Post Misc. charges at time of Product receipt


Dear readers

The SCM-costing team in collaboration with SCM-Procurement team are happy to introduce a capability requested by customers for many years.

We introduce the capability of accounting for Misc. charges already at time of posting Product receipt.

This capability will provide customers with the opportunity to better estimate cost of purchase and avoid cost fluctuations at time of Invoice.

Configuration:

As this capability directly impact valuation of inventory assets and thus can be considered a change in accounting principle the feature will be controlled by a new parameter.

Path: Procurement and sourcing/Setup/Procurement and sourcing parameters

Note: In next major release of Microsoft Dynamics AX this capability will not have its own parameter but will be controlled by the Accrue liability on product receipt parameter on the Item model group.

We recommend the following parameter settings for accounting of inventories. Applying these recommended settings will make reconciliation to General ledger much simpler at end of fiscal period.

Module/Form

Parameter

Recommended setting

Inventory Management/Item model group

Post physical inventory

Yes

Inventory Management/Item model group

Post financial inventory

Yes

Inventory Management/Item model group

Accrue liability on product reciept

Yes

Accounts payable/Accounts payable parameters

Post product reciept in ledger

Yes

Procurement and sourcing/Procurement and sourcing parameters

Generate charges on product reciept

Yes

Accounts receivable/Accounts receivable parameters

Post packing slip in ledger

Yes

Production control/Production control parameters

Post picking list in ledger

Yes

Production control/Production control parameters

Post reports as finished in ledger

Yes

 Note: If you want to account for Misc. charges at time of posting product receipt and has checked marked “Generate charges on product receipt” you must as minimum also check mark “Post physical inventory” and “Post product reciept in ledger”

Defining Misc. charges:

Before the Misc. charge will be accounted at time of posting product reciept it has to fulfil certain requirements.

Misc. charge code:

The Misc. charge code has to be configured so it will be accounted as Inventory asset.

In Fast tab Posting under field group Debit the Type has to be Item. The Credit type can be either Ledger or Vendor.

 

Misc. charge calculation categories:

Not all Misc. charge calculation categories will post at time of Product reciept. The table below list the Misc. charge calculation categories applicable and how the value is calculated.

Misc. charge calculation category

Applicable charge value on product receipt line

Applied amount

Pcs

As per purchase order line applicable charge value

Received Quantity * Pcs value rate

Percent

As per purchase order line applicable charge value

Receipt net amount * % value

Proportional *

(Purchase order line applicable charge value / ordered quantity) * Received quantity

(Received quantity / Ordered quantity) * "PO line proportional Value"

*Proportional: A new Misc. charge calculation categories delivered as part of the feature

Note: Misc. charge calculation category = Fixed. No cost will be accounted for at time of posting Product reciept. The cost will still be accounted for at time of Invoice.

Note: Sales tax on Misc. charges will not be posted at time of product reciept.

Auto charges:

Auto charges will now be applied on time of Product receipt if records correspond to the rules defined above.

 

Example:

Prerequisite for the example:

Item: Misc. charge D1

Valuation method: Moving average

Auto charge: 10.00 Category = Percent

Misc. Charge: 200.00 Category = Proportional

Indirect cost: 1.00 % on purchased price + Misc. charge cost

1. A purchase order of 10 pcs. is created. The unit cost is agreed at 100.00

 

2. Adding Misc. charge manually

 

3. Allocate the Misc. charges

 

4. Confirm PO

5. Post Product reciept.

  • Because of insufficient stock at the supplier a
    partial delivery of 5 pcs will be received

  • Select “Receive now quantity” in field Quantity

 

Press button Charge: The user can validate the Misc. charges calculated by the system for the specific Product reciept prior posting.

Line net amount = 5 * 100.00 = 500.00

Charge code 04: 500.00 * 10% = 50.00

Charge code INS: 5/10 * 200.00 = 100.00

 

Press OK to post Product receipt

6. Validating posting of Product reciept

Purchase cost transactions

 

Validating the voucher

 

Account

Name

Calculation

Direction

Amount 

600510

Indirect cost absorption

650 *1%

Credit

6.50

142100

Inventory

500.00 + 100.00 + 6.50

Debit

656.50

150690

Purchase accrual

5*100.00

Credit

500.00

600150

Auto Misc. charge absorption

500.00 * 10%

Credit

50.00

606200

Misc. charge absorption

(5/10) * 200.00

Credit

100.00

 

Validating the physical cost amount on Inventory transaction


 
7. Post a Product reciept of the remaining 5 pcs.

  • The postings are identical with the above

 

Account

Name

Calculation

Direction

Amount 

600510

Indirect cost absorption

650 *1%

Credit

6.50

142100

Inventory

500.00 + 100.00 + 6.50

Debit

656.50

150690

Purchase accrual

5*100.00

Credit

500.00

600150

Auto Misc. charge absorption

500.00 * 10%

Credit

50.00

606200

Misc. charge absorption

(5/10) * 200.00

Credit

100.00

 8. Post Invoice of all 10 pcs and validate postings

  1. The system will automatically reverse the Misc. charges postings done at time of
    Product reciept.
  2. The system will automatically apply the same Misc. charges codes at time of Invoice
    1. New calculations will be performed as the base
      amount (Unit price) could have changed
    2. Additional Misc. charges code can be added

