Chapter 2: Over/Under Delivery and Charges: Objectives

Chapter 2: Over/Under Delivery and Charges
CHAPTER 2: OVER/UNDER DELIVERY AND

CHARGES
Objectives
The objectives are:
• Set up the Accounts receivable and Procurement and sourcing

modules to accept over and under delivery.
• Set up acceptable over and under delivery percentages on a product.
• Manage over and under deliveries in sales and purchase order
processing.
• Set up a charges group for customers, vendors, and items.
• Add price charges to an item that is dependent or independent of the
item quantity.
• Set up a charges group for customers, vendors, and items.
• Set up charges codes.
• Manually add charges to a sales and purchase order.
• Manually add charges to the purchase order lines.
• Set up automatic charges for a specific customer, item, or item
group.
• Modify or delete automatic charges.
Introduction
Variability in a company's performance and supplier performance can cause
significant backorder administration to manage even small differences in
quantities ordered and received. The over delivery and under delivery
functionality in Microsoft Dynamics® AX 2012 can be used where the received
or delivered quantity of an item fluctuates occasionally and it is not significantly
sufficient to be managed as a backorder.
The Over/Under Delivery lesson introduces an effective way to manage small

differences between ordered and received quantities when an order with only a
partial quantity must be closed without administering backorders.
Charges are additional costs added to sales and purchase orders such as freight,
transport, postage, insurance, packaging, and fees. The charges capabilities in
Microsoft Dynamics AX 2012 lets companies eliminate data entry by assigning
charges to items, customers, and vendors when charges frequently occur, or are
required.
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Distribution and Trade in Microsoft Dynamics® AX 2012
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.
The Charges lesson discusses how to manage charges in sales and purchase
orders.
Over/Under Delivery
To avoid unnecessary backorder handling every time that an order is slightly
over- or under-delivered, you can configure Microsoft Dynamics AX 2012 so
that such deliveries are accepted, if they are within predefined ranges from the
originally ordered quantity. You can then close and fully invoice these orders.
This functionality will most likely be used for particular kinds of products that
are delivered by weight, in bulk, or in linear feet. These kinds of products are
also low in value and carrying costs, frequently ordered, and easily sourced.
Examples of these items are screws, brackets, and pins.
Example: Over/Under Delivery

Contoso Entertainment Systems has run low on its stock of 6001, Box –
corrugated, 16X18X40. The purchasing agent puts in an order with the vendor
for 1000 pieces. Typically, there is a 1 to 2 percent variance on the number of
lamp projectors received when ordering from this vendor. However, they offer
the best price. Because of the variance, Contoso Entertainment Systems and the
vendor have agreed to set up an over/under delivery variance to allow for a
difference of 10 percent because it is not cost-effective for either company to
create new orders or credit memos.
When the order arrives, there are 1018 pieces in the order. The order is accepted
because it is in the range that is specified in the over/under delivery setup.
Six months later, the stock is down to 500 so another order is made for 500 from
the same vendor. This time, the order contains 492 pieces. Again, the order is
accepted because it is in the range of over/under delivery setup.
Over/Under Delivery Setup

Set up an item to accept over/under delivery by using a two-step process:
1. Set up Accounts receivable and Procurement and sourcing

parameters to accept over/under delivery.
2. Define the acceptable tolerance percentage for over/under delivery
on the item.
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Parameters
To perform the first step in the over/under delivery setup, you must set up the
appropriate parameter for both the Accounts receivable and Accounts payable
modules. These settings are global and affect all sales orders and purchase orders.
• To set up the parameters for sales orders, open Accounts receivable

> Setup > Accounts receivable parameters.
• To set up the parameters for purchase orders, open Procurement
and sourcing> Setup > Procurement and sourcing parameters.
FIGURE 2.1 PROCUREMENT AND SOURCING PARAMETERS FORM -

ACCEPT OVER/UNDER DELIVERY
Accept Over/Under Delivery

For both setup areas, on the Updates tab, under the General field group, set the
global parameter to allow for over delivery, under delivery, or both.
• If you select Accept overdelivery, you can receive or sell more

products through the packing slip / product receipt or invoice update
than the quantity ordered in the purchase or sales line.
• If you select Accept underdelivery, you can close out the back-
order if you receive or sell fewer products through the packing slip /
product receipt or invoice update than the quantity ordered in the
purchase line or sales line.
NOTE: When there are multiple deliveries for an order, you can receive or send
less than the full order quantity.
• If you do not select Accept overdelivery or Accept underdelivery,

you cannot close the purchase or sales order from the packing slip /
product receipt.
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Close a Partly Delivered Order

If you do not select Accept overdelivery or Accept underdelivery, you have
two ways to close a partly delivered sales or purchase order and relieve the
demand for backorder:
• If part of the quantity is received or invoiced, you can cancel the

remaining quantity by going to Update line > Deliver remainder on
the order line. Click Cancel quantity on the Delivery remainder
form.
• You can update the quantity on the sales order line.
Procedure: Set Up Tolerance on a Product

You must define the acceptable tolerance for over and under delivery for the
product. Tolerance is expressed as a percent so that it can be scalable with every
order.
To set up the acceptable tolerance for a specific product, follow these steps:
1. Open Product information > Common > Released Products.

2. Select the product, and then click Edit in the Maintain group of the
action pane.
3. In the Purchase FastTab, specify the acceptable tolerance in the
Overdelivery and Underdelivery fields for purchase orders.
4. In the Sell FastTab, specify the acceptable tolerance in the
Overdelivery and Underdelivery fields for sales orders.
5. In the Manage inventory FastTab, specify the acceptable tolerance
in the Overdelivery and Underdelivery fields for transfer orders.
6. Close the Released product form.
NOTE: When you add an item to a sales or purchase order, the specified
percentages are defaulted to the order line. To make exceptions, you can
override these values. When a new item is created, the default setting for the
acceptable tolerance is zero percent.
Over/Under Delivery Transactions

The over and under delivery functionality is generally the same for sales orders
as it is for purchase orders. However, both situations are demonstrated: one
where the over and under delivery is set up on the order and one where the over
and under delivery is set up on the item.
In the following demonstrations, parameters in the Procurement and sourcing

and the Accounts receivable modules are set up to accept over and under
deliveries.
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Demonstration: Over/Under Delivery with a Purchase

