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[Rod Helmick]

I have a situation where I want to add a service cost to my item that is ordered on a PO.  For example, I have item XYX and I purchase it from Vendor A.  Vendor A sends the product over to another Vendor B who performs a service (in this case, engraving) on the item.  Once that service is completed, Vendor B sends the product to us so we can then receive that PO.  I’m not sure the best way to depict this on a setup situation within D365.  I want the cost of the service to be included in the overall cost of the product.  So if my product cost from Vendor A is $10 and Vendor B is an additional $2 for engraving, the overall cost of the item when received into Inventory should reflect $12.   I also want to be able to invoice and pay each vendor appropriately, $10 going to Vendor A, and $2 going to Vendor B.    Anyone come across this in their current environment and/or have any suggestions on how we can resolve this?

Thanks,

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Rod Helmick
RTHGlobal, Inc
Cave Creek
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[Rod Helmick]

Ok..Looks like Charge Codes are the way to go after further research.   However, what happens if I want to pay a different vendor from my product ordering vendor?  Usually in Landed Cost factors, you end up paying a freight vendor that is different from your product vendor.   Any ideas on how this can be accomplished?

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Rod Helmick
RTHGlobal, Inc
Cave Creek
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[Ian Gorman]

Hi Rod, again!

You are absolutely right. 

Looking to account for freight costs that vary? Charge codes! 

Looking to account for tariff costs? Cost of goods purchased nodes on the costing sheet.

Now, if you’re looking to pay a 3rd party freight vendor when buying from vendor A on the PO, then you’ll want to set the credit type on the charge code to point to a ledger account. You may need to do some testing from here with the freight ledger account and payments to your freight vendor via invoice journals.

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Ian Gorman, PMP, MCSE
Solution Architect
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[Kevin McLean]

Another option you might consider is an outside processing item on a production order.  The setup is more complex than a charge code, and probably isn’t worth it if you’re not already using production.  The advantage it provides is two separate purchase orders; one for the raw part and one for the engraving service.  Here’s what you would need to do this:

• Setup
  • Item number for raw part
  • Item number for engraved part
  • Item number for engraving service
  • Bill of material that has the raw part and the engraving service as components of the engraved part.  
• Process
  • Create a production order for the engraved part.  This creates a purchase order for the engraving service automatically.
  • Create and receive a purchase order for the raw part.  The raw part should still be shipped to vendor B.  The receipt will allow you to invoice the purchase order to vendor A.
  • Vendor B engraves the raw part and ships it to you.
  • Receive the purchase order for the engraving service.  This allows the purchase order for vendor B to be invoiced.
  • Report the production order as finished.  This puts the engraved part into inventory.

The process is more complicated than adding a charge code, but provides better information on where everything is, and when it will be available.  It also gives you two separate purchase orders for your matching and payment process.

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Kevin McLean
Strategic Solutions NW
Beaverton OR
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