Charges

AX 2012: Manual Charges

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Once you have setup Charges Codes, you can add manual charges to Sales Order (SO) or Purchase Order (PO). The question is why do we need to add charges manually to orders if we have the auto charges functionality? Typically we add manual charges to an order if it is not a regular one, which needs some eccentric charges to be addressed. An example could be expedited orders which need to be shipped before standard delivery times. In this case we may need to charge additional amount for freight. This is where Manual Charges come to play their role.

Manual Charges for Sales Order:

Manual charges can be added to either the SO header, individual line items or both the header and the line items. To setup the manual charges to:

1. SO header, navigate to Sell tab → Charges to open Charges Transactions Form.
2. SO lines, navigate to Financials → Maintain Charges to open Charges Transactions Form.

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The fields of Charges Transactions form are described below:

Field Description
Charges codes Select Charge code. For more details read the full post Charges Codes
Transaction text Text defined in the description of the charge code
Category Describes how the charges are calculated:

  1. Fixed charges
  2. Charge for each unit
  3. Percentage of the line amount
  4. Intercompany (used for intercompany trade)
Charges value Enter the amount for this charge. It can anyone of the following depending on the category selected:

  1. Fixed amount
  2. Percentage of the order or line total
  3. Fixed amount for each unit
Currency Defaulted from the currency of the selected charge code
Keep Indicates whether the charges transactions must be retained after partial invoicing or not

 

Manual Charges for Purchase Order:

Similarly, we can add charges manually to PO header or PO lines or both depending on the scenario. To setup the manual charges to:

1. PO header, navigate to Purchase tab → Manage Charges to open Charges Transactions Form.
2. PO lines, navigate to Financials → Maintain Charges to open Charges Transactions Form.

You can see the description of Charges Transactions Form above. In Purchase Order, we can also allocate header charges to lines. We determine how this allocations should be carried out by navigating to Purchase tab → Charges → Allocate charges.

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The fields of Allocate Charges form are described below:

Field Description
Charges allocation If the header charge is fixed in nature then it can be divided using the following options:

  1. Net Amount: Allocated according to line’s net amount
  2. Quantity: Allocated according to line’s quantity of units
  3. Per line: Allocated equally among all the selected lines
Allocate charges to lines Choose lines for allocation:

  1. All lines: All lines selected
  2. Positive lines: Positive quantity lines selected
  3. Negative lines: Negative quantity lines selected
Allocate all Select if you want to include all kinds of charges in the allocation process regardless of the Debit type specified in the Charges code setup. By default, charges with Debit type of Item are included in the allocation process
Received Select to only allocate charges to received order lines
Stocked Select to only allocate charges to inventoried order lines
Show selection and clear specific lines Select to exclude specific lines from this allocation. This check box is not available if no charges are set up

Thanks for reading. Happy Daxing! 🙂

AX 2012: Charges Codes

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Before you plan to add manual or automatic charges when you create a sales or purchase order, you must setup Charges Codes. They are used to define the kind of charge and how the charge is going to be debited or credited. You can setup charges by navigating to Setup → Charges → Charges codes in the following 3 modules:

1. Accounts Receivable
2. Accounts Payable
3. Procurement and Sourcing

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Fields on the Charges codes form are described below:

1. Charges code: Unique code for the charge
2. Description: Brief description about the charge
3. Item sales tax group: An item sales tax group that can be used for calculating taxes on the charge
4. Maximum amount: Maximum amount allowed for the charge

Posting FastTab

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This is where the actual game happens. In this posting fastTab we define how to automatically debit and credit the charge. Both debit and credit sections have the following fields:

1. Type – Defines the entity which will be billed for the charge. Following are the available options:

  • Item – Charge is added to the item cost
  • Ledger Account – Charge is billed internally to the ledger account
  • Customer/Vendor – Charge is billed to the customer/vendor

2. Posting – Free text field to give the description which will be used while posting the charge to journals

3. Account – Defines the ledger account which must be debited/credited when Type is set to Ledger Account

 

So far we have understood what is the purpose of different parameters used to configure charges codes. Let us now create charges codes for sales and purchases. In both cases the parameters discussed will be set differently to cater to different needs of sales and purchases.