Order
Contoso Entertainment Systems needs 7000 pieces of item number 5012, 4-40
zinc nuts, in the production. To make sure that the items can go into production
immediately, the purchasing agent orders a quantity of 9000 in case any of the
items are defective.
1. Open Procurement and sourcing > Common > Purchase orders >
All purchase orders and then create a new purchase order for 9000
4-40 zinc nuts from vendor 4101, Fabrikam Supplier. Confirm the
order.
The vendor can deliver 8000 pieces. However, because this meets
the current needs, you tell the vendor not to deliver the backorder for
the 1000 pieces. Now you want to receive the 8000 pieces and close
the order so no backorders remain.
2. When the order line is highlighted in the purchase order, enter the
8000 pieces in the Receive now field.
3. Click Product receipt in the Receive tab of the Action Pane.
4. In the Posting product receipt form, make sure that Receive now
quantity is selected in the Quantity field under the Parameters field
group.
5. Type a product receipt number in the Product receipt field.
6. On the Lines tab, select the Close for receipt check box to close the
order and then click OK.
NOTE: If you do not use the packing slip update step, you can close the order in
the invoice update step.
7. Microsoft Dynamics AX 2012 will reject the posting and give the
error Under delivery of line is 11.11 percent, but the allowed
underdelivery is only 0.00 percent. Update has been canceled. Close
the Infolog.
NOTE: The calculation of the under delivery is rounded up to two decimal

points.
Notice that the error provides you the calculated percent of the quantity that you
are trying to post. To manually override the default item tolerance settings and
close this order, you must return to the purchase order.
8. Highlight the purchase order line and then click the Delivery tab in
the Line details FastTab. Specify the value from the error 12.00 in
the Underdelivery field. Remember that the number in this field
represents a percent, not pieces. The Receive now quantity must still
be 8000 pieces.
9. Click Confirm on the Purchase tab of the Action Pane.
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10. Click Product receipt in the Receive tab of the Action Pane.
11. Type a product receipt number in the Product receipt field.
12. On the Lines tab, select the Close for receipt check box to close the
order and then click OK.
This time, the order is posted and the order status changes to Received and there
is no backorder.
To view the transactions on the purchase order, follow these steps:
1. Click Product receipt in the Journal group on the Receive tab of

the Action Pane.
2. Click the Lines tab and notice that 9,000 are ordered and 8,000 have
are received. Also, there is no remaining quantity to be delivered
because the order is closed.
BEST PRACTICE: If you must frequently adjust the accepted under and over
delivery percent for an item manually on the order, specify a tolerance on the
item to reduce the number of steps required every time that you receive the item.
Demonstration: Over/Under Delivery with a Sales Order

Customer 2021, Graphic Design Training Center, orders 90 pieces of item
number 1301, with configuration 01. A long-standing relationship with this
customer is established and this is a typical order for them.
During a production of 90 pieces, you sometimes have scrap and nonconforming

parts. To accommodate this, you always do a production run of 100 pieces. The
customer recognizes this and accepts that you can ship a bit less or more and has
decided on a 5 percent tolerance, over or under, on an order of 90 pieces.
1. Open Product information management > Common > Released

products and locate item number 1301.
2. Click Edit in the Maintain group on the Action Pane.
3. On the Sell FastTab, set up an over delivery tolerance of five percent
and an under delivery tolerance of five percent for sales orders so
that, order lines can be closed when the quantity falls within five
percent of what is ordered.
4. Close the Released product details form.
5. Open Sales and marketing > Common > Sales orders > All sales
orders.
6. Click Sales order in the New group to create a new sales order for
customer 2021, Graphic Design Training Center.
7. Add an order line for 90 pieces of the item number 1301,
configuration 01 (black) for customer 2021. Click No to override the
suggested order quantity.
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8. Click Sales order confirmation in the Generate group on the Sell

FastTab of the Action Pane.
9. Click OK to confirm the sales order.
After a production run, you can ship all 100 pieces of item number 1301 –black,
to the customer Graphic Design Center. Ship these pieces and close the order.
1. Highlight the sales order line and then type "100" in the Deliver now
field.
2. Click Packing slip in the Generate group of the Pick and Pack tab
of the Action Pane to packing slip update the order.
3. In the Packing slip posting form, make sure Deliver now is selected
in the Quantity field under the Parameters field group.
4. On the Lines tab, select the Close check box to close the order and
then click OK.
The posting is rejected and gives the error Overdelivery of line is 11.11 percent,
but the allowed overdelivery is only 5.00 percent. Update has been canceled.
Notice that the error gives the calculated percent of the quantity you are trying to
post.
Knowing that the customer will not accept this order, you will reduce the number
of product to send to the customer. Now try to packing slip update the order to
ship the customer 92 pieces.
1. Highlight the sales order line and type "92" in the Deliver now field.
2. Click Packing slip in the Generate group of the Pick and Pack tab
of the Action Pane to packing slip update the order.
3. Select Deliver now in the Quantity field.
4. On the Lines tab, select the Close check box to close the order and
then click OK.
NOTE: When you overdeliver an item, you do not have to select the Close check
box. The system will consider the order fulfilled.
The order is posted, the 92 pieces are shipped to the customer, and the order
status changes to Delivered.
To view the transactions on the sales order, follow these steps:
1. Click Packing slip in the Journal group on the Pick and pack tab.
2. Click the Lines tab and notice that 90 are ordered and 92 are
delivered.
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Lab 2.1 - Over/Under Delivery with Purchase Orders

Contoso Entertainment Systems - Company CEU
Scenario
You are the Purchasing Agent for Contoso Entertainment Systems and have
received a requisition for 1000 of item number 5003, binding posts. Typically,
when you purchase this item, you receive slightly more or less than the ordered
amount. Because this vendor, Trey Parts, offers the best price, you, your
manager, and the Accounting Manager agree to set up an over and under delivery
variance of 5 percent for this item for both sales and purchases.
Challenge Yourself!
1. Verify that Microsoft Dynamics AX 2012 is set up to accept over

and under deliveries in the Procurement and sourcing modules.
2. Set up item number 5003 with the 5 percent variance for both sales
and purchases.
3. Create the purchase order for 1000 pieces of item 5003, with vendor
4102.
4. When the order is received, it contains 1007 of item 5003. Because
this amount is within the 5 percent variance, post the Packing slip.
The Packing slip number is 3307.
Need a Little Help?
• The set up for an item to accept over and under delivery is located in
the Released product form.
• Before you receipt list the update the purchase order, specify the
quantity 1007 for the order line in the Receive now field on the
Quantity tab.
• On the Product receipt form, make sure that you only update the
quantity that you receive now, and then close the order.
Step by Step
To verify that the Accounts receivable and Accounts payable modules are set
up to accept over and under delivery, follow these steps:
1. Click Accounts receivable > Setup > Accounts receivable

parameters.
2. Click the Updates tab and verify that the Accept underdelivery and
Accept overdelivery check boxes are selected.
3. Close the Accounts receivable parameters form.
4. Click Procurement and sourcing > Setup > Procurement and
sourcing parameters.
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5. Click the Updates tab and verify that the Accept underdelivery and
Accept overdelivery check boxes are selected.
6. Close the Procurement and sourcing parameters form.
To set up item 5003 with the 5 percent variance for both sales and purchases,
follow these steps:
1. Open Product information management > Common > Released

products.
2. Select the 5003 item and then click Edit in the Action Pane.
3. In the Purchase FastTab type "5" in the Overdelivery and
Underdelivery fields.
4. In the Sell FastTab type "5" in the Overdelivery and Underdelivery
fields.
5. Close the Released product details form.
To create the purchase order for 1000 pieces, follow these steps:
All purchase orders.
2. Click Purchase order in the New group of the Action Pane.
3. Select Vendor account 4102.
4. Click Yes to transfer vendor information and then click OK.
5. Select item 5003 in the Item number field.
6. In the Quantity field, type "1000".
7. Click Confirm in the Purchase tab.
To product receipt update the order with the quantity 1007, follow these steps.
1. Type "1007" in the Receive now field.

