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Microsoft Dynamics NAV Purchasing

Dynamics NAV Purchasing

The Microsoft Dynamics NAV Purchasing function provides visibility of stock levels, sales history and forecasts to create a suggested purchase list. You can create a purchase invoice or purchase order to record the cost of purchases and to track accounts payable.

Dynamics NAV Purchasing

Dynamics NAV Purchasing

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 Microsoft Dynamics NAV purchasing costs, including service expenses, and inventory values that result from posting purchase invoices contribute to profit figures and other financial KPIs on your Home page.

You must use purchase orders if your Dynamics NAV 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.

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 all purchase processes, you can incorporate an approval workflow, for example, to require that large purchases are approved by the accounting manager.

Record Purchases

When you receive the inventory items, or when the Dynamics NAV Purchasing service is completed, you post the purchase invoice or order to update inventory and financial records and to activate payment to the vendor according to the payment terms.

You can easily correct or cancel a posted purchase invoice before you pay the vendor. This is useful if you want to correct a typing mistake or if you want to change the purchase early in the order process.

If you have already paid for items on the posted Dynamics NAV Purchasing invoice, then you must create a purchase credit memo to reverse the purchase.

Items can be type Inventory or Service. The purchase invoice process is the same for both item types.

You can fill vendor fields on the purchase invoice in two ways depending on whether the vendor is already registered.

To create a purchase invoice

  1. On the Home page, choose the Purchase Invoice action.
  2. In the Vendor field, enter the name of an existing vendor.Other fields in the Purchase Invoice window are now filled with the standard information of the selected vendor. If the vendor is not registered, then follow these steps:
  3. In the Vendor field, enter the name of the new vendor.
  4. In the dialog box about registering the new vendor, choose the Yes button.
  5. In the Select a template for a new vendor window, choose a template to base the new vendor card on, and then choose the OK button.
  6. A new vendor card opens, prefilled with the information on the selected vendor template. The Name field is prefilled with the new vendor’s name that you entered on the purchase invoice.
  7. Proceed to fill in the remaining fields on the vendor card..
  8. When you have completed the vendor card, choose the OK button to return to the Purchase Invoice window.Several fields in the Purchase Invoice window are filled with information that you specified on the new vendor card.
  9. Fill in the remaining fields in the Purchase Invoice window as necessary. Choose a field to read a short description of the field or link to more information.You are now ready to fill in the purchase invoice lines with inventory items or services that you have purchased from the vendor.
  10. On the Lines FastTab, in the Item No. field, enter the number of an inventory item or service.

  11. In the Quantity field, enter the number of items to be purchased.

    The Line Amount field is updated to show the value in the Direct Unit Cost field multiplied by the value in the Quantity field.

    The price and line amount are shown with or without sales tax depending on what you selected in the Prices Including Tax field on the vendor card.

  12. In the Invoice Discount Amount field, enter an amount that should be deducted from the value shown in the Total Incl. Tax field at the bottom of the invoice.
  13. When you receive the purchased items or services, choose Post.

The purchase is now reflected in inventory and financial records, and the vendor payment is activated.

The purchase invoice is removed from the list of purchase invoices and replaced with a new document in the list of posted purchase invoices.

Request Quotes

A purchase quote can be used as a preliminary draft for a purchase order, and the order can then be converted to a purchase invoice or a order.

To create a purchase quote

  1. Enter Purchase Quotes, and then choose the related link.
  2. Create a new document, in the same way as you make a purchase order. For more information, see How to: Record Purchases.

To convert a purchase quote to a purchase order

When you have accepted the vendors quote, you can convert it to a purchase invoice or order to process the purchase.

  1. Open a purchase quote that is ready to convert, and then choose the Make Order action.

The purchase quote is removed from the database. A purchase invoice or a sales order is created based on the information in the purchase quote in which you can process the purchase. In the Quote No. field on the purchase invoice or purchase order, you can see the number of the purchase quote that it was made from.

Purchase Items for a Sale

From sales orders and sales invoices, you can use functions to quickly create purchase documents for missing item quantities that are required by the sale. You can use two different functions depending on the document type.

Function Description
 Create   Purchase   Orders  From a sales order, this function creates a purchase order for each vendor of items on the sales   order. You can edit the purchase quantity before you create the purchase orders. Only unavailable   sales quantities are suggested.
 Create     Purchase   Invoice  From a sales order and from a sales invoice, this function creates a purchase invoice for a selected   vendor for all lines or selected lines on the sales document. The full sales quantity is suggested.

