activate changes.

FIGURE 2.7 SALES PRICES FOR CUSTOMER 30000 FOR ITEM 1972-W

The Get Sales Price page suggests that if the purchase of item 1972-W was paid in Euros instead of the local currency, the unit price is more favorable. Assume that the customer accepts this condition. Follow these steps to update the sales lines: 1. 2. 3. 4.

Click Cancel to close the Get Sales Price page. Expand the Foreign Trade FastTab. In the Currency Code field, enter EUR. Click Yes to change the currency code.

The unit price copies from the sales prices table to the Unit Price Excl. VAT field on the sales line and recalculates the line amount value.

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Chapter 2: Sales Prices and Discounts Follow these steps to check the line discounts that exist for a combination of the customer and item: 1. On the Sales Line Details FactBox, click the Sales Line Discounts link. 2. Add the Currency Code field using the Choose Columns feature. Reopen the Get Sales Line Disc. page to activate changes.

FIGURE 2.8 SALES LINE DISCOUNTS FOR CUSTOMER 30000

The records specify that the customer is allowed a 15 percent discount when buying items in the group Finished (to which item 1972-W belongs). There is also a line discount of 20 percent offered individually to customer 30000 when buying at least 15 units of item 1972-W. Following the "best price" rule, the higher discount for price calculation on the sales line is used. The same rule also determined that because the line discounts do not have a currency code set up as a condition, the program selected the highest line discount available in local currency. Both the alternative sales price and line discount have been combined when calculating the total sales price. This is because of the condition associated with the sales price setup (Allow Line Disc. check box is selected), which allows for this combination.


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Lab 2.3 - Offer the Best Price Available to a Customer Scenario You are the order processor at CRONUS. Customer 50000 is ordering 200 pieces of item 70200. Offer the customer the best (least expensive) price for the purchase.

Challenge Yourself! Create the sales order for customer 50000 for 200 units of item 70200 and review the sales pricing options for the best price.

Need a Little Help? 1. Create the sales order for customer 50000 for 200 units of item 70200. 2. Review the sales line discounts to check if this is the best price offer. 3. Review the sales prices to check if there is a better price offer. 4. Update the sales order line to provide the best price offer.

Step by Step Follow these steps to create the sales order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 50000. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter 70200. 6. In the Quantity field, type 200. The Line Amount Excl. Vat field should be 221.00. The Line Discount % field shows 15. Follow these steps to review the discounts and update the sales lines: 1. Click the Sales Line Discounts link in the Sales Line Details FactBox. The Get Sales Line Disc. page shows that because customer 50000 belongs to the Retail Customer Disc. group, this customer receives a 15 percent line discount. 2. Close the Get Sales Line Disc. page.

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Chapter 2: Sales Prices and Discounts 3. Click the Sales Prices link in the Sales Line Details FactBox. The Get Sales Price page shows that the customer can obtain a better price by ordering in boxes instead of pieces. 4. Close the Get Sales Price page. 5. In the Unit of Measure field on the sales line, enter BOX and then click OK. 6. In the Quantity field, type 2. Now the Line Amount Excl. VAT field is 170.00. This represents a combination of the sales price for purchasing in boxes instead of pieces and the sales line discount for this customer. The best price for the customer is 170.00.


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Invoice Discounts Independent of the line discounts, sales representatives may also offer customers an invoice discount. This is based on the whole invoice amount. Invoice discounts are given if the invoice is larger than a minimum amount. Different from line discounts, which calculate by the program automatically as soon as the sales line is created, automatic calculation of invoice discounts is an option that companies may decide not to use. This option is set up in Sales & Receivables Setup. The Calc. Inv. Discount and the Calc. Inv. Disc. per VAT ID check boxes define how the program automatically calculates the invoice discount amount for sales documents. Sales representatives use the customer invoice discounts table to define the rules for discounts and service charges for different customers. They set up the invoice discount code for which a set of terms - a minimum amount, discount percentages, and service charges - can be specified. The program fills in the code for the invoice discount in the Invoice Disc. Code field on the Invoicing FastTab of the customer card automatically when a new customer is created. The program uses the customer number as a default value when creating the invoice discount code because, typically, invoice discounts are granted to the customers individually. Follow these steps to review the invoice discounts set up on customers 10000 and 49633663: 1. Open the customer card for customer 10000. 2. Expand the Invoicing FastTab. The value in the Invoice Disc. Code field matches the customer number. Users can set up several discount groups to assign the customers with the same invoice discount type by replacing the default code with a different code. This code is entered in the Invoice Disc. Code field for each customer receiving the same invoice discount. 3. Open the customer card for customer 49633663 and review the Invoice Disc. Code field on the Invoicing FastTab. Instead of the customer number, the invoice discount code is specified as A.

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Chapter 2: Sales Prices and Discounts After the invoice discount code is specified, the terms under which a discount can be granted are specified in the Cust. Invoice Discounts page. 4. On the Related Information menu, point to Sales and then click Invoice Discounts.

FIGURE 2.9 INVOICE DISCOUNTS FOR CUSTOMERS IN GROUP A

Customers in group A receive an invoice discount of five percent, based on one minimum invoice amount in local currency and another minimum invoice amount in a specified foreign currency. The Cust. Invoice Discounts page also lets the user specify a service charge amount the customer must pay on a purchase whose total amount is below a specified minimum amount.

Invoice Discount Functionality After the invoice discount code and the associated terms have been set up, the program enables the user to calculate the invoice discount when invoicing a specific customer. Depending on the specifications in Sales & Receivables Setup, this calculation can be initiated manually or performed automatically. To initiate the calculation of the invoice discount, use the function called Calculate Invoice Discount on the sales order/invoice. The calculated amount of the invoice discount can be verified in the Sales Order Statistics page.


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Trade in Microsoft Dynamics® NAV 2009 Allow/Disallow Discounts Alternative (often reduced) sales prices can be combined with line and invoice discounts. The option of allowing line discounts is available on the customer card, a line in the Customer Price Groups page, and a price line in the Sales Prices page. The status of the Allow Line Disc. field on a price line in the Sales Prices page has priority over the setting of the same field in the Customer Price Groups page and on the customer card. For example, the line discount is granted to the customer - even if it is disallowed for the customer in question - if the sales price to which they are allowed justifies the line discount. According to this rule, if the user wants to stop offering line discounts to a specific customer, they have the following alternatives: •

Clear the Allow Line Disc. check box in the Sales Prices page for the lines that allowed the customer to a special price.

•

Assign the customer to a customer price group for which a line discount is disallowed in relation to all sales prices.

Where no alternative sales prices records exist, clear the Allow Line Disc. check box on the customer card for the customer. Similar principles apply when controlling invoice discounts, with the differences that: •

The option of (dis)allowing invoice discounts is associated with the item (and found on the item card).

•

The option can be (de)activated on the sales line (or sales price line if such one exists).

Summary Sales Prices and Discounts deals with the way sales prices and discounts are set up and maintained in Microsoft Dynamics NAV depending on the special agreements made with the customers. Sales Prices and Discounts are both important aspects of providing the best possible service and maintaining longlasting relationships with customers.

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Test Your Knowledge Test your knowledge with the following questions. 1. Which of the following batch jobs are used to update pricing information on item cards? ( ) Update Item Costs/Prices ( ) Adjust Item Costs/Prices ( ) Adjust Cost - Item Entries ( ) Update Cost - Item Entries 2. What information is available about sales lines from the Sales Line Details FactBox on the sales order? (Select all that apply) ( ) Sales price information ( ) Sales invoice discount information ( ) Sales line discount information ( ) Sales order total discount information 3. Explain the purpose of the Sales Price Worksheet and then how to process information in it.

4. What conditions can you specify when setting up sales prices? (Select all that apply) ( ) The customer must belong to a particular customer group. ( ) The purchase must be made by a particular buyer. ( ) The purchase must be made within a certain period. ( ) The purchase must be made in a specific unit of measure.


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Trade in Microsoft Dynamics® NAV 2009 Fill in the blanks to test your knowledge of this section. 5. Item-related discounts are referred to as _____ discounts. 6. Clear the ________ Line Disc. check box on a customer card to prevent line discounts for a customer. 7. ___________ discounts are granted on the basis of the total invoice amount independent of the item(s) sold. 8. Payment discounts are granted if the ________ invoice amount is paid within the specified time period.

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2.

3.


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Solutions Test Your Knowledge 1. Which of the following batch jobs are used to update pricing information on item cards? ( ) Update Item Costs/Prices (•) Adjust Item Costs/Prices ( ) Adjust Cost - Item Entries ( ) Update Cost - Item Entries 2. What information is available about sales lines from the Sales Line Details FactBox on the sales order? (Select all that apply) (√) Sales price information ( ) Sales invoice discount information (√) Sales line discount information ( ) Sales order total discount information 3. Explain the purpose of the Sales Price Worksheet and then how to process information in it. MODEL ANSWER: Provides users an overview of the existing pricing structure (either based on item prices or alternative sales prices), where he or she can simulate, rearrange, and update price information in a consistent and efficient way. Information can be entered manually or suggested using batch jobs, and then made effective using the Implement Price Change batch job. 4. What conditions can you specify when setting up sales prices? (Select all that apply) (√) The customer must belong to a particular customer group. ( ) The purchase must be made by a particular buyer. (√) The purchase must be made within a certain period. (√) The purchase must be made in a specific unit of measure.

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Chapter 2: Sales Prices and Discounts Fill in the blanks to test your knowledge of this section. 5. Item-related discounts are referred to as line discounts. 6. Clear the Allow Line Disc. check box on a customer card to prevent line discounts for a customer. 7.

Invoice discounts are granted on the basis of the total invoice amount independent of the item(s) sold.

8. Payment discounts are granted if the total invoice amount is paid within the specified time period.


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CHAPTER 3: CUSTOMER SERVICE FEATURES Objectives The objectives are: •

Explain how to set up and use item substitutions.

•

Describe how to set up and use item cross references.

•

Explain nonstock item setup and the processes to create nonstock items manually and through a vendor catalog import.

•

Describe how to sell nonstock items using drop shipments.

Introduction Customer service features in Microsoft Dynamics NAV® 2009 include substituting one item with another, working with item cross reference, and using nonstock items. Companies can manage the sale of a nonstock item in two ways: •

Creating drop shipments

•

Using a special order

Each of these features add to customer satisfaction by expediting the sales process.


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Item Substitutions Companies frequently offer products of similar quality and function as substitutes for one another. The purpose of this is twofold: •

A company can offer a variety of styles, brands, and prices of goods. This enables their customers to select items that best suit their needs and budgets.

•

By enabling customers to purchase inventory items of comparable quality, function, and price, companies can maintain customer satisfaction if stock shortages occur.

The Item Substitution feature enables a company to link items with the same or similar properties to one another. The substitution can be either one-way (from item x to item y, but not from y to x), or two-way. If the substitution is two-way, the items are considered interchangeable. If one item is interchangeable with another, the program automatically creates a "reverse substitution" entry for the other item during the setup of the substitution information. After substitution information is set up, every time that the number of the item with a substitute(s) is entered on the sales line, the number of substitutions set up displays in the Substitutions field in the Sales Line Details FactBox. In addition, when the quantity of items requested on the sales line exceeds the quantity available from inventory, the Substitutes Exist field displays Yes in the stockout message. If a user chooses a substitute, then the program updates the relevant fields on the sales line.

Procedure: Review Item Substitution Setup A company must create and set up corresponding item substitution entries in order to use the item substitution functionality. At CRONUS International Ltd., several item substitution entries have been set up already. Follow these steps to view the entry made for item 1968-W: 1. On the navigation pane, click Sales & Marketing and then click Inventory & Pricing. 2. On the Inventory & Pricing page, click Items.

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Chapter 3: Customer Service Features 3. Open the item card for item 1968-W. 4. On the Related Information menu, point to Item, and then click Substitutions.

FIGURE 3.1 ITEM SUBSTITUTION FOR ITEM 1968-W, THE GRENOBLE WHITEBOARD, RED

The fields in the Item Substitution Entry page specify information about the substitute item(s). Enter the item number for the substitute item in the Substitute No. field. An item can be substituted with either another item on the company's inventory list or with a nonstock item. Select the type of the item to use as a substitute in the Substitute Type field. Interchangeability of these items is defined by the Interchangeable check box. To enter comments about the conditions required to make substitutions for an item, click Condition on the Action Pane. If a condition has been entered, the Condition field on the Item Substitution Entry page will display Yes. Immediately after a substitution entry is created for an item, the Substitution Available check box is automatically selected on the sales line for this item. NOTE: Use the Choose Columns feature on the lines to show the Substitution Available field.


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Trade in Microsoft Dynamics® NAV 2009 Demonstration: Create a Sales Order with Substitutions Scenario: Customer 10000 orders three units of item 1968-W. Susan, the order processor, creates an order for the customer and learns the quantity of the requested item is not available. However, item 1968-W can be substituted by another item. With the customer's consent, Susan ships a substitute item. Follow these steps to create the sales order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter 1968-W. 6. In the Quantity field, type 3 and then press ENTER or TAB. A stockout message appears. In the message box, the Substitutes Exist field shows that a substitute exists. 7. Click Yes to record the quantity. The Substitutions field in the Sales Line Details FactBox indicates that one item has been set up as a substitute for the item on the line. Follow these steps to view the substitute item for the item on the sales line: 1. In the Sales Line Details FactBox, click the Substitutions link. The Item Substitution Entries page specifies the relevant logistical information about the substitute item(s). The header information copies from the related sales line. The Inventory and the Quantity Avail. on Shpt. Date fields specify the respective quantities of the substitute item. 2. With the line for item 1972-W selected, click OK. Item 1972-W replaces the originally entered item 1968-W on the sales line. 3. On the Action Pane, click Post. 4. Click Ship and then click OK. NOTE: You also can select Item Substitutions on a sales line using the Select Item Substitution function accessed from the Lines FastTab by clicking Actions and pointing to Line.

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Lab 3.1 - Process a Sales Order with Items Substitutions Scenario You are the order processor at CRONUS. Customer 40000 orders seven units of item 1980-S, however, none are in stock. The customer approves a substitution. Ship the order with the substituted item. NOTE: This customer's shipments are usually made from the Yellow Warehouse. Because the YELLOW location requires picking, the shipping process must be done through the warehouse. Skip this process by entering the corresponding amounts in the Qty. To Ship field on the sales lines and then by accepting the warning messages the program displays.

Challenge Yourself! Create and ship the sales order to customer 40000 for seven units of item 1980-S. Substitute the item if required.

Need a Little Help? 1. Create the sales order for customer 40000 of seven units of item 1980-S. 2. Determine whether the requested item can be substituted by another item. 3. Ship the requested quantity of a substitute item.

Step by Step 1. On the Sales & Marketing page, click Order Processing and then Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 40000. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter 1980-S. 6. In the Quantity field, type 7. 7. Click Yes on the availability message that appears. 8. In the Sales Line Details FactBox, click the Substitutions link. 9. Click OK to substitute item 1988-S. 10. In the Qty. to Ship field, type 7. 11. Click OK to accept the warning message that appears. 12. On the Action Pane, click Post. 13. Click Ship and then click OK.


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Item Cross References With item cross references, a company can use another company's item number (used, for example, by the customer or vendor) and the program refers this number to the company's own internal item number. When the external item number in the Cross-Reference No. field is entered, the program automatically fills in the internal item number and corresponding information about the sales order. Item cross reference enables the following types of item numbers to be set up for cross reference: •

Blank

•

Customer

•

Vendor

•

Bar Code

Item Cross Reference Entries Page In the Item Cross Reference Entries page, the user can specify cross-reference details.

FIGURE 3.2 ITEM CROSS REFERENCE ENTRIES

Options in the Cross-Reference Type field define for whom (customer or vendor) or for what (bar code) the cross reference is used. Perhaps one item has a different reference number for the customer, vendor, and bar code. The blank option means that any cross-reference number (for example, an internal reference used for information) can be entered and determine the item.

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Chapter 3: Customer Service Features Depending on the selection made in the Cross-Reference Type field, the user can enter either a customer or vendor number or a bar code name in the CrossReference Type No. field. A cross-reference number of up to 20 characters can be entered in the Cross-Reference No. field. The Description field enables entries of up to 30 characters. If a user enters a description for a cross reference, it will override the standard item description when the user enters the cross-reference on a sales or purchase order. The user can refer to the Discontinue Bar Code field for information when the Cross-Reference Type field is set to Bar Code and that particular bar code is no longer valid.

Demonstration: Set Up an Item Cross Reference Scenario: Nancy, the sales representative at CRONUS, must set up cross references for several selected items, including item 1896-S. The condition is that when customer 40000 purchases the item, the customer's item description, Executive Desk. 6 Dr; 36x60, is used on the sales documents, instead of the item description that is used at CRONUS. The customer's reference number for this item is ED6DR3660. Follow these steps to set up a cross reference for item 1896-S: 1. On the Sales & Marketing page, click Inventory & Pricing, and then click Items. 2. Open the item card for item 1896-S. 3. On the Related Information menu, point to Item and then click Cross References. 4. In the Cross-Reference Type field, enter Customer. 5. In the Cross Reference Type No. field, enter 40000. 6. In the Cross-Reference No. field, type ED6DR3660. 7. In the Unit of Measure field, enter PCS. 8. In the Description field, type Executive Desk. 6 Dr; 36x60. 9. Click OK to close the Item Cross Reference Entries page.

Demonstration: Create a Sales Order with a Cross Reference Scenario: Susan, the order processor at CRONUS, receives an order from customer 40000 for ten units of item ED6DR3660. The vendor does not readily know CRONUS' number for this item. Susan must create a sales order for this item using the item cross reference function to locate the item. After creating order, she reviews the Order Confirmation to confirm the customer's item description appears.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to create the sales order using item cross-references: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 40000. 4. Use the Choose Columns feature to add the Cross-Reference No. field to the line. 5. On the Lines FastTab, in the Type field, select Item. 6. In the Cross-Reference No. field, click the drop-down arrow to open the Cross Reference List page. 7. With the cross-reference number ED6DR3660 selected, click OK. The item number, cross-reference number, and customer's description appear on the sales line. 8. In the Quantity field, type 10. 9. On the Actions menu, point to Print, and then click Order Confirmation. 10. Click Preview. The document shows item number 1896-S and the description of the cross-reference number. 11. Close the Print Preview page. 12. In the Qty. to Ship field, type 10. 13. Click OK to accept the warning message that appears. 14. On the Action Pane, click Post and then click OK. The principles behind the procedures for setting up and using cross references when you purchase items from vendors are the same as described in this lesson.

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Lab 3.2 - Process a Sales Order with Item Cross References Scenario You are the order processor at CRONUS. Customer 10000 places an order for eight units of item 1900-S, and says that this item is their item number 22-786, with a description of Chair, lounge, black. Since this customer orders this item often, you decide to set up a cross-reference before creating and posting the order.

Challenge Yourself! 1. Create the item cross-reference. 2. Process the sales order.

Need a Little Help? 1. Set up item 1900-S with customer 10000's cross-reference to item 22-786 with the item description of Chair, lounge, black. 2. Create a sales order that reflects the item number the customer uses. 3. Post the order.

Step by Step Follow these steps to create the item cross-reference: 1. On the Sales & Marketing page, click Inventory & Pricing and then click Items. 2. Open the item card for item 1900-S. 3. On the Related Information menu, point to Item and then click Cross References. 4. In the Cross-Reference Type field, enter Customer. 5. In the Cross Reference Type No. field, enter 10000. 6. In the Cross-Reference No. field, type 22-786. 7. In the Unit of Measure field, enter PCS. 8. In the Description field, type Chair, lounge, black. 9. Click OK to close the Item Cross Reference Entries page.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to process the sales order: 1. On the navigation pane, under Sales & Marketing, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. On the Lines FastTab, in the Type field, select Item. 5. In the Cross-Reference No. field, click the drop-down arrow to open the Cross Reference List page. 6. With the cross-reference number 22-786 selected, click OK. 7. In the Quantity field, type 8. 8. On the Action Pane, click Post. 9. Click OK to ship and invoice the order.

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Set Up and Create Nonstock Items Nonstock processing enables companies to order, ship, and invoice items that are not usually part of their inventory, and includes many areas of operation. The primary users of this functionality are purchasing/inventory management personnel and sales representatives. Nonstock item processing allows the user to enter an item on a sales quote, order, or invoice. The user can select the item from an existing list of item numbers received from one or more vendors and imported into the program. Immediately after the relevant vendor item is selected, the program automatically creates an inventory item with a unique item number. The inventory item is processed as an ordinary "stocked" inventory item. Reports help companies decide whether to carry certain nonstock items as stocked items.

Nonstock Items Setup Page Users can set up the numbering sequence and format for nonstock items in the Nonstock Item Setup page. Follow these steps to open the Nonstock Item Setup page: 1. On the navigation pane, click Sales & Marketing. 2. On the Sales & Marketing page, click Administration and then click Nonstock Item Setup.

FIGURE 3.3 NONSTOCK ITEM SETUP


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Trade in Microsoft Dynamics® NAV 2009 The following two fields specify the format of the nonstock item number appearing on the item card. The program generates the number when the user enters a nonstock item on a document line for the first time. •

The No. Format field contains four options for how the program formats nonstock item numbers: o o o o

•

Vendor Item No. Mfr. + Vendor Item No. Vendor Item No. + Mfr. Entry No.

The No. Format Separator field contains the character that serves as a separator between the elements of a nonstock item number format if the user has chosen a No. Format of both a code and a number.

Refer to online Help for more information about the fields on the Nonstock Item Setup page.

Create Nonstock Items To use nonstock processing, a company must create items the program recognizes as nonstock goods. The program provides two methods for creating nonstock items: •

Manually: Creating the nonstock item from the nonstock item card.

•

Importing a vendor catalog: Bringing in a volume of nonstock items using a dataport.

The following demonstrations, "Create a Nonstock Item Manually" and "Import Vendor Catalog," describe each of these methods.

Procedure: Create a Nonstock Item Manually The user must enter item-related information in the appropriate fields on the nonstock item card to create a nonstock item manually. This is similar to creating a regular item card. Follow these steps to create a nonstock item: 1. On the Sales & Marketing page, click Inventory & Pricing and then click Nonstock Items. 2. Click New and the press ENTER or TAB. 3. Enter general item information on the General FastTab. 4. On the Invoicing FastTab, specify cost and posting details about the nonstock item.

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Chapter 3: Customer Service Features To sell nonstock items, complete the Vendor No., Vendor Item No., and Item Category Code fields. The item category code is important because this determines the posting groups and costing methods the program uses when the nonstock item is used in a transaction. Refer to online Help for more information about the fields on the Nonstock Item Card.

Procedure: Create an Item Card from a Nonstock Item The first time a sales order for a nonstock item is created and posted, the program automatically adds the item record to the company's inventory list by creating an item card. To create an item card for a nonstock item before using it in a transaction, run the Create Item function on the Nonstock Item Card. Follow these steps to run the Create Item function: 1. Open the Nonstock Item Card for vendor item number 2100 (Entry No. NS0001). 2. On the Action Pane, click Create Item. The program creates the corresponding item card, adds a record in the item vendor catalog, and provides confirmation. The newly created item is assigned the number with the format (Vendor Item No.) specified in the Nonstock Item Setup page. 3. Click OK to close the item creation message and then click OK to close the Nonstock Item Card. 4. On the navigation pane, click Inventory & Pricing and then click Items. 5. Open the item card for item 2100. The Created From Nonstock Item field is selected automatically on the General FastTab, indicating that this was a nonstock item converted to a stocked item.

Procedure: Import Vendor Catalogs Vendors frequently make catalogs available by using an electronic file. The program provides a dataport (object number 5700, import nonstock items) designed to import the following comma-delimited format. Run the dataport from the Object Designer in the Classic client.


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Trade in Microsoft Dynamics® NAV 2009 NOTE: Before you run this dataport, ensure that the manufacturer code, vendor number, unit of measure code, item category code, and product group code specified in the dataport are set up in Microsoft Dynamics NAV. Confirm this by opening a nonstock item card and verifying that the records in the tables related to the corresponding fields exist. Follow these steps to run the dataport: 1. Open the Microsoft Dynamics NAV 2009 Classic with Microsoft SQL Server client. 2. On the Tools menu, click Object Designer. 3. Click Dataport.

FIGURE 3.4 DATAPORTS IN THE OBJECT DESIGNER IN THE CLASSIC CLIENT

4. Click object ID 5700, Import Nonstock Items and then click Run. 5. On the Nonstock Item tab, set filters for the information desired from the catalogs. 6. On the Options tab, enter the path to the file that contains the vendor's catalog in the File Name field. 7. Ensure that the Direction field is set to Import and then click OK. 8. Close the Classic client and return to the RoleTailored client. Refer to the "Importing Nonstock Items" topic in online Help for more information about this dataport.

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Sell Nonstock Items Companies usually sell nonstock items to customers as drop shipments or special orders. Drop shipments are sent directly from the vendor to the customer, while special orders are sent to the company's warehouse before they are sent to the customer. Drop shipments are used when a company wants to avoid handling an order, such as stocking and delivering, but wants to fulfill the customer's request and include the transaction in a calculation of cost of goods sold and profit. When companies make a shipment to a customer that contains both regular and nonstock items, or want to maintain a uniform interface with customers, they might process the sales order as a special order. This lesson illustrates the sale of nonstock items using the example of drop shipment. The principles behind the procedures for handling sales orders selected as special orders are similar to the ones for handling drop shipments.

Drop Shipments Companies can use the Drop Shipments functionality to ensure drop-shipped orders are handled efficiently. In addition to making a process that involves many tasks and people easier, it ensures that the correct inventory value and item costs are calculated. Although the sales and purchase transactions of the drop shipment are registered, the drop-shipped items do not physically enter the company's inventory. The Drop Shipments Process Flow figure illustrates how drop shipments are managed.

FIGURE 3.5 DROP SHIPMENTS PROCESS FLOW


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Trade in Microsoft Dynamics® NAV 2009 Specifically, drop shipping includes the following tasks: 1. 2. 3. 4. 5.

The customer places a sales order with the company. The company places a purchase order with the vendor. The vendor delivers the ordered items directly to the customer. The vendor invoices the company for the shipment. The company invoices the customer.

Demonstration: Sell a Nonstock Item Using Drop Shipments Scenario: Customer 10000 orders ten units of item 3100. Susan, the order processor, decides to deliver the order using a drop shipment because item 3100 is a nonstock item. The item must be purchased from vendor 30000, who then ships the order directly to customer 10000. NOTE: Creating sales orders for nonstock items requires entries in the Purchasing Code field.

Steps: Create and Release the Sales Order Follow these steps to create a sales order for a nonstock item: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. Use the Choose Columns feature to add the Purchasing Code and Nonstock fields to the line. 5. On the Lines FastTab, in the Type field, select Item. To enter the nonstock item number, Susan can either: •

Select the item from the nonstock items list.

•

Select the item from the regular item list (if the nonstock item has been added to the inventory list).

Because item 3100 is not set up in the regular item list, Susan uses the Nonstock Items function. 6. On the Lines FastTab, click Actions, point to Functions, and then click Nonstock Items. 7. Select item 3100 and then click OK. 8. In the Purchasing Code field, enter DROP SHIP.

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Chapter 3: Customer Service Features 9. In the Quantity field, type 10. 10. On the Action Pane, click Release. 11. Click OK to close the sales order.

Steps: Create and Release the Purchase Order Alicia, the purchasing agent, creates a purchase order for the nonstock items that CRONUS sells to customer 10000. Create purchase orders for drop shipments by the following methods: •

Indirectly: As a part of a regular planning activity using the requisition worksheet.

•

Directly: From the purchase order.

NOTE: To learn about creating the purchase order from the requisition worksheet, refer to the topic titled "Creating Purchase Orders for Drop Shipments Indirectly" in the online Help. Follow these steps to create the purchase order for drop shipments directly: 1. On the Purchase page, click Order Processing and then click Purchase Orders. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 30000. 4. In the Vendor Invoice No. field, type 1112 in the Vendor Invoice No. field. Due to setup, a Vendor Invoice No. is required before you can invoice the purchase order. 5. Expand the Shipping FastTab. 6. In the Sell-to Customer No. field, enter 10000. 7. On the Related Information menu, point to Order, then to Drop Shipment, and then click Get Sales Order. The Sales List - Order page appears. The lines specify the sales orders created for the customer selected in the Sell-to Customer No. field. 8. Select the sales order for ten units of item 3100 (click the Related Information menu, point to Line, and then click Card to view a sales order) and then click OK. The fields on the purchase line fill in with the information copied from the sales order. Also created is the link between the sales order, which will be drop shipped, and the associated purchase order. With this link, the user can view the associated sales order directly from the purchase order and vice versa.


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Trade in Microsoft Dynamics® NAV 2009 9. On the Lines FastTab, click Actions, point to Order, then Drop Shipment, and then click Sales Order. The sales order appears. To view the purchase order from the sales order, use the same process but select Purchase Order. 10. Minimize the Sales Order page. 11. On the Action Pane of the purchase order, click Release.

Steps: Post the Orders To complete the drop shipment, process the related purchase and sales orders according to the rules that are defined for drop shipment. NOTE: You cannot post the sales order with lines selected for drop shipment until you link it to a purchase order. Follow these steps to post the sales order and purchase order: 1. Reopen the sales order. 2. On the Action Pane, click Post. 3. Click OK to ship and invoice the sales order. The Receive function automatically runs on the linked purchase order and updates the Quantity Received field. 4. On the Action Pane of the purchase order, click Post. 5. Click OK to invoice the purchase order.

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Lab 3.3 - Sell a Nonstock Item Using Special Orders Scenario Customer 10000 orders three units of item 4100. Item 4100 is a nonstock item, which must be purchased from vendor 40000. Because this customer only accepts shipments from CRONUS, the order processor places a special order with 40000. After receiving the shipment from 40000, the purchasing agent posts vendor invoice 11234 and then the order processor simultaneously ships the items to customer 10000 and posts the invoice. Perform the activities as both the order processor and purchasing agent.

Challenge Yourself! 1. Create a special order for customer 10000 for three units of item 4100. 2. Create the purchase order for the special order. 3. Receive and invoice the purchase order. 4. Ship and invoice the sales order.

Need a Little Help? 1. Create a sales order for customer 10000 for three units of item 4100. 2. Use the Nonstock Items function to add the item and then set it as a special order. 3. Release the order. 4. Create the purchase order to vendor 40000. 5. Assign customer number 10000 for shipping and then run the Get Sales Order function. 6. Add vendor invoice number 11234 and then receive and invoice the purchase order. 7. Reopen the sales order. 8. Ship and invoice the sales order.

Step by Step Follow these steps to create the sales order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. In the Type field, enter Item.


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Trade in Microsoft Dynamics® NAV 2009 5. On the Lines FastTab, click Actions, point to Functions, and then click Nonstock Items. 6. Select item 4100 and then click OK. 7. In the Purchasing Code field, enter SPEC ORDER. 8. In the Quantity field, type 3. 9. On the Action Pane, click Release. 10. Minimize the Sales Order page. Follow these steps to process the purchase order: 1. On the Purchase page, click Order Processing, and then click Purchase Orders. 2. Click New and then click ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 40000. 4. Expand the Shipping FastTab and enter 10000 in the Sell-to Customer No. field. 5. On the Related Information menu, point to Order, then to Special Order, and then click Get Sales Order. 6. Select the sales order for three units of item 4100 and then click OK. 7. In the Vendor Invoice No. field, enter 11234. 8. On the Action Pane, click Post. 9. Click OK to receive and invoice the order. Follow these steps to complete the sales order: 1. Reopen the sales order. 2. On the Action Pane, click Post. 3. Click OK to ship and invoice the order.

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Summary Companies can use item substitution to link items with the same or similar characteristics in order to offer substitute items to customers in shortage situations or to propose an alternative item that has a better price. With item cross reference, another company's item number can be used as reference number on documents. This is used as an extra service to the customers to make it easier for them to find the documents. As an additional service to the customers, the nonstock items function can be used to manage the sale of items that are not maintained as part of the normal inventory. This special business purpose can be achieved with the use of drop shipment functionality or the creation of special orders that link the purchase to the sale. These elements all add to the customer's overall perception of the company and serve to strengthen the long term relationship.


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Test Your Knowledge Test your knowledge with the following questions. 1. Without opening the item card, how can you find out if a substitution exists for an item not in stock on a sales order?

2. Which of the following can be set up as item cross-reference types? (Select all that apply) ( ) Vendor ( ) Serial No. ( ) Customer ( ) Bar Code 3. Explain the purpose of using nonstock item processing.

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Chapter 3: Customer Service Features Fill in the blanks to test your knowledge of this section. 4. A vendor __________ can be imported into Microsoft Dynamics NAV from a comma-delimited format file. 5. Drop ___________ of nonstock items are sent directly from the vendor to the customer. 6. _________ orders of nonstock items are sent to a company's warehouse before they are sent to the customer.


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2.

3.

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Solutions Test Your Knowledge 1. Without opening the item card, how can you find out if a substitution exists for an item not in stock on a sales order? MODEL ANSWER: Refer to the Substitution Available field on the sales line. Refer to the Substitutions field in the Sales Line Details FactBox. Refer to the Substitutes Exist field on the stockout warning message. Refer to the Select Item Substitutions function available from the Lines FastTab. 2. Which of the following can be set up as item cross-reference types? (Select all that apply) (√) Vendor ( ) Serial No. (√) Customer (√) Bar Code 3. Explain the purpose of using nonstock item processing. MODEL ANSWER: Nonstock processing enables companies to order, ship, and invoice items that are not usually part of their inventory. Fill in the blanks to test your knowledge of this section. 4. A vendor catalog can be imported into Microsoft Dynamics NAV from a comma-delimited format file. 5. Drop shipments of nonstock items are sent directly from the vendor to the customer. 6.

Special orders of nonstock items are sent to a company's warehouse before they are sent to the customer.


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CHAPTER 4: PURCHASE ORDER MANAGEMENT Objectives The objectives are: •

Review the setup of Purchase Order Management, including vendors, receiving options, vendor posting groups, and purchasers.

•

Explain and process purchase transactions, including quotes, blanket orders, and purchase orders.

•

Review the concept of purchase prices and discounts in relation to item costs.

•

Explain purchase price setup and processing.

•

Explain the setup defining the general rules of how discounts post and review invoice and line discount setup and processing.

•

Explain how to process prepayments on a purchase order.

Introduction Timely purchases made at the best price not only improve the efficiency of the company's inventory management and reduce requisition costs, but also have a direct impact on the company's ability to keep their customers satisfied. Companies must ensure that each purchase transaction is based on the most favorable terms, such as delivery time and price, and that the associated inventory and financial information is registered correctly. Because many aspects of a future purchase agreement with a vendor are negotiated and agreed upon in the pre-purchase stage, it is helpful for purchasing agents to record the relevant agreement details once and reuse this information when making a purchase. The following functionality in Microsoft Dynamics® NAV supports purchase transaction handling: •

Purchase Order Management: This includes documents, such as quotes, blanket orders, and purchase orders that support purchasing agents in efficiently managing purchases. It also provides the facility for: o o o

Partial order receipt Separation between receiving and invoicing Combined invoicing

•

Alternative Order Addresses: This facilitates managing purchase orders for vendors with several alternate shipping addresses.