2. In the Receive tab of the Action Pane, click Product receipt in the
Generate group.
3. In the Posting product receipt form, select Receive now quantity in
the Quantity field, and in the Product receipt field, type "3307".
4. Click OK.
The Packing slip posted without an error because the quantity
received is within the over delivery of the 5 percent variance.
5. Close the Purchase order form.
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Lab 2.2 - Use Under Delivery with Sales

Scenario
You are a new Order Processor for Contoso Entertainment Systems. You have
received an order for 100 pieces of item number 1163 from customer Forest
Wholesales. You create the sales order for Forest Wholesales, but can only
deliver 92 from stock.
When the packing slip is posted for the 92 items, you discover that this item is set
up with a variance of 5 percent. You contact the warehouse and are informed that
an order for this item was recently canceled and there are six more available to
ship.
Challenge Yourself!
1. Create the sales order for 100 pieces of item 1163, configuration 01,
and prepare to ship the order for 92 items.
2. Try to post the packing slip for 92 of item 1163.
3. Add another six pieces of item 1163 and post the packing slip again.
Need a Little Help?
• Create the sales order from the Sales and marketing module.
• On the order line, set the quantity to 92 in the Deliver now field.
• Packing slip update the Deliver now quantity.
• Add the additional six items in the Deliver now field of the sales
order and packing slip update again. Make sure that you only update
the quantity that you deliver now (98) and remember to close the
order.
Step by Step
To create and post the sales order, follow these steps:
orders.
2. Click Sales order in the New group of the Action Pane.
3. Select Customer account 1101.
4. Click OK.
5. Select item 1163 in the Item number field.
6. Select 01 in the Configuration field.
7. In the Quantity field, type "100" and then click Sales order
confirmation in the Sell tab. Click OK.
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8. Type "92" in the Deliver now field.

9. In the Pick and pack tab of the Action Pane, click Packing slip in
the Generate group.
10. In the Packing slip posting form, select Deliver now in the
Quantity field.
11. Click the Lines tab and select the Close check box.
12. Click OK. A message appears about printing, click OK.
The packing slip does not post because the quantity to deliver is not
within the 5 percent variance, it is 8 percent.
13. In the Infolog, click Close.
To add the additional six items from the canceled order to the sales order and try
to post the packing slip again, follow these steps:
1. On the sales order line type "98" in the Deliver now field.
2. In the Pick and pack tab of the Action Pane, click Packing slip in
the Generate group.
3. In the Packing slip posting form, select Deliver now quantity in the
Quantity field.
4. Click the Lines tab and select the Close check box.
5. Click OK. A message appears about printing, click OK.
6. Close the Sales order form.
The packing slip posted without error because the quantity delivered is within the
five percent variance.
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Charges
Charges are costs and fees that you can add to the cost of items, sales, and
purchases according to the setup. The following are examples of charges:
• Freight
• Transport
• Postage
• Insurance
• Recycling
• Packaging
Methods of Adding Charges

There are three ways of adding charges in Microsoft Dynamics AX 2012:
• Price charges: This is a fixed charge set up for a specific item, for
example, a startup fee that is charged every time that the item is
traded. The Price charges feature is set up on the Released products
form.
• Manual setup of charges: You can add this kind of charge manually
to the order header or order line of a sales or purchase order. An
example is a one-time fee that is charged to the whole order or a
specific line on an order. You can also add this kind of charge to
purchase order invoice header or lines. This type of charge does not
use a charge code.
This charge is set up in the Accounts receivable, Accounts payable,
or Procurement and sourcing modules under Setup > Charges.
• Automatic setup of charges: This kind of charge is set to

automatically add charges when you create a purchase or sales order.
This charge is set up in the Accounts receivable, Accounts payable,
or Procurement and sourcing modules under Setup > Charges >
Automatic charges.
The charge can be added to the following:
• A specific item.
• An item charges group.
• A specific customer or vendor.
• A customer or vendor charges group.
• All items, customers, or vendors .
• A combination of all the information listed.
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Price Charges
A price charge is an amount that is added to the price of an item. A charge could
be production and setup costs, fees, or freight.
You can set up price charges by using one of the following methods:
• Independent of the quantity of the items. The charge is a fixed

amount that is added to the order price independently of the item
quantity. Whether ten or 20 items are sold, the charges on the order
line are the same.
• Dependent on the quantity of items. The charge is calculated based
on the item quantity and added to the order line.
Price charges are set up on the Purchase and Sell FastTabs of the Released
product details form, and on price agreements.
The settings for price charges are specified for purchase prices, cost prices, and
sales prices under the relevant Base purchase price, Base cost price, and Base
sales price field groups. When you set up price charges, use the fields shown in
the following table.
Field Description
Price charges Price charges is a fixed amount added to the price of the
item, for example, attaching a charge of 80.00 U.S. dollars
(USD) to a sales price of 100.00 (USD). When you create
an order for the item, the Unit price field for the order
line displays 100.00 USD, and 80.00 USD is added to the
Net amount field.
Price quantity Price quantity is the quantity that you can use when
allocating the specified Price charges on a price for each
unit. For example, if you want to add 10 USD to the order
every time 20 of these items are traded, you must specify
20 in the Price quantity field.
Incl. in unit Incl. in unit price divides charges by the number that is
price specified in the Price quantity field and adds them to the
price specified in the Price charges field. You must select
the Incl. in unit price check box when the charge
depends on the quantity of items traded.
NOTE: Any trade agreements that are set up for a vendor override the
price/discount specifications on an item.
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Example: Add Charges that are Independent of the Item

Quantity
An item costs 10.00 USD and when you purchase it, an additional 2.00 USD is
added to the total price to cover the cost of transport. Instead of always adding
the 2.00 USD charge on the purchase order line, the price charge is added to the
item to make sure that the charge is always included. This charge is specified in
the Items form for that particular item on the Price/discount tab. The setup of
the parameters in the Base purchase price field group is as follows:
• Price: 10.00
• Price unit: 1.00
• Price charges: 2.00
When you create a purchase order for five of these items, the Net amount on the
purchase order line shows 52.00 USD because the 2.00 USD charges are added
to the price for all five items.
View the total of the charges in the Line Details FastTab by clicking Price and
discount tab on the purchase order line and viewing the Charges on purchase
field.
Example: Add Charges that Depend on the Item Quantity

