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Allocation of Charges in Dynamics 365 F&O

Post Author: Joe D365 |

Prior to the Wave 1 2020 release, the allocation of charges capability was available only on the Purchasing side of the F&O processes. In today’s blogpost, we’ll review the Current State process and share some exciting news about Future State process.

To review the current state, in the event you have a shared cost (charge) across multiple lines of a purchase order, F&O will perform the calculations required to allocate those charges accordingly to each line. Below, we have a simple 3-line PO.

We’ve added a header level charge for freight of $500. Accomplish this by selecting Purchase > Charges > Maintain charges > New.

These charges, however, need to be moved to the line level in order to process the purchase order through receipt and/or invoice.

To do so, click Purchase > Charges > Allocate charges.

On the allocation screen, you can select to allocate by: 1) Net amount, 2) Quantity, or 3) Per line.

You also have the option to further filter by All lines, Positive or Negative lines, and Received or Stocked quantities.

Here, we’ve selected by Net amount. Click Allocate.

Now, navigate to the line level and view charges by highlighting the desired line and then Financials > Charges > Maintain charges.

You will see the power of the allocation function and how each line now has the appropriately calculated amount.

To run through the math in our example, our total Net amount for all 3 lines was $2,246.26.

Line 1 had a Net Amount of $250: ($250/$2,246.26 = .11129611*$500 = $55.65)

Line 2: ($180/$2,246.26 = .0801332*$500 = $40.07)

Line 3: ($1,816.26/$2,246.26 = .80857069*$500 = $404.28)

Imagine a scenario with a shared cost among 10-100+ lines. You can easily see the advantages of allocation!

Current State for Sales Orders does not have this functionality. You simply can add header level charges or add line level charges, but F&O will not assist in any calculations or allocations from the header to line process. Instead, this is all a manual process.

Sales Orders also do not force header level charges to the line, as costs on the Sales Order do not impact inventory costs and hence don’t require the allocation. The confirmation shows how F&O simply consolidates the charges (the example below has a $500 header freight charge and $25 freight charge on line 2). Additionally, another drawback is with header level charges, if there are any partial billings that occur, the first bill takes the entire sum of the header charge, given there is no line level allocation. There could be arguments both ways as to the benefits and drawbacks of such a scenario.

The best advantage, however, of the allocation of charges is the ability to spread a cost across multiple lines. Imagine if you have a header charge that applies to 100 lines. To have to manually calculate those line level charges can obviously create a process that is less than desirable. And even outside of the calculation, to have to manually add the charge to each line? Even more efficiency losses!

But now, with Wave Release 2020, Future State will have the allocation of charges move to the Sales side as well and users can enjoy this functionality throughout F&O. Hooray!

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By Joe D365
Joe D365 is a Microsoft Dynamics 365 superhero who runs on pure Dynamics adrenaline. As the face of PowerObjects, Joe D365’s mission is to reveal innovative ways to use Dynamics 365 and bring the application to more businesses and organizations around the world.

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