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Make Your Pricing Strategy Competitive with Smart Rounding in Microsoft Dynamics AX 2012

Human psychology plays a vital role in people’s buying habits, and the price tag is the most important psychological barrier that prevents people from buying. Psychological pricing is a marketing/business concept which is used to influence the consumer’s buying power – customers respond better to certain type of prices, and they are more likely to buy with certain price levels. For example, psychological prices often end with a “9” – such as 99.99, 9999.99, 99,999.99, etc.

This pricing naturally does not have any real effect on the money that we are going to pay – if an item is $999.99, we are  essentially paying $1,000.00. But this kind of pricing affects the consumer’s buying behaviour in that it gives the consumer a different mind-set at first sight. When the customer sees an item priced at $10,000, it seems like quite a large amount; but seeing that item at $9,999.99 makes it feel less, or like we’re getting a bargain. That one penny difference can be a major determining factor in getting a customer to purchase.

Wherever we go, we see this psychological pricing: at clothing stores, grocery stores, electronics shops, etc. In fact, it is so common and widespread that most people don’t think twice about purchasing at these pricing levels.

The smart rounding concept in Microsoft Dynamics AX 2012 supports psychological pricing by allowing businesses to round sales prices of items by whatever specification they create. You can apply smart rounding after a bulk adjustment of trade agreements, or automatically apply it after a unit price is calculated, based on a generic currency and an exchange rate. By using smart rounding, you can make the market more ready to buy your products.

Set Up Smart Rounding

The smart rounding rules are static and rarely change; they are also currency dependent. This means that one currency can follow one set of rules and another currency can follow another set of rules. For example, all products for US Dollars (USD) end with 99 cents, and all products for Pound Sterling (GBP) end with 95 pence.

To set up smart rounding, follow these steps:

  1. Open Sales and marketing > Setup > Price/discount > Smart rounding.

    Navigation path for Smart Rounding

    Fig 1: Navigation path for Smart Rounding

  2. Click New.

    Click “New” to create a new Smart Rounding Rule

    Fig 2: Click “New” to create a new Smart Rounding Rule

  3. Type the Rounding version and Name into the appropriate fields.

    Enter the Rounding version and Name for the Smart Rounding Rule

    Fig 3: Enter the Rounding version and Name for the Smart Rounding Rule

  4. Click Add to create a new Smart Rounding Rule.

    Click “Add” to create a new Smart Rounding Rule

    Fig 4: Click “Add” to create a new Smart Rounding Rule

  5. Type the from and to price in the Unit Price From and Unit Price To fields.
  6. Type the syntax to be used for the smart rounding in the Syntax field.
  7. Enter the rounding limit points. Type the lower limit for rounding down in the Lower Limit field and type the upper limit for rounding up in the Upper Limit field.

    Enter different criteria for the Smart Rounding Rule

    Fig 5: Enter different criteria for the Smart Rounding Rule

  8. Repeat steps 4 through 7 to add more lines to the rounding rule.

    Enter separate lines for entering criteria for the Smart Rounding Rule

    Fig 6: Enter separate lines for entering criteria for the Smart Rounding Rule

  9. In the Rounding Version Members FastTab, click Add

    Click “Add” to select currencies for which the Smart Rounding Rule is applicable

    Fig 7: Click “Add” to select currencies for which the Smart Rounding Rule is applicable

  10. Click the Currency drop-down box and select the currency in which the smart rounding should apply.

    Add currencies for which the Smart Rounding Rule is applicable

    Fig 8: Add currencies for which the Smart Rounding Rule is applicable

Create Multiple Smart Rounding Rules

You can create multiple Smart Rounding Rules and select the multiple currencies in which the smart rounding should apply using the above steps.

Multiple Smart Rounding Rules

Fig 9: Multiple Smart Rounding Rules

Currencies for Multiple Smart Rounding Rules

Fig 10: Currencies for Multiple Smart Rounding Rules

Check Price with Smart Rounding Rule Simulation

You can check the price after rounding by entering a price in the Price Example Before Rounding field. You can view the rounding off price as per the Smart Rounding Rule in Price Example After Rounding field.

For example, I have entered the value 145.20 in the Price Example Before Rounding field, and the value according to the rounding rule is showing 149.99 in the Price Example After Rounding field.

Check price simulation with the created Smart Rounding Rule

Fig 11: Check price simulation with the created Smart Rounding Rule

Apply Smart Rounding Automatically

To apply smart rounding automatically after currency conversion, select the “Apply smart rounding after currency conversion” option. Find this option on the Prices tab in the Accounts receivable parameters form.