Charges Codes for Sales

For sales, you can configure charges in 2 different ways:

1. Customer

Charge is billed to the customer and is added to the sales order totals. Follow the steps below to achieve this functionality:

1. Open Accounts receivable > Setup > Charges > Charges code.
2. Click New to add a new code.
3. In the Charges code field, type a unique identifier for this charge.
4. In the Description field, type a short description of the charge.
5. Click the Item sales tax group arrow and select the sales tax group.
6. Click the Posting tab.
7. Setup the debit/credit fields as follows:

Debit Type Customer/Vender
Posting N/A
Account N/A
Credit Type Ledger Account
Posting Specify
Account Specify

 

2. Ledger Account (Internal)

Charge is billed to an internal ledger account and does not show up on sales transactions. Follow the steps below to achieve this functionality:

1. Open Accounts receivable > Setup > Charges > Charges code.
2. Click New to add a new code.
3. In the Charges code field, type a unique identifier for this charge.
4. In the Description field, type a short description of the charge.
5. Click the Item sales tax group arrow and select the sales tax group.
6. Click the Posting tab.
7. Setup the debit/credit fields as follows:

Debit Type Ledger Account
Posting Specify
Account Specify
Credit Type Ledger Account
Posting Specify
Account Specify

 

 Charges Codes for Purchases

For purchases you can configure charges in 4 different ways. Repeat the following basic steps for all of the 4 different configurations then we’ll see how to setup the Posting fastTab:

1. Open Accounts payable > Setup > Charges > Charges code.
2. Click New to add a new code.
3. In the Charges code field, type a unique identifier for this charge.
4. In the Description field, type a short description of the charge.
5. Click the Item sales tax group arrow and select the sales tax group.
6. Click the Posting tab.

Here are the 4 different configurations for the posting fastTab

1. Paying to Creditor – Billing to Item

Setup the debit/credit fields as follows:

Debit Type Item
Posting N/A
Account N/A
Credit Type Customer/Vendor
Posting N/A
Account N/A

 

2. Paying Internally – Billing to Item

Setup the debit/credit fields as follows:

Debit Type Item
Posting N/A
Account N/A
Credit Type Ledger Account
Posting Specify
Account Specify

 

3. Paying to Creditor – Billing Internally

Debit Type Ledger Account
Posting Specify
Account Specify
Credit Type Customer/Vendor
Posting N/A
Account N/A

 

4. Paying Internally – Billing Internally

Debit Type Ledger Account
Posting Specify
Account Specify
Credit Type Ledger Account
Posting Specify
Account Specify

 

That’s all about the configuration of charges codes. Hope you would like. Thanks for reading 🙂

 

 

 

AX 2012: Price charges

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A price charge is an amount that is added to the unit price of the item. This charge is usually used to cover Overhead costs incurred by the item unlike Direct Material or Direct Labor costs which are covered by the unit price of the item. Examples of the overhead costs could be setup, packaging, bundling and freight costs. Before we proceed further, please note that the following 3 fields play their role when it comes to apply charges to an item:

1. Price charges
2. Price quantity
3. Incl. in unit price

 

For setting up selling price charges, please go to:

Product information management → Common → Released products → Edit a Released Product → Sell FastTab1

For setting up purchase price charges, please go to:

Product information management → Common → Released products → Edit a Released Product → Purchase FastTab1

Charges can be setup in two ways:

1. Fixed Charge

Fixed charge is treated as independent of the quantity of the item. Whether line item quantity is 1, 2 or 3 a fixed charge is added to the unit price of the item and is reflected in the net amount field. An example is illustrated below:

Price: 11.00
Price Charges: 13.00
Incl. in unit price: Unchecked

Therefore the price on the order line is calculated as:

Unit Price = Price + Price Charges = 11.00 + 13.00 = 24.00

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2. Variable Charge

Variable charge depends on the quantity of the item sold/purchased. Checking “Incl. in unit price” defines the charge to be treated as variable. In this case the Price Charges are first divided by the Price Quantity and then added to the unit price of the item in the order line. An example is illustrated below:

Price: 11.00
Price Quanity: 2.00
Price Charges: 13.00
Incl. in unit price: Checked

Therefore the price on the order line is calculated as:

Unit Price = Price + (Price Charges/Price Quantity) = 11 + 13/2 = 17.50

In this way we can equally distribute the price charges among each of the item units ordered.

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 NOTE: Any Trade Agreements that are setup for a vendor override the price/discount specifications on an item.


1Navigation given is for Microsoft Dynamics AX 2012 R3. It could be different for a different version of AX

AX 2012: Managing Charges

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*Charges (in former releases called “Miscellaneous charges”) in sales and purchase orders are available to cover expenses, which are not included in the price shown in the order for example costs for freight, transport, postage, insurance, recycling and packaging.

You can set up charges so that they are included in sales and purchase transactions automatically or you can add them manually to the orders to accommodate one-time charges. Charges are available at the header and line levels. Please note that charges are only applicable to Sales Orders (SO) and Purchase Orders (PO).

There are three ways to apply charges in AX 2012:

1. Price charges
Choose when you want to setup charges for a specific item and when charges should be billed each time the item is traded. For details read this post:

https://dynamicsaxinsight.wordpress.com/2014/03/24/ax-2012-price-charges/

2. Manual charges
Choose when you want to add charges manually to the header or line of a sales or purchase order. This type of charge does not use a charge code. For example, one-time fee charged for special packaging.

https://dynamicsaxinsight.wordpress.com/2014/05/10/ax-2012-manual-charges/

3. Automatic charges
Choose when you want to apply charges automatically whenever user creates a sales order or purchase order.