Dynamics 365 procure-to-pay process flow (Finance & SCM)
Editable Dynamics 365 Finance and Supply Chain Management procure-to-pay process flow: purchase requisition workflow, RFQ, purchase order confirmation, product receipt, vendor invoice matching and payment journal.
What the dynamics 365 procure-to-pay process flow (finance & SCM) process is
Microsoft's business process catalog lists procure-to-pay as a set of process areas (plan procurement, request goods, purchase, receive, pay vendors), each with its own documentation. That is the right structure for a catalog. For a project team or a training session, you also need the end-to-end flow on one page, with the roles who do each step and the points where a workflow stops and waits.
In D365 those points are the requisition workflow, the decision to send an RFQ or buy from a trade agreement, optional purchase order change management, invoice matching against the PO and product receipt, and the vendor invoice workflow. Each is configurable, and each is a design decision your fit-gap sessions need to settle.
The template uses Finance and Supply Chain Management terms. It suits a new D365 implementation, an upgrade from AX 2012, or documenting a system that is already live. Rename the lanes to your legal entities and teams and delete what you do not use.
What this flowchart covers
In this template
- Purchase requisition entry and the purchase requisition workflow review
- Trade agreements versus a request for quotation before the purchase order is created
- Releasing approved requisitions to purchase orders and confirming the order with the vendor
- Product receipt in the warehouse and vendor invoice entry matched to the PO
- Invoice matching tolerances, vendor invoice workflow approval and the vendor payment journal
When to use this template
- You are running fit-gap or solution design sessions for a Dynamics 365 Finance and SCM implementation
- You are upgrading from Dynamics AX 2012 and want to confirm how purchasing will work in D365
- You need to document procure-to-pay for auditors or new staff on a system that is already live
- You are using Microsoft's business process catalog and want to turn its process areas into one flow
How it works
Rename the lanes
Match lanes to your requesters, workflow approvers, purchasing agents, warehouse and accounts payable, and note the legal entity if the flow differs between companies.
Set the workflow conditions
Write the purchase requisition and vendor invoice workflow conditions (amount, procurement category, cost center) on the approval steps.
Decide on RFQs and change management
Keep the RFQ branch only if you source this way, and add a PO approval step if change management is turned on for purchase orders.
Set matching tolerances
Note your invoice matching policy (two- or three-way) and price tolerance on the matching decision.
Approve and keep it current
Send the flow for approval to the procurement and AP process owners; later changes are tracked in the version history.
Frequently asked questions
What are the steps of procure-to-pay in Dynamics 365?
Create a purchase requisition, get it approved through workflow, release it to a purchase order (sending an RFQ first if the vendor or price is not known), confirm the PO, post the product receipt, enter and match the vendor invoice, approve and post it, and pay it through the vendor payment journal.
How does three-way matching work in Dynamics 365 Finance?
With three-way matching, the vendor invoice is compared with the purchase order and the product receipt. Price and quantity differences outside the tolerances set in Accounts payable parameters show as matching discrepancies, and the invoice can be blocked from posting until someone approves the variance.
Can I use Microsoft's business process catalog for process mapping?
Yes. The catalog lists hundreds of end-to-end processes and process areas for Dynamics 365, and Microsoft recommends it as the starting point for implementation projects. It describes processes in a hierarchy; a swimlane flow like this one adds the roles, handoffs and decisions for your own business.