Select the “Apply smart rounding after currency conversion” option to apply smart rounding automatically

Fig 12: Select the “Apply smart rounding after currency conversion” option to apply smart rounding automatically

Apply Smart Rounding Manually

To apply smart rounding manually to a trade agreement, click Adjustment, and then Apply Smart Rounding on the journal lines, price/discount agreement form.

Apply smart rounding manually to a trade agreement

Fig 13: Apply smart rounding manually to a trade agreement

Example of Manual Smart rounding

Create a price/discount agreement journal in Sales and Marketing. In the journal lines, enter the value 145.20. Click Adjustment, and then Apply Smart Rounding on the journal lines.

Enter the trade agreement price in the journal lines and apply smart rounding manually

Fig 14: Enter the trade agreement price in the journal lines and apply smart rounding manually

The Smart Rounding Rule version NinetyNine (Unit price ending with .99) covers this, and when you apply smart rounding the price changes.

Price changes as per the Smart Rounding Rule when applied manually

Fig 15: Price changes as per the Smart Rounding Rule when applied manually

When you create a sales order with the item, the sales order line also populates with the smart rounded amount.

A sales order line populates with the smart rounded amount for an item

Fig. 16: A sales order line populates with the smart rounded amount for an item

Conclusion

Now you can use the smart rounding functionality in Microsoft Dynamics AX 2012 to break the psychological price barrier between your customers and your products, and make them eager to buy.

If you have any questions about how Microsoft Dynamics AX 2012 can help with your pricing processes, please email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.

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Make Regulatory Compliance Easy for Process Manufacturing with Microsoft Dynamics AX 2012

January 30th, 2013 Partha Chattopadhyay No comments

Businesses in the process manufacturing industry are generally subject to varying degrees of regulation by regional, national, and global organizations, given the nature of the products they offer. Process manufacturing handles raw materials and finished product transactions that must be in compliance with each country's statutory and regulatory requirements. Additionally, transactions for certain products can be restricted in some states within a country.

When a sales order or purchase order is created, a user should secure the necessary compliance information for the product. For example, chemical and pharmaceutical manufacturers have a product safety data sheet (PSDS) for all raw materials and finished products. When the product data sheet expires or undergoes a revision, process manufacturers are responsible for updating it immediately, with the vendor and the customer.

Process Manufacturing in Microsoft Dynamics AX 2012 provides a rich toolset for food, drug and chemical manufacturers to manage products that must adhere to restricted and regulated environments.

This article describes how you can use Compliance Management features in Microsoft Dynamics AX 2012 to follow the necessary statutory requirements.

Definitions in Product Compliance

The following terms are used in product compliance:

Regulated product: An item is a regulated product if it is regulated by a government authority of a country and requires compliance and audit reporting compulsorily on a continuous basis. For example, if an Active Pharmaceutical Ingredient (API) manufacturer wants to sell Cefuroxime Axetil Amorphous in the United States, the manufacturer must obtain an approval from the United States Food and Drug Administration (USFDA) authorities.

Restricted product: A product is a restricted product if its distribution is limited or constrained by a government authority. For example, certain pharmaceutical drug products are prohibited in certain countries and could lead to disciplinary actions against the manufacturers.

Reported product: A reported product is a product that is regulated by the local and regional authorities. The manufacturer of reported products must agree to provide usage data for the product.

Product safety data sheet: A product safety data sheet (PSDS) is a brochure that contains handling, emergency and other related information about the product – for example, the flash point, or boiling point, of a substance.

Product Compliance Configuration Key

The prerequisite of product compliance functionality is the license for Process Manufacturing & Distribution.

Once you have adequate license, you must enable the product compliance key under Process Distribution from System administration > Set up > Licensing > License Configuration.

Configuration key for product compliance

Fig 1: Configuration key for product compliance

Setting Up for Product Compliance

The prerequisite setups for product compliance include the following:

Inventory and warehouse management > Setup > Inventory and warehouse management parameters > Product compliance

Product compliance set up in the Inventory and Warehouse Management parameters form

Fig 2: Product compliance set up in the Inventory and Warehouse Management parameters form

Parameters can be set up to receive warnings during following processes:

  • Purchase order entry
  • Sales order entry
  • Sales packing slip posting
  • Sales invoice posting

Parameters can also be set up to print the product safety data sheet.

Setup for Restricted Products by Regional Lists

Restricted products by regional lists need to be set up in Inventory and warehouse Management > Setup > Product compliance >Restricted products regional lists.

