In this section we’ll cover the following:
- Units of Measure
- Inventory Sites
- Item Class Setup
- Entering Purchase Orders
- Receiving Purchase Orders
- Invoicing Purchase Orders
The Inventory Control and Purchase Order Processing modules will allow you to define your inventory items, set pricing, track quantities, take cycle counts, create purchase orders, and receive and invoice purchased items.
You should do these setup tasks to get started with inventory:
- Set up one or more Unit of Measure schedules
- Set up one or more inventory sites
- Set up one or more Class ID’s
- Navigate to the Unit of Measure Schedule Setup screen: Inventory >> Setup >>Unit of Measure Schedule.
Enter a U of M Schedule ID and Description.
Specify the Quantity Decimal Places. You can specify 0, 1, 2, 3, 4, or 5. This is an important value because all quantities for an item will use this value to store and display quantity information. If you want to account for fractional units, don’t specify a quantity decimal of 0.
You can define unit equivalencies if you want. The Base U of M is the unit of measure that is used to track the inventory in Dynamics GP. You can have several U of M schedules, but any specific item can only have one U of M schedule, and the Quantity Decimal Places must match.
2. Create an inventory site by navigating to: Inventory>>Cards >> Site.
3. I recommend setting up at least one Class ID for inventory. Navigate to the inventory Class ID: Inventory>>Setup >> Item Class.
Make sure to select the four options under “Maintain History”
Click on Accounts and enter the default general ledger account numbers to be used for inventory items.
Select the Default check box on your first Class ID to make the entry of additional Class ID’s easier.
Make additional selections as desired. Values entered here will automatically be entered to new items as you enter the new items and assign them to a specific Class ID.
Item information is entered in the Item Maintenance screen. You can enter items for which you want to track quantities, and non-inventory items. Navigate to the Item Maintenance screen: Inventory>>Cards >> Item
The required fields on this screen are:
- Item Number
- U of M Schedule ID
Click on the i button to enter additional information about the item if you want.
Select a Class ID.
The Item Type can be one of the following:
- Sales Inventory (maintain quantities)
- Misc Charges (non-inventory tracking)
- Services (non-inventory tracking)
- Flat Fee (non-inventory tracking)
- Kit (we’ll cover later)
Select the Options button to access additional settings and the six user-defined fields.
You can access the item price list by clicking on the GoTo button on the upper middle area of the Item Maintenance screen, and selecting Price List.
There are several Price Methods to choose from, though you can only select one for each item.
Price Levels are user defined values that can be assigned to a customer or a group of customers. This allows you to specify pricing for a customer or a group of customers.
You should select a Default Selling U of M. This will speed up data entry on sales orders and invoices.
Once you have your items entered, you will want to assign them to one or more inventory sites. To do this, navigate to an inventory site. Inventory>>Cards >> Site. Select a site ID and click on the Assign button. Click OK to assign the items to the site.
Once you have your items set up, the inventory system pretty much operates in the background. You will access it through purchase orders and sales orders/invoices.
There are two significant relationships any inventoried item needs in order to be used in Dynamics GP. Specific records are created and maintained within Dynamics GP for these relationships:
- Item <-> Site
- Item <-> Vendor
As part of the entry of inventory items, you should have already assigned them to the site(s) in which you’ll be holding the items. You can also set up the item/vendor relationships for each item by navigating to the Items Vendor Maintenance screen: Inventory>>Cards >> Vendors.
If these relationships are not set up, you will be required to set them up when you use the items in a transaction. For example, if you are creating a purchase order and the item/vendor relationship is not set, you will be prompted to do so.
When you select “Yes” the item /vendor relationship will be created for you. You will have the option of editing the Vendor Item and Vendor Description. You can also enter other order data if you wish.
The purchase order functionality in Dynamics GP allows you to create purchase orders, and receive and invoice purchased items.
Navigate to open the Purchase Order Entry screen: Purchasing>>Transactions >> Purchase Order Entry.
Accept the default type, and tab through the PO Number, to the Vendor ID. Enter or lookup the Vendor ID for the purchase order.
Any purchase order can have as many detail lines as you’d like. You can enter inventory items and/or non-inventory items. Dynamics GP will use defaults values from the item, vendor, and system to fill in much of the required data for a purchase order. You can drill-down from the purchase order line to see additional information in the Purchasing Item Detail Entry screen. Highlight the line item you would like to change and click on the Item Detail tab on the top of the Purchase Order Entry screen.
If you want to change the general ledger account number to which the purchase will be charged, you can do it in the Purchasing Item Detail Entry screen. You can also change the date fields to enhance reporting and management of purchase orders.
When you’ve completed entry for the purchase order, you can click on Save to save it in Dynamics GP. You can go back to edit or review it in the future.
To receive and invoice the purchase order, you have two options:
- You can receive and invoice the purchase in one transaction
- You can receive the purchase in one transaction, and then enter and apply the vendor’s invoice at a later time.
To receive the purchase you can navigate to the Receivings Transaction Entry screen: Purchasing>> Transactions >> Receivings Transaction Entry. Or you can open the purchase order in the Purchase Order Entry screen, click on “Actions” and select “Receive the PO Items”.
If you start at the Receivings Transaction Entry screen, select the Type as Shipment or Shipment/Invoice and tab to the Vendor ID. Enter or Lookup the Vendor ID. Click on the “Auto-Rcv” button to easily lookup the open purchase order items.
Mark the items you want to receive. Ensure that the “Qty Shipped” quantity is the correct amount to receive, and click on the “Receive” button.
This will populate the information you need for the Receivings transaction. You can then save the transaction into a batch, or post it.
This will receive the purchased items into inventory or debit the purchasing account for the amount of a non-inventory item. It will also create an un-invoiced receipt transaction that can be matched to the vendor’s invoice at a later time.
Navigate to the Purchasing Invoice Entry screen to enter the vendor’s invoice and match it to the receipt: Purchasing >>Transactions >> Enter/Match Invoices.
Tab past the Receipt Number. Enter the vendors invoice number in the Vendor Doc. Number field. Enter or lookup the Vendor ID. Tab past the Currency ID.
Click on the “Auto-Invoice” button to open the Select Purchase Order Items screen. Select the items to invoice, and verify the quantity in the “Qty Invoiced” field. Click on the Invoice button to complete the Purchasing Invoice Entry screen.
Save the transaction to a batch or post the transaction.
This will create an invoice transaction in accounts payable.
Take a look at this video to see this in action: Purchase Order Processing in Dynamics GP