D365 Finance & Operations and Dynamics AX Forum

Expand all | Collapse all

Purchase Orders - Cutover form old system to D365

  • 1.  Purchase Orders - Cutover form old system to D365

    Posted Oct 28, 2020 10:07 AM
    Hello!

    We are preparing our game plan for go-live and are trying to plan out the cutover process for our Purchase orders.  I'm curious to hear success stories from others on how Purchase orders were handled?  More specifically, if you have a "received" purchase order in your old system (so the PO has not been invoiced), how did you handle that PO when you migrated to D365?   We're trying to ensure we keep invoicing as simple as possible and having the PO in D365 is ideal but we'd like to hear how others successfully handled this scenario.

    Thank you!
    Michelle

    ------------------------------
    Michelle Ma
    Controller
    Daisy Brand
    Dallas TX
    ------------------------------
    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 2.  RE: Purchase Orders - Cutover form old system to D365

    Posted Oct 28, 2020 12:40 PM

    Michelle,
    Basically you want to achieve a 'quiet state' for your legacy Purchase Orders, where you are no longer transacting in legacy system. 


    If you have Purchase Orders with status 'Received' you want to separate the list into tow sections: 1. Fully received not invoiced, and 2. Partially received not invoiced.
    Wherever possible, minimize the volume of (1) Fully received PO's by invoicing them.  Create new PO's in D365 for the unreceived quantities on the (2) PO's that have been  partially received.

    Create two Main Accounts in your Chart of Accounts:  Accrued Purchases,System (eg 201020), and Accrued Purchases, Legacy (eg 201021).   

     

    Migrate your legacy trial balance, related to Received Not Invoiced Purchase Orders, to the new legacy Main Account (201021).  The new system Main Account (201020) should have a zero beginning balance.
    Point your Inventory management > Setup > Posting > Posting > Purchase orders > Accrued purchases (All=201020).to the new system account.

    Have Accounts Payable process all related (1) invoices as "Vendor Invoices" (not Purchase Order Invoices" and code them to the legacy Main Account (201021).  The legacy account balance will  decrease towards zero as the legacy invoices are posted.  You may manually reconcile the legacy account against your original list (1) above.  Alternatively, if you migrated 'detailed' trial balance for the (1) Fully Received Not Invoiced, you may also utilize the General Ledger Settlement function to mark liabilities that have been invoiced,
    Jim



    ------------------------------
    James Sonne
    sonnej@365FinanceArchitect.com
    ------------------------------

    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 3.  RE: Purchase Orders - Cutover form old system to D365

    Posted Oct 29, 2020 12:21 PM
    Hi James!

    Thank you for your detailed response!  I hope you're doing well!

    In regards to the method you described above, when AP codes the invoice to the legacy account, does it matter whether they use a "Vendor Invoice" vs an "Invoice Journal"?  For D365, we will have those two options to use for invoicing so I'm not sure if you see one way more beneficial  to use than the other?

    Another route we were thinking of going is for any POs that are either (1) Fully received and not invoiced or (2) only partially received not invoiced, we were contemplating backing out the receipts, migrating them as "open POs" into D365 and receiving them back in.  AP would then be able to invoice on the PO.
    Due to the fact that we would be missing receipts in our financials, we were contemplating posting a top-side journal entry to capture those receipts balances on the last day in the old system and then reversing that journal entry on the first day in the new system (D365).  Have you ever seen it done that way?

    Thanks!
    Michelle

    ------------------------------
    Michelle Ma
    Daisy Brand
    Dallas TX
    ------------------------------

    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 4.  RE: Purchase Orders - Cutover form old system to D365

    Posted Oct 29, 2020 08:45 PM
    Michelle,
    I so enjoyed last year's visit to Daisy Brand. Yes, I am doing well and hope the same for you.

    re: Vendor Invoice vs. Invoice Journal.
    I have no preference, Just not a "PO Invoice".

    re: Another route...
    Your idea would work, but sounds like extra level of effort undoing and re-doing in a balanced fashion.
    I would consider the steps below as a simplified approach with less effort and less risk of error undoing and redoing.

    I assume the Legacy Trial Balance and Inventory Sub Ledger are not in D365.

    The below steps assume no editing of Legacy Received Not Invoiced PO's.

    1. Trial Balance Data migration:
    Use a D365FO General journal to migrate Legacy Trial Balance
    • Debit Inventory Clearing (eg.Main Account 140990, not a Main Account tied to Inventory Posting Profiles)
    • Credit Accrued Liability Clearing (eg Main Account 201021, not a Main Account tied to Inventory Posting Profiles)
    • Debit/Credit Whatever remaining Main Account balances you are Migrating.
    2. Subledger Data migration
    The will simultaneously increase Inventory SubLedger balanced  with the General Ledger, yet leave the Accrued Liability Unchanged.
    The Inventory Clearing Main Account should then be zero, or have a small balance due to costing method differences (D365 vs. Legacy)
    If an immaterial balance remains in 140990, write it off with a General Journal.
    • Debit inventory using an Inventory Movement Journal (This will use the Main Accounts specified in Inventory Posting Profiles for the Debit)
    • Credit Inventory Clearing (eg Main Account 140990) via the Offset Ledger Account in the Movement Journal)

    3. Open Purchase Order Data migration
    Create new PO's in D365FO to represent:
    • Remaining quantities on Partially Received Legacy PO's
    • Quantities on Un-Received Legacy PO's 
    4a. Process D365FO Purchase Order Receipts and Purchase Order Invoices using normal D365 process.

