In the previous part of my blog, I explained about the Credit Only process. In this part of my blog, I will go through the Physical Return process. The Physical return process is determined based on the Disposition Code that is assigned to that Return Order. Disposition Codes in D365 Finance and Operations: Disposition codes in Dynamics 365 Finance and Operations (D365FO) are essential tools used to categorize and manage returned items. These codes help businesses decide what to do with products that customers send back, whether it’s restocking, repairing, or scrapping them. By using disposition codes, companies can streamline their return processes, maintain accurate inventory records, and ensure that returned items are handled efficiently and appropriately. This not only enhances operational efficiency but also helps in improving customer satisfaction by managing returns in a clear and organized manner. Below is the List of Dispositions Codes that are available in D365 FNO: These Disposition codes are available as Standard Functionality in D365 FNO.  You can also create new codes based on the business requirements. In this part of the blog, I will walk you through the Replace Item and Credit Customer scenario. Let’s take a scenario where we have sold 5 items to the customer and after delivery the customer does the Quality check in which 2 products fail due to quality issues. The customer has Scrapped those products on our behalf and now we will provide the customer with the replacement items. For that: Go to Sales and Marketing>Sales Returns>All Return Orders. On the All return orders page click New to create a New Sales Return Order. Select the Customer for which the Return Order is to be created. Enter the Site, Warehouse, RMA number and other details and click OK. In the first part of the blog I created the Return order using the Find Sales Order function so in this part I will directly add the line with negative quantity. In the below screenshot you can see that I have added a line for the Product P-000015 with negative quantity. The next step is to register the Line with the Replace and Credit customer Disposition code. For that click on the Update Line option in the Lines tab then from the drop down click on the Registration option. Then from the Disposition Code drop down select the Replace and Credit Customer option. Then add the registration line then click on Confirm Registration. In the below screenshot you can see the Line status is changed to Registered and the Return order status is changed to Open. Now if you go to the All-Sales Order Page you can see that a New Sales Order is created with the Order type as Returned Order with the Status as Open Order. Now if you open the Sales Order and check the lines the quantity of the line will be exactly same as that of the Return order. The next step is to create a Replacement order as we have selected the Disposition Code of Replace and Credit. For that click on Update Line and Click Registration which will change the Line status from Registered to Expected. As you do this you will notice that the Post Packing Slip button is now disabled, and you can see that the Replacement Order button is now available. As our disposition code is Replace and credit Customer the next step is to create a Replacement Order. For that click on the New Replacement Order button. Add the same site and Warehouse as Return order and click Ok this will create a Replacement Order. After Replacement Order is created go back to the Return Order again and Click Registration and select the Credit disposition code which will Credit the Amount back into the Customer’s account. Now after that Post the Packing slip for the Return order which will change the Return Order status to Received. Then go ahead and Invoice the Return Order from the All-Sales Order page which will again change the Return Order status to Closed. Then go ahead and process the Replacement Sales Order. If you go to the Customer transaction and check, you can see that the Amount is credited back in to the Customer Account. So, this completes the Sales Return Process of Return and Credit to customer. We hope you found this article useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfronts.com

Introduction In the field of stock management, keeping precise stock levels is essential to the success of your business. Two key components in achieving this are physical tracking and negative inventory control. Physical tracking keeps track of inventory movements in real time, and negative inventory control makes sure that stock levels never fall below zero, which keeps operations from being disrupted. In this first part of the blog, I will explore the theory behind these concepts, highlighting their importance in preventing stock outs. Understanding these principles is essential for effectively managing inventory in Dynamics 365 Finance & Operations. First let me explain Physical Inventory: Physical inventory involves continuously monitoring the movement of goods, including receiving, storing, and shipping. This tracking helps businesses keep an up-to-date record of their stock levels and avoid discrepancies. This is the practice of recording the actual quantities of products on hand at various locations, such as warehouses, distribution centers, and retail stores. The goal is to ensure that the recorded inventory levels match the actual quantities available, which is essential for accurate stock management and financial reporting. So, physical inventory is a critical component of inventory management that ensures businesses maintain accurate records of their actual stock levels. By implementing effective physical inventory practices, companies can improve inventory accuracy, prevent stock outs, and