•

Alternative Vendors: This supports purchase situations where the same item is supplied by several different vendors.


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Salespeople/Purchasers: This enables a company to collect purchase statistics at an individual purchasing agent level.

•

Purchase Line Pricing: This helps maintain and manage alternative purchase prices negotiated and agreed upon with individual vendors.

•

Purchase Invoice and Line Discounting: This helps maintain and manage purchase discounts that are percentage-based, negotiated, and agreed upon with individual vendors.

Purchase Order Management Setup This lesson elaborates on setup options that define the functionality of purchase order management. This shows the most common tasks found in purchase management and focuses on the physical flow of purchase transactions instead of on the financial flow. The latter is addressed in more detail in the "Finance in Microsoft Dynamics® NAV 2009" training materials. The purchase setup consists of the following elements:

Purchases & Payables Setup Based on their established practices, companies must specify how they want the program to support them in managing different aspects of their purchase transactions. These are the general setup options applied to all purchase transactions regardless of which item and vendor are involved.

Vendor Setup Managing vendor information is an important part of managing the total purchases and finances of a company. Basic information (such as name, address, and so on) and details (such as credit limit, invoicing, discount and payment terms, currencies, and list of regularly supplied items) are recorded for each vendor on a vendor card.

Vendor Posting Groups The setup of vendor posting groups defines a connection between a vendor and the accounts in the general ledger. Set them up by assigning a vendor to a posting group for which balance sheet and income statement accounts are then set up.

Demonstration: Review Purchases & Payables Setup Scenario: At CRONUS International Ltd., management has a registration of all the receipts that enter their inventory. In the same manner, they want the program to automatically create a shipment note when they have to return items to the vendor. They also want to make sure that no purchase document can post unless several corresponding external documents are entered. The business requirements listed above have led to the following Purchases & Payables setup for CRONUS.

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Chapter 4: Purchase Order Management Follow these steps to open the Purchases & Payables Setup page: 1. On the navigation pane, click Purchase. 2. On the Purchase page, click Administration and then click Purchases & Payables Setup.

FIGURE 4.1 PURCHASES & PAYABLES SETUP

Setup of the fields on the General FastTab specifies the program's facilities for purchase order management. Selecting the Receipt on Invoice and Return Shipment on Credit Memo check boxes indicates that the company wants to automatically create posted receipt and posted return shipment documents at the time of posting purchase invoices and purchase credit memos respectively. If these check boxes are clear, only posted invoices/credit memos are created. (This setup option is only relevant if, in addition to the Purchase Invoicing functionality, a company also uses the Purchase Order Management and Return Order Management.) Selecting the Receipt on Invoice check box is necessary if item charges are used because they are applied to the receipt. For more information about item charges, refer to "Item Charges" in this training manual. Selecting the Ext. Doc. No. Mandatory check box indicates that users cannot post purchase documents (order, invoice, and a credit memo) as invoiced without an external document number in the Vendor Invoice No. field on a purchase header. Selecting the Exact Cost Reversing Mandatory check box indicates that the company wants the program to automatically align the cost of every item returned to the vendors with the original purchase entry.


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Trade in Microsoft Dynamics® NAV 2009 Refer to online Help for the definition and setup options of the other fields on the General FastTab. In addition, fields determining costing reversing options are described in detail in "Returns Management" in this training material.

Vendors and Receiving Options The vendor card and the type of information and vendor details that can be recorded are explained in other courses and are not repeated here. A situation where a vendor may have alternative sites, in addition to its main business address, from where it delivers items to its customers is not uncommon. For example, companies may have various warehousing and production sites that have addresses different from their main office. Alternative Order Address supports companies when they deal with such vendors. If the company receives orders from different vendor addresses, those addresses can be recorded as alternative order addresses in the program and then chosen by the purchasing agent when making an order/invoice for the vendor in question. Alternative order addresses are entered in the Order Address table, which can contain an unlimited number of addresses for each vendor. A code representing information such as vendor number and name is linked to each address.

Procedure: Review Order Addresses Follow these steps to review the Order Addresses set up on vendor 10000: 1. On the Purchase page, click Order Processing and then click Vendors. 2. Open the vendor card for vendor 10000. 3. On the Related Information menu, point to Vendor and then click Order Addresses. 4. Double-click the second line to see the address details. When this code is selected in the Order Address Code field on orders (invoices and credit memos), this order address information appears on document printouts. 5. Close the order addresses pages.

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Chapter 4: Purchase Order Management Procedure: Review Receiving Fields Follow these steps to review the receiving fields on the vendor card for vendor 10000: 1. On the vendor card for vendor 10000, expand the Receiving FastTab.

FIGURE 4.2 RECEIVING SETUP OPTIONS ON VENDOR 10000

For several reasons, for example to ensure that certain types of items are stored in the same warehouse, companies may use a decentralized location strategy. Such a strategy suggests that shipments from vendors are received in local warehouses instead of in a central one. To reflect these considerations, a company can link certain vendors to specific locations. Do this by specifying a default location in the Location Code field for the individual vendor. More information about the multiple locations setup is in the "Inventory Management In Microsoft Dynamics® NAV 2009" training material. 2. Click the drop-down arrow in the Shipment Method Code field, and then click Advanced to see the entire list of shipment methods.


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Trade in Microsoft Dynamics® NAV 2009 Depending on their profile, industrial practices, and location, vendors may have different agreements regarding who transports orders to customers (vendors themselves, shipping agents, or customers) and according to which terms. The program offers the possibility to record all the different terms of purchase and shipment methods (often based on standard international trade definitions) that can then be associated with each specific vendor. When assigned to a vendor, the shipment method code copies to purchase documents toward that vendor. 3. Close the Shipment Methods page. The two other setup options on the Receiving FastTab affect the way the program calculates different purchase order receipt dates: •

The program uses the value in the Lead Time Calculation field to calculate the order planned and expected receipt dates if no lead time calculation value is set up on the card for the item being purchased or in the item vendor catalog.

•

The two calendar fields relate to the program's facility to calculate various receiving and delivery dates on the purchase documents. These setup options are described in "Order Promising" in this training material.

Procedure: Review Alternative Vendors If a company has more than one vendor supplying the same item, purchasing agents may want these vendor-item combinations registered. To do this, they must create a Vendor Item Catalog that lists items that are purchased regularly from a specific vendor. Follow these steps to review the vendor item catalog for vendor 30000: 1. Open the vendor card for vendor 30000. 2. On the Related Information menu, point to Purchases and then click Items. In addition to specifying items typically purchased from the vendor in question, the vendor item catalog also contains information about the delivery lead time and whether there are any special price and discount agreements with that vendor. The setup and functionality of the latter is described in the "Purchase Prices and Discounts" lesson.

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Chapter 4: Purchase Order Management Vendor Posting Groups The financial value of any purchase transaction must be posted to dedicated accounts in the general ledger. Where companies do not find it possible to establish accounts for each vendor, they can put several vendors into one posting group and then specify accounts for such a group. After the company has decided on criteria for how its vendors can be grouped, it must set up the respective groups in the program in the Vendor Posting Groups page. In this page, the user can assign a code to each identified posting group and specify general ledger accounts for different amount categories, such as: •

Payables

•

Service charges

•

Payment discount amounts

•

Interest

•

Additional fees

Procedure: Review Vendor Posting Groups Follow these steps to review the vendor posting group set up for vendor 10000: 1. On the navigation pane, click Financial Management. 2. On the Financial Management page, click Administration and then click Vendor Posting Groups.

FIGURE 4.3 VENDOR POSTING GROUPS


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Trade in Microsoft Dynamics® NAV 2009 Entering a code in the Vendor Posting Group field on the Invoicing FastTab of a vendor card implies that the vendor is assigned to a specific posting group. 3. Open the vendor card for vendor 10000 and then expand the Invoicing FastTab. 4. Confirm that DOMESTIC has been selected in the Vendor Posting Group field. Each vendor can only be assigned to one vendor posting group. When a purchase transaction (order, invoice, or credit memo) involving this vendor is posted, the program uses the accounts specified for the posting group to which the vendor belongs. NOTE: General business posting groups must also be assigned to vendors. The business group code is used in combination with a general product posting group code in the general posting setup to specify the accounts to which certain transactions are posted. You can learn more about general setup rules in the "Application Setup in Microsoft Dynamics® NAV 2009" training materials. Each vendor posting group can have different general ledger accounts or the same accounts set up for it. An advantage of having different groups that have the same accounts is that it gives accountants flexibility in how they group vendors together for reporting and analysis purposes. For example, a total payables amount can be presented and analyzed for each of two groups representing domestic and foreign vendors.

Purchasers Setup If several purchasing agents work in the same company, they can each be set up and assigned a code. Companies can use the codes to prepare statistics and to filter information in printed reports. To set up purchasing agents in the program, follow the procedure for setting up Sales Representatives explained in the "Set Up Salespeople" topic in "Sales Order Management" in this training material.

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Manage Purchase Transactions Manage Purchase Transactions elaborates on the facilities that support the most common tasks in purchase transaction management. The workflow includes the following steps: •

Registering a purchase quote or blanket agreement with a vendor.

•

Converting the agreement into a purchase order.

•

Receiving and invoicing the purchase order.

This lesson takes you through a workflow, from making a quote/blanket order to reviewing the posted order.

Purchase Quotes A purchase quote can be described as a "draft order" in which purchasing agents can register the vendor's offer specifying: •

Price

•

Terms of sale

•

Description of items

If the offer matches the purchasing agent's requirements and they want to buy the items on the quote, they can convert it into an order. Similarly, when items on stock need replenishment, inventory managers can send a request to the purchasing department, who create a quote (which is later submitted to a vendor as a purchase order).

Procedure: Create and Convert a Purchase Quote Follow these steps to create a purchase quote: 1. On the Purchase page, click Order Processing and then click Purchase Quotes. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter the vendor number. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter the number of the item to be quoted. 6. In the Quantity field, type the number of items to appear on the quote. Follow these steps to convert the quote to a purchase order: 1. Update the purchase quote as needed. 2. On the Action Pane, click Make Order. 3. Click Yes to convert the quote to an order.


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Trade in Microsoft Dynamics® NAV 2009 Blanket Purchase Orders A blanket purchase order represents a framework for an agreement between you and your vendor. Use blanket orders when you have committed to buying large quantities of an item that you will receive in several smaller shipments over a certain period of time. Often blanket orders cover only one item with predetermined delivery dates. On the blanket order, you can set up each separate receipt as an order line, which you can then convert into a purchase order at the time of ordering. An example of when a Blanket Purchase Order could be used is when you have a standing order with your vendor to purchase 100 units of an item every month for a year.

Demonstration: Create a Purchase Blanket Order Scenario: Alicia, the purchasing agent at CRONUS, places an order with vendor 10000 for 1000 units of item 70000, to be delivered in 250 units every week over the next month. Follow these steps to create a blanket order for vendor 10000: 1. On the Purchase page, click Order Processing and then click Purchase Blanket Orders. 2. Click New and then press ENTER to assign a number. 3. In the Buy-from Vendor No. field, enter 10000. 4. Leave the Order Date field blank. When the separate purchase orders are created from the blanket order, the program will set the order date of the purchase order equal to the actual work date. The Purchaser Code field on the General FastTab contains the default code for the purchaser assigned to vendor 10000. This code, and the other vendor details, are retrieved from the vendor card. Follow these steps to create four lines of 250 units of item 70000: 1. Use the Choose Columns feature to add the Expected Receipt Date field to the Lines FastTab. 2. On the Lines FastTab, in the Type field, select Item. 3. In the No. field, enter 70000. 4. In the Quantity field, type 250. 5. In the Expected Receipt Date field for each line, enter the receipt dates of 02/01/10, 02/08/10, 02/15/10, and 02/22/10, respectively. 6. Repeat steps 3-5 to create a total of four order lines.

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Chapter 4: Purchase Order Management The Qty. to Receive field is automatically filled in by the program to indicate the quantity that the purchase orders are to be created for on the respective receipt dates. 7. In the Qty. to Receive field, leave the quantity of 250 for the first line and delete the quantity to receive in the three other lines.

FIGURE 4.4 COMPLETED BLANKET PURCHASE ORDER

Follow these steps to convert the blanket order into a purchase order: 1. On the Action Pane, click Make Order. 2. Click Yes to create an order. 3. Click OK to close the message stating that the blanket order has been assigned an order number. Note that the blanket order has not been deleted. The program retains the link between the blanket order and the purchase order, enabling the purchasing agent to view unposted and posted purchase order (invoice) lines. Follow these steps to open and modify the purchase order: 1. Click the first line on the blanket order. 2. On the Lines FastTab, click Actions, point to Line, then to Unposted Lines, and then click Orders. 3. On the Purchase Lines page, click Show Document.


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Trade in Microsoft Dynamics® NAV 2009 The purchase order contains all the lines from the blanket order. The lines where you deleted the quantity in the Qty. to Receive field appear, but with blank quantity fields. The purchase order line quantity must not exceed the quantity of the associated blanket order line. Otherwise, posting of the purchase order will be impossible. 4. Delete the last three lines in the purchase order. The blanket order number and line number are recorded as properties of the purchase lines when created from a blanket order. Follow these steps to review the link to the blanket order: 1. Add the Blanket Order No. and the Blanket Order Line No. to the Lines FastTab using the Choose Columns function. 2. On the Purchase Lines page, click Show Document. 3. Review the Blanket Order No. and the Blanket Order Line No. fields, noting the corresponding references. NOTE: When purchase orders are not created directly from the blanket order but still relate to it, you can establish a link between a purchase order and a blanket order by entering the associated blanket order number in the Blanket Order No. field on the purchase order line. When the purchase order is posted as received and/or invoiced, the Quantity Received and Quantity Invoiced fields update on the related blanket order. Once the purchase order(s) has been created for the total quantity of a blanket order line, the program ensures that no other purchase order(s) is created for the same line by preventing users from entering a quantity in the Qty. to Receive field.

Purchase Orders The purchase order is a cornerstone of purchase management functionality in Microsoft Dynamics NAV. In parallel with sales orders, the program supports the purchasing agents in their task of: •

Processing a purchase transaction by automatically copying the default setup information to the order header and lines

•

Performing necessary calculations

•

Ensuring a correct update of the company's financial records

Most of the properties of the purchase order (such as delivery details, location, quantity, unit of measure, and so on) are identical to those on the sales order. Therefore, only the features distinctive to the purchase order processing tasks are addressed in the "Set Up the Purchase Order for Receiving" demonstration.

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Chapter 4: Purchase Order Management Planning Flexibility By selecting a certain value in the Planning Flexibility field on the purchase order line (use the Choose Columns feature to make the field visible), the purchasing agent defines if the order in question is included in the program's planning calculations. The value must be set to None, if the purchasing agent does not want the program to alter either the receipt date or the quantity of the ordered items. If the purchase order was created because of the requisition planning (and must remain available for possible changes), the Planning Flexibility field is set to Unlimited. This makes it possible to change or move the order date and adjust the quantity as long as the order has not been posted. The default selection is Unlimited. Learn more about purchases planning and managing in "Requisition Management" in this training material.

Posting Orders The purchase order posting principles are identical to those applied to sales orders (described in "Sales Order Management" in this training material). The key points in purchasing are summarized in the following list: •

The posting function consists of two parts: receipt (quantity change) and invoice (value change) posting.

•

The Qty. to Receive and the Qty. to Invoice fields on a purchase order represent the quantities referring to the posting function.

•

Orders can be partially received/invoiced.

•

When you post an invoice, the two parts occur at the same time, without an option to separate them in time.

•

You can post an order by registering the order receipt first, while the order invoicing can occur later.

•

Related to the previous point are the facilities to: o o

Combine several receipts in one invoice. Undo a quantity record for a posted but not invoiced receipt.

Demonstration: Update the Purchase Order This demonstration is a continuation of the "Create a Purchase Blanket Order" demonstration. Scenario: Alicia is processing the purchase order created from the blanket order for 250 units of item 70000. She has discovered that vendor 10000 has a warehouse close to CRONUS. Because this is not the location from where they usually ship their orders, Alicia has agreed with the vendor to ship the items from the alternative location. She also checks the item vendor catalog to ensure this is her best option for these items.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to update the purchase order: 1. On the Purchase page, click Order Processing and then click Purchase Orders. 2. Locate the purchase order to vendor 10000 created in the "Create a Purchase Blanket Order" demonstration. 3. On the General FastTab, in the Order Address Code field, enter HOPE. The program updates the buy-from address details. If the company has more than one vendor supplying the same item, the purchasing agent may want to check if this is the case when creating and processing an order for specific items. Follow these steps to preview the Item Vendor Catalog for item 70000 from the purchase order line: 1. In the No. field for item 70000, click the drop-down arrow and then click Advanced. 2. In the Item List, click the Related Information menu, point to Purchases and then click Vendors. The Item Vendor Catalog shows that vendor 30000 is also a supplier of this item. In addition to specifying vendors, the item vendor catalog also contains information about whether any special price and discount agreements exist with the vendor. Access this by clicking the Related Information menu and pointing to Item Vendor and then select the relevant pricing information to view. 3. Escape back to the purchase order.

Demonstration: Receive the Purchase Order This demonstration is a continuation of the "Update the Purchase Order" demonstration. Scenario: Vendor 10000 delivers 200 units of 70000 on 01/29/10. John, the warehouse worker at CRONUS, posts the partial receipt in the program. On 02/01/10, the remaining 50 are received so John posts the receipt in the program. Follow these steps to receive the partial shipment from vendor 10000: 1. Open the purchase order updated in the "Update a Purchase Order" demonstration. 2. In the Posting Date field, enter 01/29/10. 3. In the Qty. to Receive field, type 200. 4. On the Action Pane, click Post. 5. Click Receive and then click OK.

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Chapter 4: Purchase Order Management A posted purchase receipt is created and the purchase line is updated as follows: •

Qty. to Receive field shows the unreceived quantity of 50

•

Quantity Received field shows the received quantity of 200

•

Qty. to Invoice field shows the uninvoiced quantity of 250

•

Quantity Invoiced field is empty because no invoicing has occurred

The remaining shipment has been received from vendor 10000. Follow these steps to receive the shipment: 1. 2. 3. 4.

In the Posting Date field, enter 02/01/10. Confirm that the Qty. to Receive field is set to 50. On the Action Pane, click Post. Click Receive and then click OK.

A posted purchase receipt is created and the purchase line is updated as follows: •

Qty. to Receive field is empty because all item have been received

•

Quantity Received field shows the received quantity of 250

•

Qty. to Invoice field shows the uninvoiced quantity of 250

•

Quantity Invoiced field is empty because no invoicing has occurred

Follow these steps to view the posted purchase receipts: 1. On the Related Information menu, point to Order and then click Receipts. 2. Select the first posted receipt and on the Actions menu, click View. 3. Note that the Quantity field matches the first receipt and the Quantity Invoiced field is blank. The Quantity Invoiced field updates when the order is invoiced. 4. Close the receipt and then review the second posted receipt. 5. Escape back to the purchase order.

Demonstration: Invoice the Purchase Order and Review the Posted Documents This demonstration is a continuation of the "Receive the Purchase Order" demonstration. Scenario: Alicia receives and approves vendor invoice number 77321 and forwards it to Cassie, the accountant, who then invoices the order after she matches the order total to the invoice total.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to confirm the totals and then invoice the order: 1. In the Vendor Invoice No. field, type 77321. 2. On the Action Pane, click Statistics to confirm the order total matches the invoice. 3. Click OK to close the Purchase Order Statistics page. 4. On the Action Pane, click Post.

FIGURE 4.5 FULLY RECEIVED PURCHASE ORDER READY FOR INVOICING

5. Click OK to post the order. The order is deleted, the linked blanket order line is updated, and a posted purchase invoice is created. Follow these steps to view the updated blanket order: 1. Open the Blanket Purchase Order created in the "Create a Purchase Blanket Order" demonstration. 2. Review the Quantity Received and Quantity Invoiced fields on the first line of the blanket order. Note that both show the full quantity received and invoiced. 3. Click OK to close the blanket order.

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Chapter 4: Purchase Order Management Follow these steps to view the posted purchase invoice and receipts: 1. On the Purchase page, click History and then click Posted Purchase Invoices. 2. Open the invoice posted to vendor 10000 for 250 units of item 70000 and review the lines. 3. Close the posted purchase invoice. 4. On the History page, click Posted Purchase Receipts. 5. Re-open the posted purchase receipts and confirm that the Quantity Invoiced fields are updated. NOTE: For more information about other purchase management tasks, refer to the relevant topic in the online Help. To learn more about payables functionality, refer to the "Finance in Microsoft Dynamics® NAV 2009" training material.


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Lab 4.1 - Process a Purchase Quote to an Order Scenario CRONUS is interested in purchasing 100 units of items 70010 and 70011, respectively. As the purchasing agent, you contact vendors 10000 and 30000 for quotes to find the best offer. Considering the quantity to be purchased, the prices are as follows: •

Vendor 10000 o o

•

Item 70010: quantity 100-500 at 24.00 LCY per unit Item 70011: quantity 100-500 at 35.00 LCY per unit

Vendor 30000 o o

Item 70010: quantity 100-1000 at 26.00 LCY per unit Item 70011: quantity 100-1000 at 34.00 LCY per unit

You create a purchase quote for each of the vendors so the offers are registered and the total purchase prices can be compared. From the total amount, it is clear that vendor 10000 gives the best offer. You convert the quote for vendor 10000 into a purchase order. You receive all the items on 02/01/10, along with vendor invoice number 81449. Receive and invoice the purchase order simultaneously. You do not need to review posted documents.

Challenge Yourself! 1. Create the purchase quotes to vendors 10000 and 30000. 2. Convert the quote to vendor 10000 into an order. 3. Post the order.

Need a Little Help? 1. Create the purchase quotes to vendors 10000 and 30000 for 100 units each of items 70010 and 70011, respectively. 2. Convert the quote to vendor 10000 to an order. 3. Open the purchase order to vendor 10000. 4. Update the posting date and enter the vendor invoice number. 5. Review the order statistics to compare to the invoice total. 6. Receive and invoice the order.

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Chapter 4: Purchase Order Management Step by Step Follow these steps to create the purchase quotes: 1. On the Purchase page, click Order Processing and then click Purchase Quotes. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 10000. 4. Leave the Order Date field blank. 5. On the Lines FastTab, in the Type field, select Item. 6. In the No. field, enter 70010. 7. In the Quantity field, type 100. 8. In the Direct Unit Cost Excl. VAT field, type 24. 9. On the next line, in the No. field, enter 70011. 10. In the Quantity field, type 100. 11. In the Direct Unit Cost Excl. VAT field, type 35. 12. On the Action Pane, click Statistics and review the Purchase (LCY) amount. 13. Close the Purchase Quote Statistics page. 14. Click the drop-down arrow on the OK button and then click OK & New. 15. Press ENTER or TAB. 16. Repeat steps 3-13 for vendor 30000 using the quoted amounts. 17. Click OK to close the Purchase Quote page. Follow these steps to convert the quote to a purchase order: 1. 2. 3. 4.

Open the purchase quote to vendor 10000. On the Action Pane, click Make Order. Click Yes to convert the quote to an order. Click OK to close the message stating that the quote has been assigned an order number.

Follow these steps to receive and invoice the purchase order: 1. 2. 3. 4. 5. 6. 7. 8.

Open the purchase order created from the quote. In the Posting Date field, enter 02/01/10. In the Vendor Invoice No. field, type 81449. On the Action Pane, click Statistics to confirm the order total matches the invoice. Click OK to close the Purchase Order Statistics page. Confirm that the Qty. to Receive field on each line is set to 100. On the Action Pane, click Post. Click OK to receive and invoice the order.


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Purchase Prices and Discounts Companies have the possibility to specify cost information for each item on the item card, and are given a functionality that facilitates the task of purchase price management. The program automatically retrieves information about the last direct cost stored on an item card to copy it to the purchase order line for the item in question. This direct cost information is the same in all purchase situations regardless of whether individual price and discount agreements exist between the company and its vendor. These agreements and policies can be based on several conditions, such as: •

Item variant and quantity bought

•

Currency paid

•

Order date

Maintaining alternative purchase prices and discounts can be challenging for the company's purchasing department. Without suitable price management tools, price agreements and information about special sales are stored in private folders, spread sheets, and so on. This frequently creates problems because discount/special pricing opportunities are missed or not taken advantage of. The Purchase Line Pricing and Purchase Line Discounting offer a pricing functionality beyond the standard item card. The functionality is described in this lesson, which is divided into two parts: •

Purchase Prices

•

Invoice and Line Discounts

Purchase Prices Apart from the default purchase price that calculates by multiplying the item's unit price with the order quantity, alternative purchase prices will be granted if a combination of vendor, item, minimum quantity, unit of measure, starting/ending date is set up as a criteria for a certain purchase price.

Procedure: Review Purchase Prices To record purchase prices that the purchasing agents have agreed upon with their vendor/group of vendors, they must use the Purchase Prices page. Access the Purchase Prices page from either the vendor card or item card. Follow these steps to review purchase prices for vendor 30000: 1. On the Purchase page, click Order Processing and then click Vendors.

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Chapter 4: Purchase Order Management 2. Open the vendor card for vendor 30000. 3. On the Related Information menu, point to Purchases and then click Prices.

FIGURE 4.6 PURCHASE PRICES SET UP FOR VENDOR 30000

Here a purchasing agent can specify the conditions that must be met before a vendor offers a unit price for an item. For example, the conditions can require that a purchase is made within a certain period. A special purchase price can also depend on the following: •

Unit of measure

•

Item variant

•

Minimum quantity

•

Currency

The following demonstration illustrates a situation where a company must set up individual prices based on a price agreement reached with one of its vendors about some selected items.

Demonstration: Set Up Purchase Prices Based on Price Agreement Scenario: Purchases from vendor 40000 have been increasing lately. Until now, CRONUS has made purchases that have been based on vendor 40000's standard price rates. Now they want to purchase items at more favorable prices. Based on an agreement with vendor 40000 that takes effect on 02/01/10, CRONUS can save 50 LCY for any purchase of item 1976-W if the quantity is at least 15 units. The current cost for each unit of item 1976-W is 150.60 LCY. Inga, the purchasing manager, must set up this price agreement in the program.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to set up the purchase prices for vendor 40000: 1. On the Purchase page, click Order Processing and then click Vendors. 2. Open the vendor card for vendor 40000. 3. On the Related Information menu, point to Purchases and then click Prices. 4. In the Item No. field, enter 1976-W. 5. In the Minimum Quantity field, type 15. 6. In the Direct Unit Cost field, type 100.60, which is the reduced price. 7. In the Starting Date field, enter 02/01/10. 8. Click OK to close the Purchase Prices page. 9. Do not close the vendor card. At this point, Inga does not need to enter an ending date as a condition in the price agreement with the vendor. If an agreement is re-negotiated at a later date, Inga can enter a new purchase price line with a new starting date. This then takes over the previous agreement.

Demonstration: Create a Purchase Order with Purchase Prices Scenario: Alicia, the purchasing agent, places an order for eight units of 1976-W from vendor 40000 on 01/28/10. The vendor's representative reminds Alicia that the new price agreement goes into effect on 02/01/10 and asks if she wants to wait until that date and also order 15 units instead. Alicia agrees and changes the order date to 02/01/10 and the quantity to 15. Follow these steps to create the purchase order: 1. 2. 3. 4. 5.

On the Action Pane of the vendor card, click Purchase Order. Press ENTER or TAB. On the Lines FastTab, in the Type field, select Item. In the No. field, enter 1976-W. In the Quantity field, type 8.

The current Direct Unit Cost Excl. VAT is 150.60 LCY. 6. In the Order Date field, enter 02/01/10. 7. Click OK to close the message. 8. In the Quantity field, type 15 and then press ENTER or TAB. The current Direct Unit Cost Excl. VAT is changed to 100.60 LCY to apply the purchase agreement.

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Chapter 4: Purchase Order Management Pricing Functionality The purpose of setting up alternative prices in the program is to support the purchasing agents in their task of always buying at the best prices. The best price is defined as the lowest possible price with the highest possible line discount on the order date. When a purchasing agent creates an order from a specific vendor, the program checks whether: •

Alternative purchase prices are set up for the vendor.

•

The purchase header and line details meet the conditions for applying an alternative price.

If all the conditions are met, the applicable price from the Purchase Prices page copies to the Direct Unit Cost (Excl./Incl. VAT) field on the purchase line. If no alternative purchase prices are recorded in the program or the conditions for applying an alternative price are not satisfied, the program uses the regular unit cost specified on the item card as a suggestion on the purchase document.


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Lab 4.2 - Manage Alternative Purchase Prices Scenario On 01/28/10, CRONUS enters into a purchase agreement with vendor 10000 on items 1900-S and 1920-S according to the following conditions: •

For item 1900-S, if CRONUS buys this item in pallets (that contain ten pieces) instead of pieces, 10.00 LCY can be taken off the regular price of 92.62.

•

For item 1920-S, when CRONUS buys this item and pays in local currency (EUR), 15.00 LCY can be taken off the item's regular price of 311.60.

As the purchasing agent, you need to set up these purchase agreements. On 01/28/10, you create a purchase order to vendor 10000 for two pallets of item 1900-S and five units of item 1920-S. Confirm that the purchase prices appear correctly and then post the order as received and invoiced with vendor invoice number 41001. HINT: Add the PALLET unit of measure that contains ten pieces to item 1900S's units of measure list when you set up the line in the Purchase Prices page, and add the Currency Code field for set up of item 1920-S.

Challenge Yourself! 1. Enter the purchase agreement for items 1900-S and 1920-S on vendor 10000. 2. Create the purchase order to vendor 10000 for two pallets of item 1900-S and confirm the discounted direct unit cost is used. 3. Add the line for five pieces of item 1920-S and assign the proper currency to ensure the discounted direct unit cost is used. 4. Post the purchase order.

Need a Little Help? 1. Open the vendor card for vendor 10000 and enter the purchase agreement for item 1900-S. 2. Add the PALLET unit of measure by clicking New from the Unit of Measure Code field. 3. Add the Currency Code field using the Choose Columns feature. 4. Add the purchase agreement for item 1920-S. 5. Create the purchase order to vendor 10000. 6. Add the line for two pallets of item 1900-S and confirm that the discounted direct unit cost is used.

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Chapter 4: Purchase Order Management 7. Add the line for five pieces of item 1920-S and confirm that the regular direct unit cost is used. 8. Assign the EUR currency to the order and then confirm that the discounted direct unit cost is used. 9. Add the vendor invoice number and then receive and invoice the order in one step.

Step by Step Follow these steps to set up the purchase prices for vendor 10000: 1. On the Purchase page, click Order Processing and then click Vendors. 2. Open the vendor card for vendor 10000. 3. On the Related Information menu, point to Purchases and then click Prices. 4. In the Item No. field, enter 1900-S. 5. In the Unit of Measure Code field, click the drop-down arrow and then click New. 6. In the Code field, enter PALLET and in the Qty. per Unit of Measure field, type 10. 7. With the line for PALLET selected, click OK to close the Item Units of Measure page. 8. In the Direct Unit Cost field, type 82.62 9. In the Starting Date field, enter 01/28/10. 10. Add the Currency Code field using the Choose Columns feature. 11. On the next line, in the Item No. field, enter 1920-S. 12. In the Unit of Measure field, enter PCS. 13. In the Direct Unit Cost field, type 296.60. 14. In the Starting Date field, enter 01/28/10. 15. In the Currency Code field, enter EUR. 16. Click OK to close the Purchase Prices page. 17. Do not close the vendor card. Follow these steps to process the purchase order: 1. 2. 3. 4. 5. 6. 7.

On the Action Pane of the vendor card, click Purchase Order. Press ENTER or TAB. On the Lines FastTab, in the Type field, select Item. In the No. field, enter 1900-S. In the Quantity field, type 2. In the Unit of Measure Code field, enter PALLET. Verify that the Direct Unit Cost Excl. VAT field is 82.62, which is the discounted price. 8. On the next line, in the No. field, enter 1920-S.


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Trade in Microsoft Dynamics® NAV 2009 9. In the Quantity field, type 5. 10. Verify that the Direct Unit Cost Excl. VAT field is 328.00, which is the regular item price. 11. Expand the Foreign Trade FastTab. 12. In the Currency Code field, enter EUR and then press ENTER or TAB. 13. Click Yes to change the currency code. 14. Verify that the Direct Unit Cost Excl. VAT field is now 296.60, which is the discounted price. 15. In the Vendor Invoice No. field, type 41001. 16. On the Action Pane, click Post. 17. Click OK to receive and invoice the order.

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Invoice and Line Discounts There are several ways to reflect the agreed discounts that will apply when you buy goods from different vendors. The most basic type of discount is a percentage discount, which is granted when the value amount of all lines on a purchase document exceeds a certain minimum. This is called a vendor invoice discount. There is also a purchase line discount. This type of discount is more advanced in that the discount percent calculates for each purchase line in a document if the line meets certain criteria within a combination of item, vendor, minimum quantity, unit of measure, and starting/ending date.

General Discount Setup General discount setup information is specified in the Purchases & Payables Setup page. Before using the discount functionality, a company must decide how to post discount amounts. The Discount Posting field on the General FastTab offers four options for defining the way the line discounts are to be posted to the general ledger: •

No Discounts

•

Invoice Discounts

•

Line Discounts

•

All Discounts

In principle, when the user makes a selection in this field, he or she can specify the type of purchase discounts to post to the general ledger (if any) and whether they post together or separately. For a detailed definition of each option, refer to the online Help for the field. If the option determining that a specific line discount posts separately is selected, the user must ensure that: •

A dedicated account(s) is created in the chart of accounts (for example, a Purchase Line Discount account).

•

The separate line discount option is set up in the General Posting Setup page.

When posting purchase documents, the program uses the general business posting group of the vendor and the general product posting group of the item to retrieve the account set up in the General Posting Setup page. If discounts are not set up to post separately, they become part of a purchase amount posted to the Purchase account.


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Trade in Microsoft Dynamics® NAV 2009 Procedure: Review Invoice Discount Setup Purchasing agents must use the Vend. Invoice Discounts page to set up conditions for invoice discounts and service charges for the vendor. Follow these steps to review purchase invoice discounts for vendor 20000: 1. On the Purchase page, click Order Processing and then click Vendors. 2. Open the vendor card for vendor 20000. 3. On the Related Information menu, point to Purchases and then click Invoice Discounts.

FIGURE 4.7 PURCHASE INVOICE DISCOUNT SET UP FOR VENDOR 20000

The program uses the invoice discount terms defined in the Vend. Invoice Discounts page to calculate the invoice discount. The program uses the currency code on the purchase document to find the invoice discount terms in the corresponding currency. If invoice discounts have not been defined for foreign currencies, the program uses the invoice discount terms in LCY defined in the Vend. Invoice Discounts page and the exchange rate as of the posting date on the purchase document to calculate the invoice discount in foreign currency.