An item costs 10.00 USD, and when you purchase the item, a 2.00 USD charge is
added for each set of ten. This also means that if only one of these items is
purchased, one tenth of the amount indicated in the Price charges field is added
to the line item. This is specified in the Items form for that particular item on the
Price/discount tab. The setup of the parameters in the Base purchase price field
group is as follows:
• Price: 10.00
• Price unit: 1.00
• Price charge: 2.00
• Price quantity: 10.00
• Incl. in unit price: Selected
For example, when you create a purchase order for one item, the Net amount
field on the purchase order line shows 10.20 USD because one tenth (0.20 USD)
of the Price charges is added to the price for one item.
If you create a purchase order for ten items, the Net amount field shows 102.00
USD because the whole Price charges value, 2.00 USD, is added to the price
because ten items are purchased.
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NOTE: When a fixed charge is specified on the Released Products form, the
posting of the charges added is considered part of the price and included in the
calculations of inventory value and margin.
Charges Codes
To add manual and automatic charges when you create a sales or purchase order,
you must set up charges codes. The charges codes are used to specify the kind of
charge and how the charge is debited and credited.
Set up charges codes in both the Accounts receivable, Accounts payable, and
Procurement and source modules by clicking Setup > Charges > Charge
codes.
FIGURE 2.2 CHARGES CODE FORM – ACCOUNTS PAYABLE
Overview
On the Overview section, specify the fields and use the buttons shown in the
following table.
Field/Button Description
Charge code A unique identifier for the charge.
Description A short description of the charge.
Item sales tax An item sales tax group that can be used for calculation
group of taxes on the charge.
Maximum Enter the maximum amount that is allowed for this
amount charges code.
NOTE: This field is not available in Accounts
receivable.
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Field/Button Description
Translations Opens the Charges code form where you can enter
button alternative language codes for the selected charges code.
These language codes are then used to print the charges
text in the language assigned to the customer or vendor.
External codes Opens the External codes form, where you can create
button or update external codes related to the selected charges
code. External codes are used with external transactions,
such as Application Integration Framework, EDI, or
intercompany processing.
Posting FastTab
Use the Posting tab to specify how to automatically debit and credit the charge.
FIGURE 2.3 CHARGES CODE FORM – POSTING FASTTAB – ACCOUNTS

PAYABLE
The following fields exist for both Debit and Credit field groups:
• Type: Determines responsibility for the charge. The options are as

follows:
o Item: A unit charge is added to the item cost, for example, a
landed cost.
o Ledger account: The charge is incurred internally.
o Customer/Vendor: The customer or vendor incurs the charge.
• Posting: Identifies a posting description. This field is required if the

Type field is set to Ledger account.
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• Account: Specifies the ledger account that must be debited or

credited, when the Type field is set to Ledger account.
• Compare purchase order and invoice values: This field only
appears for Accounts payable charges. It is only activated when the
Debit or Credit type is Customer/Vendor. This option determines
whether charges transactions with this Charge code will be included
in Accounts payable purchase order invoice matching.
Charges Codes – Sales

You can use two setups for sales in the Posting FastTab of the Charge codes
form to determine responsibility for the charge:
• Customer: The customer pays the charge and the charge is added to
the sales order totals.
• Ledger account (Internal): The charges are incurred internally and
do not appear on sales transactions.
NOTE: You cannot use the Item charge in the Accounts receivable module. If the
Type Item is selected on the Posting tab of the Charges codes form, an Infolog
appears that states that Charges on an item cannot be used.
Procedure: Set Up Charges Codes for Sales

To set up the charges codes for sales, follow these steps:
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. Determine responsibility for the charge by using the information in
the following table.
Debit Debit Debit Credit Credit Credit

Type Posting Account Type Posting Account
Customer Customer/ not not Ledger Specify Specify
Vendor applicable available account
Internal Ledger Specify Specify Ledger Specify Specify
account account
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Charges Codes – Purchases

You can use three setups for purchases in the Posting tab of the Charge codes
form to determine responsibility for the charge:
• Item
• Ledger account (Internal)
• Vendor
NOTE: The Item charge cannot be used in the Accounts payable module as a
Credit Type. If the Credit Type item is selected on the Posting tab of the Charge
codes form, an Infolog appears that states that charges on the item cannot be
used.
Procedure: Set Up Charges Codes for Purchases

To set up the charges codes for purchases, follow these steps:
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.
7. Determine responsibility for the charge by using the information in
this table.
Amounts are Paid Debit Type Credit Type

added to
Item Directly to Item Customer/Vendor
creditor
Internally Item Ledger account
Internal Directly to Ledger account Customer/Vendor
creditor
Internally Ledger account Ledger account
Example:
If there are charges on an invoice from a vendor, the credit type is

Customer/Vendor and the amount is posted to the vendor's summary account. If
the charge has some other cause (for example freight or insurance) that the
company (internally) receives and pays for separately, specify the Ledger
account and Account credit type.
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Lab 2.3 - Create a Charges Code

Scenario
You are the Accounts Payable Coordinator at Contoso Entertainment Systems,

and you must create a new Charges code for transport charges that will be added
to various items and paid to the vendor.
Create a new charge for transportation fees with the following specifications:
• Name of the Charge code: 22

• Description: Transportation Fee
This fee does not require an Item sales tax group.
Challenge Yourself!
Create a new charge for Transportation fees as specified in the scenario.
Need a Little Help?
• The Charges code form is located in Accounts payable > Setup >
Charges > Charges code.
• On the Posting tab, indicate the item debit information and the
vendor credit information.
Step by Step
1. Open Accounts payable > Setup > Charges > Charges code.
2. Click New to add a new line.
3. In the Charges code field, type "22".
4. In the Description field, type "Transportation Fee".
6. In the Type field in the Debit field group, select Item.
7. In the Type field in the Credit field group, select Customer/Vendor.
8. Close the Charges code form.
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Manual Charges
When you create a sales or purchase order, you can add charges to the order
header and/or the order lines. Typically, you can manually add charges to a sales
or purchase order when the charges apply only to the specific order.
For example, a customer calls and requests a large order. Because this is not a
common order for the customer, the order taker adds the charges directly to the
sales order instead of setting up charges for the item.
Purchase Order Invoice

When you create a purchase order invoice, charges can be added or modified on
the invoice header and/or the invoice lines. Typically, you add or modify charges
on a purchase order invoice when the charges on the invoice from the supplier
differ from what is located on the purchase order, or when additional charges are
added to the invoice.
Example
You have created a purchase order for an item. A charge on the order reflects that
shipping costs are expected to be 50.00 USD. Production losses in your company
cause an inventory shortage and you call the vendor to ask them to use expedited
shipping.
When the invoice arrives from the vendor, the shipping costs are 75.00 USD.
You can modify the invoice charge to reflect the correct charge.
Notice that the difference between the 50.00 USD on the purchase order and the
75.00 USD on the invoice are visible in the Invoice matching details form. To
open the Invoice matching details form from the Vendor invoice form click the
Review tab > Matching details in the Action Pane.
Sales Orders
You can manually add charges to the sales order header, and or, the individual
sales order lines. This is helpful when an order contains many types of items that
require different types of charges.
The charges can be added to the following:
• Header: When an overall charge must be added to the order.