enhance overall operational performance. How Physical Tracking works in D365 Finance and Operations? In D365 F&O, physical tracking works by leveraging inventory dimensions, tracking codes, and item model groups to monitor and manage inventory accurately. Physical tracking in Dynamics 365 Finance & Operations helps you monitor and manage the actual stock of items in real-time. You can define what you want to track (e.g., batch numbers, serial numbers) and then assign these dimensions to item model groups to specify how tracking is applied. In short Physical tracking ensures that you always have an accurate view of your inventory by recording and updating item details as they move through your supply chain. Physical Negative Inventory: Physical negative inventory occurs when the recorded quantity of items in your inventory system drops below zero. This situation arises when more items are issued or sold than are actually available in stock. For example, if your system shows you have 10 items in stock, but you issue 15 items, your inventory record will show a negative quantity of -5 items. In Dynamics 365 Finance & Operations, you can control this by setting parameters that prevent negative inventory from being recorded. If you disable the option for allowing physical negative inventory, the system will only permit transactions if there is enough stock on hand. This helps ensure that your inventory records are accurate and reflect the true quantity of items available, preventing potential issues such as stock outs or discrepancies between physical stock and system records. How Physical Negative Inventory works in D365 Finance and Operations? In Dynamics 365 Finance & Operations, physical negative inventory refers to how the system manages inventory levels when they fall below zero. If you allow negative inventory, the system permits transactions even if the stock levels go below zero, which can happen if more items are shipped or adjusted out than are available. To control this, you can configure settings in the system: by navigating to Inventory Parameters and Item Model Groups, you can choose whether to permit or prevent negative inventory. When negative inventory is disabled, the system ensures that transactions only occur if there is sufficient stock, preventing inventory records from showing negative amounts. This helps maintain accurate inventory records and avoids potential issues like stock outs. Regular cycle counts and inventory adjustments are also important to keep the system aligned with actual stock levels and address any discrepancies. Conclusion Dynamics 365 Finance & Operations (D365F&O) helps businesses keep track of their inventory and prevent stock issues in a simple and effective way. For physical tracking, D365 F&O uses inventory dimensions like site, warehouse, batch number, and serial number. This means you can always see where your items are and how many you have in real-time, which helps avoid mistakes and keeps your operations running smoothly. To control negative inventory, D365 F&O lets you set rules to stop inventory levels from dropping below zero. You can find these settings in Inventory Management and Item Model Groups. If you choose to prevent negative inventory, the system will block any transactions that would cause your stock to go below zero. This ensures your inventory records stay accurate, and you don’t run into issues like running out of stock or having financial discrepancies. Additionally, D365 F&O supports regular cycle counts and inventory adjustments. These regular checks help ensure that the actual physical stock matches what’s recorded in the system, allowing you to correct any differences quickly. With these features, D365 F&O makes it easy for businesses to manage their inventory accurately and efficiently, supporting better decisions and smoother operations. That’s it for this part of the blog. In the next part, I will walk you through the process with examples, including products tracked by Serial Numbers and Batch Numbers. I will also explain how these features impact inventory transactions. We hope you found this article useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfronts.com

Introduction:  As a business owner, you might have come across a situation where you want to upgrade your current systems with renowned ERP solutions available on the market. One of the ERPs you would consider is Microsoft Dynamics. However, even choosing this would require a lot of brainstorming from all decision-makers because Microsoft Dynamics comes with two ERP platforms, i.e., Dynamics 365 Business Central and Dynamics 365 Finance & Supply Chain. I assume this brainstorming itself would have probably landed you on this article. Let’s dive into the key differences and use cases for each platform. Hopefully, by the end of the article, you will be able to make a decision and choose the right platform for your business.  