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Chapter 4: Purchase Order Management Demonstration: Create a Purchase Order with Invoice Discounts When all the items have been entered on the purchase lines, purchasing agents can calculate the invoice discount for the entire purchase document using the Calculate Invoice Discount function. The discount will be apportioned over all the lines in the purchase document for items where the Allow Invoice Disc. check box on the purchase line is selected. Scenario: CRONUS receives a ten percent discount on invoice totals from vendor 20000. Alicia creates an order to vendor 20000 for 20 units of item 1928W and 10 units of item 1928-S. She runs the Calculate Invoice Discount function prior to posting the order so that she can review the discount on each line. NOTE: If the Calc. Inv. Discount check box is selected in Purchases & Payables Setup, then the invoice discount will automatically calculate when you open the document's statistics, open the Test Report, print the document, or post the document. Follow these steps to create the purchase order and calculate the invoice discount: 1. On the Purchase page, click Order Processing and then click Purchase Orders. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 20000. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter 1928-W. 6. In the Quantity field, type 20. 7. On the next line, in the No. field, enter 1928-S. 8. In the Quantity field, type 10. The total order amount shown in the Line Amount Excl. VAT for the first line is 3840.00 LCY and 278.00 LCY for the second line. 9. Add the Inv. Discount Amount field to the lines using the Choose Columns feature. 10. On the Actions menu, point to Functions and then click Calculate Invoice Discount. 11. Click Yes to calculate the discount. The Inv. Discount Amount field displays the invoice discount of 384.00 LCY on the first line and 27.80 LCY on the second line, which is ten percent of the total amount for each line.


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Trade in Microsoft Dynamics® NAV 2009 Procedure: Review Line Discount Setup Purchasing agents must use the Purchase Line Discounts page to record price discounts they have agreed upon with different vendors. The table is accessible from both the vendor card and the item card. The Purchase Line Discounts page enables a purchasing agent to specify the prerequisite conditions before a vendor offers a discount price. For example, the conditions can require that the purchasing agent buy a certain quantity or a purchase is invoiced in a specified currency before a discount can be granted. Similar to alternative purchase prices, line discounts apply to a vendor. Follow these steps to review purchase line discounts for vendor 20000: 1. On the Purchase page, click Order Processing and then click Vendors. 2. Open the vendor card for vendor 20000. 3. On the Related Information menu, point to Purchases and then click Line Discounts.

FIGURE 4.8 PURCHASE LINE DISCOUNTS SET UP FOR VENDOR 20000

Demonstration: Create a Purchase Order with Line Discounts Scenario: Alicia orders 40 units of item 1924-W from vendor 20000. She notices that there is a three percent discount on the line. She opens the line discounts for this vendor-item combination to find out if other discounts are available.

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Chapter 4: Purchase Order Management Follow these steps to create the purchase order: 1. On the Purchase page, click Order Processing and then click Purchase Orders. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 20000. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter 1924-W. 6. In the Quantity field, type 40. The current Line Discount % indicates that there is a three-percent discount. 7. On the Lines FastTab, click the drop-down arrow in the No. field and then click Advanced to open the item list. 8. On the Related Information menu, point to Purchases and then click Line Discounts. Alicia sees that there is a four-percent discount available in this item-vendor combination if 50 units are purchased. 9. Escape back to the purchase order. 10. In the Quantity field, type 50 and then press ENTER or TAB. The current Line Discount % indicates that there is a four-percent discount.

Line Discount Functionality The purpose of setting up a line discount in the program is to support the purchasing agents in their task of purchasing items at the best prices. After the line discounts and the associated terms have been set up, when an order/invoice is created for a specific vendor, the program checks whether: •

Line discounts are set up for the vendor in question.

•

The purchase header and line details meet the conditions for applying a discount price.

If these conditions are met, the program copies the discount percentage from the Purchase Line Discounts page to the Line Discount % field on the purchase line and enters the calculated discount price in the Direct Unit Cost Excl./Incl. VAT field. If no discounts are recorded in the program or the conditions for applying a discount are not satisfied, the program uses the last direct cost specified on the item card as a suggestion on the purchase document (unless a special purchase price is set up for the customer). Setup and use of the purchase line discount is similar to the setup and use of purchase prices.


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Lab 4.3 - Manage Purchase Line Discounts Scenario As the purchasing agent at CRONUS, you made an agreement with vendor 30000 that for items 70100 and 70101 purchased after 01/25/10, CRONUS receives the following discounts: •

1-99 items: 10%

•

100-499 items: 15%

•

500 or more items: 25%

On 01/28/10, you create a purchase order to vendor 30000 for 250 units of item 70100 and 600 units of item 70101. Confirm that the line discounts appear correctly and then post the order as received and invoiced with vendor invoice number 42002. HINT: Enter the starting date in the Starting Date Filter field to automatically add the date to all the lines.

Challenge Yourself! 1. Enter the purchase agreement for items 70100 and 70101 on vendor 30000. 2. Create the purchase order to vendor 30000 for 250 units of item 70100 and 600 units of 70101 and confirm that the correct discount percents are used for these quantities. 3. Post the purchase order.

Need a Little Help? 1. Open the vendor card for vendor 30000 and open the Purchase Line Discounts page. 2. Enter the purchase agreement starting date in the Starting Date Filter field. 3. Enter the following lines for item 70100: a. Minimum quantity = 1, discount = 10 b. Minimum quantity = 100, discount = 15 c. Minimum quantity = 500, discount = 25 4. Enter the following lines for item 70101: a. Minimum quantity = 1, discount = 10 b. Minimum quantity = 100, discount = 15 c. Minimum quantity = 500, discount = 25

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Chapter 4: Purchase Order Management 5. Create the purchase order to vendor 30000. 6. Add the line for 250 units of item 70100 and confirm that the correct discount percent is used for this quantity. 7. Add the line for 600 units of item 70101 and confirm that the correct discount percent is used for this quantity. 8. Add the vendor invoice number and then receive and invoice the order in one step.

Step by Step Follow these steps to set up the purchase line discounts for vendor 30000: 1. On the Purchase page, click Order Processing and then click Vendors. 2. Open the vendor card for vendor 30000. 3. On the Related Information menu, point to Purchases and then click Line Discounts. 4. In the Starting Date Filter field, enter 01/25/10 to add this date to each line automatically. 5. Fill in the line discounts to vendor 30000 as shown in the following table. Item No.

Minimum Quantity

Line Discount %

70100

1

10

70100

100

15

70100

500

25

70101

1

10

70101

100

15

70101

500

25

6. Click OK to close the Purchase Line Discounts page. 7. Do not close the vendor card. Follow these steps to process the purchase order: 1. 2. 3. 4. 5. 6.

On the Action Pane of the vendor card, click Purchase Order. Press ENTER or TAB. On the Lines FastTab, in the Type field, select Item. In the No. field, enter 70100. In the Quantity field, type 250. Verify that the Line Discount % field shows 15, which is the discount for quantities between 100-499 units.


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Trade in Microsoft Dynamics® NAV 2009 7. On the next line, in the No. field, enter 70101. 8. In the Quantity field, type 600. 9. Verify that the Line Discount % field shows 25, which is the discount for quantities over 500 units. 10. In the Vendor Invoice No. field, type 42002. 11. On the Action Pane, click Post. 12. Click OK to receive and invoice the order.

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Vendor Prepayments Prepayments enable a company to document and process prepayments that are required by vendors. If a vendor requires prepayment when certain criteria on a purchase invoice or line are met, percentages can be specified on vendors and/or each combination of item and vendor can be set up so that the rule automatically applies when the purchase documents are created.

Prepayment Setup Prepayment functionality requires that special general ledger accounts, posting groups, payment terms, and number series are set up for this purpose. In addition, the prepayment percentages for selected vendors in combination with special items must be defined. Refer to the "Finance in Microsoft Dynamics® NAV 2009" training material for information about setting up prepayments.

Prepayment Process Flow Prepayment invoices are created from a purchase order, using the prepayment invoice option. The prepayment amount on the order calculates based on the prepayment percentage populated from item or vendor cards. Users can edit the prepayment percentage or amount. Instead of using a percentage, users can define a specific amount for the entire purchase order. Prepayment amounts are set on the Prepayment FastTab on the Purchase Order Statistics page. For prepayment purchase orders, the following steps list the typical process flow: 1. 2. 3. 4. 5. 6.

Create a purchase order with a prepayment requirement. Post a prepayment invoice for the prepayment amount. Send the prepayment amount to the vendor. Apply the prepayment amount to the purchase order. Receive the order from the vendor. Create a purchase invoice for the total amount of the purchase order minus the prepayment amount. 7. Send the payment to the vendor and post the payment to the purchase order.


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Trade in Microsoft Dynamics® NAV 2009 Demonstration: Create a Purchase Order with a Prepayment Percentage Scenario: Vendor 44127904 is now requiring a five-percent prepayment on all orders. Alicia is currently in the process of creating a purchase order to the vendor for 100 units of item 1924-W. She confirms the prepayment requirement with Inga, the purchasing manager, and quickly adds the percentage to the order. Inga will complete the set up on the vendor card shortly. Follow these steps to assign an overall prepayment percentage on a purchase order: 1. On the Purchase page, click Order Processing and then click Purchase Orders. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 44127904. 4. Add the Prepayment % and Prepmt. Line Amount Excl. VAT to the lines using the Choose Columns feature. 5. On the Lines FastTab, in the Type field, select Item. 6. In the No. field, enter 1924-W. 7. In the Quantity field, type 100. 8. Expand the Prepayment FastTab. 9. In the Prepayment % field, type 5 and then press ENTER or TAB. 10. Click OK to update the lines. The Prepayment % and Prepmt. Line Amount Excl. VAT fields reflect the prepayment percentage and amount. 11. Close the purchase order. Follow these steps to set up the prepayment percent on the vendor card: 1. 2. 3. 4.

Open the vendor card for vendor 44127904. Expand the Invoicing FastTab. In the Prepayment % field, type 5. Click OK to close the vendor card.

Demonstration: Create a Purchase Order with a Prepayment Amount Scenario: Vendor 44127904 requires a prepayment amount of 1000.00 LCY on all orders over 15,000.00 LCY, if the 1000.00 LCY amount has not been met by the five-percent requirement. Alicia creates an order to vendor 44127904 for 15 units of item 1996-S and ten units of 1992-W and must add the prepayment amount to the order because the total order is over 15,000.00 LCY and the prepayment amounts do not reach 1000.00 LCY.

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Chapter 4: Purchase Order Management Follow these steps to assign an overall prepayment amount on a purchase order: 1. On the Purchase page, click Order Processing and then click Purchase Orders. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 44127904. 4. On the Lines FastTab, in the Type field, select Item. 5. In the No. field, enter 1996-S. 6. In the Quantity field, type 15. 7. On the next line, in the No. field, enter 1992-W. 8. In the Quantity field, type 10. 9. On the Action Pane, click Statistics. 10. Expand the Prepayment FastTab. 11. In the Prepmt. Amount Excl. VAT field, type 1000 and then press ENTER or TAB. 12. Click OK to update the lines. The Prepayment % and Prepmt. Line Amount Excl. VAT fields reflect the updated prepayment percentage and amount. NOTE: Refer to the "Finance in Microsoft Dynamics® NAV 2009" training material for more information about processing prepayments.

Summary Purchase Order Management can involve many different tasks, depending on the work flow and the method of supply the business partners agreed upon. Once purchase processes are configured, users are ready to manage business decisions and transactions that bring goods to the company's internal supply chain. Microsoft Dynamics NAV allows users to keep track of all purchases from the time a quote is created to the time the final order is received. Purchase Order Management functionality helps companies receive purchased items in time, maintain a good relationship with vendors, and achieve the best possible prices. This has a direct effect on the customer service a company provides to its own customers. Purchase Order Management also affects the company's inventory management and can help reduce requisition costs.


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Test Your Knowledge Test your knowledge with the following questions. 1. What is the purpose of selecting the Ext. Doc. No. Mandatory check box in Purchases & Payables Setup?

2. Where do you define the way discounts are to post to the general ledger?

3. Which purchase document would you use if you needed to receive an item of various (or equal) amounts over the course of the year? ( ) Purchase Quote ( ) Purchase Order ( ) Blanket Purchase Order ( ) Purchase Invoice

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Chapter 4: Purchase Order Management Fill in the blanks to test your knowledge of this section. 4. On a purchase order, you can enter a prepayment ________ on the Prepayment FastTab. 5. A prepayment amount instead of a prepayment percent is set on the Purchase Order __________ page. 6. An _______ discount is granted when the value amount of all purchase document lines exceed a certain criteria. 7. A purchase line discount is a _______ that is calculated for each purchase line if it meets certain criteria. 8. Specify the conditions for a special direct unit cost for a specific item using purchase _________.


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2.

3.

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Solutions Test Your Knowledge 1. What is the purpose of selecting the Ext. Doc. No. Mandatory check box in Purchases & Payables Setup? MODEL ANSWER: It prevents a user from posting a purchase document as invoiced without a value in the Vendor Invoice No. field. 2. Where do you define the way discounts are to post to the general ledger? MODEL ANSWER: In the Discount Posting field in Purchases & Payables Setup. 3. Which purchase document would you use if you needed to receive an item of various (or equal) amounts over the course of the year? ( ) Purchase Quote ( ) Purchase Order (•) Blanket Purchase Order ( ) Purchase Invoice Fill in the blanks to test your knowledge of this section. 4. On a purchase order, you can enter a prepayment percent on the Prepayment FastTab. 5. A prepayment amount instead of a prepayment percent is set on the Purchase Order Statistics page. 6. An invoice discount is granted when the value amount of all purchase document lines exceed a certain criteria. 7. A purchase line discount is a percent that is calculated for each purchase line if it meets certain criteria. 8. Specify the conditions for a special direct unit cost for a specific item using purchase prices .


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CHAPTER 5: REQUISITION MANAGEMENT Objectives The objectives are: •

Explain requisition management setup, including requisition worksheet templates and planning parameters.

•

Explain reorder policy concepts, principles, and characteristics.

•

Describe the requisition worksheet and demonstrate how to calculate a plan and process suggested orders.

•

Describe additional worksheet features including drop shipment lines, planning worksheet lines, and manually created lines.

Introduction The primary functions of purchasing include procuring materials and supplies in optimal quantities and scheduling a timely receipt into inventory. These activities contribute to a company's smooth operation, timely fulfillment of sales orders, and results in cost efficiencies, especially in inventory control. In Microsoft Dynamics® NAV, the Requisition Management functionality helps automate the procurement process and enables the purchasing agent to perform basic purchasing activities efficiently and confidently. The requisition worksheet, which is the central processing tool, offers the following features: •

Calculates a current and detailed purchase order proposal plan.

•

Creates actual purchase orders from order proposal lines.

•

Manages stockkeeping units that are replenished by transfer and creates the corresponding transfer orders.

•

Manages designated purchase order lines from other areas of the application automatically.

•

Manages manually created purchase order proposal lines.

•

Controls the flow of relevant information between concerned departments.

•

Provides a practical overview of the individual processes involved.

The planning functionality found in the requisition worksheet is the same as that found in the planning worksheet in the manufacturing application area. The difference is that the requisition worksheet plans for items that are replenished by purchase and transfer, while the planning worksheet plans for items that are manufactured, purchased, and transferred.


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Requisition Management Setup Successful use of the Requisition Management functionality requires setup in the following areas: •

The requisition worksheet template.

•

The planning parameter fields on items and stockkeeping units.

Requisition Management Templates To set up a requisition worksheet, you must first create a related template. Follow these steps to open the templates: 1. On the navigation pane, click Purchase. 2. On the Purchase page, click Administration and then click Req. Worksheet Templates. A worksheet template is already set up in CRONUS International Ltd. for requisitions to manage items that are purchased and transferred. Immediately after you have set up a requisition worksheet template, you can create different worksheets. For example, this can be a worksheet of a particular purchasing agent or a worksheet that manages specific items. When you open a requisition worksheet, it is empty. To open a requisition worksheet, on the Purchase page, click Planning and then click Requisition Worksheets.

Planning Parameters Planning parameters refer to a group of fields on the Replenishment and Planning FastTabs of the item and stockkeeping unit cards. Planning parameters are set up to reflect the optimal inventory levels a company wants to maintain with regard to market-preparedness, warehouse efficiency, and costs. Therefore, the parameters consider various market factors, such as: •

Replenishment lead time

•

Seasonal demand

•

Pricing discounts for quantity

•

Freight weights

•

Delivery schedules

The planning parameters also consider a company's internal policy regarding inventory management and control.

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Chapter 5: Requisition Management From a technical aspect, the planning parameters control the replenishment calculation. Their primary functions are described in the following table. Function

Description

Setting the Time Bucket

The period of time defined by the Reorder Cycle field determines which requirements and existing replenishment orders participate in the availability calculation and which replenishment orders can potentially be used to fill additional requirements. This, in turn, determines which action message is issued.

Setting the Inventory Level

The inventory level, as defined by the Reorder Point and Safety Stock Quantity fields, determines when to replenish the item. When projected availability falls below the inventory level, the program recognizes the need for replenishment.

Determining the Order Quantity

The program calculates order quantities to cover all gross requirements. This includes demand from forecast, sales orders, and also replenishment of the inventory level. At a minimum, order quantity is sufficient to replenish the inventory level. If there are additional requirements, the program uses the value in the Reordering Policy field and the related fields to calculate order quantity. The order modifier fields adjust the final quantity afterward.

Demonstration: Set Up Planning Parameters The "Supply Planning in Version 5.0 SP1" Technical White Paper contains an indepth description of the role of the planning parameters for the planning calculations. The main fields are described briefly here. However, refer to the online Help for additional guidelines on effectively setting the parameters. Scenario: Eduardo, the production planner at CRONUS, is responsible for maintaining the planning parameters for all items. Susan, the order processor, reviews the planning parameters that Eduardo set up for item 1924-W. The planning parameters contain detailed information about replenishment and planning for the specific item.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to review the replenishment and planning parameters for item 1924-W: 1. On the Purchase page, click Inventory & Costing and then click Items. 2. Open the item card for item 1924-W. 3. Expand the Replenishment FastTab.

FIGURE 5.1 REPLENISHMENT PARAMETERS FOR ITEM 1924-W

The following table describes the replenishment parameters.

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Field

Description

Replenishment System

This field indicates how the item is replenished and the type of order or order proposal the program creates. The options are Purchase or Production.

Lead Time Calculation

The time that it takes to replenish the item. This field calculates the date fields on order and order proposal lines. On the purchase order line, the Order Date + Lead Time Calculation = Planned Receipt Date. This field is also used in determining whether the program requires an emergency or exception order.


Chapter 5: Requisition Management 4. Expand the Planning FastTab.

FIGURE 5.2 PLANNING PARAMETERS FOR ITEM 1924-W

The following table describes the planning parameters. Field

Description

Reordering Policy

Calculates replenishment order quantity. The options are: • Blank - The user can plan for the item manually. •

Fixed Reorder Qty. - The quantity in the Reorder Quantity field is the standard lot size.

•

Maximum Qty. - The quantity in the Maximum Inventory field calculates the order quantity.

•

Order - The program generates an order for each requirement and does not use the Reorder Cycle.

•

Lot-for-Lot - The program creates an order proposal with a quantity meeting the sum of the requirements due within the Reorder Cycle.

For more information about how the Requisition Worksheet uses these fields to calculate replenishment, refer to the "Manage Reordering Policies" lesson.


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Description

Reorder Cycle

The planning time bucket for the item. Requirements that are due within the reorder cycle are grouped together. A replenishment order due within the reorder cycle may be rescheduled to fulfill a requirement.

Safety Lead Time

A buffer period that protects against delays in the purchase replenishment lead time. When calculating order and order proposal lines, the program adds the safety lead time to the lead time. On the purchase order line, the Planned Receipt Date + Safety Lead Time + Inbound Warehouse Handling Time = Expected Receipt Date.

Safety Stock Quantity

A quantity of stock wanted in inventory to protect against fluctuations in demand and supply during the item's replenishment lead time. When the projected inventory falls below the safety stock quantity, the program creates an order proposal that, at a minimum, replenishes the safety stock quantity.

Reorder Point

A quantity that sets the inventory level below where you replenish the item. When the projected inventory falls below the reorder point, the program recognizes the need to replenish the item and creates an order proposal that, at a minimum, replenishes to the reorder point.

Reorder Quantity

This standard quantity is used for all order proposals. This field is used with the Fixed Reorder Quantity reordering policy.

Maximum Inventory

This quantity is used as a maximum inventory level. The program calculates order quantity as the maximum inventory minus the safety stock. This field is used with the Maximum Quantity reordering policy.

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Minimum Order Quantity

Immediately after the order quantity calculates, you can modify it by a minimum allowed quantity for an order.

Maximum Order Quantity

Immediately after the order quantity calculates, you can modify it by a maximum allowed quantity for an order.

Order Multiple

Immediately after the order quantity calculates, you can modify it by an order multiple.



Manage Reordering Policies For an item to participate in supply planning, a user must define a reorder policy for it. The following four reordering policies exist: •

Fixed Reorder Qty.

•

Maximum Qty.

•

Order

•

Lot-for-Lot

To provide visibility into the involved planning logic, strict rules apply concerning the following: •

Role of the reorder point.

•

Monitoring the projected inventory level and the reorder point.

•

Role of the reorder cycle.

•

Managing negative inventory.

In this lesson, the characteristics of each reordering policy are described after descriptions of the above central related concepts and principles.

Role of the Reorder Point In addition to the general balancing of supply and demand, the planning system must also monitor inventory levels for the affected items to respect the defined reordering policies. A reorder point represents demand during lead time. When the projected inventory passes below the inventory level defined by the reorder point, it is time to order more quantity. Meanwhile, the inventory is expected to decrease gradually and possibly reach zero (or the safety stock level), until the replenishment arrives. Accordingly, the planning system suggests a forward-scheduled supply order at the point when the projected inventory passes below the reorder point. The reorder point reflects a certain inventory level. However, inventory levels can move significantly during the reorder cycle and, therefore, the planning system must constantly monitor the projected available inventory.

Monitor Projected Inventory Levels Inventory is a type of supply, but for inventory planning, the planning system distinguishes between two inventory levels: •

Projected inventory

•

Projected available inventory


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Trade in Microsoft Dynamics® NAV 2009 Projected Inventory Initially, projected inventory is the quantity of gross inventory, including supply and demand in the past even if not posted, when starting the planning process. In the future, this becomes a moving projected inventory level that is maintained by gross quantities from future supply and demand because those are introduced along the time line (whether reserved or in other ways allocated). The projected inventory is used by the planning system to monitor the reorder point and to determine the reorder quantity when using the Maximum Qty. reordering policy.

Projected Available Inventory The projected available inventory is the part of the projected inventory that at a given point in time is available to fulfill demand. The projected available inventory is used by the planning engine when monitoring the safety stock level. The projected available inventory is used by the planning system to monitor the safety stock level, since the safety stock must always be available to serve unexpected demand.

Time Buckets Having a tight control of the projected inventory is crucial to detect when the reorder point is crossed and to calculate the right order quantity when using the Maximum Qty. reordering policy. The projected inventory level calculates at the start of the planning period. It is a gross level that does not consider reservations and similar allocations. To monitor this inventory level during the planning sequence, the system monitors the aggregated changes over a period of time, a time bucket. The time bucket is defined by the reorder cycle of the item. The system ensures that the time bucket is at least one day because it is the most precise unit of time for a demand or supply event.

Determine the Projected Inventory Level The following sequence describes how the projected inventory level is determined: 1. When a supply event, such as a purchase order, is fully planned, it increases the projected inventory on its due date. 2. When a demand event is fully satisfied, it does not decrease the projected inventory right away. Instead, it posts a decrease reminder, which is an internal record that holds the date and quantity of the contribution to the projected inventory.

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Chapter 5: Requisition Management 3. When a subsequent supply event is planned and placed on the time line, the posted decrease reminders are investigated one-by-one until the planned date of the supply while updating the projected inventory. During this process, the reorder point level of the internal increase reminder may be passed. 4. If a new supply order is introduced, the system checks if it was entered before the current supply. If it was, the new supply becomes current supply and the balancing procedure starts over.

Role of the Reorder Cycle The purpose of the reorder cycle is to collect demand events within the time window to make a joint supply order. For reordering policies that use a reorder point, the reorder cycle concept is expanded slightly to include a time bucket principle. This ensures that demand within the same reorder cycle is accumulated before checking the impact on the projected inventory and whether the reorder point has been passed. If the reorder point is passed, a new supply order is scheduled forward from the end of the period defined by the reorder cycle. The reorder cycle buckets begin on the planning starting date. The time-bucketed concept reflects the manual process of checking the inventory level on a frequent basis rather than for each transaction. The user needs to define the frequency (the reorder cycle). For example, the user gathers all item needs from one vendor to place a weekly order. The reorder cycle is generally used to avoid a cascade effect. For example, a balanced row of demand and supply where an early demand is canceled, or a new one is created. The result is that every supply order (except the last one) is rescheduled.

Manage Projected Negative Inventory The reorder point expresses the anticipated demand during the lead time of the item. When the reorder point is passed, it is time to order more. But the projected inventory must be large enough to cover the demand until the new order is received. Meanwhile, the safety stock should take care of fluctuations in demand up to a targeted service level. Consequently, the planning system considers it an emergency if a future demand cannot be served from the projected inventory, or expressed in another way, that the projected inventory goes negative. The system deals with such an exception by suggesting a new supply order to meet the part of the demand that cannot be met by inventory or other supply. The order size of the new supply order does not take the maximum inventory or the reorder quantity into consideration, nor does it take into consideration the order modifiers Maximum Order Quantity, Minimum Order Quantity, and Order Multiple. Instead, it reflects the exact deficiency.


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Trade in Microsoft Dynamics® NAV 2009 Reordering Policy: Fixed Reorder Qty. The Fixed Reorder Qty. policy is related to inventory planning of typical C-items (low inventory cost, low risk of obsolescence, and/or many items). This policy is usually used in connection with a reorder point reflecting the anticipated demand during the lead time of the item.

Calculated by Time Bucket If the planning system detects that the reorder point has been passed in a given time bucket (reorder cycle) - above or at the reorder point at the start of the period, and below at the end - it suggests to create a new supply order of the specified reorder quantity and forward schedule it from the first date after the end of the time bucket. The bucketed reorder point concept reduces the number of supply suggestions. This reflects a manual process of frequently walking through the warehouse to check the actual contents in the various bins.

Creates Necessary Supply Only Before suggesting a new supply order to meet a reorder point, the planning system checks if supply has already been ordered to be received within the item’s lead time. If an existing supply order solves the problem by bringing the projected inventory to or above the reorder point within the lead time, the system does not suggest a new supply order. Supply orders that are created specifically to meet a reorder point are excluded from ordinary supply balancing, and will not change afterwards. Consequently, if an item using a reorder point is to be phased out (not replenished), it is advisable to review outstanding supply orders manually or change the reordering policy to Lot-for-Lot, whereby the system reduces or cancels superfluous supply.

Combines with Order Modifiers The order modifiers - Minimum Order Quantity, Maximum Order Quantity, and Order Multiple - are less important when the Fixed Reorder Qty. policy is used. However, the planning system takes these modifiers into account and decreases the quantity to the specified maximum order quantity (and creates two or more supplies to reach the total order quantity), increases the order to the specified minimum order quantity, or rounds the order quantity up to meet a specified order multiple.

Unnecessary with Forecasts Because the anticipated demand is already expressed in the reorder point level it is not necessary to include a forecast in the planning of an item using a reorder point. If it is relevant to base the plan on a forecast, use the Lot-for-Lot policy.

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Chapter 5: Requisition Management Not Used with Reservations If the user reserves a quantity, for instance a quantity in inventory, for some distant demand, the planning foundation is disturbed. Even if the projected inventory level is acceptable in relation to the reorder point, the quantities might not be available. The system may try to compensate for that by creating exception orders; however, it is recommended that users set the Reserve field to Never on items that are planned using a reorder point.

Reordering Policy: Maximum Qty. The Maximum Qty. policy is a way to maintain inventory using a reorder point. Everything regarding the Fixed Reorder Qty. policy also applies to this policy. The only difference is the quantity of the suggested supply. When using the Maximum Qty. policy, the reorder quantity is defined dynamically based on the projected inventory level and usually differs from order to order.

Calculated by Time Bucket The reorder quantity is determined at the point of time (the end of a time bucket) when the planning system detects that the reorder point has been crossed. At this time, the system measures the gap from the current projected inventory level up to the specified maximum inventory. This constitutes the quantity to be reordered. The system then checks if supply has already been ordered elsewhere to be received within the lead time and, if so, reduces the quantity of the new supply order by already ordered quantities. The system ensures that the projected inventory at least reaches the reorder point level - in case the user has forgotten to specify a maximum inventory quantity.

Combines with Order Modifiers Depending on the setup, it may be best to combine the Maximum Qty. policy with order modifiers to ensure a minimum order quantity or round it to an integer number of purchase units of measure, or split it into more lots as defined by the maximum order quantity.

Reordering Policy: Order In a make-to-order environment, an item is purchased or produced to exclusively cover a specific demand. Typically it relates to A-items, and the motivation for choosing the Order reordering policy can be that the demand is infrequent, the lead-time is insignificant, or the required attributes vary. The program creates an order-to-order link, which acts as a preliminary connection between the supply, a supply order or inventory, and the demand that it will fulfill.


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Trade in Microsoft Dynamics® NAV 2009 Order-to-Order Links and Past Due Dates Unlike most supply-demand sets, linked orders with due dates before the planning starting date are fully planned for by the system. The business reason for this exception is that specific demand-supply sets must be synchronized through to execution. For more information about the frozen zone that applies to most demand-supply types, refer to the "Dealing with Dates before the Planning Starting Date" topic in the "Supply Planning in Version 5.0 SP1" Technical White Paper.

Reordering Policy: Lot-for-Lot The Lot-for-Lot policy is the most flexible because the system only reacts on actual demand, plus it acts on anticipated demand from forecast and blanket orders and then settles the order quantity based on the demand. The Lot-for-Lot policy is aimed at A- and B-items where inventory can be accepted but is avoided. In some ways, the Lot-for-Lot policy looks like the Order policy, but it has a generic approach to items; it can accept quantities in inventory, and it bundles demand and corresponding supply in time buckets defined by the user. The time bucket is defined by the reorder cycle. The system works with a minimum time bucket of one day, because this is the smallest time unit of measure on demand and supply events in the system (although, in practice, the time unit of measure on production orders and component needs can be seconds). The reorder cycle also sets limits on when an existing supply order is rescheduled to meet a given demand. If the supply lies within the reorder cycle, it is rescheduled in or out to meet the demand. Otherwise, if it lies earlier, it causes an unnecessary build-up of inventory and must be canceled. If it lies later, a new supply order is created instead. With this policy, it is also possible to define a safety stock to compensate for possible fluctuations in supply, or to meet sudden demand. Because the supply order quantity is based on the actual demand it can make sense to use the order modifiers: round the order quantity up to meet a specified order multiple (or purchase unit of measure), increase the order to a specified minimum order quantity, or decrease the quantity to the specified maximum quantity (and thus create two or more supplies to reach the total needed quantity). For more information about these planning parameters, refer to the "Appendix A: Planning Parameters" topic in the "Supply Planning in Version 5.0 SP1" Technical White Paper.

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Requisition Worksheet The requisition worksheet can greatly ease the purchasing agent's job by calculating a plan that states which items to order, what quantities to order, and when to order. The worksheet features two main batch jobs: •

One that calculates the plan.

•

One that creates orders based on the plan.

Calculate Plan Batch Job The Calculate Plan - Req. Wksh. batch job calculates a requisition plan for items or stockkeeping units set up for replenishment by purchase and transfer order.

Item Availability An analysis of what must be ordered starts with an investigation of projected item availability. This is a fairly straightforward task that involves summarizing the whole demand and supply situation for an item at any time within a defined period. This calculates by using the following equation: Projected Available Balance = Inventory + Scheduled Receipts + Planned Receipts - Gross Requirement The result of the availability calculation, if negative, states a net requirement. This represents the item quantities that must be replenished to fulfill outstanding demand.

Replenishment Proposal The batch job calculates the most efficient way to replenish the item and create a requisition worksheet line. This is a purchase or transfer order proposal accompanied by a corresponding action message. The action message suggests how to replenish, while the order line provides the details: •

Which item

•

What quantity

•

Relevant dates

The order proposal lines are based on the accumulated data existing at the time. The proposed plan is considered a starting point from which the purchasing agent can review and make necessary adjustments according to personal knowledge, experience, and the expediency of the moment.


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Trade in Microsoft Dynamics® NAV 2009 Action Messages The program uses five action message options to suggest how to replenish an item: •

New - Create a new order. If a requirement cannot be filled by the next three options, the program suggests creating a new order.

•

Change Quantity - Change the quantity on an existing replenishment order to cover a changed or new requirement.

•

Reschedule - Reschedule the due date on an existing replenishment order.

•

Reschedule and Change Quantity - Reschedule the due date and change the quantity on an existing replenishment order.

•

Cancel - Cancel an existing replenishment order.

NOTE: The user can designate an existing purchase order line as being firm and unchangeable. This means that the program does not calculate action messages for the line during the planning calculations. Refer to the Planning Flexibility field on the purchase order line.

Carry Out Action Message Batch Job As soon as the purchasing agent has made necessary adjustments to a requisition worksheet line and approved its contents, the Carry Out Action Msg. - Req. batch job converts the order proposal line to a purchase or transfer order line. The Accept Action Message check box is selected by default. This indicates that the line is included in the Carry Out Action Msg. - Req. batch job and that the batch job converts it to an order line. You can clear the check box.

Demonstration: Process a Requisition Worksheet Scenario: Eduardo, the production planner at CRONUS, is reviewing and setting the planning parameters on various items that are increasing in sales. For item 70040, he assigns the Reordering Policy of Fixed Reorder Qty. and sets the Reorder Quantity at 1000. For this item 70040, 2221 units currently are on inventory in the BLUE location, and the reorder point is set to 250. A few days later, on 01/28/10, Susan, the order processor at CRONUS, creates an order from customer 10000 for 2000 units of item 70040. When Alicia, the purchasing agent, calculates a requisition worksheet plan for the time period of 01/28/10 through 03/30/10, the program suggests a replenishment order for item 70040.

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Chapter 5: Requisition Management Follow these steps to adjust the setup of item 70040: 1. 2. 3. 4. 5. 6.

On the Purchase page, click Planning and then click Items. Open the item card for item 70040. Expand the Planning FastTab. In the Reordering Policy field, select Fixed Reorder Qty. In the Reorder Quantity field, type 1000. Click OK to close the item card.

Follow these steps to create the sales order demand: 1. 2. 3. 4. 5. 6. 7.

On the Planning page, click Sales Orders. Click New and then press ENTER or TAB. In the Sell-to Customer No. field, enter 10000. On the Lines FastTab, in the Type field, enter Item. In the No. field, enter 70040. In the Quantity field, type 2000. Click OK to close the sales order.

Follow these steps to create the requisition worksheet: 1. 2. 3. 4.