Restricted Products Regional lists form

Fig 3: Restricted Products Regional lists form

NOTE: If the number of regions in which the product is allowed is greater than
the number in which it is not allowed, set up an inclusion list for the country and
an exclusion list for provinces where it is not allowed. If the product and excluded region appear together on a sales order line, Microsoft Dynamics AX will produce a warning and prevent the sale.

Adding Restricted Products Regional lists form

Fig 4: Adding Restricted Products Regional lists form

Setup for Regulated Products by Regional Lists

Regulated products by regional lists need to be set up in Inventory and warehouse Management > Setup > Product compliance > Regulated products regional lists.

Material Reporting lists form

Fig 5: Material Reporting lists form

Adding Item in Material Reporting lists form

Fig 6: Adding Item in Material Reporting lists form

NOTE: If the product is only regulated in a country or region then it does not have to be marked as reported. However, if the usage data of a product needs to be reported, then it also needs to exist on a reporting list.

Setup for Product Safety Data Sheet (PSDS)

The default parameters, such as the validity interval and the expiry advice interval for product safety data sheets, can be set up in the Product Safety Data sheet form.

The product safety data sheet needs to be set up in Inventory and warehouse Management > Set Up > Product compliance > Product safety data sheet

Product safety data sheet form

Fig 7: Product safety data sheet form

NOTE: The number for the expiry advice days should be less than the number
for the validity in days.

Setup Archive Directory for Document Handling

The Archive Directory for document handling needs to be set up in Organization administration > Document management > Document management parameters. Select the location in Archive directory field of General tab.

Set up Archive Directory for document handling

Fig 8: Set up Archive Directory for document handling

Associate Product Compliance to Released Products

Associating product compliance to the released products consists of regulated products, the product safety data sheet, restricted products and reporting details.

A) Regulated Products in the Released Products Form

Entering and viewing the countries that require item reporting from can be set up in Product information management > Common > Released products> Manage inventory Action Pane > Compliance > Regulated products.

Countries that require an Item Reporting form

Fig 9: Countries that require an Item Reporting form

B) Regulated Products in the Released Products Form
Entering and viewing the product safety data sheet can be set up in Product information management > Common > Released products> Manage inventory Action Pane > Compliance > Safety data sheet.

Product safety data sheet form

Fig 10: Product safety data sheet form

Product safety data sheet attached from Document Handling

Fig 11: Product safety data sheet attached from Document Handling

C) Restricted Products in the Released Products Form
Entering and viewing the list of countries that are restricted for the item from can be set up in Product information management > Common > Released products> Manage inventory Action Pane > Compliance > Restricted products.

Restricted Products form

Fig 12: Restricted Products form

D) Reporting Details from Released Products Form
Additional information that is required by local or external regulatory authorities can be set up by printing the documents or sending the documents through email. If an item name that is defined by a regulatory body is referred from an external system, then all the product related information attached to such a name can be retrieved.

Product information management > Common > Released products> Manage inventory Action pane > Compliance > Reporting details.

Reporting Details form

Fig 13: Reporting Details form

The following list describes the terms and abbreviations used in the Reporting details form:

  • EPCRA: Emergency, Planning and Community Right-To-Know Act
  • CERCLA: Comprehensive Environmental Response, Compensation, and Liability Act
  • TSCA: Toxic Substances Control Act
  • TRI: Toxics release Inventory from United States Environmental Protection Agency
  • OSHA: Occupational Health and Safety Administration
  • EHS: Extremely Hazardous Substances

The following table describes the fields located in the Reporting Details form:

Field

Description

Item number

The identifier for the selected regulated item.

EPCRA name

Enter the product name to report under the Emergency Planning and Community Right to Know Act (EPCRA).

TSCA name

Enter the product name to report under the Toxic Substances Control Act (TSCA).

CERCLA name

Compensation, and Liability Act (CERCLA).

CERCLA reportable quantity

Enter the CERCLA quantity at which reporting is required.

TRI threshold

Enter the Toxic Release Inventory (TRI) threshold at which reporting is required under EPCRA.

Release determination

Enter free-form text that describes the release of TRI.

Usage

Enter free-form text that describes the use of TRI.

OSHA product name

Enter the product name to report under the Occupational Safety and Health Administration (OSHA).

OSHA threshold quantity

Enter the OSHA threshold at which reporting is required.

EHS reportable quantity

Enter the Environmental Health and Safety (EHS) quantity at which reporting is required under EPCRA.