• Individual lines: When only certain lines on a multiple line order
have charges.
• Both the header and the individual lines: When charges are added
to the whole order but additional charges are required on individual
lines. For example, when certain items on a multiple line order
require special handling and therefore additional charges.
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You can set up manual charges in the Charges transactions form and access the
charges from the:
• Sales order header by clicking the Sell tab, and then selecting
Charges.
• Sales order lines by highlighting a line and selecting the Financials,
and then selecting Maintain charges.
Charges Transactions Form

The fields in the Charges transactions form are described in the following table.
Field Description
Charge codes Select a Charge code that is set up in the Accounts
receivable, Procurement and sourcing, and Accounts
payable modules from Setup > Charges > Charge codes.
Transaction The Transaction text field is automatically populated with
text the description of the Charge code. This text is shown in
the posted charge transaction and can be edited before
posting.
Category Charges on sales or purchase order lines can be calculated
as fixed charges, a charge for each unit, or a percentage of
the line amount.
The Intercompany category is used to set up charges for
intercompany trade.
Charges value Enter the value for the specified charge. The value can be a
fixed amount, a percentage of the order or line total, or a
fixed amount for each unit, depending on what is selected
in the Category field.
Currency The Currency field is inherited from the selected Charge
code.
Keep Select the Keep check box to indicate that the charges
transactions must be retained after partial invoicing.
Procedure: Manually Add Charges to a Sales Order

To manually add charges to the sales order header and lines, follow these steps:
orders.
2. Click Sales order in the New group to create a new sales order with
several sales order lines.
3. With the sales order selected, click Charges on the Sell tab of the
Action Pane.
4. Select a Charge code in the Charges code field.
5. Click the Category arrow and select a category.
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6. In the Charges value field, enter the value for the specified charge
category.
7. Select the Keep check box and then close the form.
8. Close the Charges transactions form.
9. Select the sales order line, click Financial > Maintain charges.
10. Click the Charges code arrow and select a code.
11. Change the text in the Description field if it is necessary.
12. Specify the Category.
category.
14. Select the Keep check box to keep charges after partial invoicing and
close the Charges transactions form.
15. To view the total charges for the order click Totals in the View
group of the Action Pane . The Total charges field displays the total
charges for the order.
NOTE: Charges on the header and line are included in the price. This means
that they are not specified on any of the posting updates.
Purchase Order
The process for the manual setup of a charge for a purchase order resembles the
setup for a sales order. However, for purchase orders, the header charges can be
allocated to the lines.
Typically, you will allocate charges to the lines when the cost must be allocated
to each line item in a purchase order. When you add charges to the purchase
order header, determine how the charges are to be allocated to the lines by
clicking the Allocate charges in the Charges group of the Purchase tab on the
Action Pane.
FIGURE 2.4 ALLOCATE CHARGES FORM
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Allocate Charges Form

Set up the method by which the charges must be allocated in the Allocate
charges form. The methods that are available in the Allocate charges form are
shown in the following table.
Method Description
Charges If the charge is a fixed amount, you determine the method
allocation for dividing charges:
• Net amount: The amount is allocated according to the
line's net amount.
• Quantity: The amount is allocated according to the
quantity of units on the lines.
• Per line: The amount is equally allocated among all
lines.
Allocate Identify the lines to which the charges are to be allocated:
charges to • All lines: Allocate to all lines
lines
• Positive lines: Allocate to lines with a positive quantity
• Negative lines: Allocate to lines with a negative
quantity
Allocate all If you select the Allocate all check box, the charges
allocation will be made to all charges, regardless of the
Debit Type specified in the Charge code setup.
If it is cleared, only those with a Debit type of Item are
allocated.
Received Select Received to only allocate charges to received order
lines.
Stocked Select Stocked to only allocate charges to inventoried order
lines.
Show selection Select to exclude specific lines from this allocation.
and clear NOTE: This check box is not available if no charges are set
specific lines up.
NOTE: If a header charge is added to the order and the Debit Type is Item in the
selected Charges code, the charge must be allocated to the lines before the order
confirmation.
Also, if the charge category is anything other than fixed amount, you will be
forced to allocate this to the lines.
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Selecting the Show selection and clear specific lines check box, displays all the
purchase order lines letting you select which lines to allocate the charge as show
in the Allocate Charges Form with Lines figure.
FIGURE 2.5 ALLOCATE CHARGES FORM WITH LINES
Procedure: Allocate Charges to Purchase Order Lines

To allocate charges to purchase order lines, follow these steps:
All purchase orders.
2. With the purchase order selected, click Manage charges on the
Purchase tab of the Action Pane.
3. Select a Charge code in the charges code field.
4. Click the Category arrow and select a category.
category.
6. Select the Keep check box and then close the form.
8. Click Allocate charges on the Purchase tab of the Action Pane
9. Select the allocation method from the Charges allocation drop-
down menu.
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NOTE: This step applies only if the charge is a fixed amount.
10. In the Allocate charges to lines field, specify whether to allocate

charges to All lines, Positive lines, or Negative lines.
11. Select the Allocate all check box to allocate charges to purchase
order lines, even if the charge code has the debit type other than
Item.
12. Select the Received check box to allocate charges only to received
order lines.
13. Select the Stocked check box to allocate charges only to inventories
order lines.
14. Select the Show selection and clear specific lines check box to
select which order lines should be excluded from the allocation.
15. Click Allocate.
NOTE: Charges are allocated to all lines based on the criteria that you selected
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Lab 2.4 - Manual Setup of Charges

Scenario
Part 1
The Grebe Wholesales customer, 1204 orders 250 pieces of item 1508, Lamps
for video projector model 02 and 20 1701, Standard DVD player - black.
Because of the large order, a 150.00 USD freight charge is added to the complete
order. In addition, the bulbs require a special freight fee of 25.00 USD.
As the Order Processor, you create the sales order, adding the overall 150 USD
charge and the special freight fee of 25 USD to the purchase order line.
Part 2
You are now the Purchasing Agent and are informed that the stock is now low on
the lamps, 1508. You call your regular supplier but they are out-of-stock. You
call the recommended supplier, 1203, Proseware Electronics, and they have lots
of stock.
Create a purchase order for 50 pieces of 1508, and because there is a special on
Item 1507, you order 25 pieces of those also.
You are informed of the 200.00 USD freight charge. Allocate this amount by the
quantity on the lines.
Challenge Yourself!
Part 1
1. Create the sales order as specified in Part 1 of the scenario, adding
the overall 150 USD charge and the special freight fee of 25 USD to
the purchase order line.
2. Verify the amounts in the Totals form.
Part 2
1. Create a purchase order for 50 pieces of item 1508, and for 20 pieces
of item 1507.
2. Allocate the 200 USD freight charge by the quantity on the lines.
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Need a Little Help?
Part 1
• Create the sales order as specified in Part 1 of the scenario. To set up
both the overall charge and the special freight on the sales order,
click Charges in the Sell tab of the Action Pane.
• Set up the special freight on the sales order line. Click Financials >
Maintain charges.
• The Totals form is accessed from the sales order header by clicking
Totals in the View group of the Action Pane.
Part 2
• To create a purchase order as specified in the scenario, create two
lines, one for 50 items of 1508 and 20 items of 1507.
• Set up the 200 USD freight charge from the sales order header by
clicking Manage charges in the Purchase tab of the Action Pane.
• To allocate the 200 USD according to quantity, click Manage
charges in the Purchase tab of the Action Pane.
Step by Step
To create the sales order and verify the amounts in the Totals form, follow these
steps:
1. Open Sales and marketing > Common > Sales order > All sales
orders.
2. Click Sales order in the New group of the Action Pane to create a
new sales order.
3. Select Customer account 1204.
4. If it is necessary, click Yes to transfer customer information.
5. Click OK.
6. Select item 1508 from the Item number drop-down menu.
8. Click Add line.
11. In the Sell tab in the Action Pane, click Charges in the Charges
group.
12. Click the Charges code drop-down menu and select 01.
13. In the Charges value field, type "150".
15. In the lines, select the line for item 1508.
16. In the lines section, click Financials > Maintain charges.
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17. Click the Charges code arrow and select 01.