On the Planning page, click Requisition Worksheets. On the Action Pane, click Calculate Plan. On the Options FastTab, enter 01/28/10 in the Starting Date field. In the Ending Date field, enter 03/31/10.


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Trade in Microsoft Dynamics® NAV 2009 5. On the Item FastTab, set a filter for item 70040. 6. Click OK.

FIGURE 5.3 PROPOSED ORDER LINE FOR ITEM 70040 IN THE REQUISITION WORKSHEET

The program has calculated the need for one new purchase order for a quantity of 1000. Immediately after the requirement of 2000 units is filled, 221 units are in inventory. However, the value in the Reorder Point field states 250. The program suggests creating a new order to vendor 10000 to replenish the reorder point. The new order must also meet the reorder quantity of 1000. The due date calculates as 01/29/10. The program adds the Default Safety Lead Time (assigned in Manufacturing Setup) of one day to the order date. NOTE: The program suggests the proposed order to a blank location because item number 70040 is not set up with a stockkeeping unit in the demonstration company.

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Chapter 5: Requisition Management Demonstration: Create a Purchase Order from the Requisition Worksheet Scenario: After calculating the plan, Alicia creates the order from the requisition worksheet. Follow these steps to create the purchase order from the requisition worksheet: 1. On the Action Pane, click Carry Out Action Message. 2. Click OK without printing the order. The line is removed from the Req. Worksheet, and the purchase order is created. 3. Close the Req. Worksheet page. 4. On the Planning page, click Purchase Orders. 5. Open the order to vendor 10000. The order line shows a planned receipt date of 01/28/10, an expected receipt date of 01/29/10, and an order date of 01/28/10.

Additional Worksheet Features You can use other functions on the requisition worksheet, depending on the types of transactions your company performs in its daily business.

Drop Shipment Lines A drop shipment is a transaction in which the vendor delivers sold goods directly to the customer. The company does not receive the items into its inventory and avoids handling time and activities. A company can record a drop shipment by creating a purchase order based on the sales order. From the Requisition Worksheet, a purchasing agent can access drop shipmentdesignated sales order lines and create the corresponding purchase order.

Demonstration: Process a Drop Shipment from a Requisition Worksheet Scenario: Susan, the order processor, submits a rush order to the purchasing department for 2000 units of item 70040 for customer 10000. Alicia, the purchasing agent, knows that inventory on the item is low. She and Susan agree to arrange a drop shipment to reduce the delivery time to the customer.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to update the existing sales order for drop shipping: 1. Open the sales order created in the "Process a Requisition Worksheet" demonstration. 2. Add the Purchasing Code field to the sales order lines using the Choose Columns feature. 3. In the Purchasing Code field, enter DROP SHIP. 4. Click OK to close the sales order. Follow these steps to calculate the requisition worksheet: 1. On the Planning page, click Requisition Worksheets. 2. On the Actions menu, point to Functions, then to Drop Shipment, and then click Get Sales Orders. 3. Set a filter, if necessary, and then click OK. The batch job copies the drop shipment sales order line to the requisition worksheet; it appears as a purchase order proposal. Immediately after Alicia approves the line, she converts it to a purchase order using the Carry Out Action Msg. - Req. batch job.

Planning Worksheet Lines The Planning Worksheet Lines feature is relevant for a large manufacturing company with separate departments handling production planning and purchasing. In the manufacturing application area, a production planner uses the planning worksheet to calculate an item replenishment plan for all items, whether they are manufactured, purchased, or transferred. From the planning worksheet, the planner can select order proposal lines for items that are replenished by purchase or transfer and forward them to the requisition worksheet by using the Carry Out Action Msg. - Plan. batch job. Refer to online Help for more information about this batch job. This function, although initiated from the manufacturing application area, results in order proposal lines appearing in the requisition worksheet. From there, the purchasing agent can edit, approve, and convert the lines to actual purchase or transfer order lines by using the Carry Out Action Msg. - Req. batch job.

Manually Created Lines It is also possible to create lines manually in the requisition worksheet. This can be practical in a situation where individual persons or departments use a worksheet to list needed items. It can then be the responsibility of the purchasing agent to approve order proposal lines and create orders using the Carry Out Action Msg. - Req. batch job.

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Summary Automate purchase transactions by using the requisition management functionality in Microsoft Dynamics NAV. Requisitions management help to provide order processors with information about when an item can be delivered to the customer. Planning parameters set up on the item card defines how items are treated in the system. The requisition worksheet is an important element in the day-to-day planning activities of the purchasing agent; it differs from the planning worksheet because it only deals with purchase orders.


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Test Your Knowledge Test your knowledge with the following questions. 1. What must you create before you can create requisition worksheets?

2. What are the three primary functions of planning parameters?

3. An item is set up with a Reordering Policy of Fixed Reorder Qty., a Reorder Point of 250, and a Reorder Quantity of 1000. There are currently 2000 units of this item on inventory. What type of replenishment does the program propose when you create a sales order for 1800 units of the item and then calculate the requisition worksheet plan? ( ) Two orders for the item are proposed, each with a quantity of 1000. ( ) One order for the item is proposed with a quantity of 1000. ( ) One order for the item is proposed with a quantity of 250. ( ) No order is proposed.

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Chapter 5: Requisition Management 4. Where are planning parameters set on item cards and stockkeeping unit cards? (Select all that apply) ( ) Requisition FastTab ( ) Planning FastTab ( ) Replenishment FastTab ( ) Item Tracking FastTab 5. What happens when the Calculate Plan - Req. Wksh. batch job is run? (Select all that apply) ( ) Determines which items to order. ( ) Creates orders based on the plan. ( ) Specifies the quantity of the items to order. ( ) Suggests how to replenish the items. 6. Which of the following action messages is available in the Requisition Worksheet? (Select all that apply) ( ) New ( ) Cancel ( ) Cancel & Change Quantity ( ) Reschedule 7. Which check box must you clear on a Requisition Worksheet line to prevent an order from being created? ( ) Carry Out Action Message ( ) Create Orders ( ) Make Orders ( ) Accept Action Message Fill in the blanks to test your knowledge of this section. 8. The Reordering ________ on an item or stockkeeping unit card calculates replenishment order quantity. 9. The Reorder _______ is the planning time bucket for the item. 10. Use the Carry Out Action Msg. - Plan batch job to transfer _________ Worksheet lines to the Req. Worksheet. 11. Use the _____ Sales Orders function on the Requisition Worksheet to access drop shipment-designated lines. 12. Instead of calculating a plan, users can ________ enter lines in the Req. Worksheet to list needed items.


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2.

3.

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Solutions Test Your Knowledge 1. What must you create before you can create requisition worksheets? MODEL ANSWER: Requisition Worksheet Templates 2. What are the three primary functions of planning parameters? MODEL ANSWER: Setting the time bucket, setting the inventory levels, and determining order quantity. 3. An item is set up with a Reordering Policy of Fixed Reorder Qty., a Reorder Point of 250, and a Reorder Quantity of 1000. There are currently 2000 units of this item on inventory. What type of replenishment does the program propose when you create a sales order for 1800 units of the item and then calculate the requisition worksheet plan? ( ) Two orders for the item are proposed, each with a quantity of 1000. (•) One order for the item is proposed with a quantity of 1000. ( ) One order for the item is proposed with a quantity of 250. ( ) No order is proposed. 4. Where are planning parameters set on item cards and stockkeeping unit cards? (Select all that apply) ( ) Requisition FastTab (√) Planning FastTab (√) Replenishment FastTab ( ) Item Tracking FastTab 5. What happens when the Calculate Plan - Req. Wksh. batch job is run? (Select all that apply) (√) Determines which items to order. ( ) Creates orders based on the plan. (√) Specifies the quantity of the items to order. (√) Suggests how to replenish the items.


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Trade in Microsoft Dynamics® NAV 2009 6. Which of the following action messages is available in the Requisition Worksheet? (Select all that apply) (√) New (√) Cancel ( ) Cancel & Change Quantity (√) Reschedule 7. Which check box must you clear on a Requisition Worksheet line to prevent an order from being created? ( ) Carry Out Action Message ( ) Create Orders ( ) Make Orders (•) Accept Action Message Fill in the blanks to test your knowledge of this section. 8. The Reordering Policy on an item or stockkeeping unit card calculates replenishment order quantity. 9. The Reorder Cycle is the planning time bucket for the item. 10. Use the Carry Out Action Msg. - Plan batch job to transfer Planning Worksheet lines to the Req. Worksheet. 11. Use the Get Sales Orders function on the Requisition Worksheet to access drop shipment-designated lines. 12. Instead of calculating a plan, users can manually enter lines in the Req. Worksheet to list needed items.

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CHAPTER 6: ITEM CHARGES Objectives The objectives are: •

Describe the setup of item charges.

•

Explain purchase item charges and demonstrate how to assign landed costs to a posted purchase receipt.

•

Describe sales item charges and demonstrate how to assign item charges to a posted sales shipment.

•

Explain purchase and sales allowances and demonstrate how to assign item charges for a sales allowance on a credit memo.

Introduction Accurate and relevant cost accounting information is an important prerequisite to efficient and competent decision-making in any trading company. At a minimum, companies register and analyze cost records derived from invoice information about their purchase and sales transactions. However, as the cost of distributing, handling, and transporting goods starts to represent a larger share in the total inventory cost than direct purchase and manufacturing costs, there is a need to account for these costs. Examples of additional costs are: •

Insurance

•

Freight cost

•

Custom duties

•

Any other costs associated with delivering and transporting services

Moreover, the possibility to collect detailed cost statistics at the item level becomes relevant when you determine cost of goods sold and when you account for additional sales expenses that affect profit calculations. In the first case, the company's cost structure must enable allocation of additional acquisition-costrepresenting expenses (inventoriable costs) related to the purchase. In the second case, additional costs incurred as part of a sale transaction must be directly linked with the sale as expenses (non-inventoriable cost) to accurately calculate profit. In Microsoft Dynamics® NAV, to account for both inventoriable and noninventoriable cost incurred for purchase and sale transactions respectively, accountants can use the Item Charges functionality. Item charges represented by, for example, the cost of a purchase invoice from a transport agent for delivering a shipment from a supplier, can be assigned to a receipt document. When posted, this item charge becomes a part of the total landed cost of the item(s) to which the charge was assigned.


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Trade in Microsoft Dynamics® NAV 2009 Additionally, the item charges solution is flexible enough to incorporate a facility that lets the user register and post additional cost independently of the posting time of the associated purchase or sales document. That is, item charges can be assigned to the delivery after they have been posted as received and invoiced and even after the respective items have been sold. The program's costing mechanism then guarantees that these costs roll into the inventory value and cost of goods sold calculations. The functionality supports allocation of the charge cost amount based on quantity and amount. In addition to its primary goal of supporting companies in identifying and accounting for additional landed and sales-related cost, the Item Charges functionality can be used when you manage other sales and purchase situations. For example, in a sales return situation where items are not required to be physically returned to the company, you can use an item charge to register and post an allowance amount (in the form of a credit memo). Another example is represented by the practice of charging (selling) a customer transportation fees in relation to delivering shipments or charging restock fees for returns.

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Item Charges Setup The item charges setup is part of the general Finance setup. Companies can set up different item charge numbers to distinguish charge types to account for and to create cost and sales statistics. CRONUS International Ltd. has set up several different item charges that are typical for their business operations.

Follow these steps to open the Item Charges page: 1. On the navigation pane, click Financial Management and then click Inventory. 2. On the Inventory page, under Administration, click Item Charges.

FIGURE 6.1 ITEM CHARGES

Like an item, an item charge must have a general product posting group and VAT product posting group to determine which account to post the charge amount to. Immediately after an item charge type is set up, it can be selected on a purchase (sales) document line. There are no limits as to what companies can include in the category of item charges.


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Purchase Item Charges When purchasing goods from suppliers, companies frequently incur additional costs, such as freight, handling charges, import taxes, and so on. These make up the purchase's total landed costs and must be included in the calculation of inventory value and cost of goods sold. Depending on the nature of their sales agreements, companies may also pay these costs when delivering shipments. In this case, the costs represent noninventoriable expenses that affect the company's overall profit calculation.

In both situations, accountants can register these additional costs as a separate cost category and link them directly to related items. In Microsoft Dynamics NAV, these costs are referred to as item charges. You can register item charges in two ways: •

As a separate document (purchase order/invoice) Typically, this is used when the invoice for the cost amount arrives some time after the original purchase document is posted or when the charge must be assigned to a sales document.

•

In the same purchase document This option is used when the charge amount is known at the time of posting the receipt of items to which the charge relates.

As an additional help, the program can also suggest an assignment of the item charge to the selected document lines. You can modify this if necessary.

Demonstration: Assign Landed Costs to a Posted Purchase Receipt Scenario: Following an earlier delivery from vendor 10000, the CRONUS accounting department receives an invoice for 100 LCY from the same vendor for the transportation services they provided for this delivery. Cassie, the accountant, must now register these landed costs in the program and assign them to the original purchase (purchase receipt 107023). Because the purchase order has posted, associated freight charges must be registered in a separate invoice.

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Chapter 6: Item Charges Steps: Create Purchase Invoice Follow these steps to create the purchase invoice: 1. On the navigation pane, click Financial Management and then click Payables. 2. On the Payables page, click Purchase Invoices. 3. Click New and then press ENTER or TAB. 4. In the Buy-from Vendor No. field, enter 10000. 5. In the Vendor Invoice No. field, type Freight12810. 6. On the Lines FastTab, in the Type field, select Charge (Item). 7. In the No. field, enter P-FREIGHT to represent the freight-related cost. 8. Update the Description field as needed. 9. In the Quantity field, type 1. 10. In the Direct Unit Cost Excl. VAT field, type 100. Entering charge details in this manner is appropriate when the total invoice amount applies to the complete order delivery.

Steps: Assign Landed Costs to Posted Purchase Receipt Follow these steps to assign the charge to the posted purchase order: 1. On the Lines FastTab, click Actions, point to Line and then click Item Charge Assignment. The Item Charge Assignment (Purch) page is empty. This signifies that an item charge is being assigned to an already posted document instead of to an order line created in the same document as the item charge. In the latter case, the order line(s) appear on this page. According to the scenario, the freight invoice relates to a purchase order. Therefore, Cassie must retrieve respective posted receipt lines using the Get Receipt Lines function. 2. On the Actions menu, point to Functions and then click Get Receipt Lines. NOTE: You can assign item charges to any posted outbound (return shipment and sales shipment) and inbound (return receipt and transfer receipt) documents. 3. Select all four lines for Document No. 107023 and then click OK. The selected lines copy into the Item Charge Assignment (Purch) page. Now Cassie can assign the charge amount manually by entering the values in the Qty. to Assign field for all the lines or make the assignment automatically.


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Trade in Microsoft Dynamics® NAV 2009 In the second case, the total charge amount can be assigned either equally among the lines or proportionally based on the line amount. Follow these steps to automatically assign the charge by amount: 1. On the Actions menu, point to Functions and then click Suggest Item Charge Assignment.

FIGURE 6.2 SELECT ITEM CHARGE ASSIGNMENT WITH THE AMOUNT OPTION SELECTED

2. With Amount selected, click OK.

FIGURE 6.3 CHARGE AMOUNT PROPORTIONALLY DISTRIBUTED AMONG POSTED PURCHASE ORDER LINES

The charge amount of 100 LCY distributes proportionally among the purchase order lines.

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Chapter 6: Item Charges At the bottom of the Item Charge Assignment (Purch) page, status fields contain the total charge amount to assign, how much of this has been assigned, and how much is left to be assigned by both quantity and amount. 3. Click OK to close the Item Charge Assignment (Purch) page. The Qty. to Assign field on the purchase invoice line is updated. 4. On the Action Pane, click Post. 5. Click Yes to post the invoice. Because of this posting, the program creates a link between the items from the selected purchase order and the item charge. As the cost value (total landed cost) of the earlier-purchased items has increased by the charge amount without the actual quantity increasing, an additional value entry links to the item ledger entry of the posted purchase receipt.

Steps: Review Posted Item Charges Follow these steps to view the value entries related to the item ledger entry for item 1928-W that was created by posting the purchase order (receipt number 107023) and the freight charge: 1. On the Financial Management page, click History and then click Posted Purchase Receipts. 2. Open purchase receipt number 107023. 3. On the Action Pane, click Navigate. 4. On the Document Entry FastTab, click Item Ledger Entry. 5. On the Action Pane, click Show.

FIGURE 6.4 ITEM LEDGER ENTRIES FOR PURCHASE RECEIPT 107023


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Trade in Microsoft Dynamics® NAV 2009 The quantity has not changed. 6. Select the first item ledger entry for item 1924-W (posted to the GREEN location). 7. On the Related Information menu, point to Entry and then click Value Entries. Alternatively, click the Cost Amount (Actual) field. A new value entry of the type Direct Cost representing the additional cost of the freight invoice was created. NOTE: Learn more about inventory accounting principles in the "Inventory Costing in Microsoft Dynamics® NAV 2009" training material. Based on the value entry, the charge amount is included in the cost and profit calculations. If required, accountants can also collect statistical information specified for each item charge category. 8. Close the Value Entries page. 9. On the Item Ledger Entries page, click the Item No. field for item 1924-W. 10. Click Advanced to open the Item List. 11. On the Item List, click Statistics on the Action Pane. 12. On the General FastTab, in the Show as Lines field, select Purch. Item Charge Spec. 13. Click Show Matrix.

FIGURE 6.5 PURCHASE ITEM CHARGE STATISTICS FOR ITEM 1924-W

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Chapter 6: Item Charges 14. Escape back to the Item Ledger Entries page. 15. Repeat steps 9-13 for item 1928-W to review the item charges. NOTE: Because an item charge assignment changes the item cost amount without changing the quantity of the posted entry, you can use item charges to correct value-related errors that frequently occur in the starting phase of program implementation.

Manage Non-inventoriable Costs as Item Charges In addition to having detailed statistics on their inventory landed cost, many companies find it important to account for non-inventoriable costs. This cost category becomes relevant where companies incur freight-out costs that affect the profit calculations, or they deal with vendor-owned or headquarters-owned inventory, and do not carry inventory on their own (the accounting model used in this case is frequently referred to as retail-minus). NOTE: The retail-minus model can be illustrated by the scenario where a company's subsidiary operates as a sales office and does not carry any inventory at its own premises. All sales could be done by using drop shipment, with the sales revenues posted at the subsidiary. The headquarters would then regularly send the subsidiary purchase invoices for the cost price of the items sold. Posted as item charges related to sales, these costs are recorded as sales expenses (noninventoriable cost) and the subsidiary's profit calculated respectively. To account for non-inventoriable cost incurred for sale transactions, accountants can use item charges functionality. The registering and posting procedure is similar to the one described in the "Assign Landed Costs to a Posted Purchase Order" demonstration. The only difference is that the item charge amount is assigned to outbound documents (posted sales and return shipments).


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Lab 6.1 - Assign Freight Charges to an Open Purchase Order Scenario Purchase order number 106009 from vendor 10000 has not been posted. You receive an invoice from the same vendor for freight service for the amount of 150 LCY. As the accountant, you must register these additional invoices, ensuring that the freight charge is distributed proportionally across the purchase lines and that inventory costs are updated correctly. Review the value entries on both lines after you post the order.

Challenge Yourself! 1. Assign the freight charge and post the purchase order. 2. Review the values entries of each posted purchase line.

Need a Little Help? 1. Open purchase order 106009. 2. Add the freight charge line for 150 LCY. 3. Assign the item charge to the line and automatically assign the total charge proportionally based on the line amount. 4. Post the order. 5. Open the posted purchase receipt. 6. Use the Navigate function to open the item ledger entries for the receipt. 7. Review the value entries on each line.

Step by Step Follow these steps to assign the freight charge and post the order: 1. On the navigation pane, click Purchase and then click Order Processing. 2. On the Order Processing page, click Purchase Orders. 3. Open purchase order number 106009. 4. On the next line on the Lines FastTab, in the Type field, select Charge (Item). 5. In the No. field, enter P-FREIGHT. 6. In the Quantity field, type 1.

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Chapter 6: Item Charges 7. In the Direct Unit Cost Excl. VAT field, enter 150. 8. On the Lines FastTab, click Actions, point to Line and then click Item Charge Assignment. 9. On the Actions menu, point to Functions and then click Suggest Item Charge Assignment. 10. With Amount selected, click OK. 11. Click OK to close the Item Charge Assignment (Purch) page. 12. On the Action Pane, click Post. 13. Click OK to receive and invoice the order. Follow these steps to review the value entries: 1. On the Purchase page, click History and then click Posted Purchase Receipts. 2. Open the posted purchase receipt to vendor 10000. 3. On the Action Pane, click Navigate. 4. On the Document Entry FastTab, click Item Ledger Entry. 5. On the Action Pane, click Show. 6. Click the Cost Amount (Actual) field for each line to see the value entries that include the freight charges.


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Sales Item Charges The "Purchase Item Charges" lesson introduced the functionality of item charges and illustrated how it can be used to manage additional (direct and noninventoriable) costs - freight costs, packing, insurance, customs, and so on - that a company may incur as part of a purchase and sale transaction. When a customer pays these additional costs, this is a regular sales transaction without physical items involved. The company can record the cost amounts as sales item charges and link them to the relevant outbound document, that is, sales shipment and sales return receipts. In this manner, the company can create detailed statistics of its sales and revenue figures. The principles of recording, assigning, and posting sale item charges are identical to those applied for purchase item charges. The demonstration in this lesson highlights the main points of sales item charges.

Demonstration: Assign Item Charges to Posted Sales Shipments Scenario: After several shipments were made to customer 20000 in January, on 01/28/10, the CRONUS shipping department informed the accounting department that they had insured all the shipments for the total amount of 40 LCY. Cassie, the accountant, must now invoice the customer for the additional insurance costs and ensure that these cost amounts are reflected in the sales statistics for the items to which insurance cost applies. First she must create a new Item Charge called Insurance with the General Product Posting Group of SERVICES and VAT Product Posting Group of VAT25. Follow these steps to create the item charge: 1. On the navigation pane, click Financial Management and then click Inventory. 2. On the Inventory page, click Item Charges. 3. Click New. 4. In the Code field, type Insurance. 5. In the Description field, type Freight Insurance. 6. In the Gen. Prod. Posting Group field, enter SERVICES. 7. In the VAT Prod. Posting Group field, enter VAT25. 8. Click OK to close the Item Charges page.

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Chapter 6: Item Charges Follow these steps to create the sales invoice: 1. On the Financial Management page, click Receivables and then click Sales Invoices. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 20000. 4. Accept the credit limit message. 5. On the Lines FastTab, in the Type field, select Charge (Item). 6. In the No. field, enter INSURANCE. 7. In the Quantity field, type 1. 8. In the Unit Price Excl. VAT field, type 40. Because the charge is sold to the customer instead of incurred by the company as cost, the charge amount must be entered in the Unit Price Excl. VAT field. NOTE: You cannot post costs associated with a charge automatically as a part of posting a charge line from a sales document. You must post costs related to a charge directly to an appropriate G/L account as an expense or as an item charge from a purchase document. Follow these steps to assign the item charges and post the invoice: 1. On the Lines FastTab, click Actions, point to Line and then click Item Charge Assignment. 2. On the Actions menu, point to Functions and then click Get Shipment Lines. 3. Select all three shipment lines and then click OK. 4. On the Actions menu, point to Functions and then click Suggest Item Charge Assignment. 5. With Amount selected, click OK. 6. Click OK to close the Item Charge Assignment (Sales) page. 7. On the Action Pane, click Post. 8. Click Yes to post the invoice. The program creates value entries with a link to the item ledger entries for original sales. Based on that, the sales statistics for the sold items update. Follow these steps to view the profit calculation statistics for item 1928-S: 1. On the navigation pane, click Sales & Marketing and then click Inventory & Pricing. 2. On the Inventory & Pricing page, click Items. 3. Select the line for item 1928-S. 4. On the Action Pane, click Statistics. 5. Click Show Matrix.


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FIGURE 6.6 ITEM STATISTICS - PROFIT CALCULATION FOR ITEM 1928-S

The amount of 4.02 LCY is now included in revenues and profit calculations. If required, the accountants can also collect statistical information specified for each item charge category.

Purchase and Sales Allowances One of the essential functions of Item Charges is to facilitate registering changes to transaction costs and price amounts at the item level without affecting item availability information. This underlying principle can find many diverse applications within managing the financial flow of purchase and sales transactions. This lesson illustrates the usage of item charges regarding purchase and sales allowances. Allowance is a term frequently used for returns. For example, if damaged items arrive to a customer, the company may offer the customer the opportunity to keep the damaged items and pay a reduced price for them instead of returning the items. The customer receives a sales allowance in a form of a credit memo for the reduced amount. Similarly, to correct a wrongly priced delivery (without a physical return of items involved), a vendor issues an allowance to the company, which registers this amount as a purchase credit memo of an item charge type. To learn more about sales and purchase returns, refer to "Returns Management" in this training material.

Demonstration: Create an Item Charge Sales Credit Memo Scenario: After a shipment was delivered and invoiced to customer 10000, Susan, the order processor at CRONUS, discovered that item 1964-W in the shipment was priced incorrectly at 15 percent higher than the agreed price. The shipment number is 102029.

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Chapter 6: Item Charges The customer must be compensated for the difference (438 LCY, 15 percent of the total order price of 2,920 LCY). Because the items are in perfect condition, they will not be returned to CRONUS. Cassie, the accountant, must now issue a credit memo of an item charge type. Follow these steps to create the sales credit memo: 1. On the Financial Management page, click Receivables and then click Sales Credit Memos. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. On the Lines FastTab, in the Type field, select Charge (Item). 5. In the No. field, enter S-ALLOWANCE. 6. In the Quantity field, type 1. 7. In the Unit Price Excl. VAT field, type 438. 8. On the Lines FastTab, click Actions, point to Line and then click Item Charge Assignment. 9. On the Actions menu, point to Functions and then click Get Shipment Lines. 10. Click the line for Document No. 102029 for item 1964-W and then click OK. 11. In the Quantity to Assign field, type 1 to assign the full amount to the line.

FIGURE 6.7 ASSIGNED SHIPMENT LINE FOR THE SALES ALLOWANCE OF 438 LCY FOR ITEM 1964-W

12. Click OK to close the Item Charge Assignment (Sales) page. 13. On the Action Pane, click Post. 14. Click Yes to post the credit memo. The customer and item sales statistics update without the original shipment quantity (and therefore item availability) changing.


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Lab 6.2 - Create an Item Charge Purchase Credit Memo Scenario Upon receiving and invoicing a shipment (No. 107019) from vendor 10000, the inventory manager at CRONUS discovers that two units of item 70011 had a small fault on the glass surface. The inventory manager contacts the vendor about the problem, and the vendor offers CRONUS the opportunity to keep the items for a reduced price (by 40 percent). CRONUS receives credit memo number CM2 from the vendor in the amount of 44.28 LCY (40 percent of the unit cost of 36.90 LCY * 2). As the accountant, your task is to register this agreement in the program, ensuring that the transaction is reflected at the item statistics level. After posting the credit memo, review the value entries for item 70011.

Challenge Yourself! 1. Process the purchase credit memo to vendor 10000 for the 44.28 LCY purchase allowance. 2. Review the posted value entries for item 70011.

Need a Little Help? 1. Create a purchase credit memo to vendor 10000. 2. Enter the purchase allowance for two at a price of 22.14. 3. Assign the item charge to the posted receipt, number 107019, for item 70011. 4. Post the credit memo. 5. Open the item card for item 70011. 6. Review the related value entries.

Step by Step Follow these steps to process the purchase credit memo: 1. On the Financial Management page, click Payables and then click Purchase Credit Memos. 2. Click New and then press ENTER or TAB. 3. In the Buy-from Vendor No. field, enter 10000. 4. In the Vendor Cr. Memo No. field, type CM2. 5. On the Lines FastTab, in the Type field, select Charge (Item). 6. In the No. field, enter P-ALLOWANCE. 7. In the Quantity field, type 2. 8. In the Unit Price Excl. VAT field, type 22.14.

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Chapter 6: Item Charges 9. On the Lines FastTab, click Actions, point to Line and then click Item Charge Assignment. 10. On the Actions menu, point to Functions and then click Get Receipt Lines. 11. Click the line for Document No. 107019 for item 70011 and then click OK. 12. In the Quantity to Assign field, type 2 to assign the full amount to the line. 13. Click OK to close the Item Charge Assignment (Purch) page. 14. On the Action Pane, click Post. 15. Click Yes to post the credit memo. Follow these steps to review the value entries for item 70011: 1. On the navigation pane, click Purchase and then click Inventory & Costing. 2. On the Inventory & Costing page, click Items. 3. Open the item card for item 70011. 4. On the Related Information menu, point to Entries and then click Value Entries. Here you can see the Purchase Allowance applied to this item.


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Summary A company can use item charges in the sales and purchase process to ensure cost control and to provide a good foundation for decision making. Purchase and sales allowances are frequently used when a customer receives a damaged item and is offered a reduced price for keeping the item instead of returning it. To learn more about posting principles and the functionality behind item charges, refer to the "Inventory Costing in Microsoft Dynamics® NAV 2009" training manual.

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Test Your Knowledge Test your knowledge with the following questions. 1. What is the primary purpose of using the Item Charges functionality?

2. How can you account for non-inventoriable costs incurred for sales transactions using item charges?

3. Which of the following posting groups do you set up on Item Charges? (Select all that apply) ( ) General Business Posting Groups ( ) VAT Product Posting Groups ( ) VAT Business Posting Groups ( ) General Product Posting Groups


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Trade in Microsoft Dynamics® NAV 2009 4. How can you assign item charges to lines in the Item Charge Assignment page? (Select all that apply) ( ) Manually enter the values in the Qty. to Assign field for each line. ( ) Automatically assign the total charge amount proportionally based on the line amount. ( ) Manually enter the values in the Amount to Assign field for each line. ( ) Automatically assign the total charge amount equally among the lines. 5. On which of the following pages can you view posted item charges? (Select all that apply) ( ) Value Entries ( ) Item Statistics Matrix ( ) Item Ledger Entries ( ) Posted Invoice Lines

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2.

3.


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Solutions Test Your Knowledge 1. What is the primary purpose of using the Item Charges functionality? MODEL ANSWER: To account for both inventoriable and non-inventoriable cost incurred for purchase and sale transactions, respectively. 2. How can you account for non-inventoriable costs incurred for sales transactions using item charges? MODEL ANSWER: Assign the item charge amount to outbound documents (posted sales and return shipments). 3. Which of the following posting groups do you set up on Item Charges? (Select all that apply) ( ) General Business Posting Groups (√) VAT Product Posting Groups ( ) VAT Business Posting Groups (√) General Product Posting Groups 4. How can you assign item charges to lines in the Item Charge Assignment page? (Select all that apply) (√) Manually enter the values in the Qty. to Assign field for each line. (√) Automatically assign the total charge amount proportionally based on the line amount. ( ) Manually enter the values in the Amount to Assign field for each line. (√) Automatically assign the total charge amount equally among the lines. 5. On which of the following pages can you view posted item charges? (Select all that apply) (√) Value Entries (√) Item Statistics Matrix ( ) Item Ledger Entries ( ) Posted Invoice Lines

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CHAPTER 7: ORDER PROMISING Objectives The objectives are: •

Describe the concepts of date calculations.

•

Define dates and times used in the date calculation process for promising orders to customers.

•

Explain the setup of date calculations for sales and order promising.

•

Demonstrate date calculation and order promising functionality in sales order shipping/delivery promising.

•

Define dates and times used in the date calculation process for estimating purchase order receipts.

•

Explain the setup of date calculations for estimating purchase order receipts.

•

Demonstrate date calculation functionality in estimating purchase order receipts.

•

Explain how transfer order receipts are estimated.

•

Describe how to use Calendars functionality to exclude non-working days in date calculations.


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Introduction A company must have the ability to give customers accurate information about order delivery and to estimate the receipt of orders shipped by vendors. In Microsoft Dynamics® NAV, the date calculation functionality and the Order Promising feature are the foundations of managing sales orders. The program calculates the delivery and shipment dates that meet the dates requested by customers based on availability dates. The date calculation functionality available for purchase orders offers companies a way to calculate the date an item must be ordered to have it in inventory on a certain date.

Date Calculation Concepts Microsoft Dynamics NAV operates with two concepts: •

Available to Promise

•

Capable to Promise

Available to Promise Available to Promise (ATP) has date calculation functionality and is based on the inventory reservation system. When you use the ATP function, the program performs the availability check of the uncommitted (unreserved) part of a company's inventory with regard to planned production, purchases, transfers, and sales returns. Based on the availability date of the items, the delivery date for the customer calculates automatically.

Capable to Promise Capable to Promise (CTP) performs "what if" scenarios. If no items are available in inventory and no inbound orders are scheduled, the program calculates the earliest date when items can be available if they are produced, bought, or transferred from another location. From the availability date of the items, the program: •

Calculates the delivery date to the customer

•

Creates order lines for this date

•

Reserves the inventory

The CTP function includes capacity constraint issues in the calculation, and you can integrate it with production scheduling, manufacturing, transfer, and purchase planning. The level of CTP depends on the model selected in the capacity-scheduling engine.

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Chapter 7: Order Promising With date calculation functionality, companies also can estimate the expected dates for order receipts from their vendors. The following lessons explain and illustrate promising orders to customers and estimating purchase and transfer order receipts. To follow the suggested demonstrations, remember to install the clean database. Otherwise, your results may vary from those described here.

Promise Orders to Customers Order processors can use the date calculation functionality to give customers accurate information about sales order delivery; this relates to the available-topromise situation. They also can supplement it with the Order Promising feature; this relates to the CTP situation. The date calculation functionality builds on a series of calculations that are based on several dates and times. To understand this functionality, review the terms and definitions of the key dates and times used and calculated by the program, and then learn about a set of calculations that are based on the interrelations between those dates and times. After you have examined the functionality's terms and definitions, continue to discover how: •

To set up the program to use the date calculation functionality and the Order Promising feature.

•

The program supports order processors in managing their sales order promising process, depending on customer requirements and item availability.

Definitions The following table defines important date fields in Order Promising. Field

Definition

Requested Delivery Date

The date when the customer wants the order delivered to his or her address. You must enter this date manually to affect the date calculation.

Promised Delivery Date

The date when the company promised the order to be delivered to the customer's address. You must enter this date manually to affect the date calculation.

Planned Delivery Date

The date when the company plans the order will be delivered to the customer's address. This date calculates automatically. If a requested delivery date exists, the planned delivery date equals the requested delivery date.

Planned Shipment Date

The date when the picking process is complete and items ship from the warehouse. This date calculates automatically.


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Definition

Shipment Date

The date when an item must be available in inventory. The picking process can start on this date. This date calculates automatically.

Outbound Warehouse Handling Time

The time that is required to pick, pack, and label the items in an order.

Shipping Time

The time between when the items ship from the warehouse to when they are delivered to the customer's address.

Date Calculations The date calculations functionality enables an order processor to provide a customer with an accurate date for when orders are delivered. The program supports the order processor in two ways: •

It calculates the earliest possible delivery date when the customer has not requested a delivery date, considering item availability.