EHS threshold planning quantity

Enter the EHS threshold planning quantity at which an emergency plan must be prepared under EPCRA.

On-hand quantity

The on-hand quantity for the item.

Yearly quantity

The item quantity that is manufactured or processed

produced

annually. The period used to calculate the quantity is based on the Start and End date parameters set up on the Product Compliance tab in the Inventory and warehouse management parameters form.

Yearly quantity used

The item quantity that was used annually. The period used to calculate the quantity is based on the Start and End date parameters set up on the Product Compliance tab in the Inventory and warehouse management parameters form.

Yearly production volume

The annual production volume for the item.

Item CAS Relations in Reporting Details Form

The Item CAS relations form is to record the chemical composition of regulated items that are stored under Chemical Abstract Service (CAS) numbers. For safety reasons, it is mandatory to create and maintain CAS item relationships to identify the active ingredients of certain chemicals to ensure proper first aid, storing and handling. Several safety related legal reports require the reference of CAS numbers for each item.

CAS number for an individual item in the Item CAS relations form from Product information management > Common > Released products> Manage inventory Action Pane > Compliance > Reporting details > Item CAS relations.

Item CAS Relations form

Fig 14: Item CAS Relations form

Validate the Product Safety Data Sheet Information in Purchase and Sales Orders

While working in process manufacturing, the product safety data sheets for all regulated products must be tracked. Checking the availability and validity of the product safety data sheet information is mandatory for the purchase and sales order of each item. Warning messages might be generated on the non-availability and expiration of the product safety data sheets in the purchase and sales order.

Procedure: Validate Product Safety Data Sheet Information in Purchase Order

To validate the compliance of the product safety data sheet in the purchase order, follow these steps:

  1. On the Navigation Pane, click Procurement and sourcing, go to Common, click Purchase orders and then click All purchase orders.
  2. Click the Purchase order button to create a new purchase order
  3. Select the vendor account.
  4. On the Purchase order lines select the item from the drop-down list, which is a regulated product.
  5. Press Ctrl+S to save the record. If the product safety data sheet is expired for the regulated product, the following warning message will be displayed: "Product safety data sheet is either not on file or has expired. Request a product safety data sheet for the product from the vendor".

    Warning message in purchase order form

    Fig 15: Warning message in purchase order form

    Product safety data expired

    Fig 16: Product safety data expired

  6. Create a new product safety data sheet in the Product safety data sheet form for the item and make it active.

     

    New Active Product Safety Data

    Fig 17: New Active Product Safety Data

  7. Click the Purchase Action Pane and then select Confirm to confirm the purchase order.
  8. Go to the Receive Action Pane, and then click Product receipt.
  9. Under the Parameters field group enter the ordered quantity as the Quantity.
  10. Enter the Product receipt number and then click OK.

A warning message can be generated that will ask for a product safety data sheet from the vendors, by setting up the necessary parameter in the Inventory and warehouse management parameters form. A warning message can be generated for the expiry advice internal and the expiry of the product safety data sheet for each item.

Procurement and sourcing > Common > Purchase orders > All purchase orders > Purchase orders lines > Inventory > Product safety sheet log

Product safety sheet log

Fig 18: Product safety sheet log

Procedure: Validate Product Safety Data Sheet Information the Sales order

To validate the compliance of the product safety data sheet in the sales order,
follow these steps:

  1. On the Navigation Pane, click Sales and marketing, go to common, click Sales orders and then click All sales orders.
  2. Press the New button to create a new sales order record.
  3. Select the customer account
  4. On the Lines tab enter the Item number that is a regulated product.
  5. Press Ctrl + S to save the sales order line. NOTE: Because this is a regulated product, the following Infolog message will display “Please deliver the latest product safety data sheet to the customer.”

     

    Warning message in a sales order line for the regulated product

    Fig 19: Warning message in a sales order line for the regulated product

  6. Click the Inventory button and select the product safety data sheet. If required, create a new product safety data sheet and attach it to the document.
  7. Close the Product Safety Data Sheet (PSDS) form.
  8. Click the Pick and pack Action Pane and select Packing slip.
  9. Under the Parameters field group, enter All as the Quantity.
  10. Select the Print product safety data sheet check box to print the product safety data sheet with the packing slip. Click OK. This should print the PSDS document only the first time this item is shipped to this customer for an active document. Proper setup of print functionality and document handling is required.
  11. Click the Posting button and select Invoice.
  12. Under the Parameters field group enter the Packing slip as the Quantity.
  13. Click OK.
  14. Click Inventory and select the product safety data sheet log. The correct document shows in the log and the last sent date is updated.