To create one or more purchase orders from a sales order

To create a purchase order for each unavailable item quantity on the sales order, you use the Create Purchase Orders function.

  1. On the Home page, choose the Ongoing Sales Orders tile.
  2. Open a sales order that you want to purchase items for.
  3. Choose the Create Purchase Orders action.The Create Purchase Orders window opens showing a line for each different item on the sales order. Lines for both fully available sales quantities and unavailable sales quantities (grayed) are shown by default. You can choose the Show Unavailable action to only see lines for unavailable sales quantities.The Quantity to Purchase field contains the unavailable sales quantity by default.
  4. To purchase another quantity than the unavailable sales quantity, edit the value in the Quantity to Purchase field.
  5. Choose the OK button.

    A purchase order is created for each vendor of items on the sales order, including any quantity changes that you made in the Create Purchase Orders window.

  6. Proceed to process the purchase order or orders, for example, by editing or adding purchase order lines.

To create a purchase invoice from a sales order or sales invoice

To create a single purchase invoice for one or more lines on a sales document by first selecting which vendor to buy from, you use the Create Purchase Invoice function.

  1. On the Home page, choose the Ongoing Sales Invoices tile.

  2. Open a sales invoice that you want to purchase items for.
  3. Select one or more sales invoice lines that you want to use on the purchase invoice. To use all the sales invoice lines, select either all of them or do not select any lines.
  4. Choose the Create Purchase Invoice action.
  5. Select either All Lines or Selected Lines, and then choose the OK button.
  6. In the list of vendors that appears, select the vendor that you want to buy all the items from, and then choose the OK button.A purchase invoice is created that contains one, more, or all the lines on the sales invoice.
  7. Proceed to process the purchase invoice, for example, by editing or adding purchase invoice lines.

Correct or Cancel Unpaid Purchase Invoices

You can correct or cancel a posted purchase invoice. This is useful if you want to correct a typing mistake, or if you want to change the purchase early in the order process.

If you have already paid for products on the posted purchase invoice, you cannot correct or cancel it from the posted purchase invoice itself. Instead, you must manually create a purchase credit memo to reverse the purchase, optionally managed with a purchase return order.

In the Posted Purchase Invoice window, you can choose the Correct button or the Cancel button. When you correct or cancel a posted purchase invoice, the corrective purchase credit memo is applied to all general ledger and inventory ledger entries that were created when the initial purchase invoice was posted.

This reverses the posted purchase invoice in your financial records and leaves the corrective posted purchase credit memo for your audit trail. In the following the use of Correct and Cancel is described.

To correct a posted purchase invoice

  1. Enter Posted Purchase Invoices, and then choose the related link.

  2. Select the posted purchase invoice that you want to correct.

  3. In the Posted Purchase Invoice window, choose Correct.

    A new purchase invoice with the same information is created where you can make the correction.

    A purchase credit memo is automatically created and posted to void the initially posted purchase invoice.

4. Choose Show Corrective Credit Memo to view the posted purchase credit memo that voids the initially posted purchase invoice.

To cancel a posted purchase invoice

  1. Enter Posted Purchase Invoices, and then choose the related link.

  2. Select the posted purchase invoice that you want to cancel.

  3. In the Posted Purchase Invoice window, choose Cancel.

    A purchase credit memo is automatically created and posted to void the initially posted purchase invoice. The Canceled field on the initially posted purchase invoice is changed to Yes.

  4. Choose Show Corrective Credit Memo to view the posted purchase credit memo that voids the initially posted purchase invoice.

Combine Receipts on a Single Invoice

If you want to invoice more than one purchase receipt at a time, you can use the Combine Receipts function.

Before you can create a combined purchase receipt, more than one receipt from the same vendor in the same currency must be posted. In other words, you must have filled in two or more purchase orders and posted them as received, but not invoiced.

When purchase receipts are combined on an invoice and posted, then a posted purchase invoice is created for the invoiced lines.

The Quantity Invoiced field on the originating purchase order, or blanket purchase order, is updated based on the invoiced quantity. However, this original purchase document is not deleted, even if it has been fully received and invoiced, and you must therefore delete the purchase document.