•

It verifies whether the delivery date requested by the customer/promised by the order processor is realistic, considering item availability.

To perform these two actions, the program performs a set of calculations based on the dates entered by the order processor and information set up in the program. The relationship between the dates and times used in calculations is illustrated in the following scheme:

FIGURE 7.1 DATE AND TIME CALCULATION RELATIONSHIP IN SALES ORDERS

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Chapter 7: Order Promising To calculate the earliest delivery date for the orders when a customer has not requested a delivery date, the program sets the shipment date to be equal to the current working date and bases the availability date on that date. If items are available on that date, the program makes a forward calculation to determine when the order can be delivered to the customer. These calculations are represented by the following formulas. Shipment Date + Outbound Warehouse Handling Time = Planned Shipment Date and Planned Shipment Date + Shipping Time = Planned Delivery Date To verify that the delivery date requested by the customer/promised by the order processor can be met, the program sets the planned delivery date equal to the requested/promised delivery date and a backward calculation determines the date when items must be available to meet the customer's request/order processor's promise. These calculations are represented by the following formulas: Planned Delivery Date - Shipping Time = Planned Shipment Date and Planned Shipment Date - Outbound Warehouse Handling Time = Shipment Date The program uses the shipment date, which is the calculated availability date, to make the availability check. If items are available on this date, the program confirms that the requested/promised delivery date can be met by setting the planned delivery date equal to the requested/promised delivery date. In this manner, the interface between the time functionality and the availability check is at the shipment date. If the program determines that items are not available on the current working date (when there is no requested/promised delivery date) or on the calculated availability date (when there is a requested/promised delivery date), an order processor can use the CTP functionality of the Order Promising feature. Based on new dates, the program recalculates all other related dates according to the formulas defined here. The program also recalculates all related dates if an order processor manually changes any date involved in date calculations.


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Trade in Microsoft Dynamics® NAV 2009 There is an order of priority for how the program uses the dates entered on the sales header when it calculates all related dates on the lines. These priorities are illustrated in the following table. Promised Delivery Date

Requested Delivery Date

Priority 1

X

Priority 2

is not entered

X

Priority 3

is not entered

is not entered

Shipment Date

X

The program takes the date with the highest priority as a starting point for the calculation.

Date Calculation for Sales and Order Promising Setup To set up date calculations for sales, a company must define warehouse handling time, shipping time, and availability periods. These specify the time parameters that calculate shipping and availability dates. To set up the Order Promising feature, a company must specify certain parameters for order promising calculations. These specify the time parameters that calculate item availability and which worksheet stores the information.

Date Calculation for Sales Setup The setup for date calculations on the sales side consists of the following elements: •

Outbound Warehouse Handling Time setup. This is the time required to pick, pack, and label the items in an order before shipping. The program uses the outbound warehouse handling time in calculating the planned delivery date or shipment date.

•

Shipping Time setup. This setup can include definitions of the types of services the company's shipping agent can offer and the corresponding shipping times.

•

Availability Test Interval setup. This is the period within which the program makes the availability calculation.

Demonstration: Set Up Outbound Warehouse Handling Time Companies can set up the outbound warehouse handling time on:

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•

The inventory setup card.

•

The location card.


Chapter 7: Order Promising If a company has more than one location, it must set up handling time for each location. This setup has priority over the setup on the inventory setup card. Scenario: Ellen, the warehouse manager at CRONUS International Ltd., is contacted by Kevin, the sales manager, regarding some recent delays in shipments from the Blue Warehouse. After speaking to warehouse staff, Ellen determines that it takes one day for the warehouse personnel at the Blue Warehouse to handle the picking, packing, and labeling procedures. Therefore, to ensure shipments are not delayed, she sets up the BLUE location to accommodate this extra handling time. Follow these steps to set up the outbound warehouse handling time for the Blue Warehouse: 1. On the navigation pane, click Warehouse. 2. On the Warehouse page, click Administration and then click Locations. 3. Open the location card for the Blue Warehouse, and then expand the Warehouse FastTab. 4. In the Outbound Whse. Handling Time field, type 1D. 5. Click OK to close the location card.

Demonstration: Set Up Shipping Time Because the shipping time can depend on the type of shipping services companies' shipping agents offer, they can set up the shipping time for each shipping agent service. With the shipping agent services and shipping times set up, the companies can link them to the customers. Then, whenever an order processor makes a sales order for a specific customer, the program uses the shipping time associated with the shipping agent service set up for this customer to calculate the planned delivery date. Companies also can set up a shipping time for each customer, independent of the specific shipping agent service. They do so by entering the information in the Shipping Time field on the Shipping FastTab of the customer card. In this case, they overwrite the shipping time associated with a specific shipping agent service. To use the shipping time dependent on a chosen shipping agent and services, companies must set up shipping agents and define their services. Scenario: At CRONUS, there are four shipping agents. For each shipping agent, the company sets up several services that differ on shipping time. These shipping agent services are linked to customers. Michael, the account manager, is responsible for setting up the FEDEX shipping agent and the Next Day shipping service for his customer, 20000 Selangorian Ltd.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to review the shipping agent information for FEDEX: 1. On the navigation pane, click Sales & Marketing and then click Order Processing. 2. On the Order Processing page, click Shipping Agents. 3. Click the line for FEDEX and on the Related Information menu, point to Line and then click Shipping Agent Services.

FIGURE 7.2 SHIPPING AGENT SERVICES FOR FEDEX

Based on this setup, there is a one-day shipping time used for next day delivery. Follow these steps to set up customer 20000 with the FEDEX shipping agent and Next Day shipping service: 1. Close the shipping agents pages. 2. On the Order Processing page, click Customers. 3. Open the customer card for customer 20000 and then expand the Shipping FastTab. 4. In the Shipping Agent Code field, enter FEDEX. 5. In the Shipping Agent Service Code field, select NEXT DAY, and then press ENTER or TAB. The Shipping Time field is automatically populated with 1D. The next time a sales order is created for this customer, the information about the shipping agent services and shipping time from the customer card is copied automatically to the corresponding fields on the Shipping FastTab of the sales order.

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Chapter 7: Order Promising Demonstration: Review the Availability Test Interval Setup Scenario: Sales management at CRONUS decided that when an order processor runs the ATP function, the program must check item availability for 90 days starting from the current day, checking one week at a time. Follow these steps to ensure the setup of the availability test interval: 1. On the navigation pane, click Administration, then Application Setup and then click General. 2. On the General page, click Company Information. 3. Expand the Shipping FastTab.

FIGURE 7.3 AVAILABILITY TEST INTERVAL SETUP

The Check-Avail. Period Calc. field contains 90D and the Check-Avail. Time Bucket field contains Week. The check-availability period reflects an agreement between a company and its customers. This indicates the maximum time customers are willing to wait before their order requests can be met.


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Trade in Microsoft Dynamics® NAV 2009 Order Promising Setup The Order Promising feature is set up in the Order Promising Setup page, which you can access on the navigation pane by clicking Sales & Marketing, then Administration and then clicking Order Promising Setup.

FIGURE 7.4 ORDER PROMISING SETUP

The Order Promising Template field set up in CRONUS contains PLANNING. This means that replenishment proposals are created by default in the planning worksheet. For more information about setting up parameters in the Order Promising Setup page, refer to the "Setting Up Order Promising" topic in online Help.

Promising Sales Order Delivery The date calculations provide the order processor with information about when an order can be promised to a customer. The following demonstrations illustrate the date calculation functionality and the functionality of Order Promising. In these examples, the current day is assumed to be the 28th of January, 2010 (01/28/10).

Demonstration: Promise Sales Orders without a Requested Delivery Date Scenario: Customer 10000 orders 100 units of item 70002. The customer does not request a specific delivery date. Susan, the order processor at CRONUS, creates a sales order and tells the customer when the order will be delivered. Follow these steps to create the sales order for customer 10000 for 100 units of item 70002: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB.

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Chapter 7: Order Promising 3. 4. 5. 6. 7.

In the Sell-to Customer No. field, enter 10000. Leave the Requested Delivery Date field blank. On the Lines FastTab, in the Type field, select Item. In the No. field, enter 70002. In the Quantity field, type 100.

FIGURE 7.5 SALES ORDER WITH DELIVERY AND SHIPMENT DATES

Notice the Planned Delivery Date, Planned Shipment Date, and Shipment Date fields on the sales lines. The program fills in the date fields with dates from the forward calculation, when the shipment date is set equal to the order date. First, the program checks the availability of the required quantity of item 70002 at the Blue Warehouse on the current date. When the availability check shows that items are available, the program performs forward calculation, taking this date as a starting point for calculations. Because the outbound warehouse handling time is one day for this location, and the shipping time is one day for this customer, the program calculates the planned shipment date and the planned delivery date. Susan can inform the customer that the order will be delivered in two days.


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Trade in Microsoft Dynamics® NAV 2009 Demonstration: Request Items Unavailable for Shipping Scenario: Customer 20000 orders 30 units of item 1968-S. The customer does not request a specific delivery date, and the order will ship from the Green Warehouse. Susan creates a sales order and tells the customer when the order will be delivered. Follow these steps to create a sales order for customer 20000 for 30 units of item 1968-S: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 20000. 4. Leave the Requested Delivery Date field blank. 5. Expand the Shipping FastTab. 6. In the Location Code field, enter GREEN. 7. On the Lines FastTab, in the Type field, select Item. 8. In the No. field, enter 1968-S. 9. In the Quantity field, type 30. A stockout warning message appears.

FIGURE 7.6 STOCKOUT WARNING SHOWING THE EARLIEST AVAILABILITY DATE

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Chapter 7: Order Promising The Earliest Availability Date field on the warning card contains 02/02/10. This means that a transfer, production, or sales return order has been created for item 1968-S, and the expected receipt date for this order is 02/02/10. Susan uses this information to recalculate the date when the sales order can be delivered. 10. Click Yes to record the quantity. 11. In the Shipment Date field on the sales line, enter 02/02/10 and then press ENTER or TAB. The planned shipment date and the planned delivery date recalculate.

FIGURE 7.7 RECALCULATED DELIVERY AND SHIPMENT DATES

Based on these calculations, Susan can tell the customer that the order will be delivered on 02/04/10. NOTE: In addition to using the suggested earliest availability date, the order processor can run the CTP function. If Susan decides to change the shipment date to a later date, the program recalculates all related dates. NOTE: If the shipment date is changed on the header, and the availability check for existing sales lines shows that items are unavailable on the new shipment date, the program does not give a stockout message. The warning appears only when the shipment date is changed on an individual line.


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Trade in Microsoft Dynamics® NAV 2009 12. In the Shipment Date field on the sales line, change the date to 02/03/10 and then press ENTER or TAB. The program makes the forward calculations to determine the new planned shipment and planned delivery dates and fills in the corresponding fields on the sales lines. If Susan decides to change the planned delivery date, the program makes a backward calculation to determine when items must be available (the shipment date). Based on this new date and depending on item availability, the program performs forward calculations.

Demonstration: Meet the Requested Delivery Date Scenario: Customer 50000 orders 25 units of item 70010. The customer requests that the order be delivered on 02/02/10. Susan creates a sales order and checks if the requested order delivery date can be met. Follow these steps to create a sales order for customer 50000 for 25 units of item 70010: 1. On the Sales Orders list page, click New and then press ENTER or TAB. 2. In the Sell-to Customer No. field, enter 50000. 3. In the Requested Delivery Date field, enter 02/02/10. 4. Expand the Shipping FastTab. 5. In the Location Code field, enter BLUE. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 70010. 8. In the Quantity field, type 25. Notice the Planned Delivery Date, the Planned Shipment Date, and the Shipment Date fields on the sales lines. •

Planned Delivery Date: 02/02/10

•

Planned Shipment Date: 01/31/10

•

Shipment Date: 01/30/10

The program fills in these fields with dates from the backward calculation, when the planned delivery date is set equal to the requested delivery date. Then it verifies that items are available for shipping on the calculated shipping date (01/30/10) and leaves the planned delivery date unchanged. Based on these calculations, Susan can inform the customer that the order will be delivered on the requested delivery date of 02/02/10.

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Chapter 7: Order Promising If Susan decides to change the shipping time and the outbound warehouse handling time, the program recalculates all related dates. Follow these steps to change the outbound warehouse handling time in the sales order from one day to two days: 1. On the Shipping FastTab, in the Outbound Warehouse Handling Time field, type 2D and then press ENTER or TAB. 2. Click Yes to update the lines. The program now recalculates the shipment date and verifies that items are available for shipping on this date. The requested delivery date remains unchanged.

Demonstration: Request an Unavailable Delivery Date Scenario: Customer 20000 orders 30 units of item 70200. The customer requests that the order arrives on 02/01/10. Susan creates a sales order and checks if the requested order delivery date can be met. The sales order will ship from the Green Warehouse. Follow these steps to create a sales order for customer 20000 for 30 units of item 70200: 1. On the Sales Orders list page, click New and then press ENTER or TAB. 2. In the Sell-to Customer No. field, enter 20000. 3. In the Requested Delivery Date field, enter 02/01/10. 4. Expand the Shipping FastTab. 5. In the Location Code field, enter GREEN. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 70200. 8. In the Quantity field, type 30. A stockout warning message appears. This message appears because the program checks whether the needed quantity of the item is available for shipping on 01/30/10. This is the day when the order must ship to meet the requested delivery date of 02/01/10. The availability check shows that items are unavailable on that date. The Earliest Availability Date field on the warning message does not contain a date. This means that there are no transfer, production, or sales return purchase orders created for item 70200. 9. Click Yes to accept the warning message.


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Trade in Microsoft Dynamics® NAV 2009 NOTE: If the requested delivery date is changed on the header, and the availability check for existing sales lines shows that items are unavailable on the calculated shipment date, the program does not give a stockout warning. The warning appears only when the requested delivery date is changed on an individual line. Susan can use the CTP functionality of the Order Promising functionality to calculate when the requested quantity can be available. Follow these steps to use the CTP functionality: 1. On the Related Information menu, point to Order and then click Order Promising. The Order Promising Lines page appears. The program copies information to the Requested Delivery Date field and the Original Shipment Date field from the sales order header and line, respectively. 2. On the Related Information menu, point to Calculate and then click Capable-to-Promise. The program checks when the required item quantity can be available if it must be produced, transferred, or purchased. Then it fills in the Earliest Shipment Date field and, based on this date, recalculates the new planned delivery date.

FIGURE 7.8 CALCULATED CAPABLE-TO-PROMISE LINES

3. On the Action Pane, click Accept. The program copies the dates from the fields on the Order Promising Lines page to the corresponding fields on the sales lines.

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Chapter 7: Order Promising Based on these calculations, Susan can inform the customer that the requested delivery date cannot be met. At the same time, she can inform the customer that CRONUS can deliver the order two days later than first requested, on 02/03/10 (the Planned Delivery Date). NOTE: After the CTP function runs, the program reserves the required quantity for the sales order and creates a requisition proposal line in the Planning Worksheet in Manufacturing. If the requested delivery date changes after you run the CTP function, the lines in the planning (requisition) worksheet are not updated. If, with the customer's agreement, Susan moves the requested delivery date to another date, the program recalculates all related dates. Follow these steps to change the requested delivery date from 02/01/10 to 02/03/10: 1. In the Requested Delivery Date field, enter 02/03/10. 2. Click Yes to update the lines. The program recalculates all other dates and fills in the corresponding fields on the sales lines. If Susan changes the planned shipment date, the program recalculates all associated dates and makes a backward calculation to determine the new shipment date and a forward calculation to determine a new planned delivery date.

Demonstration: Set Shipment Date Before Current Date Scenario: Customer 50000 orders 20 units of item 1988-S and requests that the order arrives on 01/30/10. The sales order ships from the Yellow Warehouse. Susan creates a sales order and checks if the requested order delivery date can be met. Follow these steps to create a sales order for customer 50000 for 20 units of item 1988-S: 1. On the Sales Orders list page, click New and then press ENTER or TAB. 2. In the Sell-to Customer No. field, enter 50000. 3. In the Requested Delivery Date field, enter 01/30/10. 4. Expand the Shipping FastTab. 5. In the Location Code field, enter YELLOW. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 1988-S and then press ENTER or TAB.


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Trade in Microsoft Dynamics® NAV 2009 The program performs calculations and gives a message that the shipment date is before the work date. By clicking OK, you accept the suggested shipment date of 01/28/10. 8. In the Quantity field, type 30. The Late Order Shipping field on the Shipping FastTab is set to Yes. This indicates that the shipment is delayed compared to the customer's requested delivery date or the shipment date is before the work date. The program does not give a direct warning. NOTE: It may be necessary to refresh the page to see the change to the Late Order Shipping field. On the Actions menu, click Refresh or click the field. In this situation, Susan can do either of the following steps: •

Accept the planned delivery date and the requested delivery date, and find an internal solution to comply.

•

Set the shipment date equal to the current date and make the program recalculate all associated dates and suggest a new planned delivery date.

Promising Sales Order Delivery in Other Situations When creating sales orders, with or without requested delivery dates, order processors may want to ship the orders on a different date than that calculated by the program. Shipping orders on certain week days to a specific customer (and having a fixed routing schedule) is an example. Another example is when the shipping of various sales lines with different planned delivery dates on the same date is an optimal option for both the order processor and the customer. In these and similar situations, the order processor first confirms the new delivery date with the customer and then, with the customer's agreement, regards this date as a promised delivery date. After the date is entered in the Promised Delivery Date field, the program sets the planned delivery date equal to the promised delivery date and calculates all associated dates in the same way as if there is a requested delivery date.

Demonstration: Request Different Shipment Dates on Lines Scenario: Customer 50000 orders 10 units of item 1908-S, 15 units of item 1964S, and 90 units of item 1906-S. The customer requests that the order be delivered on 02/01/10. The sales order will ship from the Green Warehouse. Susan creates the sales order and checks if the requested order delivery date can be met.

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Chapter 7: Order Promising Follow these steps to create a sales order for customer 50000 for 20 units of item 1988-S: 1. On the Sales Orders list page, click New and then press ENTER or TAB. 2. In the Sell-to Customer No. field, enter 50000. 3. In the Requested Delivery Date field, enter 02/01/10. 4. Expand the Shipping FastTab. 5. In the Location Code field, enter GREEN. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 1908-S. 8. In the Quantity field, type 10. 9. On the next line, enter 1964-S in the No. field. 10. In the Quantity field, type 15. 11. On the next line, enter 1906-S in the No. field. 12. In the Quantity field, type 90 and then press ENTER or TAB. A stockout message appears, stating that the earliest availability date for this item is 02/03/10. 13. Click Yes to record the quantity. 14. In the Shipment Date field on the third line, enter 02/03/10. The order now contains three sales lines with two different shipment dates. To ship all three items on the same date, Susan obtains the customer's acceptance to deliver the order on 02/06/10. 15. On the General FastTab, in the Promised Delivery Date field, enter 02/06/10 and then press ENTER or TAB. 16. Click Yes to update the lines. The program recalculates all other dates and fills in the corresponding fields on the sales lines.


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Lab 7.1 - Promise Order Delivery to a Customer Scenario Customer 50000 orders 50 units of item 70040. The customer requests the order be delivered on 01/30/10. The sales order will ship from the Yellow Warehouse. As the order processor, it is your responsibility to create the sales order and check if the requested order delivery date can be met. If the requested delivery date cannot be met, determine when you can deliver the order.

Challenge Yourself! 1. Create the sales order for customer 50000 for 50 units of item 70040 to ship from the Yellow Warehouse for delivery on 01/30/10. 2. Accept any warning messages. 3. Run the CTP function to check delivery availability and accept the new delivery date.

Need a Little Help? 1. Create the sales order for customer 50000 with a requested delivery date of 01/30/10. 2. Set the location to the Yellow Warehouse. 3. Enter a line for item 70040 for a quantity of 50 and accept any warning messages. 4. Open the Order Promising Lines page. 5. Run the CTP function. 6. Accept the planned delivery date of 02/03/10.

Step by Step Follow these steps to create the sales order: 1. On the Sales & Marketing page, click Order Processing and then click Sales Orders. 2. Click New to insert a new order and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 50000. 4. In the Requested Delivery Date field, enter 01/30/10. 5. Expand the Shipping FastTab. 6. In the Location Code field, enter YELLOW. 7. On the Lines FastTab, in the Type field, select Item. 8. In the No. field, enter 70040 and then press ENTER or TAB.

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Chapter 7: Order Promising 9. Click OK to close the message regarding the work date. 10. In the Quantity field, type 50 and then press ENTER or TAB. 11. Click Yes to record the quantity. Follow these steps to run the CTP function: 1. On the Related Information menu, point to Order and then click Order Promising. 2. On the Related Information menu, point to Calculate and then click Capable-to-Promise. 3. According to these dates, you can deliver the order on 02/03/10. On the Action Pane, click Accept.


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Estimate Order Receipt To understand the functionality of the Order Promising feature when you estimate purchase order receipts, review the terms and definitions of key dates and times used and calculated by the program. Then, examine some calculations, which are based on the interrelations between the dates and times. After you have become familiar with the terms, definitions, and calculations, review how: •

To set up the program to use the date calculation functionality.

•

The program supports purchasing agents in managing the purchase order receipt process.

Definitions The following table defines important date fields in Order Promising.

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Field

Definition

Requested Receipt Date

The date when the company requests a vendor to deliver the order. You must enter this date manually to affect the date calculation.

Promised Receipt Date

The date when the vendor promises the order will be delivered to the company. You must enter this date manually to affect the date calculation.

Planned Receipt Date

The date when the company plans to receive the order. This date calculates automatically.

Expected Receipt Date

The date when the company expects the put-away process to finish and when items are available for picking. This date calculates automatically and affects item availability.

Order Date

The date when the vendor must ship the items to meet the planned receipt date.

Inbound Warehouse Handling Time

The time that is required to receive and put away the items of an order.

Lead Time Calculation

The time interval between items being ordered at the vendor and items being received by the company.

Safety Lead Time

The buffer period if there are delays in the production process. This affects the date when items are available for sale.


Chapter 7: Order Promising Date Calculations The date calculation functionality enables a purchasing agent to estimate when orders are received at the company. The program supports a purchasing agent in two ways: •

It calculates the expected receipt date for the orders when a purchasing agent has not requested a receipt date, considering vendor's lead time.

•

It calculates the date when the purchasing agent must make a purchase order to receive it on the requested date.

To perform these actions, the program makes a set of calculations based on the dates entered by the purchasing agent and information set up in the program. The relationship between the dates and times in calculations is illustrated in the following scheme:

FIGURE 7.9 DATE AND TIME CALCULATION RELATIONSHIP IN PURCHASE ORDERS

To calculate the expected receipt date for orders when a purchasing agent does not request a receipt date, the program sets the order date equal to the current working date. The program makes a forward calculation from this date to determine when the order will be delivered. These forward calculations are represented by the following formulas. Order Date + Lead Time Calculation = Planned Receipt Date and Planned Receipt Date + Inbound Warehouse Handling Time + Safety Lead Time = Expected Receipt Date To calculate an order date for an order to be received on the requested date, the program sets the planned receipt date equal to the requested receipt date. The program makes a backward calculation to determine when items must be ordered (the order date).


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Trade in Microsoft Dynamics® NAV 2009 To calculate the expected receipt date for an order with the requested receipt date, the program sets the planned receipt date equal to the requested receipt date. The program makes a forward calculation. These calculations are represented by the following formulas. Planned Receipt Date - Lead Time Calculation = Order Date and Planned Receipt Date + Inbound Warehouse Handling Time (+ Safety Lead Time) = Expected Receipt Date The program also recalculates all related dates if a purchasing agent manually changes any date involved in date calculations. There is an order of priority for how the program uses the dates entered on the purchase header when it calculates all related dates on the lines. These priorities are illustrated in the following table. Promised Receipt Date

Requested Receipt Date

Expected Receipt Date

Priority 1

X

Priority 2

is not entered

X

Priority 3

is not entered

is not entered

X

Priority 4

is not entered

is not entered

is not entered

Order Date

X

The program uses the date with the highest priority as a starting point for the calculation.

Date Calculation Setup for Purchase Orders The order promising setup on the purchase side consists of three elements: •

Inbound Warehouse Handling Time setup. When users set up the inbound warehouse handling time, they define the time required to receive and put away items. The program uses this time to calculate the planned receipt date or expected receipt date.

•

Lead Time Calculation setup. When users set up the lead time calculation, they define a date formula for the time required for the item to be delivered to the company. Alternatively, the user can define a date formula for the time required for a vendor to deliver (orders) from when orders are placed to when they are received at the company.

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Chapter 7: Order Promising The program uses the formula to calculate the date when the items/orders are planned to be received (when there is no requested receipt date) or the order date (when there is a requested receipt date). •

Safety Lead Time setup. In the planning process, this time affects the date the items produced are available for sale. The safety lead time is a buffer period if delays occur in the production process.

Demonstration: Set Up Inbound Warehouse Handling Time Companies can set up the inbound warehouse handling time on: •

The inventory setup card.

•

The location card.

If a company has multiple locations, they must set up the handling time for each location. This setup has priority over the setup on the inventory setup card. Scenario: Ellen, the warehouse manager at CRONUS, has been working with staff in the Blue Warehouse to ensure that inbound items are accurately included in the date calculation on the purchase lines. After speaking to warehouse staff, Ellen determines that it takes one day for the warehouse personnel to complete the procedures for receiving and putting away before items are available for picking. Therefore, she sets up the BLUE location to accommodate this extra handling time. Follow these steps to set up the inbound warehouse handling time for the Blue Warehouse: 1. On the navigation pane, click Warehouse. 2. On the Warehouse page, click Administration and then click Locations. 3. Open the location card for the Blue Warehouse, and then expand the Warehouse FastTab. 4. In the Inbound Whse. Handling Time field, type 1D. 5. Click OK to close the Location Card.


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Trade in Microsoft Dynamics® NAV 2009 Lead Time Calculation and Safety Lead Time Setup Companies can set up the lead time calculation on: •

The Item Vendor Catalog page.

•

The Receiving FastTab of the Item Card (or on the Replenishment FastTab of the Stockkeeping Unit Card if the stockkeeping unit exists for the item).

•

The Receiving FastTab of the Vendor Card.

The program uses the lead time calculation in the same order of priority as shown above. Companies can set up the safety lead time on the Planning FastTab of the item card or the Planning FastTab of the Manufacturing Setup page, where the term "default safety lead time" is used. The program uses the default safety lead time set up on the Manufacturing Setup page only if it is not set up on the item card. Because this time is relevant to manufacturing companies, non-manufacturing companies should set this time to zero on item cards or remove it from the Manufacturing Setup page and the item card.

Demonstration: Set Up Lead Time Calculations Scenario: Based on the purchasing practices and long-term relationships with vendors, Alicia, the purchasing agent at CRONUS, has an idea of how long it takes a vendor to deliver each item. Similarly, she knows how long it takes for vendors to deliver a specific item and for a vendor to deliver orders. For example, it takes one week for item 70010 to be delivered to CRONUS if shipped by vendor 30000, and it takes three days for vendor 40000 to deliver orders (regardless of the items). It takes all vendors two days to ship items 70011 and 1928-W. The safety lead time is not relevant for CRONUS' business operations. Therefore, all items on the company's inventory must have zero safety lead time. First, review how CRONUS has set up the lead time calculation for item 70010 and vendor 40000. Then, set up the lead time calculation for items 70011 and 1928-W and the safety lead time for items 70010, 70011, 70040, and 1928-W. In the situation where several vendors ship the same items, companies can set up vendors for each item using the Item Vendor Catalog page. Follow these steps to review the setup for item 70010 and vendor 40000: 1. On the navigation pane, click Purchase and then click Inventory & Costing. 2. On the Inventory & Costing page, click Items. 3. Select the line for item 70010 and then on the Related Information menu, point to Purchases and then click Vendors.

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Chapter 7: Order Promising On the Item Vendor Catalog page, the Vendor No. field contains 30000, and the Lead Time Calculation field contains 1W. This means that when item 70010 is purchased from vendor 30000, the program uses one week as a default lead time in date calculation for the purchase order. 4. 5. 6. 7. 8.

Click OK to close Item Vendor Catalog page. On the navigation pane, under Purchase, click Order Processing. On the Order Processing page, click Vendors. Open the vendor card for vendor 40000. Expand the Receiving FastTab.

The Lead Time Calculation field contains 3D. This means that when an order is placed with vendor 40000, the program uses a three-day default lead time in date calculation for the purchase order. 9. Click OK to close the Vendor Card. Follow these steps to set up the lead time calculations for items 70010, 70011, 70040, and 1928-W: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

On the navigation pane, under Purchase, click Inventory & Costing. On the Inventory & Costing page, click Items. Open the item card for item 70010. Expand the Planning FastTab. In the Safety Lead Time field, type 0D. Click OK to close the item card. Open the item card for item 70011. Expand the Replenishment FastTab. In the Lead Time Calculation field, type 2D. On the Planning FastTab, type 0D in the Safety Lead Time field. Click OK to close the item card. Repeat steps 3-6 for item 70040. Repeat steps 7-11 for item 1928-W.


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Estimating Purchase Order Receipts You can estimate the receipt of a purchase order by using the estimate purchase order receipt functionality. The following demonstrations illustrate the date calculation functionality. In these examples, the current day is assumed to be the 28th of January 2010 (01/28/10).

Demonstration: Calculate Purchase Order Receipt without a Requested Receipt Date Scenario: Alicia, the purchasing agent at CRONUS, orders 25 units of item 70011 from vendor 10000 and does not request a specific receipt date. She then creates a purchase order and wants to estimate when the order will arrive at the Blue Warehouse. Follow these steps to create a purchase order to vendor 10000 for 25 units of item 70011: 1. On the navigation pane, click Purchase and then click Order Processing. 2. On the Order Processing page, click Purchase Orders. 3. Click New and then press ENTER or TAB. 4. In the Buy-from Vendor No. field, enter 10000. 5. Expand the Shipping FastTab. 6. In the Location Code field, enter BLUE. 7. Leave the Requested Receipt Date field blank. 8. On the Lines FastTab, in the Type field, select Item. 9. In the No. field, enter 70011. 10. In the Quantity field, type 25. The program calculates when the vendor can deliver the items to the warehouse and when they are available for picking. Refer to the Planned Receipt Date, the Expected Receipt Date, and the Order Date fields on the purchase lines. Based on the lead time (+ safety lead time) set up for item 70011 and the inbound warehouse handling time set up for the Blue Warehouse, the program calculates planned and expected receipt dates. Alicia can expect the items to be available for picking in the Blue Warehouse on 01/31/10. If Alicia decides to change the order date, the program recalculates all related dates.

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Chapter 7: Order Promising For example, change the order date on the purchase line from 01/28/10 to 02/03/10 to see how the dates recalculate: 11. In the Order Date field on the purchase line, enter 02/03/10. The program makes a forward calculation to determine the new planned receipt date and expected receipt date and fills in the corresponding fields on the purchase line.

FIGURE 7.10 PURCHASE ORDER WITH RECEIPT DATES

If Alicia changes the expected receipt date, the program makes a backward calculation from this date to determine the new planned receipt date and a new order date.

Demonstration: Estimate Purchase Order Receipt with a Requested Receipt Date Scenario: Alicia orders 30 units of item 70010 from vendor 30000 and requests that the order be delivered to the Blue Warehouse on 02/06/10. She creates a purchase order and wants to estimate the latest order date for it to arrive at the Blue Warehouse on the requested date and when the items will be available for picking.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to create the purchase order to vendor 30000 for 30 units of item 70010: 1. On the Purchase Orders list page, click New and then press ENTER or TAB. 2. In the Buy-from Vendor No. field, enter 30000. 3. Expand the Shipping FastTab. 4. In the Location Code field, enter BLUE. 5. In the Requested Receipt Date field, enter 02/06/10. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 70010. 8. In the Quantity field, type 30. The program calculates when the vendor can deliver the items to the warehouse and when they will be available for picking. Refer to the Planned Receipt Date, Expected Receipt Date, and the Order Date fields on the purchase lines. The program sets the planned receipt date equal to the requested receipt date from which the program subtracts the lead time (set up for this item to one week if purchased from vendor 30000) to calculate the order date. The program calculates the expected receipt date by adding inbound warehouse handling time (+ safety lead time) to the planned receipt date. Alicia estimates that to receive the items on 02/06/10, the order must be placed on 01/30/10. If she changes the requested receipt date, the program recalculates all related dates accordingly. For example, change the requested receipt date from 02/06/10 to 02/05/10 to see how the dates are recalculated. 9. In the Requested Receipt Date field on the Shipping FastTab, enter 02/05/10 and then press ENTER or TAB. 10. Click Yes to update the lines. Based on the new requested receipt date, the program makes a backward calculation from this date to determine the new order date and then a forward calculation to determine a new expected receipt date.

Demonstration: Calculate Order Placed Before the Current Date Scenario: Alicia orders 40 units of item 70040 from vendor 40000 and requests that the order be delivered to the Green Warehouse on 01/30/10. She creates a purchase order and wants to estimate the latest order date for the order to arrive at the warehouse on the requested date.

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Chapter 7: Order Promising Follow these steps to create the purchase order to vendor 40000 for 40 units of item 70040: 1. On the Purchase Orders list page, click New and then press ENTER or TAB. 2. In the Buy-from Vendor No. field, enter 40000. 3. Expand the Shipping FastTab. 4. Ensure that the Location Code is set to GREEN. 5. In the Requested Receipt Date field, enter 01/30/10. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 70040 and then press ENTER or TAB. 8. Click OK to accept the work date warning message. 9. In the Quantity field, type 40. The program does not change the calculated order date that is before the work date. In this situation, Alicia can either: •

Discuss the possibility of receiving the items on the initially requested receipt date (leaving the dates on the line unchanged).

•

Set the order date to equal to the current date and make the program recalculate all associated dates.

NOTE: If the user changes the requested receipt date on the header and the date calculation for existing purchase lines results in the order date being before the work date, the program does not give a warning. The warning appears only when the requested receipt date is changed on an individual line.

Demonstration: Estimate Purchase Order Receipt in Other Situations Scenario: When using the program to estimate the receipt of purchase orders, Alicia assumes the delivery process adheres to time periods set up for this process. However, she likes to confirm the program's calculated delivery dates with their vendors. If a vendor requests another date, she considers it as a promised receipt date. After Alicia enters the date in the Promised Receipt Date field, the program sets the planned receipt date equal to the promised receipt date and the program makes a forward calculation to suggest a new expected receipt date. The first calculated order date remains unchanged. Alicia orders 20 units of item 1928-W from vendor 40000 and requests that the order be delivered to the Green Warehouse on 02/01/10. She creates a purchase order and uses the program to estimate the latest order date for the order to arrive at the warehouse on the requested date.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to confirm the calculated receipt date: 1. On the Purchase Orders list page, click New and then press ENTER or TAB. 2. In the Buy-from Vendor No. field, enter 40000. 3. Expand the Shipping FastTab. 4. Ensure that the Location Code is set to GREEN. 5. In the Requested Receipt Date field, enter 02/01/10. 6. On the Lines FastTab, in the Type field, select Item. 7. In the No. field, enter 1928-W. 8. In the Quantity field, type 20. The program uses the lead time set up for the item (two days for item 1928-W) to calculate the order date instead of using the lead time set up for the vendor (three days for vendor 40000). The vendor cannot deliver the order on the requested date and promises to deliver three days later on 02/04/10. 9. On the Shipping FastTab, in the Promised Receipt Date field, enter 02/04/10 and then press ENTER or TAB. 10. Click Yes to update the lines. The program sets the planned receipt date equal to the promised receipt date and calculates forward to suggest a new expected receipt date. The initial order date of 01/30/10 remains unchanged.