     

    Product safety sheet log

    Fig 20: Product safety sheet log

  15. Close the Infolog and close the Sales order form.

Procedure: Control delivery of restricted Items in restricted regions

To validate control delivery of restricted items in restricted regions through the sales order, follow these steps:

  1. On the Navigation Pane, click Sales and marketing, go to common, click Sales orders and then click All sales orders.
  2. Press the New button to create a new sales order record.
  3. Select the customer account.
  4. On the Lines tab enter the Item number that is a restricted to the Delivery address of the Customer selected.
  5. Press Ctrl + S to save the sales order line. A warning message popped up saying, “Product ####' is restricted for sale to the delivery address on the sales line. Change the address or the product”.

    Warning message showing Item is restricted in Delivery address

    Fig 21: Warning message showing Item is restricted in Delivery address

    Set up for Restricted Products in released product form

    Fig 21: Set up for Restricted Products in released product form

Conclusion

By using Microsoft Dynamics AX 2012 to configure regulated and restricted products, process manufacturers can now easily meet product compliance regulations. Manufacturers should also note that it helps to maintain the validations required to update the product safety data sheet information, while performing purchase and sales order entries.

Most uniquely, Microsoft Dynamics AX 2012 controls delivery of restricted items in restricted regions automatically, saving companies on time and resources, and also preventing delivery issues from occurring.

If you have questions about how Microsoft Dynamics AX 2012 can help your process manufacturing practice, please email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.

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Improve Supply Chain and Procurement Processes with UNSPSC Codes in Microsoft Dynamics AX 2012

December 5th, 2012 Partha Chattopadhyay No comments

With the growth of the business at Ignify, we felt the necessity of having a product code to reduce the effort in our supply chain functions. Efforts were made to generate an in-house product code, a code that took a long time to build and was not capable of increasing efficiency outside the organization in such areas as purchasing and outsourcing products.

Many other businesses have been in the same situation as Ignify – today’s customers demand faster fulfilment at lower cost (especially customers who conduct business through the Web, such as e-commerce). The need to approach procurement more strategically has never been greater. All of these combine to make fast, simple, accurate classification of goods and services an imperative in the marketplace.

Luckily, there is a single coding convention that all companies can draw from so that all speak the same language to speed-up and rationalize processes. And that code is called the UNSPSC.

UNSPSC code, the United Nations Standard Products and Services code® (UNSPSC®), offers a single global classification system. It provides an open, global multi-sector standard for efficient, accurate classification of products and services. The code’s hierarchical convention can be used for:

  • Company-wide visibility of spend analysis
  • Cost-effective procurement optimization
  • Full exploitation of electronic commerce capabilities

The availability of UNSPSC codes is simple; users can search http://www.unspsc.org/  to locate commodity codes that can be used by his company. The user can then browse and download the current version of the code at no cost from the website.

Use of UNSPSC code enables businesses to prevent duplicated effort by allowing every trading partner to code differently. These already available codes also mean that businesses can save time and resources by not needing to create the typical home-grown coding systems, which can take a year or more to develop. 

Advantages of UNSPSC

The main advantages of UNSPSC codes are:

  • The UNSPSC is available in 10 languages: Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Portuguese and Spanish.
  • Standard codes eliminate ambiguity.
  • Segments exist for Raw Materials, Industrial Equipment, Components and Supplies, End-Use Products, and Services.
  • There is a comprehensive categorization of codes, with over 20,000 categories available for businesses to use.
  • UNSPSC codes are responsive to the marketplace.

UNSPSC Design

The UNSPSC code is designed as a hierarchical 4-level tree structure: Segment, Family, Class and Commodity. These levels allow analysis by drilling down or rolling up to analyze expenditures. Each level in the hierarchy has its own unique number.

– Note: “Commodity” is not defined as bulk materials but in the broader sense as any article of commerce, including capital equipment, high-value products, and professional services.

  • Category titles are unambiguous and mutually exclusive.
  • Products appear in only one category; categories each have only have one parent.
  • Products are grouped according to dominant usage in the world market.

Please see Figure 1 for a description of each level in the UNSPSC code hierarchy.

UNSPSC Hierarchy

The purpose of the hierarchical structure is to enable collaborative commerce. Hierarchical organization allows a given company to focus on a level of specificity that best suits its purposes and situation.

“Root” = All Products and Services (implied)

The UNSPSC code’s hierarchical structure

Fig 1: The UNSPSC code’s hierarchical structure.

