Insights from: Diane Perry, Edgewater Fullscope, Functional Architect
Companies often want to implement buying power across multiple divisions and departments, but also have a requirement to control spending and inventory levels. By introducing Purchase Requisitions, with an approval workflow hierarchy, Microsoft Dynamics AX ERP is able to support procuring of product throughout a company while providing strict controls on what can be suggested for purchasing and how much is being purchased at what price. It provides a way to keep people informed on the total spend.
Step 1: Planning out a simple approval process workflow. Sketch out the requirements for the workflow including conditions for automatic approval and rejection.
Step 2: Design the Purchase Requisition Managerial Hierarchy. Gather information to support the hierarchy including:
Employees (Name of Employee as they will be “hired” in AX)
Position and Job of Employee (these are created and assigned in AX in the Human Resources Module)
What position will each Employee/Position report to (this relationship is created in the Human Resources Module)
Does the Employee/Position have an automatic approval amount? This is used to support the Spending Limit Policy attached to the workflow.
Note: If there are two or more people with the same position but their automatic approval amounts are different, they cannot share the same position. For example, 2 Lab Techs will enter Purchase Requisition. One can spend $500 and one can spend $800. This will require 2 unique Lab Tech positions.
Ex: Lab Tech 1 = $500, Lab Tech 2 = $800
Hint: Plan the positions, amounts, reports to, in a spreadsheet before building in AX.
Step 3: Build Position, Employee, Reports to
Human Resources> Common> Organization> Positions
Step 4: Configure the Signing limit policy
Applying Positions and Limits: Organization administration> Setup> Signing limits> Signing limit policies
Signing limit policies hold the Spending amount and Approval amount of “Jobs.” This setup holds the information to support the automatic approval workflow decision or the need to pass the spending amount through the hierarchal process for further approval (meaning the employee’s spending limit has been exceeded).
Tip: Signing limit policies are company-specific and employees assigned the same “Job” have the same spending limit.
Step 5: Configure the Purchasing Policy
Within the company-specific Purchasing Policy settings/options are found to manage access to Procurement Categories, Items, Vendors and Pricing.
Creating a Purchasing Policy: Procurement and Sourcing> Setup> Policies> Purchasing Policies
- Category access policy rule: Management of Categories available on the Purchase Requisition line. Choose categories to make available for requisitioning.
- Category policy rule: Management of the ability to add new Categories, Vendors on the Purchase Requisition line, enforcing of matching, enforcing of receiving and deduction requirements, and the option to accrue expenses upon receipts of Products/Items.
- Purchase requisition control rule: Management of the required fields on the Purchase Requisition line.
- Purchase order creation and demand consolidation rule: Manage automatic consolidation and settings to control demand consolidation vs. manual consolidation (which can be across multiple companies)
Step 6: Allow a person to requisition on behalf of someone else
Configure requisitioning permissions: Procurement and sourcing> Setup> Policies> Purchase requisition permissions
Assign an employee the ability to requisition for another employee.
Tip: This is helpful when one person is designated to enter Purchase Requisitions for a group of people but the workflow needs to support each individuals spending limit. This setup allows the Requisition to still flow through the approval hierarchy.