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Lab 7.2 - Purchase Order Promising Scenario As the purchasing agent at CRONUS, you order ten units of item 70011 from vendor 30000 and request that the order be delivered at the Green Warehouse on 02/09/10. The vendor informs you that it can deliver the order three days earlier than first requested. Record this information in the purchase order.

Challenge Yourself! 1. Create the purchase order to vendor 30000 for 10 units of item 70040 to be received into the Green Warehouse on 02/09/10. 2. Record the earlier receipt date of 02/06/10 promised by the vendor.

Need a Little Help? 1. Create the purchase order to vendor 30000 with a requested receipt date of 02/09/10. 2. Set the location to the Green Warehouse. 3. Enter a line for item 70011 for a quantity of 10 and accept any warning messages. 4. Change the promised receipt date to 02/06/10.

Step by Step Follow these steps to create the purchase order: 1. On the navigation pane, click Purchase and then click Order Processing. 2. On the Order Processing page, click Purchase Orders. 3. Click New and then press ENTER or TAB. 4. In the Buy-from Vendor No. field, enter 30000. 5. Expand the Shipping FastTab. 6. In the Location Code field, enter GREEN. 7. In the Requested Receipt Date field, enter 02/09/10. 8. On the Lines FastTab, in the Type field, select Item. 9. In the No. field, enter 70011 and then press ENTER or TAB. 10. The work date message indicates that the order must be placed by 01/26/10 to meet the requested receipt date. Click OK to accept the work date warning message. 11. In the Quantity field, type 10.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to record the earlier receipt date promised by the vendor: 1. On the Shipping FastTab, in the Promised Receipt Date field, enter 02/06/10. 2. Click Yes to update the lines. The Planned Receipt Date and Expected Receipt Date fields on the line update accordingly.

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Estimate Transfer Order Receipt With the date calculation functionality, companies can estimate a date when transfer orders are received at the transfer-to location. The program calculates the receipt date according to the following formula. Shipment Date + Outbound Warehouse Handling Time + Shipping Time + Inbound Warehouse Handling Time = Receipt Date The shipping time can be either: •

The time associated with the shipping agent service set up for a specific transfer route.

•

Entered manually on the transfer header.

Learn more about how to estimate transfer order receipts in the "Inventory Management in Microsoft Dynamics® NAV 2009" training material.

Calendars The date calculation in this description does not consider non-working days. This section describes setting up the program to calculate days using the Calendars feature. Non-working days are when the company is closed for business, such as weekends or holidays. Working days vary from one country/region to another and between companies. Companies base their scheduling on working and nonworking days and acknowledge that their business partners may work with different calendars.

Set Up and Assign Calendars The Calendar feature enables companies to calculate working days based on specific calendars. In the calendar, users set up the specific days to be considered as working and non-working days and then assign the calendars to the company and to its business partners. When users assign them, the program calculates all order lines according to the relevant calendar. The program defines two different types of calendars: •

Base Calendar

•

Customized Calendar

The Base Calendar is the calendar that defines working and non-working days and is the basis for the customized calendars. The Customized Calendar is a copy of a specific base calendar with added settings for the assigned business partner.


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Trade in Microsoft Dynamics® NAV 2009 The procedures for creating and maintaining the Base Calendar are described in the online Help when you search for "Base Calendar."

Procedure: Review Base Calendar Setup Follow these steps to review the base calendar set up in CRONUS: 1. On the navigation pane, click Administration, then Application Setup and then click General. 2. On the General page, click Base Calendar. 3. Double-click the line for UK Base National Calendar.

FIGURE 7.11 BASE CALENDAR CARD FOR THE UK BASE NATIONAL CALENDAR

Saturdays and Sundays are set up as nonworking days. Users can specify nonworking days that occur weekly or annually (for example, bank holidays) in the Base Calendar Changes page. 4. On the Actions menu, point to Functions and then click Maintain Base Calendar Changes. 5. Close the Base Calendar Changes and Base Calendar Card pages.

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Chapter 7: Order Promising Follow these steps to assign the Base Calendar to a company: 1. 2. 3. 4.

On the navigation pane, under Application Setup, click General. On the General page, click Company Information. Expand the Shipping FastTab. Enter the relevant code in the Base Calendar Code field.

NOTE: Do not assign a Base Calendar in the Company Information page at this time. Assign and customize the Base Calendar to the following areas: •

Shipping FastTab on the Customer Card

•

Receiving FastTab on the Vendor Card

•

Warehouse FastTab on the Location Card

•

Shipping Agent Services list page

•

General FastTab on the Service Mgt. Setup page

NOTE: If you do not assign a base calendar to a company or business partner, the program calculates all dates as working days. If you enter a blank location on an order line, the program calculates all dates as working days.

Summary The date calculation and Order Promising functionality can make a critical difference in customer satisfaction levels regarding order promising dates and ontime delivery. With Order Promising, Microsoft Dynamics NAV calculates the date that an item is available to promise or capable to promise, and it will create sales order lines for the dates the order processor can accept. In the sales order delivery promising functionality, Microsoft Dynamics NAV calculates the earliest possible date that an item on a sales order line can be shipped and/or delivered. In the estimating a purchase order receipt functionality, Microsoft Dynamics NAV calculates when an item needs to be ordered to have it in inventory on a certain date, and when items ordered on a particular date can be expected to be available for picking availability.


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Trade in Microsoft Dynamics® NAV 2009 You also can use the date calculation functionality to estimate when transfer orders are received at the transfer-to location. You can set up Microsoft Dynamics NAV to disregard non-working days in date calculations using the Calendar feature. When calendars are defined and assigned, the program calculates all order lines according to the relevant calendar. Order processing with these features helps maintain the best customer service levels and enables the exchange of order date information with vendors.

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Test Your Knowledge Test your knowledge with the following questions. 1. Which date field do you change on a sales line to make a backward calculation to determine when items must be available? ( ) Shipment Date ( ) Planned Shipment Date ( ) Planned Delivery Date ( ) Promised Delivery Date 2. Which field on the sales order Shipping FastTab indicates that the shipment is delayed compared to the customer's requested delivery date, or that the shipment date is before the work date?

3. When you enter a date in the Promised Delivery Date field on a sales order, which field on the sales line is set to the same date? ( ) Shipment Date ( ) Planned Shipment Date ( ) Planned Delivery Date ( ) Promised Delivery Date 4. Which field on a purchase line calculates when you add inbound warehouse handling time (+ safety lead time) to the planned receipt date? ( ) Promised Receipt Date ( ) Expected Receipt Date ( ) Order Date ( ) Requested Receipt Date


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Trade in Microsoft Dynamics® NAV 2009 5. What date formula is used to calculate transfer order receipts?

6. Where are Base Calendars assigned in Microsoft Dynamics NAV? (Select all that apply) ( ) Item Card ( ) Customer Card ( ) Location Card ( ) Company Information Fill in the blanks to test your knowledge of this section. 7. ________ to Promise performs "what if" scenarios. 8. The Base Calendar defines working and non-working days and is the basis for the ___________ calendars. 9. __________ to Promise is based on the inventory reservation system. 10. ______ Time Calculation is the time interval between items being ordered and received. 11. The _________ Available Date on a stockout warning message indicates when an item is available for sale.

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2.

3.


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Solutions Test Your Knowledge 1. Which date field do you change on a sales line to make a backward calculation to determine when items must be available? ( ) Shipment Date ( ) Planned Shipment Date (•) Planned Delivery Date ( ) Promised Delivery Date 2. Which field on the sales order Shipping FastTab indicates that the shipment is delayed compared to the customer's requested delivery date, or that the shipment date is before the work date? MODEL ANSWER: Late Order Shipping 3. When you enter a date in the Promised Delivery Date field on a sales order, which field on the sales line is set to the same date? ( ) Shipment Date ( ) Planned Shipment Date ( ) Planned Delivery Date (•) Promised Delivery Date 4. Which field on a purchase line calculates when you add inbound warehouse handling time (+ safety lead time) to the planned receipt date? ( ) Promised Receipt Date (•) Expected Receipt Date ( ) Order Date ( ) Requested Receipt Date 5. What date formula is used to calculate transfer order receipts? MODEL ANSWER: Shipment Date + Outbound Warehouse Handling Time + Shipping Time + Inbound Warehouse Handling Time = Receipt Date

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Chapter 7: Order Promising 6. Where are Base Calendars assigned in Microsoft Dynamics NAV? (Select all that apply) ( ) Item Card (√) Customer Card (√) Location Card (√) Company Information Fill in the blanks to test your knowledge of this section. 7.

Capable to Promise performs "what if" scenarios.

8. The Base Calendar defines working and non-working days and is the basis for the Customized calendars. 9.

Available to Promise is based on the inventory reservation system.

10. Lead Time Calculation is the time interval between items being ordered and received. 11. The Earliest Available Date on a stockout warning message indicates when an item is available for sale.


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CHAPTER 8: RETURNS MANAGEMENT Objectives The objectives are: •

Review a returns management activity diagram.

•

Describe the returns management setup for sales and purchases.

•

Explain and demonstrate how to manage customer returns.

•

Explain and demonstrate how to manage returns to vendors.

Introduction Sales returns management is an important part of superior customer and vendor relationships because timely repair, replacement of damaged items, and crediting for returned items are perceived as a parts of good customer service. From the company's perspective, the internal management of return-related processes can seem extensive. In most cases, companies' processes include (but are not limited to): •

Adjusting customer (and vendor) balances

•

Accounting for additional costs

•

Updating inventory quantities and values

•

Inspecting returned items

•

Sending returned items to the vendor for repair

The scope of these processes depends on a variety of factors, such as: •

The customer's request

•

Reason for return

•

Item type and value

•

Causes of damage

•

Practices common in a specific line of business

The handling of these processes involves different tasks that are performed by various groups of employees: order processors, warehouse workers, bookkeepers, purchasing agents, and inspectors. Although logically related, the tasks are not operationally dependent. For example, the replacement for a damaged item can be shipped to a customer before the customer returns the damaged item. Similarly, a customer can be credited for a returned item before the company inspects and approves the return.


8-1

Trade in Microsoft Dynamics® NAV 2009 In such a multi-process environment, the challenge is to ensure that all returnassociated processes are completed in a timely manner and errors are easily recovered. Because of the complexity and scope of return-related processes, a company's costs can be significant. To control costs, companies must optimize their return management processes. The Sales Return Order Management and the Purchase Return Order Management functionality in Microsoft Dynamics® NAV 2009 offers a solution to help companies achieve responsive customer service by implementing costefficient customer and vendor return policies. The application is characterized by the following key features: •

Rapid response to customers' requests

•

Flexibility

•

Traceability and overview

•

Automation of the return to vendor process

Personnel responsible for customer relationships can register the details of an agreement with the customer about the return and information relevant to handling the return with one entry point. Several return-related tasks can be performed at the same time in Microsoft Dynamics NAV. This gives priority to handling customer-oriented processes. The program can manage sales return processes in different business environments. The program provides full document traceability for an overview of the sales return history. This becomes important for customer inquiries and internal follow-up purposes. If companies manage items with warranties provided by vendors (a sales return with a return to vendor process), the program offers functionality that automates creating all relevant documents. NOTE: To guarantee the full traceability of an item with a serial number, assign the item an item tracking code that requires the entry of serial numbers at the point of inbound sale (sales return) and outbound purchase (purchase return). Read more about how to set up item tracking codes in the "Inventory Management in Microsoft Dynamics® NAV 2009" training material.

8-2



Activity Diagram for Returns Management The Return Management Activity Diagram is helpful for the order processor to maintain an overview of the return process in each of the different situations.

FIGURE 8.1 RETURN MANAGEMENT ACTIVITY DIAGRAM

For an overview of procedures associated with handling specific return-related tasks, refer to the respective topic in online Help.


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Returns Management Setup The setup of returns management consists of two elements: •

General setup. The setup of the Sales Return Order Management and the Purchase Return Order Management functionality is defined by several fields on Sales & Receivables Setup and Purchases & Payables Setup.

•

Return Reasons setup. A company can set up codes that specify the reasons for returning items. These apply to both customer and vendor returns. The user can select a return reason code when registering the agreement about a sales/purchase return in most sales/purchase documents.

Procedure: Review Sales Return Order Setup Follow these steps to review the general setup of Sales Return Order Management: 1. On the navigation pane, click Sales & Marketing. 2. On the Sales & Marketing page, click Administration and then click Sales & Receivables Setup. Four fields on the General FastTab define the sales return management setup: •

Return Receipt on Credit Memo

•

Copy Cmts Ret. Ord. to Cr. Memo

•

Copy Cmts Ret. Ord. to Ret. Rcpt

•

Exact Cost Reversing Mandatory

When you select the Return Receipt on Credit Memo check box, the program automatically creates return receipt documents when a sales credit memo posts. When you select the Copy Cmts Ret. Ord. to Cr. Memo and Copy Cmts Ret. Ord. to Ret. Rcpt check boxes, the program copies comments from the return orders to the credit memo or return receipt documents. The Exact Cost Reversing Mandatory field defines whether a company wants to apply an exact cost reversing policy when processing inventory increases represented by the sales returns. This means that when inventory is returned to stock, the program values the items on the sales return at exactly the same cost as the original sale. If an additional cost is later added to the original sale, the program updates the value of the sales return respectively. Selecting this check box indicates that the program prohibits a return transaction to post unless the Appl.-from Item Entry field on a corresponding order line contains an entry.

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Chapter 8: Returns Management Procedure: Review Purchase Return Order Setup Follow these steps to review the general setup of Purchase Return Order Management: 1. On the navigation pane, click Purchase. 2. On the Purchase page, click Administration and then click Purchases & Payables Setup. Four fields on the General FastTab define the purchase return management setup: •

Return Shipment on Credit Memo

•

Copy Cmts Ret. Ord. to Cr. Memo

•

Copy Cmts Ret. Ord. to Ret. Shpt

•

Exact Cost Reversing Mandatory

When you select the Return Shipment on Credit Memo check box, the program automatically creates return shipment documents when a purchase credit memo posts. When you select the Copy Cmts Ret. Ord. to Cr. Memo and Copy Cmts Ret. Ord. to Ret. Shpt check boxes, comments copy from the return orders to the credit memo or return shipment documents. The Exact Cost Reversing Mandatory field defines whether a company wants to apply an exact cost reversing policy in connection with purchase returns. This means that when inventory is removed from stock, the program values the items on the purchase return at exactly the same cost as the original purchase. If an additional cost is later added to the original purchase, the program updates the value of the purchase return respectively. Selecting this check box indicates that the program will not allow a return transaction to post unless the Appl.-to Item Entry field on the purchase order line contains an entry.

Procedure: Review Return Reason Code Setup Companies set up return reason codes to distinguish return situations encountered when it deals with customers and vendors. Because a return reason copies to the item ledger entries, companies may use it for statistical purposes when evaluating their performance toward a customer or assessing their relationship with a specific vendor.


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Trade in Microsoft Dynamics® NAV 2009 To review the return reason codes set up in CRONUS International Ltd., on the Sales & Marketing page, click Administration and then click Return Reasons.

FIGURE 8.2 RETURN REASONS

In addition to setting up the return reasons code and its description, companies also can link a default location code to it. This ensures that items returned because of a specific reason are, by default, always received and shipped from this location. For example, companies may want to store items meant for repair in a dedicated position in a warehouse. This position can be set up as a location in the program to which all items to be repaired will be received and from which they cannot be sold. Similarly, special locations can be set up for damaged/defective items.

Demonstration: Create a Return Location and Assign to a Return Reason Code Scenario: CRONUS has decided to create a new location called Repair and set it up as the default in relation to the S-REPAIR return reason code. Follow these steps to complete this setup: 1. On the navigation pane, click Warehouse. 2. On the Warehouse page, click Administration and then click Locations. 3. Click New. 4. In the Code field, type Repair. 5. In the Description field, type Repair Warehouse.

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Chapter 8: Returns Management 6. Click OK to close the Location Card and then close the Location List page. 7. On the navigation pane, click Sales & Marketing. 8. On the Sales & Marketing page, click Administration and then click Return Reasons. 9. In the Default Location Code field on the line for the S-REPAIR return reason code, enter REPAIR. 10. Ensure that the Inventory Value Zero check box is selected. Selecting the Inventory Value Zero check box indicates that the program automatically values inventory increases, such as sales return orders or purchase orders, at zero cost. This is relevant for customer item repairs. Because the item is the customer's property, it is not included in the inventory value. Therefore, it makes sense to associate the option of valuing inventory at zero with the return reason code of Repair. NOTE: If an item's costing method is set up as Standard, it means the inventory increase is valued at a budgeted (standard) cost instead of at an acquisition cost, and the program ignores the Inventory Value Zero field.

Manage Customer Returns Compensating a dissatisfied customer is a necessary and important transaction. The faster and more accurately a company performs the return process, the more likely the company is to enhance the customer's perception of good customer service. Typically, the order processor responsible for customer interaction is also the person to receive complaints from customers about the items purchased. In other cases, a company may have a dedicated person(s) dealing with returns, such as employees in the customer service department. Managing returns from customers includes completing a series of tasks. The number and scope depends on a company's return policy and business practices. A customer-oriented return handling process may include the following tasks: •

Registering a compensation agreement with the customer

•

Shipping a replacement item(s) to the customer (if replacement is part of the compensation agreement)

•

Crediting the customer (either by a credit for physically returned items or a sales allowance where the customer is not required to physically return the items)

•

Shipping a repaired item(s) to the customer (if repair is a part of a compensation agreement)

•

Following up on the return status (if there are customer inquiries)


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Trade in Microsoft Dynamics® NAV 2009 Related to the customer-oriented process, there are several internal handling tasks: •

Receiving returned items and inspecting them (if relevant)

•

Applying restock charges

•

Using the cost reversal process

•

Shipping returned items to the vendor for repair

•

Ensuring the accurate inventory value is set for the returned items

Sales Return Order Management in Microsoft Dynamics NAV enables companies to manage all these tasks in an efficient and accurate manner. This section explains and illustrates handling of these processes in Microsoft Dynamics NAV using CRONUS as an example. When entering a sales return line, the order processor must ensure that upon invoicing the order, the returned item is revalued at the unit cost of the original sale (instead of at the unit cost suggested by the program as based on either average or standard unit cost). There are three methods of assigning exact cost reversing to a return line:

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•

Fill in the return order line manually, add the Appl.-from Item Entry field using the Choose Columns feature and then select the relevant line from the Item Ledger Entries page.

•

Use the Copy Document function to fill in the return order automatically from another posted shipment or invoice document. If the Exact Cost Reversing Mandatory check box is selected on the Sales & Marketing Setup, the Appl.-from Item Entry field automatically populates on the return line with the corresponding entry.

•

Use the Get Posted Document Lines to Reverse function to select one or more posted document lines for exact cost reversal. This function is especially useful when users need to copy one or more lines that appear in one or more posted documents.


Chapter 8: Returns Management The Get Posted Document Lines to Reverse function uses the Posted Sales Document Lines page to select from multiple posted documents. This page provides rich information about the status of posted quantities, displaying, for example, whether any have already been returned.

FIGURE 8.3 POSTED SALES DOCUMENT LINES WITH THE POSTED INVOICES VIEW

The Options FastTab includes the following fields: •

Select the Show Reversible Lines Only check box to see only lines with quantities that have not yet been returned.

•

Select the Return Original Quantity check box to use the original quantity. This allows you, for example, to receive quantities associated with specific shipments. Otherwise the program will use the remaining quantity when you create the lines.

On the left side of the page, the different document types are listed, and the number in parentheses shows the number of documents available of each document type. In the Document Type Filter field, select the type of posted document lines to use. In the lines, the Unit Cost (LCY) field shows the current, potentially adjusted unit cost, and the Reverse Unit Cost (LCY) field shows the original unit cost at which the item was originally sold and at which it must be reversed. The Qty. Not Returned field is implemented in the item ledger entry table where the reversible quantity of an outbound item ledger is stored. The program verifies during the posting of return orders that only the quantity remaining in relation to the original sales document line can be reversed. This ensures that users do not mistakenly return more than what was sold. For more information about each cost reversal method, refer to the topic called "Assigning Exact Cost Reversing" in the online Help.


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Trade in Microsoft Dynamics® NAV 2009 Register a Compensation Agreement with Customers There are various ways to compensate a customer who is dissatisfied with the order delivery. The terms of a compensation agreement between the company and the customer frequently depend on the stated reason for return and the company-customer relationship. For example, the parties may agree that for wrongly ordered items, the customer returns them to the company against a credit, receives replacement items, and accepts that the company charges a certain restock fee. In other situations, for example, where an item arrives at the customer slightly damaged, the customer may agree to receive a price deduction against the original sales order price. Meanwhile, where the sold item has a warranty, the company may offer the customer to take the malfunctioned/broken item in for repair. In Microsoft Dynamics NAV, the sales return order is the central document that lets the user register an agreement with a customer. From here, the user can access other sales-related documents and enter and maintain the return-related information, the method of compensation, and the items in question. The user can create return lines of different types to register aspects of a compensation agreement in the same return order. In return situations: •

Item type line represents a transaction where the item is physically returned to the company before the customer receives a credit.

•

Charge (Item) and G/L Account type lines represent a financial transaction where a customer receives a credit (in the form of a sales allowance) for the item(s), without physically returning it to the company. The same type lines can be used for registering charges and fees associated with a return.

NOTE: To register details about a compensation agreement, the user can use other standard documents (or combinations of them) in Microsoft Dynamics NAV. These documents are sales credit memos, sales orders, and sales invoices. In the return order/credit memo, a return transaction is expressed as a line with a positive quantity. In the sales order/invoice, a return is represented by a line with negative quantity. Refer to the example illustrating this principle in the topic titled "Sales Return Order" in online Help. When deciding on which document to use as a preferred entry point for a compensation agreement, the user must be aware that, compared to a credit memo/invoice (where posting updates both quantity and value at the same time), the return/sales order can separate the quantity and value parts of the transaction. Therefore, companies where this flexibility is important may prefer using a return order instead of a credit memo.

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Chapter 8: Returns Management In the sales return order, the user can create other return-related documents. These include a replacement sales order, and, where return to vendor is required, a purchase return order and a replacement purchase order. The following demonstrations illustrate the handling of a situation involving a sales return and a sales allowance, and another where an item must be sent to the vendor for repair.

Demonstration: Create a Sales Return Order Scenario: A representative from customer 10000 calls Susan, the order processor at CRONUS, and says that he or she received five units of item 70011 instead of item 70010 and that two units of item 1964-W were delivered damaged. The customer explains that the wrong delivery of item 70010 was his or her own fault, while item 1964-W appeared to have been damaged during shipment. Susan and the customer agree that item 70011 must be returned to CRONUS and a replacement of the same quantity of item 70010 will be shipped to the customer. CRONUS will charge the customer a restock fee of five percent of the original order amount. Meanwhile, item 1964-W will not be returned, and CRONUS will provide the customer with a sales allowance of 15 percent off the price of the item. Susan must register the compensation agreement that has been reached with the customer and process the return. She must also ensure that the returned items, when put back on stock, are valued at the same unit cost as originally sold (according to CRONUS internal policy about the inventory valuation). Finally, Susan must register the compensation agreement settled with customer 10000 about the return of a wrongly ordered item.

Steps: Create Sales Return Order Header Follow these steps to create the sales return order from customer 10000 for five units of item 70011: 1. On the Sales & Marketing page, click Order Processing and then click Sales Return Orders. 2. Click New and then press ENTER or TAB. 3. In the Sell-to Customer No. field, enter 10000. 4. In the External Document No. field, type SR024. This is the number the program uses as a reference to the return document. It is important to enter an external document number for an overview of the return status. External document numbers help locate the sales documents created for a specific customer return.


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Trade in Microsoft Dynamics® NAV 2009 Steps: Add Line with Exact Cost Reversal Susan must now enter the sales return line, ensuring that upon invoicing the order, the returned item is revalued at the unit cost of the original sale. She chooses to use the automated Get Posted Document Lines to Reverse function. Follow these steps to use the Get Posted Document Lines to Reverse function to enter the sales return line: 1. On the Action Pane, click Get Posted Document Lines to Reverse. 2. In the Document Type Filter field, select Posted Shipments. 3. Click the line with Document No. 102029 for item 70011 and then click OK. The shipment number information is added on the top line and then a separate return line is added on the next line, with the Appl.-from Item Entry field automatically populated. 4. In the Return Reason Code field, enter WRONG.

FIGURE 8.4 SALES RETURN ORDER WITH LINE INFORMATION FROM THE GET POSTED DOCUMENT LINES TO REVERSE FUNCTION

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Chapter 8: Returns Management If necessary, add some comment lines with additional information about the related posted invoice and shipment. This makes tracking the related documents in the returning process easier. 5. On the Lines FastTab, click Actions, point to Line, and then click Comments. 6. Close the Comment Sheet page.

Steps: Create Replacement Order Line The customer also requested a replacement of item 70011 with item 70010. Susan can register this requirement in the sales return order by entering a line for the replacement item with a negative quantity. Follow these steps to add the replacement item to the return order: 1. On a new line, in the No. field enter 70010. 2. In the Quantity field, type -5. The advantage of doing this in the Sales Return Order is that Susan can register the customer's requests to receive a replacement in one page, instead of opening a new Sales Order. NOTE: To avoid confusion, remember that the sales return lines (of the item type) with positive quantities represent items that are being returned, while lines with negative quantities represent items that are to be replaced. The process of creating the replacement sales order is performed in the "Process the Sales Return" demonstration.

Steps: Apply Restock Fee Next, according to the compensation agreement, Susan applies a five percent restock fee to cover the physical handling of returning the item. She can do this in the same sales return order by creating a charge (item) line for sales restock charge. Follow these steps to assign a restock fee charge on the return order: 1. 2. 3. 4.

On a new line, in the Type field, enter Charge (Item). In the No. field, enter S-RESTOCK. In the Quantity field, type 5. In the Unit Price Excl. VAT field, type -3.615. This is five percent of 72.30 LCY, which is the original unit price.


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Trade in Microsoft Dynamics® NAV 2009 The program calculates the total restock fee amount equal to 18.08 LCY (5*3.615). Remember that the quantity of the restock charge must be positive. But the unit price must be negative for the customer to pay the restock charge.

FIGURE 8.5 SALES RETURN ORDER WITH RETURNED ITEM, REPLACEMENT ITEM, AND RESTOCK CHARGE

To guarantee accurate sales statistics, Susan assigns the restock charge to the return entry by following these steps: 1. On the Lines FastTab, click Actions, point to Line and then click Item Charge Assignment. The Item Charge Assignment (Sales) page appears. 2. On the line for 70011, type 5 in the Qty. to Assign field. 3. Click OK to close the page. The Qty. to Assign field on the restock charge line updates accordingly. NOTE: As an alternative to creating a charge (item) line, the order processor can create a G/L account line for the amount of the restock fee and post the entry directly to the G/L account. However, the advantage of using an item charge is that item statistics update correctly.

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Chapter 8: Returns Management Steps: Record Sales Allowance Susan must record the agreement with the customer about the provision of a sales allowance of 15 percent for two units of the damaged item 1964-W. She will use the sales return order as an entry point for the details of this agreement. (An alternative entry point for a sales allowance is a sales credit memo.) Susan must create a charge (item) line and assign the corresponding charge amount to the original sale of item 1964-W by following these steps: 1. On a new line, in the No. field, enter S-ALLOWANCE. (Add extra information about this allowance in the Description field if desired.) 2. In the Quantity field, type 2. This is the number of items that arrived damaged to the customer and for which the order processor provides an allowance. 3. On the Lines FastTab, click Actions, point to Line, and then click Item Charge Assignment. 4. On the Actions menu, point to Functions and then click Get Shipment Lines. The program lists all posted shipment lines related to the customer. 5. Select the shipment line for item 1964-W and then click OK. 6. On the shipment line in the Item Charge Assignment (Sales) page, type 2 in the Qty. to Assign field. 7. Click OK to close the page. The Qty. to Assign field on the sales allowance line updates accordingly. 8. On the sales allowance line, type 43.80 in the Unit Price Excl. VAT field. This is 15 percent of 292.00 LCY, which was the original unit price at which item 1964-W was sold to the customer.

Demonstration: Process the Sales Return Scenario: After Susan registers the details of the compensation agreement in the sales return order, the next task is to process the return. In the "Create a Sales Return with Sales Allowance" demonstration, this means that CRONUS must: •

Ship the customer a replacement item

•

Credit the customer for the returned items upon receipt at the company (with deduction for the restock charge)

•

Provide a sales allowance for the items the customer is not required to return to CRONUS

Unless the total order amount is negative, Susan can perform all the procedures at the same time, when she posts the sales return order. However, if for example, the replacement order needs to ship without waiting until the returned items are received, then the replacement line(s) (lines with negative quantities) can be moved to a regular sales order.


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Trade in Microsoft Dynamics® NAV 2009 When a replacement is posted from the return order, the program does not create a separate posted shipment document for this shipment. NOTE: The program does not allow posting of any orders with a negative total amount. According to general conventions in the program, the warehouse management functionality does not manage negative lines. For the warehouse, it does not make sense to pick a negative quantity. Therefore, when you are using warehousing, you must move negative lines to documents where they appear positive.

Steps: Create Replacement Sales Order Susan decides to move the negative line (representing a demand for a replacement) to a separate sales order using the Move Negative Lines function. Follow these steps to move the negative line to create the replacement sales order: 1. Open the sales return order created in the "Create a Sales Return Order" demonstration. 2. On the Actions menu, point to Functions and then click Move Negative Lines. The document to receive the negative lines is defined in the To Document Type field. To learn about different options, refer to the topic "Move Negative Sales Lines Batch Job" in online Help. 3. Ensure that the To Document Type field is set to Order and then click OK. The program deletes the return line with the negative quantity and creates a new sales order. A message providing the new sales order number appears. 4. Click Yes to view the created document. Susan can process the order in the usual manner. 5. On the Action Pane, click Post. 6. Click OK to ship and invoice the order.

Steps: Post Sales Return Order Upon receipt of the returned item, Susan posts the sales return order, which creates the customer's account for: A) the value of returned item 70011, with a deduction of the restock charge; and B) the amount of the sales allowance provided for two damaged units of item 1964-W. Follow these steps to post the sales return order: 1. On the Action Pane of the sales return order, click Post. 2. Click OK to receive and invoice the return order.

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Chapter 8: Returns Management The program creates a posted return receipt and a posted credit memo.

Steps: Review Posted Sales Return Order For an overview of a sales return status, Susan uses the navigate function to find and access the sales documents created for the return. She can use the external document number, provided by the customer as a reference to the return document, as a search parameter. Follow these steps to view the status of the sales return: 1. On the navigation pane, click Sales & Marketing. 2. On the Sales & Marketing page, click Tasks and then click Navigate. 3. Click the External tab at the bottom of the page. 4. In the Business Contact Type field, enter Customer. 5. In the Business Contact No. field enter 10000. 6. In the Document No. field, type SR024. 7. On the Action Pane, click Find. The program lists all the sales documents created to process the sales return initiated by customer 10000. These are the posted sales shipment and invoice for the replacement sales order and the posted return receipt and credit memo for the sales return order.

FIGURE 8.6 NAVIGATION RESULTS OF POSTED SALES RETURN TO CUSTOMER 10000 WITH DOCUMENT NUMBER OF SR024


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Trade in Microsoft Dynamics® NAV 2009 NOTE: You also can trace where specific serial or lot numbers were used with the Navigate and Item Tracing features. For more information about handling serialized return items, refer to the "Processing Sales Returns," "Processing Purchase Returns," and "Tracing Item-Tracked Items" topics in the online Help.

Returned Items for Vendor Repair When a customer returns an item for repair at the company's vendor, an order processor creates a sales return order and several documents related to returning the item to the manufacturer and shipping it back to the customer upon repair. These documents include: •

Purchase return order

•

Purchase order

•

Sales order

The management of the sales returns for repair with regard to associated documents is shown in the Sales Return Documents Flow figure.

FIGURE 8.7 SALES RETURN DOCUMENTS FLOW

The Create Return-Related Documents function enables users to create all these documents automatically. The next demonstration illustrates a situation where the customer returns an item to CRONUS for repair at the company's vendor and uses the Create ReturnRelated Documents function.

Demonstration: Return Items to Vendor for Repair Scenario: Alicia, the purchasing agent at CRONUS, orders 40 units of item 80102 from vendor 50000 on December 15, 2009. On January 4, 2010, customer 20000 orders eight units of item 80102. On January 28, 2010, Susan receives a call from a representative from customer 20000 stating that two units of item 80102 must be returned due to manufacturing defects. Susan and the customer agree that the items must be returned to CRONUS, and CRONUS will send them to the manufacturer for repair. Susan must register the compensation agreement and process the return. 8-18


Chapter 8: Returns Management Susan creates the return documents to prompt Alicia to contact the vendor regarding the defective items. John, the warehouse worker, receives the items from the customer on February 1, 2010. He informs Susan of the return receipt so that she can post the return and create the sales credit memo.

Steps: Process Purchase Order Follow these steps to process the purchase order: 1. Change the work date to 12/15/09. 2. On the navigation pane, click Purchase and then click Order Processing. 3. On the Order Processing page, click Purchase Orders. 4. Click New and then press ENTER or TAB. 5. In the Buy-from Vendor No. field, enter 50000. 6. In the Vendor Invoice No. field, type 11619. 7. On the Lines FastTab, in the Type field, enter Item. 8. In the No. field, enter 80102. 9. In the Location Code field, enter BLUE. 10. In the Quantity field, type 40. 11. On the Action Pane, click Post. 12. Click OK to receive and invoice the order.

Steps: Process Sales Order Follow these steps to process the sales order: 1. Change the work date to 01/04/10. 2. On the navigation pane, click Sales & Marketing and then click Order Processing. 3. On the Order Processing page, click Sales Orders. 4. Click New and then press ENTER or TAB. 5. In the Sell-Customer No. field, enter 20000. 6. On the Lines FastTab, in the Type field, enter Item. 7. In the No. field, enter 80102. 8. In the Location Code field, enter BLUE. 9. In the Quantity field, type 8. 10. On the Action Pane, click Post. 11. Click OK to ship and invoice the order.