Below are the key factors differentiating Dynamics 365 Business Central and Dynamics 365 Finance & Supply Chain: Company Size: When determining company size, the usual factors that are considered are revenue and employee count. The definition of which can change based on the country you are located in. Here, for reference, we would consider the following: – Revenue: a. SME: Having revenue between 0 and 1 billion USD. Business Central is ideal for this size of company. b. Large companies: Having revenue above 1 billion USD. Finance and Operations is the ideal platform for large organizations. – Employees: a. SME: having employees between 0 and 500. b. Large companies: having more than 500 employees. Number of Entities: If your company has multiple legal entities in multiple geographical locations across the world,a. Business Central is ideal for companies with a single legal entity or multiple legal entities in the same country. Business Central allows you to create and manage individual products and accounts for each legal entity; however, it cannot be managed centrally. b. Finance and supply chain are ideal for companies with multiple legal entities across the world. Finance & Supply Chain allows you to manage products and accounts centrally and release them centrally to each legal entity across the world. Business Operations: Does your company have streamlined and simple operations? a. Business Central can handle operations for companies with streamlined and simplified operations that do not require very detailed data capture or sophisticated reporting. b. Finance & Supply Chain captures detailed data, covers a lot more processes than Business Central, and hence can provide robust and detailed reporting. Future Growth: It is also important to consider what the growth plans are for your company. If you currently have 2–3 legal entities, you may be tempted to go with Business Central, as it comes with low implementation and operating costs, ease of use, and faster implementation timelines. However, ERP projects are not done frequently, and it is important that you consider future organizational plans. Let’s say you intend to expand over the next three to five years into multiple different geographical areas. You should think about finance and supply chain as your organization’s go-to platform since this will be a big, long-term investment. You might want to consider the following factors while making the decision: – Licensing: a. Since finance and supply chain are for large companies, they come with a minimum licensing requirement of 20 licenses. b. Business Central is perfect for small and medium-sized businesses (SMEs) because it only requires one license and has no minimum licensing requirements. – Implementation timelines:a. Finance and Supply Chain has a typical implementation timeline of 6 months or more, considering the size of the implementation and global rollout.b. Business Central can be up and running in 3–6 months.    Conclusion:  Choose Business Central if: You’re an SME seeking an easy-to-use, all-in-one solution with a lower upfront and operating cost.  Choose D365 Finance & Operations if: You’re a large enterprise requiring extensive functionalities, deep customization, and global capabilities.  We hope you found this article useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfronts.com

In D365 Finance and Operations, managing transfer orders is a crucial aspect of maintaining efficient inventory operations. However, there may be instances where you need to cancel a transfer order shipment due to various reasons such as changes in demand, inventory discrepancies, or operational adjustments. In such cases, it is essential to understand the process of cancelling the transfer order shipment to ensure accurate inventory management and smooth operations. Here are the steps to cancel the transfer order shipment in D365 Finance and Operations: Go to Inventory Management>Out Bound Orders>Transfer Order. Here, I have already created the Transfer Order which is in Created State. Here, I am transferring the Items from (Warehouse W1 to Warehouse W2). The next step is to ship the Transfer Order. In the below screenshot you can see that the Transfer Order has been Shipped. As the Transfer Order is shipped the following Transactions are posted. Now to Cancel the Transfer Order Shipment. In the Transfer Order tab click on Transfer Order History which is under the View Action tab. Here you can see the Transfer Order Shipment. Select that and then click on the Cancel Button from the top of the screen. By clicking this the system will automatically reverse the Transaction. You will see that a Reverse entry is posted with negative quantity and there will be a right tick under the Cancelled Shipment column. Now if I go to Transactions, I can see that the entry has been reversed and the Transfer Order status has been reverted back to Created. Note: The Transfer Order which has been received cannot be Reversed by this process. Transfer Orders which are only in Shipped state or transfer orders where in Shipment has been sent can only be cancelled or Reversed. Depending on your system configuration you may need to manually adjust the Inventory. That’s it for this blog! Hope that helps, thank you for reading!!

In Dynamics 365 Finance and Operations (D365 F&O), the use of batch numbers is a common practice to manage and trace items with specific characteristics. Batch numbers are typically assigned to groups of items produced or received together, allowing for better control, tracking, and compliance with industry regulations. In this blog I will explain how to solve the expiration date issue while registering a Batch and Serial number tracked product. In the above screenshot you can see that the Batch Number 23010-CM-000088 has been assigned for my Item P-000014. Here, the Expiration Date is 08-04-2023. Now if I try to register this Item with the same Batch Number, I will get the Batch Number Expiration Date being past the Required Date error. Now to solve this error go to Inventory Management>Enquiries and Reports>Tracking Dimensions>Batches. Now on the Batch Number page go to Reset Tab then under the Reset tab click on Reset Shelf-Life Dates. The next step is to select the New Expiration Date and then Click Ok. This will Update the Expiiration Date of that Batch Number. In the above screenshot you can see that the Expiration Date has been changed. Now we will be able to register the Item. Here, you can see that now I am able to register the Item successfully. That’s it for this blog. Hope this helps you! Thank You!