The following figure shows how UNSPSC hierarchy works with a real-life example.

UNSPSC Hierarchy Example

UNSPSC hierarchy  with a real-life example

Fig 2: UNSPSC hierarchy with a real-life example.

According to the above example of UNSPSC code:

44101501 Photocopiers – this is the number code referring to photocopiers.

44103103 Toner – this is the number code referring to toner.

UNSPSC Code Structure

Segment 44000000 Office Equipment and Accessories and Supplies

Family 44100000 Office machines and their supplies and accessories

Class 44103100 Printer and facsimile and photocopier supplies

Commodity 44103103 Toner

44103103 = Toner

UNSPSC Components

  • UNSPSC Code: 8 digits, e.g. 44103103
  • Title: The product that is identified by the code can be given a natural language text title up to 120 characters long, e.g. “Toner”
  • Definition: The product identified by the code can also be given a free-form text definition that gives a concise explanation of what the product is or does
  • Business Function: The 2-digit, optional Business Function codes can identify if the product/service is for Rental or Lease, Maintenance or Repair, Manufacturer, Wholesale, Retail, Recycle, Installation

How to use UNSPSC in Microsoft Dynamics AX 2012 Product?

Let us describe how we can use UNSPSC in Microsoft Dynamics AX 2012 Product. It has the following steps:

  • Creation of UNSPSC Category hierarchy types
  • Creation of UNSPSC Category hierarchy
  • Attaching UNSPSC codes to Products

Creation of UNSPSC Category Hierarchy Types and Category Hierarchies

Go to Product Information Management > Set up > Categories.

Two menus are available:

  • Category hierarchies
  • Category hierarchy types

The navigation  path for category hierarchies and category hierarchy types

Fig 3: The navigation path for category hierarchies and category hierarchy types.

Click Category hierarchies > Category hierarchy types and find UNSPSC and UNSPSC category hierarchy available. This is available out-of-the-box in Microsoft Dynamics AX 2012.

Category hierarchy types setup

Fig 4: Category hierarchy types setup.

Category hierarchies’ setup

Fig 5: Category hierarchies’ setup.

Click Edit to open the UNSPSC Category hierarchy.

Category hierarchy UNSPSC

Fig 6: Category hierarchy UNSPSC

The following page will open to create a New Hierarchy.

UNSPSC Category hierarchy page in edit mode

Fig 7: UNSPSC Category hierarchy page in edit mode.

Click “New Hierarchy node”.

Category hierarchy page to create a new hierarchy node

Fig 8: Category hierarchy page to create a new hierarchy node.

Create a new Segment by entering the Name of the Segment and the Code. In the example below, we have “Office Equipment and Accessories and Supplies” and 44000000.

UNSPSC Segment code created

Fig 9: UNSPSC Segment code created.

Place the cursor on the created segment and click “New Hierarchy node”.

Create a new Family by entering the Name of the Family and the Code. In the example below, we have “Office machines and their supplies and accessories” and 44100000.

UNSPSC Family code created

Fig 10: UNSPSC Family code created.

Place the cursor on the created Family and click “New Hierarchy node”.

Create a new Class by entering the Name of the Class and the Code. In the example below, we have “Printer and facsimile and photocopier supplies” and 44103100.

UNSPSC Class code created

Fig 11: UNSPSC Class code created.

Place the cursor on the created Class and click “New Hierarchy node”.

Create a new Commodity by entering the Name of the Commodity and the Code. In the example below, we have “Toner” and  44103103.

UNSPSC Commodity code created

Fig 12: UNSPSC Commodity code created.

The above steps describe the creation of the Segment, Class, Family and Commodity hierarchy of UNSPSC in Microsoft Dynamics AX 2012.

The user can also add multiple Classes under one Segment, multiple Families under one Class, and multiple Commodities under one Family.

Alternately, the user can use an available inbound port named CatImpService for importing Code categories.

Attaching UNSPSC codes to Products

After creating or importing UNSPSC codes, the user needs to attach them to Products.

To attach UNSPSC codes to Products, the user needs to go to Product information management > Area page > Released Products.

Select a Product and click Product category.

Released Product page in Microsoft Dynamics AX 2012

Fig 13: Released Product page in Microsoft Dynamics AX 2012.

Select UNSPSC as a Category Hierarchy from the dropdown, and also as a Category from the dropdown.

Adding Category Hierarchy to a Product

Fig 14: Adding Category Hierarchy to a Product.