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Trade in Microsoft Dynamics® NAV 2009 Steps: Create Return Order Because the item will be repaired at the vendor (manufacturer), the customer keeps the ownership of the item during the repair process. In this case, CRONUS must exclude the item value from its own inventory value. To do this, the program performs all the transactions with this item, such as receiving it at the company, shipping it to the manufacturer, and receiving it back and shipping it back to the customer, at zero unit cost and unit price. Instead of entering a zero amount in the Unit Cost (LCY) and Unit Price Excl. VAT fields manually on the sales return lines, Susan may use the functionality available in the program to automate the process. As described in the "Create a Return Location and Assign to a Reason Code" demonstration, the option of valuating inventory at zero when the user manages returns for repair is linked to the return reason S-REPAIR. By selecting this return reason, Susan accepts the option. Follow these steps to create a sales return order for customer 20000 for two units of item 80102: 1. Change the work date to 01/28/10. 2. On the navigation pane, click Order Processing under Sales & Marketing. 3. On the Order Processing page, click Sales Return Orders. 4. Click New and then press ENTER or TAB. 5. In the Sell-to Customer No. field, enter 20000. 6. In the External Document No. field, type R0015. This is the number that is used as a reference to the return document. 7. On the Lines FastTab, in the Type field, enter Item. 8. In the No. field, enter 80102. 9. In the Return Reason Code field, enter S-REPAIR.

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Chapter 8: Returns Management The Location Code field automatically populates with REPAIR, which is the default location for this return reason code. 10. In the Quantity field, type 2.

FIGURE 8.8 SALES RETURN ORDER WITH ITEM SET UP FOR REPAIR PROCESSING

The Unit Price Excl. VAT field does not contain an amount.


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Trade in Microsoft Dynamics® NAV 2009 Steps: Create Return-Related Documents Now that CRONUS has received the items from customer 20000, Susan creates the return-related documents: 1. On the Action Pane, click Create Return-Related Documents.

FIGURE 8.9 CREATE RETURN RELATED DOCUMENTS PAGE

In the Create Ret.-Related Documents page, users select which documents the program needs to create to further manage the return. There is an option of creating a purchase return order and a purchase order if the items are returned to and received from the vendor, and a replacement sales order can be created if necessary. 2. In the Vendor No. field, enter 50000. 3. Click OK and accept any credit limit warnings that appear. The created documents are listed in the Returns-Related Documents page. 4. Click OK to close the Returns-Related Documents page. Purchase return orders and purchase orders with the Open status indicate that the return to vendor/purchase replacement process can begin.

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Chapter 8: Returns Management Steps: Receive Defective Items When the items arrive at CRONUS, John informs Susan, who then posts the return order to create the sales credit memo. Follow these steps to receive and credit the returned items. 1. In the Posting Date field, enter 02/01/10. 2. On the Action Pane, click Post. 3. Click OK to receive and invoice (credit) the order. You can review further processing of this return in the "Manage Returns to Vendors" lesson.


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Lab 8.1 - Process a Customer Return Scenario You are the order processor at CRONUS. A representative from customer 10000 calls and says that the complete delivery of 50 units (boxes) of item 80100 from the Green Warehouse appear to be damaged. You and the customer agree that the complete quantity of item 80100 must be returned to CRONUS, and a replacement of the same quantity will ship to the customer immediately. The customer provides a reference number to his or her own return document, which is R-0113. To perform this return, you must first create the sales order to customer 10000 for 50 boxes of item 80100 from the Green Warehouse. When creating the return order, you must: •

Find the returned items from a list of posted shipments and ensure that they are valued at the same unit cost as originally sold.

•

Create and post a replacement sales order to the customer using the Move Negative Lines function.

•

Create a purchase return order to vendor 45858585.

•

Receive and invoice the sales return order.

You can review further processing of this return in the "Process a Vendor Return" lab.

Challenge Yourself! 1. Create the sales order of 50 boxes of item 80100 to customer 10000. 2. Create the sales return order to customer 10000 for 50 boxes of item 80100. 3. Create and post the order for the replacement quantity. 4. Create the purchase return order to vendor 45858585. 5. Post the sales return order.

Need a Little Help? 1. Create the sales order to customer 10000 for 50 boxes of item 80100 from the Green Warehouse. 2. Create the sales return order to customer 10000 with customer reference number R-0113. 3. Use the Get Posted Document Lines to Reverse function to access the shipment line for item 80100.

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Chapter 8: Returns Management 4. Assign the defective warehouse to the return item. 5. Add a replacement line for two of item 80100 from the Green Warehouse. 6. Run the Move Negative Lines function. 7. Ship and invoice the sales replacement order. 8. Run the Create Return-Related Documents function and create a Purchase Return Order to vendor 45858585. 9. Receive and invoice the sales return order.

Step by Step Follow these steps to create the sales order of 50 units of item 80100 to customer 10000: 1. On the navigation pane, click Sales & Marketing and then click Order Processing. 2. On the Order Processing page, click Sales Orders. 3. Click New and then press ENTER or NEW. 4. In the Sell-to Customer No. field, enter 10000. 5. On the Lines FastTab, in the Type field, enter Item. 6. In the No. field, enter 80100. 7. In the Location Code field, enter GREEN. 8. In the Quantity field, type 50. 9. In the Unit of Measure field, enter BOX. 10. In the Qty. to Ship field, type 50 then click OK to accept the warehouse message. 11. On the Action Pane, click Post. 12. Click OK to ship and invoice the order. Follow these steps to create the sales return order: 1. On the navigation pane, click Sales & Marketing and then click Order Processing. 2. On the Order Processing page, click Sales Return Orders. 3. Click New and then press ENTER or TAB. 4. In the Sell-to Customer No. field, enter 10000. 5. In the External Document No. field, type R-0113. 6. On the Action Pane, click Get Posted Document Lines to Reverse. 7. In the Document Type Filter field, select Posted Shipments. 8. Click the line for item 80100 and then click OK. 9. In the Return Reason Code field, enter DAMAGED.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to create the order for the replacement quantity: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

On a new line, in the No. field, enter 80100. In the Location Code field, enter GREEN. In the Quantity field, type -50. In the Unit of Measure field, enter BOX. On the Actions menu, point to Functions and then click Move Negative Lines. Ensure that Order is selected in the To Document Type field and then click OK. Click Yes to view the created document. In the Qty. to Ship field, type 50 and then click OK to accept the warehouse message. On the Action Pane of the sales order, click Post. Click OK to ship and invoice the order.

Follow these steps to create the purchase return order: 1. On the Action Pane of the sales return order, click Create ReturnRelated Documents. 2. In the Vendor No. field, enter 45858585. 3. Clear the Create Purchase Order and Create Sales Order check boxes. 4. Click OK to create the orders. 5. Click OK to close the Returns-Related Documents page. Follow these steps to post the sales return order: 1. In the Return Qty. to Receive field, type 50 and then click OK to accept the warehouse message. 2. On the Action Pane, click Post. 3. Click OK to post the order.

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Manage Returns to Vendors Receiving compensation from a vendor for an item you are dissatisfied with is important to recover costs and measure vendor relationships. Streamlining the return to vendor process helps companies greatly reduce the costs associated with returns. Typically, the purchasing agent responsible for vendor interaction also contacts the vendors when dissatisfied with purchased items. Managing returns to vendors includes performing a series of tasks. The number and scope of the tasks depend on who initiates the return: the company (when, for example, dissatisfied with the quality of purchased items or if there is a wrong delivery) or a company's own customer. A vendor-oriented return process may include the following tasks: •

Registering the compensation agreement with the vendor.

•

Debiting the vendor, either by receiving a credit for physically returned items or with a purchase allowance (if the company is not required to physically return the items).

•

Creating a replacement purchase order(s) if replacement is in the compensation agreement.

Related to the vendor-oriented process, several internal handling tasks exist: •

Shipping items to the vendor if the purchase return that includes repair is part of a compensation agreement.

•

Receiving replaced/repaired items.

•

Ensuring that the accurate inventory value of the items is returned to the vendor.

•

Combining several return shipments to the same vendor into one credit memo document.

Purchase Return Order Management in Microsoft Dynamics NAV enables companies to manage these tasks in an efficient and accurate manner.

Register a Compensation Agreement with the Vendor There are many ways a company expects compensation when it is dissatisfied with the received order or dissatisfied on behalf of its customers. The terms of compensation agreement depends on the reason for the return and the companyvendor relationship. For example, the parties may agree that if there is a wrongly ordered or delivered item(s), the company returns the item to the vendor against receiving a credit and receives a replacement item.


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Trade in Microsoft Dynamics® NAV 2009 In other situations, for example, where an item arrives at the company damaged, the company may require a price deduction against the original purchase order price. The same may be applied when a company provided a sales allowance for its own customers and wants to recover costs by requesting a purchase allowance from its vendor. Meanwhile, where the purchased item has a warranty, the company may ask the vendor to repair the malfunctioned/broken item. In Microsoft Dynamics NAV, the purchase return order is the central document that lets the user register a compensation agreement. From here, the user can access other purchase-related documents and enter and maintain the returnrelated information about the vendor, the method of compensation, and the items in question. NOTE: In addition to the purchase return order, to register details about a compensation agreement with the vendor, the user can use other standard documents (or combinations) to register a return. These documents are purchase credit memos, purchase orders, and purchase invoices. The concept of creating different return line types and registering a compensation agreement with a vendor are the same as in sales return situations. The principles of creating a purchase document to register a compensation agreement are explained in detail in the topics "Purchase Return Order" and "Posting a Purchase Return Order" in online Help. The following demonstrations illustrate the handling of an item returned to a vendor for repair and a purchase allowance. Both returns have been initiated by the customer and are a logical continuation of the demonstrations presented in the previous section. Because the same purchase return handling procedures apply, regardless of whether a company initiates a return itself or it has been initiated by the customer, the first case is not given a separate explanation in this lesson.

Demonstration: Return Items to Vendor for Repair This is a continuation of the "Returns Items to Vendor for Repair" demonstration. Scenario: For the return of two units of item 80102 initiated by customer 20000, CRONUS now has to ship the units back to vendor 50000 for repair. When registering a compensation agreement with this customer, Susan, the order processor, ran the Create Return-Related Documents function. The program created a purchase return order, a purchase order, and a sales order. Alicia, the purchasing agent, contacts the vendor's representative and the parties agree on CRONUS sending the item for repair. She is given the return authorization number of RO155 to reference on the order and now performs the return process.

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Chapter 8: Returns Management Follow these steps to process the purchase return order: 1. On the navigation pane, click Purchase and then click Order Processing. 2. On the Order Processing page, click Purchase Return Orders. 3. Open the order to vendor 50000 created in the "Return Items to Vendor for Repair" demonstration. The Direct Unit Cost Excl. VAT field is empty. NOTE: To guarantee the accurate inventory value (at zero unit cost) of repair items without serial numbers, the order processor applies a purchase return entry for the sales return entry. 4. In the Vendor Authorization No. field, type RO155. 5. Expand the Shipping FastTab. 6. In the Expected Receipt Date field, enter 02/02/10. This is the shipment date for the return order. 7. Click Yes to update the lines. 8. On the Action Pane, click Post. 9. Click Ship and then click OK to ship the return. The program updates the available inventory and creates a posted return shipment.

Demonstration: Combine Return Shipments When there are several orders (to be returned to the same vendor or be bundled in the same shipment), the user can combine them in one shipment and transport it to the vendor. The combined shipment is then invoiced as one purchase credit memo. NOTE: Individual posted return shipment documents, when sent to the vendor, can be an indication for the vendor to send a replacement item(s) instead of the one returned at some later point. Scenario: On January 25, 2010, five units of item 80100 were purchased from vendor 50000. During put-away, John, the warehouse worker notices that one pallet was damaged and needs to be returned. He contacts Alicia, who contacts the vendor and then creates the purchase return order. Because more items need to be returned to the same vendor for repair, the items are shipped in the same shipment. Upon receiving a credit memo from the vendor for this combined shipment, Alicia invoices the two shipments on a single purchase credit memo.


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Trade in Microsoft Dynamics® NAV 2009 Steps: Process Purchase Order Follow these steps to process the purchase order: 1. Change the work date to 01/25/10. 2. On the navigation pane, click Purchase and then click Order Processing. 3. On the Order Processing page, click Purchase Orders. 4. Click New and then press ENTER or TAB. 5. In the Buy-from Vendor No. field, enter 50000. 6. In the Vendor Invoice No. field, type 11624. 7. On the Lines FastTab, in the Type field, enter Item. 8. In the No. field, enter 80010. 9. In the Location Code field, enter BLUE. 10. In the Quantity field, type 5. 11. On the Action Pane, click Post. 12. Click OK to receive and invoice the order.

Steps: Process Return Order Follow these steps to create a purchase return order to vendor 50000 for one pallet of item 80100: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

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Change the work date to 01/28/10. On the navigation pane, click Order Processing under Purchase. On the Order Processing page, click Purchase Return Orders. Click New and then press ENTER or TAB. In the Buy-from Vendor No. field, enter 50000. In the Vendor Authorization No. field, type RO158. On the Action Pane, click Get Posted Document Lines to Reverse. In the Document Type Filter field, select Posted Receipts. Click the line for item 80100 and then click OK. In the Return Reason Code field, enter DAMAGED. In the Quantity field, type 1. Expand the Shipping FastTab In the Expected Receipt Date field, enter 02/02/10. Click Yes to update the lines. On the Action Pane, click Post. Click Ship and then click OK.


Chapter 8: Returns Management Steps: Process Combined Return Shipment Follow these steps to create the combined return shipment: 1. 2. 3. 4. 5. 6.

On the navigation pane, click Order Processing under Purchase. On the Order Processing page, click Purchase Credit Memos. Click New and then press ENTER or TAB. In the Buy-from Vendor No. field, enter 50000. In the Vendor Cr. Memo No. field, enter CM1305. On the Lines FastTab, click Actions, point to Functions and then click Get Return Shipment Lines.

The Get Return Shipment Lines page contains a list of all the shipment lines that have not been invoiced. 7. Select both lines in the list and then click OK.

FIGURE 8.10 PURCHASE CREDIT MEMO WITH COMBINED RETURN SHIPMENT LINES

8. On the Action Pane, click Post. 9. Click Yes to post the credit memo.


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Trade in Microsoft Dynamics® NAV 2009 When the vendor has repaired the items and delivered them to CRONUS, Alicia posts the corresponding purchase order (created because of running the Create Return-Related Documents function when registering the sales return from the customer). A sales order for the same items can then be shipped back to the customer.

Demonstration: Process a Purchase Allowance This is a continuation of the "Create a Sales Return Order" demonstration. Scenario: Susan, the order processor, was told by customer 10000 that two units of item 1964-W were damaged in shipment. Instead of returning the items, the customer was given a 15 percent sales allowance. Because the carrier is responsible, CRONUS wants to recover the costs associated with this damage. Ted, the transportation coordinator, contacts the carrier's representative (the carrier [vendor] number is 49989898), and the parties agree on CRONUS making a freight claim toward the carrier. The amount of the claim is equal to the amount of the sales allowance offered to the customer (87.60 LCY). Ted decides to issue a freight claim toward vendor 49989898 from a purchase credit memo (alternatively, the purchase return order may be used). Follow these steps to issue the purchase allowance: 1. 2. 3. 4. 5.

6. 7. 8. 9. 10. 11. 12.

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On the navigation pane, click Order Processing under Purchase. On the Order Processing page, click Purchase Credit Memos. Click New and then press ENTER or TAB. In the Buy-from Vendor No. field, enter 49989898. In the Vendor Authorization No. field, type R123. This is the number that Ted received from the carrier (vendor) authorizing the claim (return). In the Vendor Cr. Memo No. field, type CM478. On the Lines FastTab, in the Type field, enter G/L Account. In the No. field, enter 6810. In the Quantity field, type 1 In the Direct Unit Cost Excl. VAT field, type 87.60. On the Action Pane, click Post. Click Yes to post the purchase credit memo.



Lab 8.2 - Process the Vendor Return Scenario For the return of 50 boxes of item 80100 initiated by customer 10000, CRONUS wants to return the defective items to the original vendor and receive replacements. When registering the compensation agreement, you, as the order processor, created a purchase return order. Now you are the purchasing agent. You contact the vendor's representative (vendor 45858585), and you both agree that CRONUS will send the item back for replacement. The vendor provides a return authorization number, which is PR0558. To perform this return, you must first post the existing purchase order for vendor 45858585, number 6001. When processing the return order, you must: •

Manually assign the original receipt line to ensure that the items are valued at the same unit cost as originally purchased instead of the average cost.

•

Post and receive a replacement from the vendor using vendor invoice number 522891.

•

Ship the damaged items to the vendor and receive credit memo number CM0058.

HINT: Add the Appl.-to Item Entry field using the Choose Columns function.

Challenge Yourself! 1. Post purchase order number 6001. 2. Process the purchase return order to vendor 45858585. 3. Post the order for the replacement quantity of 50 boxes of item 80100. 4. Post the purchase return order.

Need a Little Help? 1. Open and then post purchase order 6001 to vendor 45858585. 2. Open the purchase return order created in the "Process a Customer Return" lab. 3. Add the Appl.-to Item Entry field to the lines using the Choose Columns function.


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Trade in Microsoft Dynamics® NAV 2009 4. Fill in the Appl.-to Item Entry field with the purchase receipt created from purchase order 6001. 5. Add a replacement line for 50 boxes of item 80100 to the Green Warehouse. 6. Run the Move Negative Lines function. 7. Fill in the Qty. to Receive field and then receive and invoice the purchase replacement order. 8. Fill in the credit memo number and Return Qty. to Ship field and then ship and invoice the purchase return order.

Step by Step Follow these steps to post purchase order number 6001: 1. On the navigation pane, click Purchase and then click Order Processing. 2. On the Order Processing page, click Purchase Orders. 3. Open purchase order number 6001. 4. On the Action Pane, click Post. 5. Click OK to receive and invoice the order. Follow these steps to process the purchase return order: 1. On the Order Processing page, click Purchase Return Orders. 2. Open the return order to vendor 45858585 created in the "Process a Customer Return" lab. 3. In the Vendor Authorization No. field, type PR0558. 4. Add the Appl.-to Item Entry field to the lines using the Choose Columns function. 5. In the Appl.-to Item Entry field, click the drop-down arrow and select the purchase receipt created from purchase order 6001 (use the Navigate feature to open the posted purchase receipt) and then click OK. Follow these steps to create and post the order for the replacement quantity: 1. 2. 3. 4. 5.

On the next line, in the No. field, enter 80100. In the Location Code field, enter GREEN. In the Quantity field, type -50. In the Unit of Measure field, enter BOX. On the Actions menu, point to Functions and then click Move Negative Lines. 6. Ensure that Order is selected in the To Document Type field and then click OK. 7. Click Yes to view the created document.

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Chapter 8: Returns Management 8. In the Vendor Invoice No. field, type 522891. 9. In the Qty. to Receive field, type 50 and then click OK to accept the warehouse message. 10. On the Action Pane of the purchase order, click Post. 11. Click OK to receive and invoice the order. Follow these steps to post the purchase return order: 1. In the Vendor Cr. Memo No. field, type CM0058. 2. In the Return Qty. to Ship field, type 50 and the click OK to accept the warehouse message. 3. On the Action Pane, click Post. 4. Click OK to post the order.


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Summary The return order is the central document in Microsoft Dynamics NAV that allows the user to register a compensation agreement settled with a customer or vendor. From here, the user can access other sales-related or purchase-related documents, and enter and maintain: •

The return-related information concerning the customer or vendor.

•

The method of compensation.

•

The items in question.

Superior customer service is a key strategic objective of companies that strive for a high level of customer loyalty. For many wholesalers and distributors, sales returns are a standard element of their customer service policy, which directly influences the customer's perception of the service level. Timely crediting for returned items, repairing/replacing a damaged item, and replacing a wrong item are among those aspects of handling returns that a customer associates with good service. The more seamless and efficient these return procedures appear to the customer, the more likely it is that the customer will rate the company's customer service highly.

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Test Your Knowledge Test your knowledge with the following questions. 1. How do you ensure that Microsoft Dynamics NAV automatically values inventory increases at zero cost?

2. What is the purpose of selecting the Exact Cost Reversing Mandatory check box in either the Sales & Receivable Setup or Purchases & Payables Setup?

3. Which of the following return-related documents can be created from the sales return order? (Select all that apply) ( ) Purchase Order ( ) Sales Order ( ) Purchase Credit Memo ( ) Purchase Return Order


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Trade in Microsoft Dynamics® NAV 2009 4. When you create a sales return order, which line types represent a financial transaction where a customer receives a credit (in the form of a sales allowance) for the item(s). (Select all that apply) ( ) Charge (Item) ( ) Item ( ) G/L Account ( ) Fixed Asset 5. Which of the following procedures allows you to ensure that a returned item is revalued at the unit cost of the original sale? (Select all that apply) ( ) Fill in the return order line manually and enter the relevant item ledger entry in the Appl.-from Item Entry field. ( ) Use the Get Exact Cost function to automatically populate the return order line from the posted shipment or invoice document. ( ) Use the Copy Document function to fill in the return order automatically from another posted shipment or invoice document. ( ) Use the Get Posted Document Lines to Reverse function to select one or more posted document lines.

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2.

3.


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Solutions Test Your Knowledge 1. How do you ensure that Microsoft Dynamics NAV automatically values inventory increases at zero cost? MODEL ANSWER: Select the Inventory Value Zero check box on the relevant Return Reason Code. 2. What is the purpose of selecting the Exact Cost Reversing Mandatory check box in either the Sales & Receivable Setup or Purchases & Payables Setup? MODEL ANSWER: It ensures that an exact reversing policy is applied in returns processing by prohibiting the posting of a return transaction unless the Appl.-from Item Entry field (for sales returns) or the Appl.-to Item Entry field (for purchase returns) on the corresponding return order line contains an entry. 3. Which of the following return-related documents can be created from the sales return order? (Select all that apply) (√) Purchase Order (√) Sales Order ( ) Purchase Credit Memo (√) Purchase Return Order 4. When you create a sales return order, which line types represent a financial transaction where a customer receives a credit (in the form of a sales allowance) for the item(s). (Select all that apply) (√) Charge (Item) ( ) Item (√) G/L Account ( ) Fixed Asset 5. Which of the following procedures allows you to ensure that a returned item is revalued at the unit cost of the original sale? (Select all that apply) (√) Fill in the return order line manually and enter the relevant item ledger entry in the Appl.-from Item Entry field. ( ) Use the Get Exact Cost function to automatically populate the return order line from the posted shipment or invoice document. (√) Use the Copy Document function to fill in the return order automatically from another posted shipment or invoice document. (√) Use the Get Posted Document Lines to Reverse function to select one or more posted document lines.

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CHAPTER 9: ANALYSIS AND REPORTING Objectives The objectives are: •

Explain how to set up and use sales and purchase analysis reports.

•

Describe and demonstrate how to perform analysis by dimensions.

•

Explain how to create and export budgets and use them in analysis reports.

Introduction The Analysis and Reporting features of Microsoft Dynamics® NAV 2009 provide sales managers, purchasing managers, and warehouse managers tools to easily budget, forecast, and analyze data. These features are designed for people without a background in finance and accounting. Companies can use analysis reports to review real-time data in highly customizable reports, saved under unique names, and positioned in the respective application area to analyze data in a preferred format. Analysis line templates and analysis column templates are user-defined and unlimited. This means reports can be created that are customized for a company's needs and business processes. Dimensions enable the user to analyze trends and compare characteristics across a range of entries. It is also possible to combine and compare source data online by changing parameters. The program-wide drill-down functionality enables the user to make decisions based on real-time data investigations of detailed transactions. Companies can use Sales and Purchase Budgets functionality to make sales budgets on customer and item levels and purchase budgets on vendor and item levels, both in amounts and quantities. Users can track actual performance by calculating variances and can move budget figures between Microsoft Dynamics NAV and Microsoft® Office Excel®. The system supports budget version control and lets users work on individual budgets at the same time. Comparing analysis report data against budgets is easier than traditional budgeting with dimensions and dimension filters. The user can create user-defined budgets for identical time periods, G/L accounts, and dimensions.


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Analysis Reports Companies can use analysis reports to create customized reports that are based on posted transactions, such as sales, purchases, transfers, and inventory adjustments. An analysis report consists of objects to analyze represented as lines and analysis parameters (the way to analyze the object) represented as columns. For sales analysis, the Analysis Report Sale page contains all analysis reports, the analysis line template, and the analysis column template attached to each analysis report.

FIGURE 9.1 LIST OF SALES ANALYSIS REPORT NAMES

Users can create, view, and modify analysis reports from the Sales & Marketing page and the Purchase page by clicking Reports and Analysis and then clicking Sales Analysis Reports or Purchase Analysis Reports. The functionality is identical whether it is accessed from Purchase or Sales. The following explanation uses Sales Analysis Reports and also applies to Purchase Analysis Reports. To create an analysis report:

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•

Set up the line template.

•

Set up the column template.

•

Enter a report name and description in the Analysis Report Sale page and then select the line and column templates.


Chapter 9: Analysis and Reporting Line Templates The lines in a report contain the objects to analyze. Follow these steps to set up line templates: 1. On the navigation pane, click Sales & Marketing. 2. On the Sales & Marketing page, click Administration and then click Sales Analysis Line Templates. In this page, create rows that display: •

Customers and Customer Groups

•

Items and Item Groups

•

Salespeople

•

Formulas

Dimensions define Customer and Item Groups and Salespeople. Using dimensions in analysis reports is explained in the "Analysis by Dimensions" lesson. Select which lines to use in an Analysis Report from the Analysis Lines Templates - Sales page. To access the Sales Analysis Lines page, click Lines on the Action Pane of the Analysis Line Templates - Sales page.

FIGURE 9.2 SALES ANALYSIS LINES SET UP FOR THE CUSTGROUPS SALES ANALYSIS LINE TEMPLATE

These lines can be modified manually or with the insertion function to add, for example, a new customer.

Column Templates The columns in a report contain the analysis parameters. To set up column templates, on the Sales & Marketing, Administration page, click Sales Analysis Column Templates.


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Trade in Microsoft Dynamics® NAV 2009 In this page, define columns that display: •

Sales amounts

•

Cost amounts

•

Quantities

•

Non-inventoriable amounts

•

Unit price

•

Standard cost

•

Indirect cost

•

Unit cost

Companies can use the Analysis Columns Templates - Sales page to access existing column templates or create new templates. Click Columns on the Action Pane of the Analysis Column Templates - Sales page. The Analysis Columns Sales page displays.

FIGURE 9.3 SALES ANALYSIS COLUMNS SET UP FOR THE BUDGET SALES ANALYSIS COLUMN TEMPLATE

Set up columns to appear in the analysis report. For each column, define the data in the item ledger entries and budget entries to retrieve for the analysis report. For information about each field, refer to the online Help.

Analysis Types For each column set up in the Analysis Columns - Sales page, select an analysis type to specify a value in the column; for example, Cost of Goods Sold or Consumption. Default analysis type codes for most of the relevant analyses are included in the program. NOTE: On the Analysis Types page, you can set up the default analysis types that are included in the program by clicking Reset Default Analysis Types on the Action Pane.

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Chapter 9: Analysis and Reporting Click the drop-down arrow in the Analysis Type Code field and then click Advanced to view the Analysis Type List. Each Analysis Type code has a default Item Ledger Entry Type filter, Value Entry Type filter, and Value Type that together define the values in the item and budget entries to retrieve. View, create, or modify analysis type codes by clicking Analysis Types from the Sales & Marketing, Administration page. The following table shows from where Value Type information is accessed. Value Type

Information From

Sales amount

Item ledger entries

Cost amount

Item ledger entries

Non-inventoriable amount

Item ledger entries

Quantity

Item ledger entries

Unit cost

Item card

Standard cost

Item card

Indirect cost

Item card

Unit price

Sales prices

Demonstration: Customize Analysis Reports It is possible to use existing analysis reports to create customized reports. The following demonstration shows the key fields in the analysis report and describes how to customize an existing analysis report. Scenario: Kevin, the sales manager at CRONUS International Ltd., created a report named KA-SALES, which provides an overview of sales turnover and profit for some specific customers who are being followed closely. Kevin has to run this report to retrieve January sales numbers, but first, it is necessary to add customer 49633663, Autohaus Mielberg KG, to the report. Follow these steps to review the current KA-SALES analysis report for the month of January 2010: 1. On the Sales & Marketing page, click Reports and Analysis and then click Sales Analysis Reports. 2. Click the line for the KA-SALES and then click Edit Analysis Report on the Action Pane. 3. Expand the Matrix Options FastTab. 4. In the View by field, select Month. 5. On the Action Pane, click Show Matrix.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to add the customer to the analysis line template: 1. Close the Sales Analysis Matrix page. 2. On the Related Information menu, point to Actions and then click Set Up Lines. 3. Click the Key Accounts Total line and then click the Actions menu, point to Functions, and then click Insert Customers. 4. Click the line for customer 49633663 and then click OK. The program automatically enters the customer information into the report lines. The customer number copies into the Row Ref. No. field. NOTE: Row reference numbers are optional and are used to create formulas; they are not related to other number series in the program. To use a row reference number in a formula, at least one character must be in the Row Ref. No. field that is not a number. Because row reference numbers are used in a formula to calculate the Key Accounts Total amount, Kevin must modify the information in the Sales Analysis Lines page accordingly. Follow these steps to update the sales analysis lines and then review the updated KA-SALES analysis report for the month of January 2010: 1. In the Row Ref. No. field for customer 49633663, type A6. 2. In the Range field on the Key Accounts Total line, type A1..A6. 3. Click OK to close the Sales Analysis Lines page. NOTE: You can also insert rows into the Sales Analysis Lines page manually. 4. On the Sales Analysis Reports page, click Show Matrix. Customer Autohaus Mielberg KG appears in the report. Follow these steps to view the analysis columns to determine the parameters set up to analyze this data: 1. Close the Sales Analysis Matrix page. 2. On the Related Information menu, point to Actions and then click Set Up Columns.

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Chapter 9: Analysis and Reporting The Column Header field shows the columns used to create the report and the Formula field shows how certain values are calculated on the report. 3. On any line, click the drop-down arrow in the Analysis Type Code field and then click Advanced to open the Analysis Type List page. 4. On the Action Pane, click Setup to view the filters for each analysis type. 5. Close the open pages to return to the Sales Analysis Report page. Analysis reports allow users to drill down into the data to investigate the results. Drill down capabilities are available on any lines that pull information from the ledgers; users cannot drill down into formula lines. Follow these steps to drill down into the Sales, Invoiced field on the KA-SALES report: 1. On the Action Pane, click Show Matrix. 2. On any row, click the Sales, Invoiced field. The Value Entries page displays the invoiced sales entries that make up the data on the report line.

Demonstration: Create an Analysis Report Scenario: CRONUS needs a report that shows quantities purchased this year versus last year for all the customers assigned to the YELLOW location.

Steps: Create Analysis Line Template Follow these steps to create the analysis line template: 1. On the Sales & Marketing page, click Administration and then click Sales Analysis Line Templates. 2. On the Action Pane, click New. 3. In the Name field, type Yellow. 4. In the Description field, type Yellow Warehouse Customers. 5. On the Action Pane, click Lines. 6. On the Actions menu, point to Functions and then click Insert Customers. 7. On the Filter Pane, in the Type to filter field, enter YELLOW. 8. On the drop-down menu, select Location Code and then press ENTER or TAB. 9. Select all lines and then click OK. The customer information copies into the sales analysis lines. 10. Select all lines that contain a customer and then on the Actions menu, point to Functions and click Renumber Lines. 11. In the Start Row Ref. No. field, type Y1 and then click OK.


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Trade in Microsoft Dynamics® NAV 2009 12. Click OK to close the message. 13. In the first blank row underneath the customer names, in the Description field, type Yellow Warehouse Customers, Total. 14. In the Type field, enter Formula. 15. In the Range field, type Y1..Y34 to include all customer lines. 16. Select the Bold check box.

FIGURE 9.4 COMPLETED SALES ANALYSIS LINES FOR THE YELLOW TEMPLATE

17. Click OK to close the Sales Analysis Lines page. 18. Click OK to close the Analysis Line Templates - Sales page.

Steps: Create Analysis Column Template Follow these steps to create the analysis column template and enter the first column row (many default values will not be changed): 1. On the Sales & Marketing, Administration page, click Sales Analysis Column Templates. 2. On the Action Pane, click New. 3. In the Name field, type Quantity. 4. In the Description field, type Quantity. 5. On the Action Pane, click Columns. 6. In the Column No. field, type A1. 7. In the Column Header field, type Quantity Invoiced. 8. Select the Invoiced check box. 9. Select the Show Opposite Sign check box. 10. In the Analysis Type Code field, enter SALES-QTY. 11. In the Rounding Factor field, enter 1.

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Chapter 9: Analysis and Reporting Follow these steps to enter the next column row: 1. 2. 3. 4. 5. 6. 7. 8.

Go to the next line. In the Column No. field, type A2. In the Column Header field, type LY: Quantity Invoiced. Select the Invoiced check box. Select the Show Opposite Sign check box. In the Comparison Date Formula field, type -1Y. In the Analysis Type Code field, enter SALES-QTY. In the Rounding Factor field, enter 1.

Follow these steps to enter the last column row and finish creating the column template: 1. 2. 3. 4. 5. 6.

Go to the next line. In the Column No. field, type B1. In the Column Header field, type Change %. In the Column Type field, enter Formula. In the Formula field, type (A1/A2)*100. In the Rounding Factor field, enter 1.

FIGURE 9.5 COMPLETED SALES ANALYSIS COLUMNS FOR THE QUANTITY TEMPLATE

7. Click OK to close the Analysis Columns - Sales page. 8. Click OK to close the Analysis Columns Templates - Sales page.

Steps: Create Analysis Report and Assign Lines and Columns Follow these steps to create the analysis report and assign the lines and columns templates: 1. On the navigation pane, click Sales & Marketing. 2. On the Sales & Marketing page, click Reports and Analysis and then click Sales Analysis Reports.


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Trade in Microsoft Dynamics® NAV 2009 3. 4. 5. 6. 7.

On the Action Pane, click New. In the Name field, type Quantity. In the Description, type Location by Quantity. In the Analysis Line Template Name field, enter YELLOW. In the Analysis Column Template Name field, enter QUANTITY.

Steps: Review Report and Modify Line Template Follow these steps to review the report: 1. 2. 3. 4.

On the Action Pane, click Edit Analysis Report. Expand the Matrix Options FastTab. In the View by field, select Year. On the Action Pane, click Show Matrix.

The report contains quantity statistics for the yellow location customers for the current and previous year. When Kevin prints this report, he wants it to show only those customers who bought from CRONUS this or last year so he needs to modify the line template. Follow these steps to modify the line template: 1. Close the Sales Analysis Matrix page. 2. On the Related Information menu, point to Actions and then click Set Up Lines. 3. On each line, in the Sales field, enter If Any Column Not Zero. 4. Click OK to close the Sales Analysis Lines page. 5. Click OK to close the Analysis Line Templates page. NOTE: This change does not affect the view in the Sales Analysis Matrix page.

Steps: Preview Printed Report Follow these steps to preview the printed report: 1. On the Related Information menu, point to Reports and then click Print. 2. Click Preview. Only customers who bought from CRONUS this or last year appear on the report.

Procedure: Set Up Customer Groups and Item Groups When creating the Analysis Report line templates, users cannot select customer groups, item groups, or salespeople without setting up a corresponding dimension in an Analysis View Card.