20. In the Sales order tab of the Action Pane, click Totals.
21. Verify that the Total charges field is 175.00 USD.
22. Close the Totals and Sales order forms.
To create the purchase order and allocate the amount by quantity on the line,
follow these steps:
All purchaser orders.
2. Click Purchase order in the New group of the Action Pane to create
a new purchase order.
3. Select Vendor account 1203.
4. Click Yes to transfer vendor information.
5. Click OK.
8. Click Add line.
11. In the Purchase tab, click Maintain charges in the Charges group.
12. Click the Charges code drop-down menu and select 01
15. In the Purchase tab, click Allocate charges in the Charges group.
16. Click the Charges allocation drop-down menu, and then click
Quantity.
17. Select the Allocate all check box.
18. Click Allocate.
19. Verify the charge allocation of item 1508, by selecting line and then
clicking Financials > Maintain charges.
20. Verify that the charge for item 1508 is 142.86 (200 USD/70 pieces x
50 pieces), and the charge for item 1507 is 57.14 (200 USD / 70
pieces x 20 pieces).
21. Close the Charges transactions form and the Purchase order form.
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Automatic Charges
Set up Microsoft Dynamics AX 2012 to add charges automatically when you buy
or sell an item. Before you set up and assign automatic charges, you can create
and set up charges groups.
Charges Groups
Charges groups are used for the automatic setup of charges. This is because they
classify items, customers, or vendors into groups for which the same charges
apply. The groups are available for selection on the Auto charges form, and
when orders are then created for these groups, the charges are automatically
calculated and applied to the order.
There are three kinds of groups:
• Customer charges
• Vendor charges
• Item charges
Charges groups are useful when:
• A company has charges that apply to certain customers or groups of

customers.
• Vendors charge certain fees on all orders.
• One or more items are associated with one or more customers or
vendors.
Set Up Charges Groups

Charges groups are set up in the same manner for customers, vendors, and items,
but on different forms. To access the specific form, follow these paths:
• Customer charges groups form:

o Open Accounts receivable > Setup > Charges > Customer
charges groups.
o Open Inventory and warehouse management > Setup >
Charges > Customer charges groups.
• Vendor charges group form:

o Open Accounts payable > Setup > Charges > Vendor charges
groups.
Charges > Vendor charges groups.
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• Item charges group form:

Charges > Item charges groups.
o Open Accounts receivable > Setup > Charges > Item charges
groups.
o Open Accounts payable > Setup > Charges > Item charges
groups.
Procedure: Customer Charges Groups

To set up a charges group for a customer, follow these steps:
1. Open Accounts receivable > Setup > Charges > Customer

charges groups.
2. Click New to create a new charges group.
3. In the Charges group field, enter a unique identifier for the group.
4. In the Description field, type a short description of the charges
group.
5. Close the Customer charges group form.
Assign Charge Groups to the Base Data

Now the Charges group can be assigned to the specific base data:
• Item charges groups can be assigned to specific items from the

Released products form.
• Customer charges groups can be assigned to specific customers
from the Customer form. Customer charges groups can also be
assigned a specific sales order in the Sales order form.
• Vendor charges groups can be assigned to specific vendors from
the Vendors form. Vendor charges groups can also be assigned a
specific purchase order in the Purchase order form.
Procedure: Assign Charges Groups to Items

To assign charges groups to items, follow these steps:
1. Open the Released products form by clicking Product information

management Common > Released products.
2. Select the product to which you want to assign charge groups and
then click Edit in the Action Pane.
3. In the Purchase FastTab select the relevant charge group for
purchase orders in the Charge group field.
4. In the Sell FastTab select the relevant charge group for sales in the
Charge group field.
5. Close the Released products details form.
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Procedure: Assign Charges Groups to Customers and

Vendors
To assign charges groups to customers and vendors, follow these steps:
1. Open Sales and marketing > Common > Customers > All
customers or Procurement and sourcing > Common > Vendor >
All vendors.
2. Select the customer or vendor to assign charges groups to, and then
click Edit in the Action Pane.
3. Click the Sales order defaults FastTab on the Customer or the
Purchase order defaults FastTab on the Vendor.
4. Select the relevant charges group in the Charges group field.
Procedure: Assign Charges Groups to Orders

To assign charges groups to orders, follow these steps:
1. Open the sales order or the purchase order.

2. Select the order to assign a charges group to and then click Edit in
the Action Pane.
3. Click the Price and Discount FastTab on the header view.
4. Select the relevant charges group in the Charges group field.
Set Up Automatic Charges

You can specify automatic charges for the following:
• Specific customer account, a group of customers, or all customers.

• Specific vendor account, a group of vendors, or all vendors.
• Specific item, group of items, or all items.
• Combination of the information mentioned in the list. For example,
charges can be added when a specific customer buys a specific item.
You can set up automatic charges codes for sales in Accounts receivable >
Setup > Charges > Auto charges.
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You can set up automatic charges codes for purchases in Accounts payable >
Setup > Charges > Automatic charges or Procurement and sourcing >
Setup > Charges > Automatic charges.
FIGURE 2.6 AUTO CHARGES FORM - CUSTOMER
All auto charges are automatically calculated for the customer or vendor and
added to the sales or purchase order.
You can select the Main or Line level to determine how the charges will be
calculated in the Level field.
• Main: Applies charges to the order header.

