Microsoft Dynamics AX 2012:Procurement Overview in AX 2012

Hi All,

This is the first blog of a series of blogs in which I will be covering the entire Procurement process HANDS ON  in Ax 2012.Hope it will be beneficial to all 🙂

Before digging in to the Procurement process ,first we need to understand what procurement really is and different terminologies the are commonly used as a part of Procurement process.

What is Procurement in AX 2012:

“Procurement is the process where company acquires or get something ;it may be goods or it may be services from suppliers.”

Procurement process in AX  2012 involve keys features that need to be perform in order to acquire somethings,which includes:

  1. Purchasing Policies
  2. Vendor Requests
  3. Product management
  4. Purchase Requisition(PR)
  5. RF* like RFQ (Request for Quotes)
  6. Purchase Order
  7. Purchase Agreement
  8. Invoicing

Here is the complete pictorial view of  Procurement


Right now I am demonstrating a brief overview of some of  the features that  i will be describing in my upcoming blogs.

Purchase Requisition(PR):   If an employee/Department of the company wants to buy something (mostly not in the items list  of the company),then a Purchase requisition needs to be created.PR authorizes the Purchasing Department(which actually purchases the items) to generate Purchase Orders for the items.Finally PR is a document that is used internally with in the organization.
Vendor Requests:  During the creation of Purchase Requisition there is an option for the user to select vendor(s) from the approved vendor groups,but this may be the case that the existing approved vendors don’t have the required item,so in this case,what user can do is,if he/she  know a specific vendor that have the desired item and the vendor is not in the approved list of the company then a user have the option to generate a vendor request form with a complete justification.

Request For Quotes(RFQ):  After receive of a PR from the employee, Purchasing Department approves the PR then the next thing require is to get quotations/prices of the desired items from the suppliers/vendors.For this RFQ is generated and send to different selected vendors.Note that each single RFQ would be send to single vendor.Vendors in return send their quotations for the items.Purchase Department then compare the quotations form different vendors.

Purchase Order (PO):Once Purchasing Department decided that from which vendor , items need to be purchased then the next thing is to generate an Order for the times to be purchase from the vendor .PO contains all the information related to items.A purchase order is a document that is generated by a buyer that authorizes the purchase of products. When the document is accepted by the vendor (or seller or products), it becomes a contract binding on both parties.Purchase Order is a document which is used externally.

Purchase Agreement(PA):PA is an agreement between buying party /purchasing party and the supplier party that certain quantity of items would be purchased in a specific tenure with special amount and discount prices.PA can be of any specific time period.Mostly company made an agreement from the supplier party at the start of their Fiscal Calendar period.

Hope the above brief definitions will give you guys some idea of the features in Procurement module in AX 2012.



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