The Vendor collaboration module in D365 Operations is targeted at vendors who don’t have electronic data interchange (EDI) integration with MS D365 for Finance and Operations. It lets vendors work with purchase orders, invoices, consignment inventory information, and requests for quotation and also lets them access parts of their vendor master information.
Vendor collaboration is a process where you, as a company, grant access to your vendors in order to perform the following:
- Review, accept and reject a request for quotations (RFQs)
- Review, accept, reject, accept with the changes purchase orders (POs)
- Perform vendor invoicing
- Work with consignment stock
Pre Requisites for Vendor Collaboration
Before you start with vendor collaboration or vendor portal in Dynamics 365 below are the pre-requisites or things need to be considered:
- Establish Connectivity between system and External Vendor
- Setting up Contact for External Vendor
- To maintain the contact request, D365FO is supported with workflow, Where Vendor can request new contact request and these request would be approved in the system.
Activate a Vendor for Self Service/Collaboration in Dynamics 365
- On the vendor master record > General Fast Tab, select Active (PO is auto-confirmed) or Active (PO is not auto-confirmed).
- Setup the Primary contact for the vendor.
- Once you add a new contact, click Provision vendor user button on the Contact tab in the Requests section. By provisioning vendor user, you determine that contact which you are provisioning will be created as a user and will get the access into the D365 and will do all activities from vendor side like approving purchase orders.
- In the Provision vendor user form, set Vendor collaboration flag. Select which roles should be assigned to the user.
- New vendor user request will be hence created.
- Go to Vendor collaboration > Contacts > Vendor collaboration user requests in Dynamics 365. The created request will be displayed with the Submitted status and workflow will be started.
- Go into details and check the roles that will be assigned to the user. Approve the request by clicking the Workflow -> Approve button.
- Once you approve the request, the status will be changed into Pending approval. After a workflow is executed, the status will be changed to Azure AD B2B user invitation pending. New button the Export user invitation file will be available. It will export a CSV file with the connection information. Complete the workflow by clicking the Workflow -> Complete button.
- And again, Pending approval status will be set and Approve the creation of AX user task will be started. Approve the creation of AX user by clicking Workflow -> Approve button. The workflow will be completed.
- Once the vendor logs in the following workspace are available
Only Vendor collaboration module is available in Dynamics 365 for the vendor as below
Status Flow of Purchase Orders in Dynamics 365
- Create a new purchase order by navigating to Accounts payable > Purchase orders > All purchase orders. Status of the purchase order will be set to Approved.
- Then send the PO to the vendor portal for obtaining a confirmation response from the vendor.
- The status will be changed to In external review.
- Now the vendor logs in and sees that the PO is sent and then goes into the PO details. At this point, the vendor can review the PO header and line details and do the following.
- Print a copy or original PO if he needs to send it to anyone else.
- Review the PO Header and Line information
- Accept or Reject the PO Confirmation request.
- Additionally, a vendor can suggest changes on the PO, such as Mode of delivery, Delivery date, and Quantity.
- Once approved, the status is changed to Confirmed
Apart from PO Confirmation & Consignment details features, with the new D365FO vendor can also process Invoice request through the Vendor portal. From a vendor, collaboration vendor can find Invoice workspace where we can find all history or paid, Un-paid and draft invoices created with vendor-specific information. From the workspace, the vendor can create an Invoice and save. This will be reflected in pending vendor information under Accounts payable module for further process.
Accounts Payables now can directly verify the documents attached and post the Invoice. Vendor collaboration is a great functionality which can reduce cost from the number of aspects if implemented in the right approach. A lot of business value would be added via reducing communication issues & documents miss matching and time where Accounts payable spends to process Invoice would be much faster with this feature.
For further information, please refer: External Vendors