Dynamics 365 Business Central – Purchasing & Inventory
Business Central is a business management solution for small and mid-sized organizations that automates and streamlines business processes and helps you manage your business. Highly adaptable and rich with features, Business Central enables companies to manage their business, including finance, manufacturing, sales, shipping, project management, services, and more. Companies can easily add functionality that is relevant to the region of operation, and that is customized to support even highly specialized industries.
Today we are going to focus on Purchasing & Inventory features.
You create a purchase invoice or purchase order to record the cost of purchases and to track accounts payable. If you need to control an inventory, purchase invoices are also used to dynamically update inventory levels so that you can minimize your inventory costs and provide better customer service. The purchasing costs, including service expenses, and inventory values that result from posting purchase invoices contribute to profit figures and other financial KPIs on your Role Center.
You must use purchase orders if your purchasing process requires that you record partial receipts of an order quantity, for example, because the full quantity was not available at the vendor. If you sell items by delivering directly from your vendor to your customer, as a drop shipment, then you must also use purchase orders. In all other aspects, purchase orders work the same way as purchase invoices.
You can have purchase invoices created automatically by using the OCR (Optical Character Recognition) service to convert PDF invoices from your vendors to electronic documents, which are then converted to purchase invoices by a workflow. To use this functionality, you must first sign up for the OCR service, and then perform various setup. For more information, see Process Incoming Documents. Products can be both inventory items and services.
For all purchase processes, you can incorporate an approval workflow, for example, to require that large purchases are approved by the accounting manager. For more information, see Using Approval Workflows.
The following table describes a sequence of tasks, with links to the topics that describe them.
|Create a purchase invoice to record your agreement with a vendor to purchase products on certain delivery and payment terms.||Record Purchases|
|Create a purchase quote to reflect a request for quote from your vendor, which you can later convert to a purchase order.||Request Quotes|
|Create a purchase invoice for all or selected lines on a sales invoice.||Purchase Items for a Sale|
|Understand what happens when you post purchase documents.||Posting Purchases|
|Perform an action on an unpaid posted purchase invoice to automatically create a credit memo and either cancel the purchase invoice or recreate it so you can make corrections.||Correct or Cancel Unpaid Sales Invoices|
|Create a purchase credit memo to revert a specific posted purchase invoice to reflect which products you are returning to the vendor and which payment amount you will collect.||Process Purchase Returns or Cancellations|
|Prepare to invoice multiple receipts from the same vendor once by combining the receipts on one invoice.||Combine Receipts on a Single Invoice|
|Convert, for example, electronic invoices from your vendors to purchase invoices inside Business Central.||Receive and Convert Electronic Documents|
|Learn how Business Central calculates when you must order an item to receive it on a certain date.||Date Calculation for Purchases|
|Resolve confusion when two or more records exist for the same vendor.||Merge Duplicate Records|
|Manage your commitment to a vendor to purchase large quantities delivered in several shipments over time.||Work With Blanket Purchase Orders|
For each physical product that you trade in, you must create an item card of type Inventory. Items that you offer to customers but do not keep in inventory you can register as catalogue items, which you can convert to inventory items when necessary. You can increase or decrease the quantity of an item in inventory by posting directly to the item ledger entries, for example, after a physical count or if you do not record purchases.
Inventory increases and decreases are naturally also recorded when you post purchase and sales documents respectively. Transfers between locations changes inventory quantities across your company’s warehouses.
To increase your overview of items and to help you find them, you can categorize items and give them attributes to search and sort by.
Planning for items to fulfil demand is covered as part of supply planning functionality.
When you post inventory transactions, such as sales shipments, purchase invoices, or inventory adjustments, the changed item costs are recorded in item value entries. To reflect this change of inventory value in your financial books, the inventory costs are automatically posted to the related inventory accounts in the general ledger. For each inventory transaction that you post, the appropriate values are posted to the inventory account, adjustment account, and COGS account in the general ledger. Even though inventory costs are automatically posted to the general ledger, it is still necessary to ensure that the costs of goods are forwarded to the related outbound sales transaction, especially in situations where you sell goods before you invoice the purchase of those goods. This is referred to as cost adjustment.
Item costs are automatically adjusted when you post item transactions, but you can also adjust item costs manually. The following table outlines related tasks.
|Create item cards for inventory items that you trade in.||Register New Items|
|Structure parent items that you sell as kits consisting of the parent’s components or that you assemble to order or to stock.||Work with Bills of Material|
|Maintain an overview of items and help you find and sort items by organizing them in categories.||Categorize Items|
|Assign item attributes of different value types to your items to help you sort and find items.||Work with Item Attributes|
|Create special item cards for items that you offer to customers but do not maintain inventory for.||Work with Catalogue Items|
|Perform physical counting of your inventory with the Physical Inventory Order and Physical Inventory Recording pages.||Count Inventory Using Documents|
|Perform physical counting, make negative or positive adjustments, and change information, such as location or lot number, on item ledger entries.||Count, Adjust, and Reclassify Inventory Using Journals|
|View the availability of items per location, by period, by sales or purchase event, or by their use on assembly or production BOMs.||View the Availability of Items|
|Transfer inventory items between locations with transfer orders, to manage warehouse activities, or with the item reclassification journal.||Transfer Inventory Between Locations|
|Reserve inventory or inbound items for sales orders, purchase orders, service orders, assembly orders, or production orders.||Reserve Items|
|Set up a vendor’s or customer’s own description for an item, so that you can easily insert their item description on trade documents.||Use Item Cross References|
|Assign serial numbers or lot numbers to any outbound or inbound document or journal line, for example to track items in case of recalls.||Work with Serial and Lot Numbers|
|Set up a vendor’s or customer’s own item description on your item card so that you can quickly insert their item description on trade documents.||Use Item Cross-References|
|Find where any serial or lot number was used in its supply chain, for example in recall situations.||Trace Item-Tracked Items|
|Block items from being entered on sales or purchase lines or from being posted in any transaction.||Block Items|
|Manage business operations in sales offices, a purchasing department, or plant planning offices across multiple locations.||Work with Responsibility Centres|
|Use resources with specific skills for various services and service items.||Set Up Resource Allocation|