To combine receipts

  1. Enter Purchase Invoices, and then choose the related link.

  2. Choose the New action.
  3. On the Lines FastTab, choose the Get Receipt Lines action.
  4. Select multiple receipt lines that you want to include in the invoice.If an incorrect receipt line was selected or you want to start over, you can just delete the lines on the purchase invoice and then use the Get Receipt Lines function again.
  5. To post the invoice, choose the Post action.

To remove open purchase orders after combined receipt posting

  1. Enter Delete Invoiced Purchase Orders, and select the related link.
  2. Fill in the fields as necessary. Choose a field to read a short description of the field or link to more information..
  3. Choose the OK button.

Alternatively, delete the individual orders manually.

Repeat steps 1 through 3 for any other affected documents, such as blanket purchase orders.

Process Purchase Returns or Cancellations

If you want to return items to your vendor or cancel services that you have purchased, then you can create and post a purchase credit memo that specifies the requested change with regard to the original purchase invoice.

To include the correct purchase invoice information, you can create the purchase credit memo directly from the posted purchase invoice or you can create a new purchase credit memo with copied invoice information.

If you need more control of the purchase return process, such as warehouse documents for the item handling or better overview when shipping back items from multiple purchase documents with one purchase return, then you can create purchase return orders. A purchase return order automatically issues the related purchase credit memo.

Typically, you create a purchase credit memo or purchase return order in reaction to a credit memo sent to you by a vendor. The purchase credit memo or purchase return order functions as your internal documentation of the credit memo process for accounting purposes or to control the shipping of the involved items.

The change may relate to all the products on the original purchase invoice or only to some of the products. Accordingly, you can partially return received items or demand partial reimbursement of received services. In that case, you must edit the information on the purchase credit memo or purchase return order.

In addition to the original posted purchase invoice, you can apply the purchase credit memo or purchase return order to other purchase documents, for example another posted purchase invoice because you are also returning items delivered with that invoice.

The credit memo posting will also revert any item charges that were assigned to the posted document, so that the item’s value entries are the same as before the item charge was assigned.

Inventory Costing

To preserve correct inventory valuation, you typically want to pick return items from inventory at the unit cost that they were purchased at, not at their current unit cost. This is referred to as exact cost reversing.

Two functions exist to assign exact cost reversing automatically.

Function Description
 Get Posted Document Lines   to   Reverse function in   the Purchase Return   Order window  Copies lines of one or more posted documents to be   reversed  into the purchase   return order.
 Copy Document function in   the Purchase   Credit   Memo and Purchase Return   Order windows  Copies both the header and lines of one posted document to   be reversed.

Requires that the Exact Cost Reversing Mandatory check   box is selected in the Purchases & Payables Setup window.

To assign exact cost reversing manually, you must choose the Applies from Item Entry field on any type of return document line, and then select the number of the original purchase entry.

This links the purchase credit memo or purchase return order to the original purchase sales entry and ensures that the item is valued at the original unit cost.

To create a purchase credit memo from a posted purchase invoice

  1. Enter Posted Purchase Invoices, and then choose the related link.
  2. In the Posted Purchase Invoices window, select the posted purchase invoice that you want to reverse, and then choose the Create Corrective Credit Memo action.Most fields on the purchase credit memo header are filled with the information from the posted purchase invoice. You can edit all the fields, for example with new information that reflects the return agreement.
  3. Edit information on the lines according to the agreement, such as the number of items returned or the amount to be reimbursement.
  4. Choose the Apply Entries action.
  5. In the Apply Vendor Entries window, select the line with the posted purchase document that you want to apply the purchase credit memo to, and then choose the Applies-to ID action. The number of the purchase credit memo is inserted in the Applies-to ID field.
  6. In the Amount to Apply field, enter the amount that you want to apply if smaller than the original amount.At the bottom of the Apply Vendor Entries window, you can see the total amount to apply to reverse all involved entries, namely when the value in the Balance field is zero.
  7. Choose the OK button. When you post the purchase credit memo, it will be applied to the specified posted purchase documents.When you have created or edited the needed purchase credit memo lines and the single or multiple applications are specified, you can proceed to post the purchase credit memo.
  8. Choose the Post action.

The posted purchase invoices that you apply the credit memo to are now reversed. If you have already paid the original invoice, the vendor should now refund the payment to you. If the credit memo is only for part of the product on the original invoice, you may only pay the remaining amount on the original purchase invoice to close it.