Adding Category to a Product

Fig 15: Adding Category to a Product.

Category Hierarchy and Category added to a Product

Fig 16: Category Hierarchy and Category added to a Product.

The Value of Implementing UNSPSC

Implementation of UNSPSC helps to collaborate with customers or suppliers through the use of a common classification system. With this collaboration, businesses reduce inventory through product standardization, and automate the gathering and analyzing of spend data – which allows a uniform, enterprise-wise view of spend. It also helps to run centralized procurement functions, leverage volume for better pricing, and reduce off-contract spend at higher prices.

Value for Suppliers

Implementation of UNSPSC helps facilitate sales function, particularly through Internet exchanges. It helps suppliers to qualify as a preferred supplier to customers with e-procurement initiatives; speed up new product introductions using Web services, XML, etc.; and facilitate globalization of the business. It helps collect consistent sales data across channels and regions, as well as help businesses collaborate with customers to improve contract compliance, increasing the supplier’s market share – a win-win.

Conclusion

Given that this functionality is available out-of-the-box in Microsoft Dynamics AX 2012, every business who has implemented the system can gain the benefits of using UNSPSC code in their Product. If you have any questions about using UNSPSC code in Microsoft Dynamics AX 2012, or questions about Microsoft Dynamics AX 2012 in general, please email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.

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Get Better Invoice Visibility with Microsoft Dynamics AX 2012

November 8th, 2012 Partha Chattopadhyay No comments

In business, sometimes processes require that items are sold which are not directly purchased. By using Microsoft Dynamics AX 2012, you are able to sell an item using free text invoice, as well as enter the unit price and quantity for better visibility.

One of the many improvements introduced to free text invoices in Microsoft Dynamics AX 2012 includes the ability to enter quantities and unit prices on free text invoice lines – since the option to input price and quantity in free text invoice was not available in earlier versions of Microsoft Dynamics AX.

With Microsoft Dynamics AX 2012, a free text invoice line can be used to sell a quantity of any kind of goods, services, or rights – providing unit price and quantity information to the customer. It also helps basic amount calculation, and it helps to better identify and explain charges to customers.

This article will describe how you can use unit price and quantities in free text invoice of Microsoft Dynamics AX 2012.

What is changed in Microsoft Dynamics AX 2012?

In Microsoft Dynamics AX 2009, there is no scope of entering unit price and quantities in free text invoice.

In Microsoft Dynamics AX 2012, improvement has been done to include unit price and quantities in free text invoice.

The Process

Let’s use ABC Company as an example – ABC Company wants to sell the surplus goods that are left over from a large project recently completed. The goods were not purchased through the inventory system; therefore, they cannot be sold through a sales order.

Instead, they must be sold through a simple free text invoice transaction. A subcontractor has requested to purchase 15 pieces and ABC Company agreed to sell all 15 for USD $50.

To create a free text invoice with quantities and amounts, follow these steps:

  1. Click Accounts receivable > Common > Free text invoice > All free text invoices.

    Navigation path for a free text invoice

    Fig 1: Navigation path for a free text invoice

  2. Click New > Free text invoice to create a new free text invoice.

    Click New to create a new free text invoice7

    Fig 2: Click New to create a new free text invoice

  3. Select a customer in the Customer field, and enter any additional information.

    Select Customer and other information in the Free Text Invoice Header

    Fig 3: Select Customer and other information in the Free Text Invoice Header

  4. Click Add Lines in the Invoice Lines grid.

     Click Add Lines in the Invoice Lines grid to create a free text invoice line

    Fig 4: Click Add Lines in the Invoice Lines grid to create a free text invoice line

  5. In the Description field, type a description for the invoice line.
  6. In the Main Account field, select the ledger account to be used for posting.
  7. Select Sales Tax Group and Item Sales Tax Group.
  8. In the Quantity field, type 15 as a number for the quantity.
  9. In the Unit price field, type 50 as an amount for each quantity in the invoice line. Notice the Amount field is updated with the extended amount.

    Add details of Quantity and Unit Price in a free text invoice line

    Fig 5: Add details of Quantity and Unit Price in a free text invoice line

  10. Click Charges and add charges if required.

    Click Charges in the Action pane and add Charges in the free text invoice line

    Fig 6: Click Charges in the Action pane and add Charges in the free text invoice line

  11. Click the Total option in the Action pane to check the Total. Check that the Subtotal Amount, Sales Tax, Charges and Invoice Total are correctly calculated.