• Line: Applies charges to the order lines.
Lines identified by a category and description, where the line-level charges show
All is selected in the Item code field, are added to the invoice line when the
category is selected. Lines identified by a product, have the line-level charges
added to the invoice line when the product is selected.
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Set Up Automatic Charges – Overview Section

The fields in the Overview section of the Automatic charges form are described
in the following table.
Fields Main level Line level

Account code Specifies whether the Refer to the Main level.
charge is to be calculated
for a specific account
(Table), a specific
account group (Group), or
for all accounts (All). If
you select All, the
remaining fields cannot
be specified.
Customer/Vendo If the value in the Refer to the Main level.
r relation Account code field is set
to Table, specify the
account number for which
the charge is created.
If Group is selected in the
Account code field,
specify the customer or
vendor charge group for
which the charge is
created.
If All is selected in the
Account code field, the
charge will be calculated
on the order line,
regardless of the item
number selected.
Item code By default, this field is set Specify whether the
to All. If you are on the charge is to be calculated
Main level, this field for a specific item, a
cannot be changed. specific item group, or
for all items.
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Fields Main level Line level

Item relation By default, this field is If the value in the
blank. If you are on the Account code field is set
Main level, this field to Table, specify the item
cannot be changed. number for which the
value is created.
If the value is Group in
the Account code field,
specify the item charge
group for which the
charge is created.
If All is selected in the
Account code field, the
purchase charge will be
calculated on the
purchase order line,
regardless of the item
number selected.
NOTE: The charges are applied according to the Microsoft Dynamics AX 2012
hierarchy. They are first applied at the Table level, and then the Group level
and, finally, the Items level.
Set Up Automatic Charges – Lines FastTab

The fields on the Lines FastTab of the Auto charges form are described in the
following table.
Fields Description
Currency Specify the currency code for the charges transaction.
Charge code Select one of the charges defined in the Charge code
form.
Category Specify whether the charges will be calculated as one of
these four options:
· A fixed amount for each invoice
· An amount for each piece
· As a percentage of the invoice amount
· As a percentage on the line for intercompany
orders
Fixed and percent can be used on charges in the order
header and the order lines, whereas each piece can only
be used on order lines.
Charges value Specify the value for the specified category.
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Fields Description
Charges The Currency field is inherited from the selected
currency code Charge code. Specify the currency code for the charge
if you want to use a different currency than what is
specified in the sales/purchase order. However, you can
only do this if the debit/credit type is the Ledger account
or the Item for the selected Charge code.
Sales tax group Specify the tax group for the charges transaction.
Keep Select the Keep check box to indicate that charges
transactions must remain after partial invoicing.
NOTE: The Charge's currency code must be the same as the default currency for
the customer or vendor currency for the charges to be allocated to the sales or
purchase order.
Procedure: Activate Automatic Charges

To make sure that automatic charges are appropriately handled, you must activate
them in the Accounts receivable or Procurement and sourcing parameter form.
To activate automatic charges, follow these steps:
1. Open Accounts receivable > Setup > Accounts receivable

parameters or Procurement and sourcing > Setup > Procurement
and sourcing parameters.
2. Click the Prices tab.
3. Select the Find main charges and Find charges for line check
boxes.
4. Close the form.
Procedure: Edit Automatic Charges

Occasionally, you must change charges on orders. For example, because of a
problem with a previous purchase, the vendor has offered to waive the typical
handling fee on the next order.
To view, modify, or delete the automatic charges on a sales order, follow these
steps:
1. Open a sales order.

2. On the Sell tab, click Charges in the Charges group for sales order
charges or Financials > Manage charges for sales order line
charges.
3. In the Charges transactions form, modify the transaction. To delete
an automatic charge line, select the line and then click Delete.
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To view, modify, or delete the automatic charges on a purchase order, follow

these steps:
1. Open a purchase order.

2. On the Purchase tab, click Charges in the Charges group for
purchase order charges or Financials > Manage charges for
purchase order line charges.
3. In the Charges transactions form, modify the transaction. To delete
an automatic charge line, select the line and then click Delete.
NOTE: You can modify or delete the Automatic charges at any time through the
posting process.
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Lab 2.5 - Create a Customer Charges Group

Scenario
Contoso Entertainment Systems is the largest supplier of item 1508, the lamps
for video projector model 02, for customers 1204, Grebe Wholesales, and 1302,
Turtle Wholesales.
Because of the large quantity and weight of items sold, Contoso Entertainment
Systems and the two customers have agreed to a 15 percent freight charge for all
orders. This charge represents a reduced fee because of the bulk purchases.
As the Accounts Receivable Administrator, you are asked to set up a new

Customer charges group and assign the code to customers 1204 and 1302.
The name of the new charge group is "06" and the description is "Freight 15%".
NOTE: You are only responsible for the customer charges group and assigning
it to the customer. The Controller will define the automatic charges group.
Challenge Yourself!
Set up a new customer charges group and assign the code to customers 1204 and
1302.
Need a Little Help?
• Set up a new customer charges group. The customer charges groups

form is located in Accounts receivable > Setup > Charges >
Customer charges groups.
• Create a new freight charge 06, with a description of Freight 15%.
• Assign the charge code to the customers. Do this by locating
customers 1204 and 1302 in the Customers form. Then add the new
customer charges group to each customer on the Sales order tab.
Step by Step
To set up a customer charges group, follow these steps:
1. Open Accounts receivable > Setup > Charges > Customer

charges groups.
2. Click New.
3. In the Charges group field, type "06".
4. In the Description field, type "Freight 15%".
5. Close the Customer charges groups form.
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To assign the charges group to customers, follow these steps:
1. Open Sales and marketing > Common > Customers > All
Customers.
2. Locate and select customer 1204, Grebe Wholesales.
3. Click Edit in the Maintain group of the Action Pane.
4. Click the Sales order defaults FastTab.
5. Select 06 in the Charges group drop-down menu.
6. Close the Customer form.
7. Click OK to recalculate credit limit, if it is necessary.
8. Locate customer 1302, Turtle Wholesales.
9. Click Edit in the Maintain group of the Action Pane.
10. Click the Sales order defaults FastTab.
11. Select 06 in the Charges group drop-down menu.
12. Close the Customers form.
13. Click OK to recalculate credit limit, if it is necessary.
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Lab 2.6 - Set Up of Automatic Charges

Scenario
Part 1
Customer 1304, Otter Wholesales, purchases small quantities from Contoso
Entertainment Systems. Because of their purchase history, an agreement is made
that all orders now include a 15.00 USD freight charge. As the Accounting
Manager for Contoso Entertainment Systems, you must set up a new automatic
charge for customer 1304. Use charge code 01 for this freight charge.
NOTE: This charge code is set up to debit the customer and credit the charges
ledger account 403500. This information is used at the end of this lab to verify
posting.
Part 2
At a later date, the purchaser for Otter Wholesales orders 45 of item 1702, the
Standard DVD player – Silver. As the Order Processor for Contoso
Entertainment Systems, you create the Sales order. The purchaser asks you to
verify that the 15 USD freight charge is included in the order. You verify it in the
header and then post the Sales order.
Challenge Yourself!
Part 1
On the Auto charges form, add the 15 USD freight charge for customer 1304.
Part 2
1. Create a Sales order to customer 1304 for 45 of item 1702.

