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Purchasing for Non-Inventory Supplies

  • 1.  Purchasing for Non-Inventory Supplies

    TOP CONTRIBUTOR
    Posted 9 days ago
    ​Hi all,

    Seeing the other thread about purchase requisitions is prompting me to ask, again, if anyone has any experience in using the purchase requisition and purchase order processes for non-inventory supplies?

    We are currently using a paper-based requisition process and the PO's in AX are being created using dummy item keys that basically perform the same function as procurement categories - that is making sure the cost ends up in the correct GL account. We'd like to move beyond this, but haven't found any good documentation or blog posts from people who have got their whole purchasing process into AX.

    What we absolutely want to avoid is ending up with non-inventory items in our product list in AX for every nut, bolt and screw we need to buy. It seems like procurement categories and catalogs are the way to go, but we haven't found any good way to get vendor part numbers and descriptions in (ideally, they would be manually entered through the purchase requisition the first time and be stored, so that next time the user starts keying in the part number, the system can finish filling in the details). Manually setting up catalogs for most of our vendors isn't an option - too many parts and new ones being added all the time.

    We've got 1000's of supplies, many of them one-off purchases, that we make every year in a hundred different categories. The paper process is flexible enough to handle that, but it isn't scalable and doesn't allow for any kind of automated approval process, 3-way matching, etc.

    Currently on AX 2012 R3 CU11, but planning to move to D365FO in the next year.



    ------------------------------
    Steve Latta
    Accountant
    Ortec, Inc.
    Easley SC
    ------------------------------


  • 2.  RE: Purchasing for Non-Inventory Supplies

    Posted 9 days ago
    Hi Steve,

    Our company has moved the whole purchasing process into D365FO. We have vendors set up for indirect as well as direct purchases, and use the purchase pool to indicate if the PO is for direct/indirect items. We use procurement categories for correct GL allocation and financial dimensions to allocate further to the correct departments' budgets. I believe the product name/item number has to be manually entered every time, it's only the procurement category and the vendor that comes from the system and has to be chosen. We also have a workflow that - depending on approval limit by position - will route the PR through the right people (managerial hierarchy) for approval to eventually leave it with our purchasing manager to create the PO.

    I am no expert in that module, being a BA, but if you have any specific questions, feel free to send me a message or ask here.

    ------------------------------
    Kerstin Newman
    StarTech.com
    London ON
    ------------------------------



  • 3.  RE: Purchasing for Non-Inventory Supplies

    TOP CONTRIBUTOR
    Posted 8 days ago
    Hi Steve,
    I have a number of clients who also do this, happy to answer any questions you may have.

    Regards

    ------------------------------
    Andrew Lencsak
    Solution Architect
    DXC
    GA
    ------------------------------



  • 4.  RE: Purchasing for Non-Inventory Supplies

    TOP CONTRIBUTOR
    Posted 8 days ago
    ​Hi Andrew,

    I don't know enough at this point about how to use it or how others have implemented it to have questions. I don't know if you guys have a blog you post tips and how to's on, or if you do any AXUG webinars or Summit courses, but this is an area that seems to be completely lacking in actual use case examples or best practices. Since it's an area you've successfully implemented with customers, it would be great if your team would consider putting some of that knowledge out there - at least enough basics so we can start to know what questions we need to be asking.

    ------------------------------
    Steve Latta
    Accountant
    Ortec, Inc.
    Easley SC
    ------------------------------



  • 5.  RE: Purchasing for Non-Inventory Supplies

    TOP CONTRIBUTOR
    Posted 8 days ago
    ​Hi Kerstin,

    That does sound like at least a step in the right direction. How detailed/deep did you decide to make your procurement categories? For example, do you just have a category for office supplies, or did you did you go another level and have subcategories for paper, folders, etc.? For us, at least, we'd be pointing to the same GL account either way, but we're trying to decide what would make the most sense to our end users. Office supplies probably isn't a wonderful example. A better one might be a GL account we have for small equipment. It might be a pump, a motor, a pressure washer nozzle, a lab balance, a hot plate, etc., basically anything that is a piece of equipment but falls below our capitalization policy threshold. Another example might be outside services, where we might have outside lab testing done or a sprinkler system inspection. We want to make it easy for the purchasing folks to decide what category to use, and we want people across the company to use the same category for similar items - so more categories = more guidance but also more to go through on set up and use. It is a bummer that you can't add/store vendor part numbers and descriptions without having to set up actual items though.

    How do you use purchasing pools? I'm not familiar with those at all.

    ------------------------------
    Steve Latta
    Accountant
    Ortec, Inc.
    Easley SC
    ------------------------------



  • 6.  RE: Purchasing for Non-Inventory Supplies

    Posted 8 days ago
    Hi Steve,

    When we moved to D365FO from our old ERP, we just moved the same procurement categories we had before over to the new system. We have quite a few different ones, but they are not as granular, so we do have one for office supplies in general, and a building maintenance one, consulting, etc. You could always start with a base set of procurement categories and add to the list as you go along.

    (We actually have our GL team in the approval workflow as a first checkpoint to ensure that the submitter chose the right procurement category as it caused more cleanup tasks at month-end when they didn't know which PO was placed incorrectly whereas now they won't reject a PR with the wrong procurement category, but they know about it from the start and can fix the GL postings once it's completely processed.)

    We use purchase pools to categorize and easily identify what a PO is for: direct or indirect, and there are different people approving them, i.e. our purchasing manager (finance) approves indirect POs, and the procurement manager (supply chain) approves direct POs.

    Let me know if you have any more questions.

    ------------------------------
    Kerstin Newman
    StarTech.com
    London ON
    ------------------------------



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