Thursday, April 27, 2023

Purchase cycle in Dynamics 365 FO

In this blog of Dynamics Community 101 we will learn about the Purchase cycle in Dynamics 365 FO

Purchase cycle in Dynamics 365 F&O

The purchase cycle in Dynamics 365 Finance and Operations (F&O) outlines the series of steps taken to procure goods or services from vendors. It typically follows this sequence:

Create a Purchase Requisition (optional): Employees can submit a purchase requisition to request specific goods or services. This step is optional, as not all organizations use purchase requisitions.

Create a Request for Quotation (RFQ) (optional): Generate an RFQ to solicit pricing and delivery information from multiple vendors. This step is optional, as not all procurement processes involve requesting quotations.

Evaluate and Select a Vendor: Evaluate the received quotations and select a vendor based on factors such as price, quality, and delivery time.

Create a Purchase Order: Create a purchase order for the selected vendor, detailing the products or services being procured, their quantities, and agreed-upon prices.

Confirm the Purchase Order: Confirm the purchase order, which will finalize the agreement and trigger subsequent processes such as inventory reservation and vendor communication.

Receive the Goods or Services: Upon delivery, receive the goods or services and update the inventory records accordingly.

Create a Vendor Invoice: Receive a vendor invoice, which is a formal request for payment from the vendor. This document includes information about the products or services procured, quantities, prices, taxes, and any applicable discounts.

Post the Vendor Invoice: Post the vendor invoice to update the general ledger and accounts payable. This step finalizes the accounting process and ensures that the financial records are accurate.

Process and Make Payment: Process and make the payment to the vendor, applying it to the appropriate vendor invoice and updating the accounts payable.