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Chapter 9: Analysis and Reporting Define customer groups and salespeople as dimensions in Sales & Receivables Setup. Before use in an Analysis View Card, product groups must be defined as dimensions in Inventory Setup. Follow these steps to set up customer groups and salesperson dimensions for use in analysis reports: 1. On the Sales & Marketing page, click Administration and then click Sales & Receivables Setup. 2. On the Dimensions FastTab, enter the relevant customer group dimension in the Customer Group Dimension Code field. 3. In the Salesperson Dimension Code field, enter the relevant salesperson dimension. 4. Click OK to close the Sales & Receivables Setup page. Follow these steps to set up product groups for use in analysis reports: 1. On the Warehouse page, click Administration and then click Inventory Setup. 2. On the Dimensions FastTab, enter the relevant product group dimension in the Item Group Dimension Code field. 3. Click OK to close the Inventory Setup page. NOTE: Advanced Dimensions functionality is necessary to use groups of objects in analysis reports. Generally, the two global dimensions are used for other reporting entities and are unavailable for analysis report grouping. After the user defines these dimensions in setup, he or she can assign each one to an analysis view. NOTE: Customer and item groups are unusable in an Analysis Lines Template unless the appropriate Analysis View Code is selected in the Analysis Lines Templates page. The program lets users add customer and item groups in the Sales Analysis Lines. However, an error message displays when users try to use the Analysis Lines Template in a report.

Procedure: Review Analysis View Setup In the CRONUS demonstration database, an Analysis View Card exists for customers who have the dimensions for Customer Groups and Salespeople. Follow these steps to review the customer groups and salespeople set up as dimensions in the Customers analysis view: 1. On the Sales & Marketing page, click Administration and then click Sales Analysis View Card.


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Trade in Microsoft Dynamics® NAV 2009 2. With the line for CUSTOMERS selected, click the Actions menu and then click View or Edit to open the Sales Analysis View Card. 3. Expand the Dimensions FastTab.

FIGURE 9.6 SALES ANALYSIS VIEW CARD FOR THE CUSTOMERS ANALYSIS VIEW

This analysis view is set up with Customer Group and Salesperson dimensions. Users can select up to three dimensions for each Analysis View. Users can also set up filters on dimensions not included in the analysis view by clicking the Related Information menu, pointing to Analysis, and then clicking Filters. No additional filters have been set on this analysis view. On the General FastTab, the Update on Posting check box is clear. This means that this analysis view must be updated manually to ensure that the recent posted entries are included in the analysis view. You can update this view by clicking Update on the Action Pane or running the Update Analysis View batch job. 4. On the Action Pane, click Update. 5. Click Yes to update the analysis view.

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Chapter 9: Analysis and Reporting Demonstration: Analyze Quantity Purchased by Customer Groups This demonstration is a continuation of the "Create an Analysis Report" demonstration. Scenario: Kevin now needs to modify the Location by Quantity report to analyze quantity purchased by customer groups this year versus last year. Follow these steps to modify the existing analysis report: 1. On the Sales & Marketing page, click Reports and Analysis and then click Sales Analysis Reports. 2. On the line for the Location by Quantity report, click the drop-down arrow in the Analysis Line Template Name field and then click Advanced. In the Sales Line Templates - Sales page, the CUSTGROUPS template has the Item Analysis View Code of CUSTOMERS. 3. Click CUSTGROUPS and then click OK to select this template for use in the analysis view. 4. On the Action Pane, click Edit Analysis View. 5. On the Matrix Options FastTab, in the View by field, enter Year. 6. On the Action Pane, click Show Matrix. The report updates to show quantity statistics for each customer group.

View, Modify, and Present Analysis Reports Users can modify and present analysis view reports in a variety of ways from the Sales Analysis Report or Purchase Analysis Report pages, respectively: •

Preview and print the report by clicking the Related Information menu, pointing to Reports and then clicking Print.

•

Export the report to Microsoft Excel by clicking the Related Information menu, pointing to Actions, and then clicking Export to Excel. Use features in Microsoft Excel to modify and present the report.

Demonstration: Export an Analysis Report to Microsoft Excel This demonstration is a continuation of the "Customize Analysis Reports" demonstration. Scenario: Kevin has to demonstrate to the sales staff the January 2010 turnover for its top customers. He exports the KA-SALES analysis report to Microsoft Excel, where he can then use features to create the presentation.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to export an analysis report to Microsoft Excel: 1. On the Sales & Marketing page, click Reports and Analysis and then click Sales Analysis Reports. 2. Click the line for the KA-SALES and then click Edit Analysis Report on the Action Pane. 3. Expand the Matrix Options FastTab. 4. In the View by field, select Month. 5. On the Related Information menu, point to Actions and then click Export to Excel. 6. Click OK to create a new workbook. 7. Select the relevant server access to Excel and then click OK. Microsoft Excel opens with the sales analysis report information.

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Lab 9.1 - Create an Analysis Report Scenario CRONUS management has asked you, the sales manager, to provide a sales report that displays sales by sales representatives for January 2010. The requirements for the report are as follows: •

The report can only include sales representatives assigned the Salesperson dimension.

•

The report must be broken down by invoiced sales and those that have not been invoiced.

•

The report must include a final line that displays total sales by salespeople.

•

The printed report can only show those salespeople who recorded sales in the report timeframe.

As the sales manager, you must first set up an analysis view card with the Salesperson dimensions and add it to the Analysis Lines Template before selecting salespeople in an Analysis Report. Before setting up the analysis column template, review existing templates to see whether you can reuse or modify one. The final step is to print preview the report.

Challenge Yourself! 1. Create the analysis view card. 2. Create the analysis line template. 3. Review the existing analysis column templates to see if one with the sales columns exists. 4. Create the analysis report. 5. Print preview the SALES analysis report.

Need a Little Help? Follow these steps to create the analysis view card: 1. Open the Sales Analysis View Card page and create a new analysis view with a code of SALESREPS, name of Sales by Sales Representatives, and dimension filter of Salesperson. 2. Update the analysis view. 3. Open the Sales Analysis Line Templates page and create a new line template with a code of SALESPERS and description of Salespeople and use the SALESREPS item analysis view. 4. Open the Sales Analysis Lines page and insert all the sales/purchase persons.


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Trade in Microsoft Dynamics® NAV 2009 5. Renumber the lines starting with row number S1. 6. Add a final row called Total Sales with the formula to include all salesperson lines and make this line bold. 7. Set each line to only print if there is value not equal to zero. 8. Open the Sales Analysis Column Templates page and review the columns for the SALES template to see if it contains the necessary information. 9. Open the Sales Analysis Reports page and create a new report called SALES with a description of Sales by Salesperson. Use the SALESPERS line template and the SALES column template. 10. Open the Sales Analysis Report page and set the filters to view the analysis for January 2010. 11. Print preview the report and then close the print preview.

Step by Step Follow these steps to create the analysis view card: 1. On the Sales & Marketing page, click Administration and then click Sales Analysis View Card. 2. On the Action Pane, click New. 3. In the Code field, type SALESREPS. 4. In the Name field, type Sales by Sales Representatives. 5. In the Dimension 1 Code field, enter Salesperson. 6. On the Action Pane, click Update. 7. Click Yes to update the analysis view. 8. Click OK to close the Sales Analysis View Card page. 9. Close the Analysis View List Sales page. Follow these steps to create the analysis line template: 1. On the Sales & Marketing, Administration page, click Sales Analysis Line Templates. 2. On the Action Pane, click New. 3. In the Name field, type SALESPERS. 4. In the Description field, type Salespeople. 5. In the Item Analysis View Code field, enter SALESREPS. 6. On the Action Pane, click Lines. 7. On the Actions menu, point to Functions and then click Insert Sales/Purchase Persons. 8. Select all lines and then click OK. 9. Select all lines and then on the Actions menu, point to Functions and then click Renumber Lines. 10. In the Start Row Ref. No. field, type S1 and then click OK.

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Chapter 9: Analysis and Reporting 11. Click OK to close the message. 12. In the first blank row underneath the salesperson names, in the Description field, type Total Sales. 13. In the Type field, enter Formula. 14. In the Range field, type S1..S4 to include all salesperson lines. 15. Select the Bold check box. 16. On each line, change the Show field to If Any Column Not Zero. 17. Click OK to close the Sales Analysis Lines page. 18. Click OK to close the Analysis Line Templates - Sales page. Follow these steps to review the existing SALES analysis column template: 1. On the Sales & Marketing, Administration page, click Sales Analysis Column Templates. 2. Click the line for the SALES template, and then click Columns on the Action Pane. This analysis column template will provide the needed salesperson information. 3. Click OK to close the Analysis Columns - Sales page. 4. Click OK to close the Analysis Columns Templates - Sales page. Follow these steps to create the analysis report: 1. On the navigation pane, click Sales & Marketing. 2. On the Sales & Marketing page, click Reports and Analysis and then click Sales Analysis Reports. 3. On the Action Pane, click New. 4. In the Name field, type Sales. 5. In the Description, type Sales by Salesperson. 6. In the Analysis Line Template Name field, enter SALESPERS. 7. In the Analysis Column Template Name field, enter SALES. Follow these steps to print preview the SALES analysis report: 1. 2. 3. 4.

On the Action Pane, click Edit Analysis Report. Expand the Matrix Options FastTab. In the View by field, select Month. On the Related Information menu, point to Reports and then click Print. 5. Click Preview and review the report. 6. Close the Print Preview page.


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Analysis by Dimensions To analyze information by using multiple dimensions, companies can use the Analysis by Dimensions feature found on either the Sales & Marketing or Purchase pages by clicking Reports and Analysis. This function lets users view amounts derived from analysis views. With analysis by dimensions, users can: •

Combine dimensions

•

Filter entries

•

Explore data from different perspectives

•

View net change or balance at date numbers

•

Select time periods

Users cannot print this information directly. They can export it to Excel and use all of Excel's tools to create presentations and print data. Analysis Views are used to analyze multiple dimensions: customers, customer groups, or salespeople versus items or item groups in term of actual or budgeted amounts or quantities. Immediately after a group is set up as a dimension, it can be added to an analysis report and analysis view by dimensions. These groups are set up in the Analysis View Card.

Demonstration: Analyze Purchase Costs by Dimensions In this demonstration, a purchase analysis by dimensions is created and used to explore the analysis by dimensions features. Scenario: Vince, the operations manager at CRONUS, must determine the cost amount of the inventory at each location. He wants to filter by purchaser and by specific business groups. This requires the following dimensions: •

Location

•

Purchaser

•

Business group

Follow these steps to create the analysis view card: 1. On the Purchase page, click Administration and then click Purchase Analysis View Card. 2. On the Action Pane, click New. 3. In the Code field, type Purchaser. 4. In the Name field, type Purchaser. 5. In the Starting Date field, enter 01/28/10. 6. Select the Include Budgets check box.

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Chapter 9: Analysis and Reporting 7. 8. 9. 10. 11. 12. 13.

Expand the Dimensions FastTab. In the Dimension 1 Code field, enter PURCHASER. In the Dimension 2 Code field, enter BUSINESSGROUP. On the Action Pane, click Update. Click Yes to update the analysis view. Click OK to close the Analysis View Card. Close the Analysis View List Purchase page.

NOTE: Because the location dimension is available in the Analysis by Dimensions page, the Analysis View Card only has to be set up with the purchaser and business group dimensions. Follow these steps to review the Total Quantity and Total Cost by location by time period: 1. On the Purchase page, click Reports and Analysis and then click Purchase Analysis by Dimensions. 2. Click the line for PURCHASER and then click Edit Analysis View on the Action Pane. 3. On the General FastTab, in the Show as Lines field, select Location. 4. Ensure that the Show as Columns field is set to Period and the Show Value As field is set to Cost Amount. 5. On the Action Pane, click Show Matrix. 6. Close the Purch. Analysis by Dim Matrix page. Follow these steps to review the analysis by dimension by quantity instead of cost amount: 1. On the General FastTab, in the Show Value As field, enter Quantity. 2. On the Action Pane, click Show Matrix. 3. Close the Purch. Analysis by Dim Matrix page. Follow these steps to filter these results by purchaser and business group: 1. 2. 3. 4. 5.

Expand the Filters FastTab. In the Purchaser Filter field, enter RL. In the BusinessGroup Filter field, enter INDUSTRIAL. On the Action Pane, click Show Matrix. Close the Purch. Analysis by Dim Matrix page.


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Trade in Microsoft Dynamics® NAV 2009 Follow these steps to reverse the lines and columns displayed on the Purch. Analysis by Dim Matrix page: 1. On the Related Information menu, point to Actions and then click Reverse Lines and Columns. 2. On the Action Pane, click Show Matrix. 3. Do not close the Purch. Analysis by Dim Matrix page. Follow these steps to export the analysis by dimensions report to Excel: 1. On the Related Information menu, point to Actions and then click Export to Excel. 2. Select the relevant server access to Excel and then click OK.

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Lab 9.2 - Analyze Item Sales by Area Scenario You are the sales manager at CRONUS and have to analyze item sales by area for the year 2010. The analysis includes item numbers 1896-S to 766BC-C. After reviewing the sales amounts of item sales by area: •

View the analysis as the COGS amount and quantity.

•

Compare the sales amounts sold by Peter Saddow with those by John Roberts.

•

Export the sales amounts by John Roberts to an Excel workbook.

HINT: Look for an existing analysis view that uses the Area and Salesperson dimensions.

Challenge Yourself! 1. Review the existing analysis view cards. 2. Set up the analysis view to review the item sales by area information for the year 2010. 3. Review the analysis by dimension by COGS amount and quantity instead of sales amount. 4. Filter the analysis by dimension results by sales amounts for salesperson Peter Saddow and then John Roberts. 5. Export John Roberts' sales amounts to Excel.

Need a Little Help? 1. Open the Sales Analysis View Card page and browse through the existing analysis view cards to see whether a card is set up with both the Area and Salesperson dimensions. 2. Update the DEFAULT analysis view. 3. Open the Sales Analysis by Dimensions page and set the filters to view the year's item sales by area, for item numbers 1896-S through 766BC-C, and show column names. 4. Review the analysis in the Sales Analysis by Dim Matrix page. 5. Go back to the Sales Analysis by Dimensions page and then set the filters to view the same item sales by area by COGS amount. 6. Review the analysis in the Sales Analysis by Dim Matrix page. 7. Go back to the Sales Analysis by Dimensions page and set the filters to view the same item sales by area by quantity.


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Trade in Microsoft Dynamics® NAV 2009 8. Review the analysis in the Sales Analysis by Dim Matrix page. 9. Go back to the Sales Analysis by Dimensions page and set the filters to view the item sales by area by sales amount for salesperson Peter Saddow. 10. Review the analysis in the Sales Analysis by Dim Matrix page. 11. Go back to the Sales Analysis by Dimensions page and set the filters to view the same item sales by area for salesperson John Roberts. 12. Review the analysis in the Sales Analysis by Dim Matrix page and then export it to Excel.

Step by Step Follow these steps to review the existing analysis view cards: 1. On the Sales & Marketing page, click Administration and then click Sales Analysis View Card. 2. Browse through the existing analysis view cards to see whether a card is set up with both the Area and Salesperson dimensions. The DEFAULT analysis view card contains these dimensions. 3. Select the line for the DEFAULT analysis view. 4. On the Action Pane, click Update. 5. Click Yes to update the analysis view. Follow these steps to review the item sales by area information for the year 2010: 1. With the DEFAULT analysis view selected, click Edit Analysis View on the Action Pane. 2. On the General FastTab, ensure that the Show as Lines field is set to Item. 3. In the Show as Columns field, enter Area. 4. Expand the Filters FastTab. 5. In the Item Filter field, enter 1896-S..766BC-C. 6. Expand the Options FastTab. 7. Select the Show Column Name check box. 8. Expand the Matrix Options FastTab. 9. In the View by field, enter Year. 10. On the Action Pane, click Show Matrix. 11. Close the Sales Analysis by Dim Matrix.

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Chapter 9: Analysis and Reporting Follow these steps to review the analysis by dimension by COGS amount and quantity instead of sales amount: 1. On the General FastTab, in the Show Value As field, enter COGS Amount. 2. On the Action Pane, click Show Matrix. 3. Close the Sales Analysis by Dim Matrix page. 4. On the General FastTab, in the Show Value As field, enter Quantity. 5. On the Action Pane, click Show Matrix. 6. Close the Sales Analysis by Dim Matrix. Follow these steps to filter these results by salespeople PS and JR: 1. On the General FastTab, in the Show Value As field, enter Sales Amount. 2. On the Filters FastTab, in the Salesperson Filter field, enter PS. 3. On the Action Pane, click Show Matrix. 4. Close the Sales Analysis by Dim Matrix. 5. On the Filters FastTab, in the Salesperson Filter field, enter JR. 6. On the Action Pane, click Show Matrix. Follow these steps to export John Roberts' sales to Excel: 1. On the Related Information menu, point to Actions and then click Export to Excel. 2. Select the relevant server access to Excel and then click OK.


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Sales and Purchase Budgets Companies use Sales and Purchase budget functionality for planning, forecasting, and tracking against performance. Access sales and purchase budgets on either the Sales & Marketing or Purchase pages by clicking Reports and Analysis. Select a budget to view and then click Edit Budgets on the Action Pane. Set any filters and then click Show Matrix on the Action Pane.

FIGURE 9.7 CUSTOMER BUDGET SET TO MONTHLY VIEW

Enter Budget Numbers As soon as a budget is created, users must decide how to enter data: •

On the Sales Budget Overview page, in the Show Value as field, choices include Sales Amount, COGS Amount, and Quantity.

•

On the Purchase Budget Overview page, choices in the Show Value as field are Cost Amount and Quantity.

When values are shown as a quantity, they are totaled in the Budgeted Quantity field. When values are shown as an amount, the values are totaled in the Budgeted Sales Amount or Budgeted Cost Amount field (depending on whether it is a sales or a purchase budget). In the Sales Budget Overview Matrix or Purchase Budget Overview Matrix, clicking a number field opens the Item Budget Entries page. Here users can define additional information about the budget entry. For more information about the fields in sales and purchase budgets, refer to online Help.

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Chapter 9: Analysis and Reporting Demonstration: Create a Purchase Budget Scenario: Inga, the purchasing manager at CRONUS, must create a budget to forecast what is forecasted to be spent for each vendor for January through April 2010. This requires a new budget to be set up in Microsoft Dynamics NAV. The first budget she sets up only has to include some specific vendors (vendors 01254796 through 01905382). Therefore, she filters out the vendors that she does not have to consider. Follow these steps to set up the purchase budget: 1. On the Purchase page, click Reports and Analysis and then click Purchase Budgets. 2. On the Action Pane, click New. 3. In the Name field, type Purchase. 4. In the Description field, type Purchase. 5. In the Budget Dimension 1 field, enter PURCHASER. 6. On the Action Pane, click Edit Budget. 7. On the General FastTab, in the Show as Lines field, enter Vendor. 8. Ensure that the Show as Columns field is set to Period. 9. In the Date Filter field, enter 01/01/10..04/30/10. 10. In the Vendor Filter field, enter 01254796..01905382. 11. Ensure that the Show Value as field is set to Cost Amount. 12. Expand the Options FastTab. 13. In the Rounding Factor field, enter 1. 14. Select the Show Column Name check box. 15. Expand the Matrix Options FastTab. 16. In the View by field, enter Month. 17. On the Action Pane, click Show Matrix. Follow these steps to enter the budget line amounts: 1. On the line for vendor Progressive Home Furnishings, click the Budgeted Cost Amount field. 2. On the Action Pane, click New. 3. In the Source Type field, enter Vendor. 4. In the Source No. field, enter 01254796. 5. In the Cost Amount field, type 900. 6. Go to the next line. 7. In the Date field, enter 02/01/10. 8. In the Source Type field, enter Vendor. 9. In the Source No. field, enter 01254796. 10. In the Cost Amount field, type 900.


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Trade in Microsoft Dynamics® NAV 2009 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.

Go to the next line. In the Date field, enter 03/01/10. In the Source Type field, enter Vendor. In the Source No. field, enter 01254796. In the Cost Amount field, type 3600. Go to the next line. In the Date field, enter 04/01/10. In the Source Type field, enter Vendor. In the Source No. field, enter 01254796. In the Cost Amount field, type 900. Close the Item Budget Entries page. On the Action menu, click Refresh. Repeat steps 1-22 for the other lines as specified in the following table.

Vendor Name, Number

January

February

March

April

American Wood Exports, 01863656

3600

3600

4800

3600

Mundersand Corporation, 01905283

720

1800

720

720

NewCaSup, 01905382

4800

9000

12600

12600

Custom Metals Incorporated, 01587796

In addition to entering the values in the Item Budget Entries page, users can add a description for the budget entry and assign dimensions and other information as needed.

Demonstration: Export Budgets to Excel Users can export to and modify the sales and purchase budgets in Excel, and then import them back into Microsoft Dynamics NAV. This demonstration describes the steps to export and import a budget and view the results. Scenario: Now that the purchase budget has been created, Inga sent it to Vince, the operations manager, for approval. Vince is on the road and does not have access to Microsoft Dynamics NAV. Inga has to export the budget to Excel and then send it to him for changes. Vince wants to reduce purchases of a certain item from vendor NewCaSup, so he has changed the amounts as follows:

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•

January: 3500

•

February: 7500

•

March: 10000

•

April: 10000


Chapter 9: Analysis and Reporting After changes are made, Inga imports the changes into the budget in Microsoft Dynamics NAV. Follow these steps to export the budget: 1. On the Purchase page, click Reports and Analysis and then click Purchase Budgets. 2. Select the line for the PURCHASE budget. 3. On the Action Pane, click Edit Budget. 4. On the Related Information menu, point to Action and then click Export to Excel. 5. Ensure that the Option field is set to Create Workbook. 6. Click OK. 7. Select the relevant server access to Excel and then click OK. Immediately after the data finishes processing, the Microsoft Excel workbook opens. The filters set in Microsoft Dynamics NAV are visible in the Excel worksheet. By default, the program has named the worksheet "Budget." 8. Save the workbook as Purchase Budget. 9. Change the budget as indicated in the following table. Name

January

February

March

April

NewCaSup

3500

7500

10000

10000

10. Save and close the modified workbook. 11. On the Purchase Budget Overview page in Microsoft Dynamics NAV, click the Related Information menu, point to Action and then click Import from Excel. 12. In the Workbook File Name field, click the Edit button and browse to the Purchase Budget workbook. 13. In the Worksheet Name field, click the Edit button and select Budget. 14. Ensure that the fields are filled in as follows: Field

Value

Budget Name

PURCHASE

Option

Replace entries

Description

Imported from Excel 01/28/10

Import Value as

Cost Amount

15. Click OK to import the workbook. 16. Click Yes to replace the existing entries and accept the message that appears.


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Trade in Microsoft Dynamics® NAV 2009 The Microsoft Dynamics NAV budget updates with the new numbers for vendor NewCaSup.

Demonstration: Budgets in Analysis Reports Use sales and purchase budgets in analysis reports to track budgeted amounts against actuals. This demonstration shows how to use budgets in analysis reports. Scenario: Kevin, the sales manager at CRONUS, must compare the company's customer sales against the company's budget figures for January 2010. Follow these steps to add budget information to the existing CUST1-BUDG report, which shows actual amounts against budgeted amounts for each customer group: 1. On the Sales & Marketing page, click Reports and Analysis and then click Sales Analysis Reports. 2. The first report is CUST1-BUDG. On the Action Pane, click Edit Analysis Report. 3. Expand the Matrix Options FastTab. 4. In the View by field, enter Month. 5. On the Action Pane, click Show Matrix. 6. Expand the Filter Pane. 7. Under Limit totals to, click Add Filter. 8. Select Item Budget Filter and then in the Enter a value field, enter BUDGET 10.

FIGURE 9.8 SALES ANALYSIS REPORT WITH ACTUAL VERSUS BUDGETED AMOUNTS

The Sales Analysis Matrix shows the actual amounts compared with the budgeted amounts.

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Lab 9.3 - Create a Sales Budget Scenario Create a sales forecast for sales representative Linda Martin using the Sales Budget function for January through March 2010. The budget will show the following items and quantities you expect Linda Martin to sell: Item

January

February

March

8904-W

10

10

10

8908-W

10

10

5

8912-W

15

15

8916-W

10

20

Export the budget to Excel for feedback from Linda Martin in the field. Linda says that the March quantity for item 8908-W is supposed to be 10. Update the spreadsheet and import it back into Microsoft Dynamics NAV.

Challenge Yourself! 1. Create the sales budget as specified in the scenario. 2. Create the budget lines as specified in the scenario. 3. Export the budget to Excel and modify the workbook so that the March quantity for item 8908-W is 10, not 5. 4. Import the modified workbook into Microsoft Dynamics NAV and review the updated entries to confirm that the March budgeted quantity for item 8908-W is 10.

Need a Little Help? 1. Open the Sales Budgets page and create a new budget with the name Sales, description Sales Forecast, and set the budget dimension to Salesperson. 2. Open the Sales Budget Overview page and filter on the date range of January through March 2010 for items 8904-W through 8916-W. 3. Set filters so you can enter quantities rather than amounts for salesperson LM. 4. Set rounding to a factor of one and show the column names rather than the codes.


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Trade in Microsoft Dynamics® NAV 2009 5. Open the Sales Budget Overview Matrix and enter the quantities of each item, for each month, in the Budgeted Quantity field as specified in the following table. Item

January

February

March

8904-W

10

10

10

8908-W

10

10

5

8912-W

15

15

8916-W

10

20

6. Refresh the page to see the changes. 7. Go back to the Sales Budget Overview page and export the analysis to Excel. 8. For item 8908-W, change the March quantity to 10. 9. Save and close Excel. 10. In the Sales Budget Overview page, import the modified workbook, Budget worksheet. 11. Open the Sales Budget Overview Matrix and confirm that the March quantity for item 8908-W has updated to 10.

Step by Step Follow these steps to create the sales budget: 1. On the Sales & Marketing page, click Reports and Analysis and then click Sales Budgets. 2. On the Action Pane, click New. 3. In the Name field, type Sales. 4. In the Description, type Sales Forecast. 5. In the Budget Dimension 1 Code field, enter SALESPERSON. 6. On the Action Pane, click Edit Budget. 7. In the Date field, enter 010110..033110. 8. In the Item Filter field, enter 8904-W..8916-W. 9. In the Show Value as field, enter Quantity. 10. Expand the Filters FastTab. 11. In the Salesperson Filter field, enter LM. 12. Expand the Options FastTab. 13. In the Rounding Factor field, enter 1. 14. Select the Show Column Name check box. 15. Expand the Matrix Options FastTab. 16. In the View by field, enter Month. 17. On the Action Pane, click Show Matrix.

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Chapter 9: Analysis and Reporting Follow these steps to create the budget lines: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

On the line for item 8904-W, click the Budgeted Quantity field. On the Action Pane, click New. In the Quantity field, type 10. Go to the next line. In the Date field, enter 02/01/10. In the Quantity field, type 10. Go to the next line. In the Date field, enter 03/01/10. In the Quantity field, type 10. Close the Item Budget Entries page. On the Action menu, click Refresh. Repeat steps 1-11 for the other lines as specified in the following table.

Item

January

February

March

8908-W

10

10

5

8912-W

15

15

8916-W

10

20

Follow these steps to export the budget to Excel and modify the workbook: 1. Close the Sales Budget Overview Matrix page. 2. On the Related Information menu, point to Actions and then click Export to Excel. 3. Click OK to create a new workbook. 4. Select the relevant server access to Excel and then click OK. 5. On the line for item 8908-W, change the quantity to 10 in the column for 03/01/10. 6. Save the workbook and close Excel. Follow these steps to import the modified workbook into Microsoft Dynamics NAV and review the updated entries: 1. On the Sales Budget Overview page in Microsoft Dynamics NAV, click the Related Information menu, point to Actions, and then click Import from Excel. 2. In the Workbook File Name field, click the Edit button and browse to the saved workbook. 3. In the Worksheet Name field, click the Edit button and select Budget.


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Trade in Microsoft Dynamics® NAV 2009 4. Click Yes to replace entries and accept other messages. 5. On the Action Pane, click Show Matrix. The March budgeted quantity for item 8908-W is 10.

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Summary The analysis reporting and budgeting functionality in Microsoft Dynamics NAV is important when companies present information about themselves for the management and other roles that analyze performance. This functionality is easy to use by employees without a background in finance or accounting. The reporting functionality is customizable in many ways to suit the individual company's needs. Users can calculate variance and move budget figures between Microsoft Dynamics NAV and Microsoft Excel. The budgets functionality can be used to make sales budgets and purchase budgets on a detailed level. Budget version control is supported and works on individual budgets at the same time. Finally, the program makes comparing analysis report data against budgets easy by using dimensions and dimension filters.


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Test Your Knowledge Test your knowledge with the following questions. 1. Where must you set up customer groups, item groups, and salespeople before using them in an Analysis View Card? (Select all that apply) ( ) Sales & Receivables Setup ( ) Purchases & Payables Setup ( ) General Ledger Setup ( ) Inventory Setup 2. Explain the difference between the line template and column template used when creating an analysis report.

3. How do you set up a budget to enter a quantity of items to be purchased or sold?

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Chapter 9: Analysis and Reporting 4. List three ways you can present analysis reports.

Fill in the blanks to test your knowledge of this section. 5. Sales and purchase ________ functionality is used for planning, forecasting, and tracking against performance. 6. Analysis by Dimensions functionality allows you to analyze information using _________ dimensions. 7. Analysis reports are customized reports that are based on _________ transactions.


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2.

3.

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Solutions Test Your Knowledge 1. Where must you set up customer groups, item groups, and salespeople before using them in an Analysis View Card? (Select all that apply) (√) Sales & Receivables Setup ( ) Purchases & Payables Setup ( ) General Ledger Setup (√) Inventory Setup 2. Explain the difference between the line template and column template used when creating an analysis report. MODEL ANSWER: Line templates define the objects to analyze in an analysis report, such as customers, vendors, customer groups, items, or formulas. Column templates define the parameters used to analyze the objects, such as quantities and sales and cost amounts. The defined lines appear as rows in the report and the defined columns appear as the columns. 3. How do you set up a budget to enter a quantity of items to be purchased or sold? MODEL ANSWER: Set the Show Value as field to Quantity on the General FastTab of the Purchase Budget Overview or Sales Budget Overview page, respectively. 4. List three ways you can present analysis reports. MODEL ANSWER: Printed document, print preview from the screen, and exported Excel file Fill in the blanks to test your knowledge of this section. 5. Sales and purchase budget functionality is used for planning, forecasting, and tracking against performance. 6. Analysis by Dimensions functionality allows you to analyze information using multiple dimensions. 7. Analysis reports are customized reports that are based on posted transactions.


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Appendix A: Glossary

APPENDIX A: GLOSSARY This appendix contains a glossary for the inventory application areas in Microsoft Dynamics® NAV. NOTE: For definitions and explanations of Sales and Purchasing batch jobs, reports, and documents, refer to Tables, Reports, and Batch Jobs on the Contents tab in online Help. Cross-dock To move items directly from the receiving area to the shipping area, thereby minimizing handling and storage and allowing sales orders to be shipped sooner. Noun and adjective forms: cross dock NOTE: The program systematically compares inventory receipts with outstanding sales orders and indicates that a cross-docking opportunity is available. Delivery Note A note that accompanies a shipment and that lists the items in the shipment. Synonyms: advice note, accompanying note, dispatch note, covering note for picking. Inventory Items held in a store or a warehouse and purchased for resale, items used to support production (raw materials and work-in-process), and items for maintenance activities (including repair and operating supplies). The program calculates inventory as the quantity of an item available in inventory. Item A manufactured or purchased article, product, part or material that is part of inventory. If a company has several locations, it stores inventory control information about items or item variants at a particular location in the stockkeeping unit for that item or item variant at that location. Item Substitute An item that can be offered to a customer as a substitute for an item that currently is unavailable. Lead Time The time between recognition of the need for an order and the receipt of goods. Individual components of lead time can include order preparation time, queue time, processing time, move or transportation time, and receiving and inspection time. Location A physical structure or place where inventory is received, stored, and shipped. A location can be a warehouse, service car, showroom, plant, or area within a plant.


A-1

Trade in Microsoft Dynamics® NAV 2009 Negative Adjustment A reduction in inventory that is not due to a sale or consumption entry. Nonstock Item An item that a company sells but does not carry in inventory. A non-stock item is often an item in a vendor catalog, also called a catalog item. Order Date The date on which the vendor must ship the items in order to meet the planned receipt date. Physical Inventory Abbreviation: Phys. Invt. The determination of inventory quantity by the counting of items, which is performed on a continuous, periodic, or annual basis. Pick To physically withdraw from inventory items to be shipped or components of items to be assembled and shipped. Positive Adjustment An increase in inventory that is not due to a purchase or output entry. Put Away To remove the item from the receiving area, transport it to a specific location in a storage area, and record the movement and the exact location of the item. Noun and adjective form: put-away Receipt The physical acceptance of an item at a location. A warehouse person immediately registers the receipt of an item in the program, but the item is not a part of available-to-pick inventory until it has been put away. NOTE: The program systematically compares inventory receipts with outstanding sales orders and indicates that a cross-docking opportunity is available. Receiving The function encompassing the physical receipt of items, the inspection of the items for conformance to the purchase order (quantity and damage), the putting away of the items, and the preparation of the receiving report. Release To send a document to the next stage of processing without posting the document. You cannot change information on a released document unless you reopen the document. EXAMPLE: You can release a sales order to the warehouse. The order is then among the source documents from which the warehouse can retrieve lines to be assigned, picked, and shipped.

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Appendix A: Glossary Reservation The designation of a quantity of inventory on a purchase order, production order, or item ledger entry for a specific sales order or production order. Responsibility Center Abbreviation: Resp. Ctr. An organizational unit to which a company assigns duties or activities. NOTE: A responsibility center can be a cost center or a profit center. Examples are a sales office that sells items from one or more locations, a purchasing office for one or several locations, a service unit, a production-planning unit, and a branch office with responsibility for sales, purchases, and cost accounting. A responsibility center that has been assigned responsibility for a location accounts for location inventory in monetary terms, while the location is responsible for the physical inventory count. Safety Lead Time An element of time added to normal lead time to protect against fluctuations in lead time so that an order can be completed before its real need date. Shipment Date The date a shipment leaves your location for delivery to a customer, either with a shipping agent or your own means of transportation. Source Document The original evidence of a transaction that supports journal entries in the accounting system. EXAMPLE: Vouchers and contracts, but also internal documents that create journal entries, such as sales, transfer, or purchase orders or internal freight charges. Specific Item An individual item that is distinguished by a unique identification number. Stockkeeping Unit Abbreviation: SKU A unit for inventory control that concerns items and item variants at specific locations. Transfer Order An order to move items from one location to another. Warehouse Abbreviation: Whse. A building or part of a building where items are received, stored, and shipped. As such, it is a particular kind of location. Synonyms: distribution center, branch warehouse, field warehouse Warehouse Activity An activity in the Warehouse Management application area. Each activity has its own menu item.


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