However, most companies would like to have default charges applied automatically. Once the charge codes have been defined, they can be used manually on a purchase order. Obviously, charge codes with debit posting set to Item are only relevant for purchase order line charges. This means that the charge will go to the inventory account for the item on the purchase order line and be included in the inventory value. In the next example, FEE, the debit configuration is pointing to Item. In this case, FREIGHT, the cost (debit) is posted to a nominal ledger account (600120) and the debt (credit) is included is the amount owed to the supplier and therefore the accounts payable account set up for the supplier. The key decision to make here is how to post the charge to the general ledger.

Since we are dealing with inbound charges, the configuration takes place in the Procurement and sourcing module under Setup / Charges.įirstly, we must configure the necessary charge codes as shown in the following example. Charges on a purchase order are perceived to be estimated – realised charges are connected to the invoice.īefore we can use Charges in D365FO, they need to be configured.

A charge can only be applied to the supplier on the purchase order – not a 3PL supplier.Purchase order line charges can be included in the product cost and taken into the inventory.A purchase order header charge can be allocated across the purchase order lines (manually).A charge cannot be split across multiple purchase orders.A Charge can be applied to a purchase order header or lines manually or automatically.

A charge is a relatively simple concept based on the following business logic: A charge can be any type of landed cost and can be set up for products and suppliers. In D365FO, landed costs are recorded and managed through so-called Charges. Total cost of an inbound shipment of goods including product cost, freight, insurance and duties. I am not sure if there is a formal definition of what landed cost is, but for the purpose of this article landed cost is defined as: In this post we will look more into how you work with landed cost. In the previous posts, we looked at the core concepts underpinning the inventory cost model in D365FO and how some of the key areas should be configured. The series is expected to include the following parts: This is the fourth instalment in my series of articles explaining the inventory cost model in Dynamics 365 for Finance and Operations (D365FO).

D365 finance and operations pricing