    Click the Total option in the Action pane to check the Total

  12. Post the free text Invoice.

Exceptions: Free Text Invoices without Quantities

When a quantity or unit price is not available for the free text invoice line, the fields can be left blank.

For example, if you do not have a unit price and quantity for the line, only a total amount for the line, you can ignore the Unit Price and Quantity fields and then enter an amount for the line. The system will display the amount entered, and the Unit Price and Quantity fields will remain blank.

You can also enter a Quantity and enter an Amount, leaving the Unit Price field blank.

Conclusion

As you can see, by using the enhanced free text functionality in Microsoft Dynamics AX 2012, you can easily enter the unit price and quantity of products to give better transparency to your customers. If you have any questions about free text functionality or about Microsoft Dynamics AX 2012, please email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.

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Correct Invoice Errors with New Invoice Correction Process in Microsoft Dynamics AX 2012

October 8th, 2012 Partha Chattopadhyay No comments

Making mistakes is a very common thing to happen for human beings. One such thing that can sometimes happen is making a mistake on a free text invoice posted for a customer. After realizing the mistake, you of course want to correct it, but you may be worried that you don’t know how to do it – or that the system can’t make the correction.

Don’t worry – with the customer invoice correction process you can easily correct your posted free text invoice.

What is changed in Microsoft Dynamics AX 2012?

In Microsoft Dynamics AX 2009, correcting a free text invoice involved issuing a credit note against the incorrect customer invoice and creating a new customer invoice. In addition, you could not link the new customer invoice, corrected customer invoice, and customer credit note to one another.

In Microsoft Dynamics AX 2012, a new Correct Invoice button is added to the free text invoice details form and the free text invoice list page. After clicking the button, a new form will open where the user can adjust the necessary information and then post the correction.

Required System Configuration

Since the invoice correction feature is not enabled by default, you must enable it by going to the General ledger > Free text invoice correction configuration key in the License configuration form under System administration.

System configuration is required for free text invoice correction

Fig 1: System configuration is required for free text invoice correction.

Free Text Invoice Correction Process

Let us start with an example where you posted a free text invoice amount for USD $2,500 to Customer 1301-Whale Wholesales – but the amount should really be USD $3,000. You realize your mistake, and you want to quickly correct the free text invoice.

Posted free text Invoice with the wrong amount

Fig 2: Posted free text Invoice with the wrong amount.

The process for correcting a free text invoice involves the following steps:

  1. The user clicks Correct on the Free text invoice form.

    To correct a free text invoice, first click Correct Invoice

    Fig 3: To correct a free text invoice, first click Correct Invoice.

  2. Select the error code as “ERROR”, enter the invoice cancelling date and then click Create Corrected Invoice.

    Enter a reason code and a cancelling Invoice date to create  a corrected free text invoice

    Fig 4: Enter a reason code and a cancelling Invoice date to create a corrected free text invoice.

  3. The system then creates a copy of the original free text invoice.

    Created copy of the free text invoice after entering a reason code and a cancelling invoice date

    Fig 5: Created copy of the free text invoice after entering a reason code and a cancelling invoice date.

  4. Make the desired changes to the copied free text invoice.

    Make changes in the free text invoice copy

    Fig 6: Make changes in the free text invoice copy.

  5. Post the changed free text invoice.

    Post the changed free text invoice

    Fig 7: Post the changed free text invoice

  6. The system creates a credit note and all the original settlements are reversed and reapplied to the new credit note. An Infolog appears to show the successful completion of the process.

    Infolog showing the successful completion of the process

    Fig 8: Infolog showing the successful completion of the process

  7. The system creates a link between the Corrected, Credited (Canceling), and Original customer invoice for a clear audit trail.

    The previous free text invoice, credit note, and the corrected invoice are created during the process

    Fig 9: The previous free text invoice, credit note, and the corrected invoice are created during the process.

    Invoice corrections created during the process

    Fig 10: Invoice corrections created during the process.

    The original free text invoice that was corrected

    Fig 11: The original free text invoice that was corrected.

    The credit note automatically created during the correction process

    Fig 12: The credit note automatically created during the correction process.

    The new free text invoice created during the correction process

    Fig 13: The new free text invoice created during the correction process.

NOTE: You can also use the new free text invoice workflow configuration to approve the change.

Conclusion

As you can see, you are now able to easily correct any free text invoice which was posted with the wrong amount. After going through the correction process, the system cancels the incorrect one and posts a new one linked with the old one to meet the audit requirements.

If you have any questions about correcting free text invoices, or would like more information about Microsoft Dynamics AX 2012, please email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.

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