Contents

Purchase order:.........................................................................................................................2
Purchase order types............................................................................................................2
In what cases do we use journal and purchase order?.........................................................2
Difference between Accounting date and Delivery date......................................................2
Difference between Purchase Agreement and Trade agreement in dynamics 365.
Commitment:.......................................................................................................................2
Pool field in Purchase orders................................................................................................3
Active Change Management................................................................................................3
Purpose of unplanned Po.....................................................................................................4
Finalize Purchase order........................................................................................................5
Tiered charges......................................................................................................................5
Purchase order:
o Orderer is the one who is creating the purchase order
o Requester is the one who is requesting goods

Purchase order types

When you create a purchase order, you must indicate which type of order it is. You
can select one of the following types:
o Journal - Use as a draft. This type does not affect stock quantities and does not
generate item transactions. The purchase order journal lines are not included
in master scheduling.
o Purchase order - A purchase order is a document that represents an agreement
with a vendor to buy goods or services. The document also helps keep track of
product receipts that are made toward the order and, later, the accounting of
vendor invoices that the vendor bills toward the order.
o Returned order - Use when you return goods to the vendor. The returned item
number, which is the RMA number that you receive from the vendor, must be
entered on the Other tab.
In what cases do we use journal and purchase order?
Key Considerations:
o No direct impact on stock quantities or item transactions: Draft purchase
orders don't trigger inventory updates or create item transactions in the
system.
o Not included in master scheduling: They won't be considered in planning
processes for production or material requirements.
o Can be converted to standard purchase orders: When ready to commit to the
purchase, you can convert a draft purchase order to a standard purchase order,
which will then have the full impact on inventory, financials, and scheduling.
Difference between Accounting date and Delivery date
Accounting date for example you have prepaid the vendor the accounting date is
recorded immediately even though delivery date will be different.
Receive invoice we have received invoice after 5 days
Difference between Purchase Agreement and Trade agreement in dynamics
365. Commitment:
Purchase Agreement: Represents a binding commitment between the buyer and
vendor to purchase a specific quantity or amount of goods over a defined period. This
commitment often involves negotiated discounts in exchange for guaranteed volume.
Trade Agreement: Offers flexible discounts without requiring a guaranteed purchase
volume. While it can encourage increased purchases, it doesn't bind the buyer to any
specific commitment.
2. Flexibility:
Purchase Agreement: Typically applies to specific items and vendors, providing
targeted discounts for high-volume commitments.
Trade Agreement: Can be applied to a wider range of items and vendors, offering
broader discounts based on purchase criteria (e.g., total spending, item categories).
3. Purpose:
Purchase Agreement: Primarily used for strategic sourcing with dedicated vendors,
securing negotiated prices and reliable supply for critical items.
Trade Agreement: More suitable for general purchasing scenarios, providing overall
cost savings without committing to specific volumes or vendors.
Real-Life Examples:
Purchase Agreement: Manufacturer commits to buy 10,000 steel sheets per month
from a specific supplier at a discounted price in exchange for guaranteed volume.
Trade Agreement: Retail store applies a 5% discount on all cleaning supplies
purchased from any vendor exceeding a monthly spend of $1000.
Choosing between them:
Use a Purchase Agreement when securing long-term supply of critical items at pre-
negotiated prices and building strong supplier relationships.
Use a Trade Agreement for general purchases where flexibility and broader cost
savings are priorities, without committing to specific vendors or volumes.
Pool field in Purchase orders
Purchase pool and sales pool are used for filter and selection purposes at Purchase
orders and sales orders level and also report selections criteria, mostly used for
grouping purpose.
For example local vendors, preferred IT hardware suppliers
Active Change Management
You can use change management to control the changes that you make to purchase
orders in your organization. Change management introduces a managed workflow
that makes sure that purchase orders are locked when they have been approved. The
purchase orders cannot be changed until you start the change request workflow. When
the workflow starts, all changes are stored in a history log, so that you can review the
changes and compare purchase order versions.
To understand the change management process, you must understand how the change
process fits into the life cycle of the purchase order. There are six approval statuses
that the purchase order travels through, from Draft to Finalized. Change requests can
be raised in only two of the approval statuses.