The purchase credit memo is removed and replaced with a new document in the list of posted purchase credit memos.

To create a purchase credit memo by copying a posted purchase invoice

  1. Enter Purchase Credit Memos, and then choose the related link.
  2. Choose the New action to open a new empty purchase credit memo.
  3. In the Vendor field, enter the name of an existing vendor.
  4. Choose the Copy Document action.
  5. In the Copy Purchase Document window, in the Document Type field, select Posted Invoice.
  6. Choose the Document No. field to open the Posted Purchase Invoices window, and then select the posted purchase invoice that contains lines that you want to reverse.
  7. Select the Recalculate Lines check box if you want the copied posted purchase invoice lines to be updated with any changes in item price and unit cost since the invoice was posted.
  8. Choose the OK button. The copied invoice lines are inserted in the purchase credit memo.
  9. Complete the purchase credit memo as explained in the “To create a purchase credit memo from a posted purchase invoice” section.

To create a purchase return order based on one or more a posted purchase documents

  1. Enter Purchase Return Orders, and then choose the related link.
  2. Choose the New action.
  3. Fill in the fields on the General FastTab as necessary.
  4. On the Lines FastTab, fill the lines manually, or copy information from other documents to fill the lines automatically:
    • Use the Get Posted Document Lines to Reverse function to copy one or more posted document lines from one or more posted documents. This function always exactly reverses the costs from the posted document line. This function is described in the following steps.
    • Use the Copy Document function to copy an existing document to the return order. Use this function to copy the entire document. It can be either a posted document or a document that is not yet posted. This function only enables exact cost reversing when the Exact Cost Reversing Mandatory check box is selected in the Sales and Receivables Setup window.
  5. Choose the Get Posted Document Lines to Reverse action.
  6. At the top of the Posted Purchase Document Lines window, select the Show Reversible Lines Only check box if you want to see only lines that have quantities that have not yet been returned. For example, if a posted purchase invoice quantity has already been returned, you may not want to include that quantity on a new purchase return document.
  7. In the Document Type Filter field, select the type of posted document lines you would like to use.
  8. Select the lines that you would like to copy to the new document.
  9. Choose the OK button to copy the lines to the new document.The following processes occur:
    • For posted document lines of the type Item, a new document line is created that is a copy of the posted document line, with the quantity that has not yet been reversed. The Applies to Item Entry field is filled in as appropriate with the number of the item ledger entry of the posted document line.
    • For posted document lines that are not of the type Item, such as item charges, a new document line is created that is a copy of the original posted document line.
    • Calculates the Unit Cost (LCY) field on the new line from the costs on the corresponding item ledger entries.
    • If the copied document is a posted shipment, posted receipt, posted return receipt, or posted return shipment, the unit price is calculated automatically from the item card.
    • If the copied document is a posted invoice or credit memo, the unit price, invoice discounts, and line discounts from the posted document line are copied.
    • If the posted document line contains item tracking lines, the Applies to Item Entry field on the item tracking lines is filled with the appropriate item ledger entry numbers from the posted item tracking lines.When you copy from a posted invoice or posted credit memo, the program copies any relevant invoice discounts and line discounts as valid at the time of posting that document from the posted document line to the new document line.
    • Be aware, however, that if the Calc. Inv. Discount option is activated in the Purchases & Payables Setup window, then the invoice discount will be newly calculated when you post the new document line. The line amount for the new line may therefore be different than the line amount for the posted document line, depending on the new calculation of the invoice discount.
  10. In the Purchase Return Order window, in the Return Reason Code field on each line, select the reason for the return.
  11. Choose the Post action.

To create a replacement purchase order from a purchase return order

You may agree with your vendor that they compensate you for a purchased item by replacing the item. The replacement item can be the same or it can be different. This situation could occur if the vendor mistakenly shipped the wrong item.

  1. In the Purchase Return Order window for an active return process, on an empty line, make a negative entry for the replacement item by inserting a negative amount in the Quantity field.
  2. Choose the Move Negative Lines action.
  3. In the Move Negative Purchase Lines window, fill in the fields as necessary.
  4. Choose the OK button. The negative line is deleted from the purchase return order, and a new purchase order is created.