2. Pick the sales order line, and post and review the invoice for the
freight charge.
3. After you post the Sales order, open the ledger transactions for
account 403500 and verify the charge is posted correctly to the
account.
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Need a Little Help?
Part 1
• Add the 15 USD freight charge as an Automatic charge for customer

1304. The Auto charges form is located in Accounts Receivable >
Setup > Charges > Auto charges.
Part 2
• From the Sales and marketing module create a new Sales order.
• Pick the sales order lines.
• Invoice the sales order.
• Open the Main accounts from the General ledger located in General
ledger > Common > Main accounts.
Step by Step
To add freight charges for customer 1304 to the Auto charges form, follow these
steps:
1. Open Accounts receivable > Setup > Charges > Auto charges.
2. In the Auto charges form, verify the Level field is Main.
3. Click New.
4. Select Table in the Account code field.
5. Select 1304 in the Customer relation field.
6. Open the Lines FastTab, and then click Add.
7. Select 01 in the Charges code drop-down menu.
8. Type "15" in the Charges value field.
9. Close the Auto charges form.
To create a Sales order, post the invoice and review the freight charge, follow
these steps:
orders.
2. Click Sales order in the New group of the Action Pane.
3. Select Customer account 1304, and then click OK.
4. Select item 1702 in the Item number drop-down menu.
6. Click Totals.
7. Verify the Totals charges fields is 15.
8. Close the Totals form.
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9. Click Update line > Pick on the sales order line. You may have to
click the arrow to see the Update line button.
10. Click Add picking list update, and then click Register all.
11. Close the Pick form.
12. Generate the sales order invoice by clicking Invoice in the Generate
group of the Invoice tab of the Action Pane.
13. In the Parameters field group, select All in the Quantity field.
14. Select the Print invoice check box, and then click OK.
15. Click Yes to the message about printing. The Invoice appears.
16. Note the Invoice number and then scroll to the bottom to verify that
the 15 USD charges is displayed.
17. Close all the open forms.
Verify the charges have posted correctly to the account:
1. Open General ledger > Common > Main accounts.

2. Locate and select Ledger account 403500 and then click Posted in
the Journal entries group on the Action Pane.
3. Locate the invoice number noted in the previous step by step and
verify the 15 USD charge is posted to the account.
4. Close the form.
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Summary
Over/Under delivery is an effective way to manage small differences between
ordered and received or delivered quantities in Microsoft Dynamics AX 2012.
The charges functionality helps companies to perform the following tasks:
• Add costs to sales and purchases such as freight, transport, postage,

insurance, packaging, and fees.
• Eliminate data entry by:
o Allocating charges to items
o Setting up and using automatic charges
• Set up and use manual charges on sales and purchase orders.

• Include landed costs in an item's total cost with the following
methods:
o On an Invoice Journal
o On the purchase order
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Test Your Knowledge

Test yourself with the following questions
1. True or False: Overdelivery and underdelivery tolerance is expressed as a

quantity
( ) True
( ) False
2. You can add this kind of charge manually to the order header or order line of
a sales or purchase order
( ) Price charges
( ) Manual charges
( ) Automatic charges
( ) Negative charges
3. Automatic set up of charges can be added to which of the following? (Select

all that apply)
( ) An item charges group
( ) A specific customer or vendor
( ) A customer or vendor charges group
( ) A specific item
4. You can add charges to a purchase order at what points in time? (Select all
that apply)
( ) Before the order is confirmed
( ) After the order has generated the product receipt
( ) After the order is invoiced
( ) After the order is confirmed
2-43
Quick Interaction: Lessons Learned

Take a moment and write down three key points you have learned from this
chapter
1.
2.
3.
2-44
Solutions
Test Your Knowledge
1. True or False: Overdelivery and underdelivery tolerance is expressed as a
quantity
( ) True
(•) False
2. You can add this kind of charge manually to the order header or order line of
a sales or purchase order
( ) Price charges
(•) Manual charges
( ) Automatic charges
( ) Negative charges
3. Automatic set up of charges can be added to which of the following? (Select

all that apply)
(√) An item charges group
(√) A specific customer or vendor
(√) A customer or vendor charges group
(√) A specific item
4. You can add charges to a purchase order at what points in time? (Select all
that apply)
(√) Before the order is confirmed
(√) After the order has generated the product receipt
(√) After the order is invoiced
(√) After the order is confirmed
2-45
2-46

Chapter 2: Over/Under Delivery and Charges: Objectives

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Chapter 2: Over/Under Delivery and Charges: Objectives

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Chapter 2: Over/Under Delivery and Charges

CHAPTER 2: OVER/UNDER DELIVERY AND

• Set up the Accounts receivable and Procurement and sourcing

The Over/Under Delivery lesson introduces an effective way to manage small

Example: Over/Under Delivery

Over/Under Delivery Setup

1. Set up Accounts receivable and Procurement and sourcing

• To set up the parameters for sales orders, open Accounts receivable

FIGURE 2.1 PROCUREMENT AND SOURCING PARAMETERS FORM -

Accept Over/Under Delivery

• If you select Accept overdelivery, you can receive or sell more

• If you do not select Accept overdelivery or Accept underdelivery,

Close a Partly Delivered Order

• If part of the quantity is received or invoiced, you can cancel the

• You can update the quantity on the sales order line.

Procedure: Set Up Tolerance on a Product

1. Open Product information > Common > Released Products.

Over/Under Delivery Transactions

In the following demonstrations, parameters in the Procurement and sourcing

Demonstration: Over/Under Delivery with a Purchase

NOTE: The calculation of the under delivery is rounded up to two decimal

To view the transactions on the purchase order, follow these steps:

1. Click Product receipt in the Journal group on the Receive tab of

Demonstration: Over/Under Delivery with a Sales Order

During a production of 90 pieces, you sometimes have scrap and nonconforming

1. Open Product information management > Common > Released

8. Click Sales order confirmation in the Generate group on the Sell

To view the transactions on the sales order, follow these steps:

Lab 2.1 - Over/Under Delivery with Purchase Orders

1. Verify that Microsoft Dynamics AX 2012 is set up to accept over

Need a Little Help?

1. Click Accounts receivable > Setup > Accounts receivable

1. Open Product information management > Common > Released

1. Type "1007" in the Receive now field.

Lab 2.2 - Use Under Delivery with Sales

Need a Little Help?

8. Type "92" in the Deliver now field.

Methods of Adding Charges

• Automatic setup of charges: This kind of charge is set to

The charge can be added to the following:

• Independent of the quantity of the items. The charge is a fixed

Example: Add Charges that are Independent of the Item

Example: Add Charges that Depend on the Item Quantity

FIGURE 2.2 CHARGES CODE FORM – ACCOUNTS PAYABLE

FIGURE 2.3 CHARGES CODE FORM – POSTING FASTTAB – ACCOUNTS

• Type: Determines responsibility for the charge. The options are as

• Posting: Identifies a posting description. This field is required if the

• Account: Specifies the ledger account that must be debited or

Charges Codes – Sales

Procedure: Set Up Charges Codes for Sales

Debit Debit Debit Credit Credit Credit

Charges Codes – Purchases

Procedure: Set Up Charges Codes for Purchases

Amounts are Paid Debit Type Credit Type

If there are charges on an invoice from a vendor, the credit type is

Lab 2.3 - Create a Charges Code

You are the Accounts Payable Coordinator at Contoso Entertainment Systems,

• Name of the Charge code: 22