How to Enable the Latest Purchase Price Parameter in Microsoft Dynamics 365 Finance & Operations
Managing item purchase prices effectively is crucial for accurate cost control in Microsoft Dynamics 365 Finance & Operations (D365FO). One of the key features that impacts how item prices update is the Latest Purchase Price Parameter.
When enabled, this parameter ensures that an item’s price is updated based on the most recent purchase cost recorded in a Purchase Order (PO). This means that every time a new PO is created, the item’s purchase price can change depending on the most recent cost price recorded in the system.
In this blog, we will explore:
The impact of enabling the Latest Purchase Price parameter.
Step-by-step instructions to activate this parameter.
How to track price changes using Last Price History.
Impact of Enabling the Latest Purchase Price Parameter
Key Effects of Enabling This Parameter:
The purchase price of an item in the Item Master updates automatically based on the latest purchase price in a PO.
This applies to both fixed and variable pricing models.
If multiple POs are created for the same item at different prices, the purchase price will fluctuate accordingly.
The updated purchase price will also reflect in the Manage Cost > Item Price section.
Example Scenario:
- Initially, an item is priced at 50 USD in the Product Master.
- A new Purchase Order (PO) is created, purchasing the same item at 100 USD.
- Once the PO is invoiced, the item price in the Product Master automatically updates to 100 USD.
Steps to Enable the Latest Purchase Price Parameter in Released Products
Step 1: Navigate to Released Products
- Go to Product Information Management > Released Products.
Step 2: Select the Product
- Choose the product for which you want to enable the Latest Purchase Price parameter.
Step 3: Enable the Latest Purchase Price Parameter
- Click on the Purchase Tab and locate the Price Update Section.
- Activate the Latest Purchase Price parameter.
Step 4: Set Initial Price in Product Master
- Set the product price to 50 USD in the Product Master.
- Alternatively, prices can be set using a Trade Agreement.
Step 5: Create a Purchase Order (PO)
- Generate a Purchase Order for the selected product.
- Add the item to the purchase order lines.
Step 6: Update the Purchase Price
- Set the purchase price of this product to 100 USD in the PO.
Step 7: Confirm the Purchase Order
- Confirm the PO to finalize the order details.
Step 8: Post the Product Receipt (GRN)
- Post the Goods Receipt Note (GRN) for the PO to record the receipt of the items.
Step 9: Invoice the Purchase Order
- Complete the invoicing process for the PO.
Outcome:
Once invoicing is complete, navigate to the Product Master and open the product. If the Latest Purchase Price parameter is enabled, you will see that the purchase price has been updated from 50 USD to 100 USD, reflecting the latest purchase cost.
Additionally, under Manage Cost > Item Price, the updated purchase price of 100 USD will be visible.
How to Enable Last Price History in Dynamics 365
To track purchase price fluctuations over time, you need to enable the Last Price History feature.
Steps to Enable Last Price History:
- Navigate to Inventory Management > Setup > Inventory and Warehouse Parameters.
- Click on the Inventory Accounting tab.
- Enable the Last Price History option.
Outcome:
Once enabled, you can view historical purchase price changes in the Item Price section, helping businesses analyze pricing trends and make informed purchasing decisions.
To conclude, enabling the Latest Purchase Price Parameter in D365FO ensures that item prices remain current based on the most recent purchase cost. This feature is beneficial for businesses managing fluctuating costs and needing accurate pricing in their procurement process.
Additionally, by enabling Last Price History, organizations can track price variations over time, ensuring better cost analysis and decision-making.
By following the steps outlined in this blog, you can optimize your item pricing strategy and enhance financial accuracy in Dynamics 365 Finance & Operations.
We hope you found this blog useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfonts.com.
Need further assistance? Feel free to leave a comment or reach out for expert guidance on pricing configurations in D365FO!
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