For simplicity in this example no change in unit price or additional Misc. charges are added

 

Voucher of Invoice

 

Account

Name

Direction

Amount 

600510

Indirect cost absorption

 Credit

0.00

142100

Inventory

Debit

0.00

150690

Purchase accrual

Debit

1000.00

600150

Auto Misc. charge absorption

Credit

0.00

606200

Misc. charge absorption

Credit

0.00

211100

Vendor Balance

Credit

1000.00

Note: You will see a few 0.00 postings in the voucher. These are related to a current limitation in posting engine and will be addressed at a later time. The postings are not effecting any balances in General ledger.

Inventory transactions after invoice

 

Released versions:

The feature will be made available for following releases of Microsoft Dynamics AX.

  • Microsoft Dynamics AX 2012 R3
  • Microsoft Dynamics AX 2012 R2 (This will beavailable at later time)
Comments (23)

  1. PP says:

    Hi, i cant find this feature? when will it be released?

  2. SE has promised that the KB article for AX2012 R3 will be available by start of next week.  

  3. k says:

    Can you please specify the KB article here, once its available?

  4. Babel AX says:

    Hi

    thanks for this interesting post.

    When will it be available in R2?

    thanks a lot

  5. Hi K

    The  KB article number is KB3006787

  6. Hi Babel AX

    SE org are working on the backport. I would expect it end of year or start next year

  7. PP says:

    Not able to find anything on KB3006787. Reuqest you to provide a link

  8. The KB is uploaded by our SE org but currently no on CustomerSource. You can contact Support and ask the KB and they will be able to provide you with a link.

    Should be on CustomerSource within 72 hours

    Sorry for the delay

  9. Binit says:

    Is the above feature available in AX 2012 R2

  10. JW says:

    @CostManagement: we still cannot find it on neither customersource or partnersource....

    Can you please verify if it is uploaded?

  11. I have been in contact with SE org. In the future you should access HF via LCS homepage

    lcs.dynamics.com/.../Index

    But to help you I have added a direct link

    support.microsoft.com/.../KBHotfix.aspx

    SE expects to have the R2 version of the HF ready by ultimo February

  12. I have received confirmation from SE org that the AX2012 R2 version of the HF is uploaded. The same KB Number should be used to find it

  13. Jefry says:

    Hi, if I post product receipt from a purchase order, charges will be generated, but if we post product receipt from posted arrival journal and its journal lines consists of several purchase orders, it will raise an error. Is it a bug or is it a limitation?

    We also able replicate this error from purchase order if we multi select purchase order and hit product receipt button.

    Thanks

  14. Hassan says:

    Hi,

    The links provided above doesn't seems to work. it says "the page doesn't exist".

    Has this functionality been recalled for further improvement?

    Any help?

    Regards

    Hassan

  15. Hi Hassan. The link is working fine for me. Have you tried LCS? Here are the direct links to the hotfixes:

    R3: fix.lcs.dynamics.com/.../762507

    R2: fix.lcs.dynamics.com/.../762507

  16. Hassan says:

    Thanks a lot Markus, I got the hotfix.

  17. fd says:

    Hi

    Can someone help me out with this question: What is the business process in DYS module "Service calls" , "hour" charges. basically when should hourly charges should apply when creating an invoice?

  18. Joe Villella says:

    Hi,

    In AX2009 I'm trying to come up with a way for the Percent calculation to use the standard cost (less misc chg) as the calculation basis, rather than the PO price. From the above post it appears that part of the MC functionality is unchanged in 2012. Is this being considered or is there a different way of applying absorption factors to purchased items based on the "pre-landed" standard cost?

    Thanks.

  19. Lally says:

    Hi  ,

    Ax 2012 R2 has the two options a) Cost of Purchase  b) Cost of Manufacturing in Costing sheet.

    I have configured the both options cost of purchase and cost of manufactuing , system not calucating the overheads for purchase materials through PO , but overhead calucating correctly for Cost of manufacturing , in both cases same raw material and same cost group .

    Do you know why it is not calucating /posting the overhead during Product receipt /Invoice in Ax 2012 R2 ? Is it known issue ?

    Thanks in advance

  20. Jefry says:

    Sorry for late reply Jefry. The system should be able to support multi-product reciept posting. I have just tested this in AX7 and it works. Please search for the issue in KB article database to see if you can find a KB id that resolve the issue. Going forward it has been fixed

  21. Cost management says:

    Hi Lally This is because of the Default order settings on Product. You either choose Production, Purchase or Kanban

    Production/Kanban means that you hit Cost of Manufacturing

    Purchase means that you hit Cost of Purchase

  22. MM says:

    Note: Misc. charge calculation category = Fixed. No cost will be accounted for at time of posting Product reciept. The cost will still be accounted for at time of Invoice.

    Why fixed charges are not posted at product receipt?

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