    4b. As per initial reply, Have Accounts Payable process all invoices related to Legacy Received Not Invoiced as "Vendor Invoices" or "Invoice Journals" (not Purchase Order Invoices) and code them to the legacy Accrued Liabilities Clearing Main Account (eg 201021).  The legacy account balance will  decrease towards zero as the legacy invoices are posted.  You may manually reconcile the legacy account against your original list or utilize GL Settlements as described in initial reply.

    Best Practice Reminder:  Test in a TEST environment before performing in PROD.

    Jim.




    ------------------------------
    James Sonne
    sonnej@365FinanceArchitect.com
    ------------------------------

    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 5.  RE: Purchase Orders - Cutover form old system to D365

    Posted 27 days ago

    Hi James!

    I appreciate the detailed response! This is great information and we will make sure to test out in TEST before!

    It sounds like your recommendation is not to try/attempt to move "received" PO lines from legacy over to D365 and I do understand the risks involved.  I'll continue to think through this as we come up with our cutover plan.

    Have a great day!
    Michelle



    ------------------------------
    Michelle Ma
    Daisy Brand
    Dallas TX
    ------------------------------

    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 6.  RE: Purchase Orders - Cutover form old system to D365

    SILVER CONTRIBUTOR
    Posted 26 days ago

    Greetings

    We have recently migrated from AX2009 to D365 and I wanted to start D365 in the same sate as AX2009 was left - i.e. with Receipted purchase orders still receipted but I did not want to do manual postings into Control accounts that could case reconciliation issues later as invoices were processed so I feel like I have done more or less what you are proposing.
    I found the best method was to:
    (1) Import all Open and Receipted Purchase order Headers. Setting the number sequence to manual allow the Purchase numbers to be kept the same.
    (2) Import all receipted order quantities  (I sourced this from Inventory Transactions) as open purchase order lines and Bulk confirm them
    (3) I then generated a single delivery note for all open purchase orders - the is the one step I could not really import and had to enter the Delivery note number for each order line. We could have receipted each delivery separately but this was not a big deal for us so using the delivery note number '1' for all Purchase orders was a quick solution.
    (4) The check is that all Purchase orders should now be receipted.
    (5) The Remaining purchase order lines can be imported once the reconciliation process for this step is complete. Where a line has been part receipted it becomes two lines on the same PO in D365.

    At this point the issue arises that the receipt stock could be (a) Physically onhand (b) In production (c) delivered to customers (d) sold.
    You could take this into account then importing opening stock by allowing inventory to go into physical negative and taking your exported onhand stock and adjusting by the receipted PO values but for us this was too complicated. Instead after receiving the orders I counted all stock out to get inventory back to zero. This also allows the ledger offsets from the above transactions to be journaled against each other to zero off unwanted opening balances.
    For us the next step was to Import production orders (which can be 4-8weeks long per order so a clean cut-over was not an option) with stock split into picked and unpicked.
    This allowed the Productions to be started and the opening WiP to to picked to these jobs, again leaving zero stock onhand.
    Finally i imported the opening stock - reconciled and ready to go live.

    At the start of this the process it was recommended to us as being too complicated but I feel most consultants are truing to produce a system what can be reconciled on the day rather than one that keeps the business running with the minimum interruptions. In the defense of consultant's in their shoes I would recommend the same but as I imported my own data I would time the imports to do each stage at a time with the minimum of additional cost and downtime between steps.
    We are running MRP with capacity constraints across three sites.
    What didn't work well was that we were also remapping the general ledger, refining Units of Measure and OUM conversions that were wrong in the old system. This should not have been an issue but it did make the data import and checking processes more complicated.
    Mostly this was because time constraints meant that this happened in live for the first time with no dry run or testing - I would never recommend this but would repeat if required.
    Secondly if the Purchase price on the order differed from the invoice then the true costs (including misc. charges and freight) would not flow to the Production Job but instead it would end up as stock loss from the first counting journal. Processing invoices manually would not deal with this any better but what I did do was set the dates for the import step so the in/out transactions would happen in the right order for the Date-weighted average to have the best shot at being right. There was also a big focus on making sure Purchase orders were for the right value several months prior to go-live. having separate dates for different import types also makes a staged reconciliation of the ledger much easer.
    Finally what made this work for us is our open and receipted purchase orders were right to start with, we didn't have years of accumulated old orders that had not been closed off that would have imported a mess into the new system.

    In short- as much as a perfect cut-over is the ideal, we had to pick what was most important to the business, match against skills were available for the cut-over period and ignored everything else.

    I am happy to assist if you have further questions as I have not gone into any of the ledger posting in detail but what you are proposing can be done and does work.

    Good luck (whatever you decide),
    Duane





    ------------------------------
    Duane Jenkin
    Business Analyst
    Tourism Holdings Limited
    Hamilton, New Zealand
    ------------------------------

    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


If you've found this thread useful, dive deeper into User Group community content by role