Approval Description Change

status allowed
Draft The purchase order is a draft and has not been submitted for No
approval in the purchase order workflow.
In review The purchase order was submitted for approval in the purchase No
order workflow. Approval is pending.
Rejected The purchase order was rejected during the approval process. No
Approved The purchase order was approved. Yes
Confirmed The purchase order was confirmed. A purchase order cannot be Yes
confirmed until it has been approved.
Finalized The purchase order was made final. It is financially closed and can No
no longer be changed.

What do you want to do?

 Learn more about...
 Set up change management for purchase orders
 Set up workflow for change management
 Change a purchase order
 View purchase order history and compare versions
Purpose of unplanned Po
n your custom T-shirt business using Dynamics 365, creating an unplanned purchase
order can serve several purposes, offering flexibility and speed in specific situations.
Here are some real-life examples:
1. Urgent Material Replenishment:
Imagine you run out of a popular printing ink color during a peak order period.
Creating an unplanned purchase order allows you to immediately initiate the
procurement of more ink without waiting for a standard PO creation process. This
expedites the refill and minimizes downtime, ensuring you can fulfill customer orders
on time.
2. Sample Material for New Design:
You want to prototype a new T-shirt design using a unique fabric type not previously
sourced. An unplanned purchase order lets you quickly acquire a small quantity of the
fabric for testing and sample creation without needing to go through a lengthy PO
approval process for larger volumes.
3. Unexpected Opportunity Purchase:
Your regular fabric supplier offers a limited-time closeout deal on a high-quality
material you want to incorporate into your collection. An unplanned purchase order
allows you to quickly capitalize on this opportunity without delay, securing the
discounted material before it runs out.
4. Last-minute Customer Request:
A customer wants a personalized T-shirt with a specific logo or image not part of your
regular inventory. An unplanned purchase order lets you promptly acquire the
necessary transfer paper or blank shirts for this one-off request without disrupting
your standard PO workflow.
5. Handling Vendor Stock Errors:
Your primary supplier mistakenly sends you the wrong size or color of shirts in a
recent order. An unplanned purchase order allows you to quickly rectify the issue by
ordering the correct items without waiting for the formal returns and replacement
process.
Finalize Purchase order
Once the PO is invoiced, finalize button can be used to Closed the Po. It means goods has
been received against the PO.

Tiered charges
In Dynamics 365 Purchase Orders, tiered charges can serve several purposes depending on
your specific configuration and business needs. Here are some possibilities:

1. Quantity-Based Discounts:

 You can set up tiered pricing discounts for a specific item based on the purchase
quantity. For example, buying 10 units might offer a 5% discount, while buying 50
units offers a 10% discount. This incentivizes bulk purchases and optimizes
purchasing costs.

2. Contractual Agreements:
  Tiered charges can be linked to pre-negotiated contracts with specific
vendors. Prices might change based on factors like order volume, delivery
frequency, or total annual spend, reflecting negotiated benefits and cost structures.

3. Vendor Rebates:

 Some vendors offer tiered rebates based on purchase volume or achievement of

specific targets. Dynamics 365 can automatically calculate and track these rebates
based on tiered rates set within the purchase order.

4. Product Variations or Bundles:

 If you offer products with different configurations or bundle options, tiered charges
can reflect varying costs and pricing structures. This clarifies pricing for different
product versions within the purchase order.

5. Dynamic Cost Calculations:

 In complex pricing scenarios, tiered charges can be linked to formulas or external

data sources to dynamically calculate costs based on factors like raw material
prices, exchange rates, or custom criteria. This provides real-time pricing
adjustments on your purchase orders.