To create a purchase allowance

If you receive items from your vendor that are not what you wanted, for example, if they are slightly damaged, the wrong color or the wrong size, the vendor may offer you a purchase allowance.

You can post this reduced purchase cost as an item charge on a credit memo or return order and link it to the posted receipt. The following describes it for a purchase return order, but the same steps apply to a purchase credit memo.

  1. Enter Purchase Credit Memos, and then choose the related link.
  2. Choose the New action to open a new empty purchase credit memo.
  3. Fill in the credit memo header with information about the vendor who sent you the purchase allowance.
  4. On the Lines FastTab, in the Type field, select Charge (Item).
  5. In the No. field, select the appropriate item charge value.You may want to create a special item charge number to cover purchase allowances.
  6. In the Quantity field, enter 1.
  7. In the Direct Unit Cost field, enter the amount of the purchase allowance.
  8. Assign the purchase allowance as an item charge to the items in the posted receipt. When you have assigned the allowance, return to the Purchase Credit Memo window.

When you post the purchase return order, the purchase allowance is added to the relevant purchase entry amount. In this way, you can maintain accurate inventory valuation.

To combine return shipments

If you want to return items covered by different purchase return orders to the same vendor, then you can use the Combine Return Shipments function.

When you ship the items, you post the related purchase return orders as shipped and this creates posted purchase return shipments.

When you are ready to invoice these items, instead of invoicing each purchase return order separately, you can create a purchase credit memo and automatically copy the posted purchase return shipment lines to this document. Then you can post the purchase credit memo and conveniently invoice all the open purchase return orders at the same time.

When return shipments are combined on a credit memo and posted, then a posted purchase credit memo is created for the invoiced lines.

The Quantity Invoiced field on the originating purchase return order is updated based on the invoiced quantity. However, this original purchase return order is not deleted, even if it has been fully received and invoiced, and you must therefore delete the purchase return order manually.

  1. Enter Purchase Credit Memos, and then choose the related link.
  2. Choose the New action.
  3. On the General FastTab, fill in the fields as necessary.
  4. Choose the Get Return Shipment Lines action.
  5. Select multiple return shipment lines that you want to include in the invoice.If an incorrect return shipment line was selected or you want to start over, you can just delete the lines on the purchase credit memo and then use the Get Return Shipment Lines function again.
  6. Choose the Post action.

To remove open purchase return orders after combined return shipment posting

  1. Enter Delete Invoiced Purchase Return Orders, and then choose the related link.
  2. Fill in the fields as necessary, and then choose the OK button.
  3. Alternatively, delete the individual purchase return orders manually.

Date Calculation for Purchases

data calculation

data calculation

Dynamics NAV Purchasing automatically calculates the date on which you must order an item to have it in inventory on a certain date. This is the date on which you can expect items ordered on a particular date to be available for picking.

If you specify a requested receipt date on a purchase order header, then the calculated order date is the date on which the order must be placed to receive the items on the date that you requested. Then, the date on which the items are available for picking is calculated and entered in the Expected Receipt Date field.

If you do not specify a requested receipt date, then the order date on the line is used as the starting point for calculating the date on which you can expect to receive the items and the date on which the items are available for picking.

Calculating with a Requested Receipt Date

If there is a requested receipt date on the purchase order line, then that date is used as the starting point for the following calculations.

  • requested receipt date – lead time calculation = order date
  • requested receipt date + inbound warehouse handling time + safety lead time = expected receipt date

If you entered a requested receipt date on the purchase order header, then that date is copied to the corresponding field on all the lines. You can change this date on any of the lines, or you can remove the date on the line.

Calculating without a Requested Delivery Date

If you enter a Dynamics NAV Purchasing order line without a requested delivery date, then the Order Date field on the line is filled with the date in the Order Date field on the purchase order header.

This is either the date that you entered or the work date. The following dates are then calculated for the purchase order line, with the order date as the starting point.

  • order date + lead time calculation = planned receipt date
  • planned receipt date + inbound warehouse handling time + safety lead time = expected receipt date

If you change the order date on the line, such as when items are not available at your vendor until a later date, then the relevant dates on the line are automatically recalculated.

Changing the order date on the header, then that date is copied to the Order Date field on all the lines, and all the related date fields are then recalculated.

Integrated document management provides features such as barcoding documents which allow documents to be scanned and automatically linked to the relevant Dynamics NAV Purchasing record.

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