Hello Everyone!!! In this blog I will explain the Quarantine Management process in Dynamics 365 Supply Chain Management.  Here the Product was first received in the Main warehouse and then it was moved to Quarantine Warehouse for further inspection as the Product failed to clear the Quality Test. In this blog I will explain a scenario where the Products should be directly received in the Quarantine Warehouse for inspection and after final inspection it turns out that all the products fail the inspection so, a few products will be scrapped and the rest will be returned back to vendor. What is Quarantine Management? The quarantine management process in D365 aims to effectively manage and control quality issues, ensuring that only items meeting the required standards are released for use or distribution. The quarantine management process in Dynamics 365 is a systematic approach to handling items that are suspected of having quality issues or non-conformities. When an item is flagged for quarantine, it is physically segregated from the regular inventory and moved to a designated quarantine location. The quarantined item undergoes thorough inspection and testing to assess the extent of the quality issue. Based on the evaluation, decisions are made regarding the item’s disposition, which may include repair, return to the vendor, or scrapping. If the item is repairable, necessary actions are taken to rectify the identified issues. In cases where the vendor is responsible, the item can be returned for resolution. Once the necessary actions are completed, and the item meets the required quality standards, it is released from quarantine and reintegrated into the regular inventory for use or distribution. This process ensures that only items meeting quality criteria are allowed for further processing, while mitigating the risk of non-conforming products entering the supply chain Let’s start with the setups first: Step 1: Map the Quarantine Warehouse to the Main Warehouse. For that the Pathway is: Go to Inventory Management>Set Up>Inventory Breakdown>Warehouses. Step 2: The next step is to Enable the “Quarantine Management” parameter in the Item Model Group Quarantine Management Process: The below Purchase Order CM-PO-0000137 has been received in the Quarantine Warehouse as per the setup, hence a Quarantine Order CM-0000142 with 9 quantities has been created. Now if I go to the Quarantine Orders page, I can see that a new Quarantine Order has been created. The below screenshot shows the Transactions that took place after the Product Receipt was posted. After Inspection it was found out that 5 quantities were damaged, 4 quantities were to be returned back to the Vendor which means that all the 9 quantities failed to pass the Quality Inspection. So, what I will do is Scrap the 5 quantities and return back the 4 quantities to the Vendor by creating a Purchase Return Order.  Now I will split the Quarantine Order CM-0000142 into 2 separate Quarantine Orders. For that I will use the Split function which is available at the Top of the screen under the Functions Tab. In the above image you can see that I have split the Quarantine Order CM-0000142 into 2 different Quarantine Orders that is CM-0000143 and CM-0000144 for further processing. Now let’s begin the further processing. To scrap this order, I will use the Scrap functionality. To Scrap this order, click on Function and then select Scrap. Here, you can see that the Quarantine Order CM-000143 has been ended as it has been scrapped. 2.  Return the Items back to vendor: Now in order to return the Items back to vendor I will first the Invoice the existing Purchase Order which is CM-PO-0000137. Then I will receive the Items from the Quarantine warehouse to the W3 warehouse. Below you can see that I have invoiced the purchase order CM-PO-0000137. Now let’s receive the items from the Quarantine Warehouse to the Central Warehouse, for that I will use the Arrival Journal. As you can see that a New Arrival Journal has been created. Validate and Post the Journal. Vendor Return Process: After posting the Journal create a New Purchase Order with the type as Return Order.  For that go to Procurement and Sourcing>Purchase Orders>All Purchase Orders. Then select the Vendor to whom the Items will be returned and select the Purchase Type as Return Order. Enter the Site and Warehouse from which the Items will be returned back to the Vendor. Then enter the RMA number provided by the Vendor and then Click OK. Click on the Purchase Order line, select Credit Note, choose the specific invoice, input the quantity as a negative value, and then click OK. In my case the Invoice Number was 311711, so I will select that and then click OK. Then proceed with the normal purchase order processing which will be Product Receipt and Invoicing. After Invoicing the Return Order aa credit note will be  created which will be  deducted from the Vendor Balance. The below screenshot represents the On hand List before and after posting the Return Order Invoice. In the above screenshot you can see that the On hand Quantity changed from 26 to 22 since 4 quantities have been returned back to vendor. That’s it for this blog. Hope this helps you! Thank You!