Using the Decentralized Purchasing Feature

To use the Decentralized Purchasing feature in the Procurement and sourcing module of Microsoft Dynamics 365 for Finance and Operations, you need to perform the following tasks:

1. Create a Business Justification
2. Configure a Purchasing Policy
3. Create a Purchase Requisition
4. Create and Confirm Purchase Orders
5. Post Product Receipts
6. Generate an Invoice

Create a Business Justification

Institutions need to create a Business justification record and set the Invoice available flag to indicate whether the items have already been invoiced. The Invoice available flag is later used in downstream workflows and processes to simplify purchase order creation, receiving, and invoicing.

Navigate to Modules > Procurement and sourcing > Setup > Policies > Business justifications and specify the reasons for creating a purchase request.

Configure a Purchasing Policy

A purchasing policy consists of a set of policy rules that can be configured by institutions based on their business requirement.

To automate the process of purchase order creation from purchase requisitions and shorten the purchase cycle, institutions must configure the "Purchase order creation and demand consolidation rule" in the Purchasing policy.

To configure the "Purchase order creation and demand consolidation rule":

1. Navigate to Modules > Procurement and sourcing > Setup > Policies > Purchasing policies.

2. Expand the Policy Rules section, and select Purchase order creation and demand consolidation rule.

   • For an existing policy, select the Effective date link in the Policy rules grid.

   • For a new policy, select Create policy rule.

3. Configure the following options:

   • On the General tab, specify the Effective and Expiration dates.

   • On the Manual purchase order creation tab, select the following options:

     • Automatically create purchase orders

     • Run automatic purchase order creation as a batch

   • Select Save and close the page.

4. Select Save to save the Purchasing policy record.

For more information on configuring a Purchasing policy, refer to Microsoft Documentation.

Create a Purchase Requisition

A purchase requisition is an internal document that authorizes the Purchasing department to buy items or services. For more information on Purchase requisitions, refer to Microsoft Documentation.

Institutions need to create a purchase requisition record and select a reason in the Business Justification section. The Invoice available field in the Business Justification section is populated based on the value associated with the selected Business justification. Users can update the value of this flag.

The purchase requisition records are then submitted for review and processed using the Purchase requisition workflow, which updates the status of the Purchase requisition record to Approved from its initial status of Draft.

Create and Confirm Purchase Orders

A purchase order (PO) is a document that represents an agreement with a vendor to buy items or services. For more information on Purchase orders, refer to Microsoft Documentation.

In Dynamics 365, Purchase orders can be automatically created from Approved purchase requisitions when a Purchasing policy is configured for creating Purchase order automatically.

The Purchase order inherits the value of the Invoice available field from the purchase requisition record, and its status is set to Approved. The user can then update the status of the Purchase order to Confirmed by selecting Purchase > Actions > Confirm.

Post Product Receipts

Product receipt is the process of recording that the ordered products have been received, so that the purchase order (PO) lines can be processed for invoicing.

Institutions can post the product receipts using one of the following methods:

• Manually Generate Product Receipts

• Automatically Generate Product Receipts

To generate the product receipts manually:

1. Navigate to Procurement and sourcing > Purchase orders > All Purchase Orders.

2. Select a Purchase order that matches the following field values:

   • Approval status = Confirmed

   • Purchase order status = Open order

   • Invoice Available = Yes

3. Select Receive > Generate > Product receipt.

   The Posting product receipt page is displayed. The Product receipt field displays the same value as the purchase order number.

4. Select OK.

   The product receipt for the purchase order is generated. The Purchase order status is automatically updated to Received.

To generate the product receipts for purchase orders automatically:

1. Navigate to Procurement and sourcing > Purchase orders > Post product receipts.

2. On the Posting product receipt page, under Settings, select Select.

3. On the Purchase update page, select Add and configure the filter criterion by selecting Yes in the Invoice available field.

4. Select OK.

   The Posting product receipt page displays the purchase orders that match the filter criterion. The Product receipt field displays the same value as the purchase order number.

5. Select Batch and schedule the batch for posting the product receipts.

6. Select OK on the Posting product receipt page.

After the batch is successfully run, the product receipts for the purchase orders are generated. The Purchase order status is automatically updated to Received.

For more information on Product receipts against purchase orders, refer to Microsoft Documentation.

Generate an Invoice

When the status of a Purchase Order changes to Received, institutions can generate an invoice for the purchase order.

The Vendor Invoice workflow available in the Accounts payable module can be configured to automate the process of invoice generation based on business requirements.

For the Decentralized Purchasing feature of Anthology Finance & HCM, institutions must configure the Vendor Invoice workflow with a condition to automatically approve and generate an invoice when the Invoice Available field is Yes for the Purchase Order.

To update the Vendor Invoice workflow to automatically approve and generate an invoice for a purchase order:

1. Navigate to Modules > Accounts payable > Setup > Accounts payable workflow.

2. On the Create workflows page, select New and select Vendor Invoice workflow .

3. On the Vendor invoice workflow page, perform the following steps:

   Add a Conditional decision for Invoice Available:

   1. From the Workflow elements pane, Flow controls section, select Conditional decision and add it to the Workflow.

   2. Right-click the Conditional decision element, and select Properties.

   3. In the Properties dialog under Basic Settings in the Condition, select Add condition.

   4. In the Where condition, select Vendor invoices.InvoiceAvailable.

   Add the Approve vendor invoice step:

   1. From the Workflow elements pane, in the Approvals section, select Approve vendor invoice and add it to the Workflow.

   2. Double-click the Approve vendor invoice element, select Step 1, right-click, and select Properties.

   3. In the Properties dialog, select Basic Settings > Assignment.

   4. In the Assignment type, select Participant.

   5. On the Role-based tab, in Type of Participant, select Participant provider from the drop-down.

   6. In the Participant drop-down, select one of the following values depending on who will approve the workflow:

      • Purchase order requester
      • Purchase order preparer

4. Save the workflow.

When the status of a Purchase Order changes to Received, institutions can generate an invoice for the purchase order using the following steps:

1. Navigate to Procurement and sourcing > Purchase orders.

2. Select and view Purchase orders with the Purchase order status of Received.

3. Select Invoice > Generate > Invoice.

   The Vendor Invoice page is displayed.

4. Select the Workflow menu.

5. On the Vendor Invoice Workflow page, select Submit.

6. Select OK.