Vendor Status and Vendor Groups

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Dear Champions,

I need to understand the effect of Vendor Groups and Vendor Status (Approved/Preferred) in standard D365FO.

Q1 - On Vendor Status: By default when a vendor is created I assume it is just registered.
What is impact of adding
1.1 Approved vendor against Category
1.2 Preferred vendor against Category
1.2 Approved vendor against Item

Q2 - On Vendor Groups : What are the factors to consider while defining Vendor Groups? Is it always mandatory? Please give detailed examples if possible (especially for any financial implications).

Best Regards,
Sarath Pillai
#537

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Rahul Mohta 21,032 on at

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RE: Vendor Status and Vendor Groups

+1 Ludwig and others

Vendor group is segmenting your vendors and being able to capture them in GL separately using groups.

Approved vendor is on inventory and procurement side which helps in putting rules in buying items from select vendors

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Ludwig Reinhard Microsoft Employee on at

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RE: Vendor Status and Vendor Groups

Hello Sareth,

To add,

For Q1: Please see the following MS docs sites for details.

docs.microsoft.com/.../set-up-vendor-accounts

For Q2:

Vendor groups 'belong' to your accountants as they define how accounting occurs. Don't use them for some other (e.g. analysis) purposes.

Best regards,

Ludwig

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Zain Mehmood 4,173 Most Valuable Professional on at

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RE: Vendor Status and Vendor Groups

Hi Sarath,

Is there any more information required on this? If not please mark for closure of the thread so other community members can take guidance. Many Thanks

Regards,

Zain

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qianwang 7,168 on at

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RE: Vendor Status and Vendor Groups

Hi Sarath Pillai，

1.The field you said shows you how to specify that a vendor is approved or preferred for a specific procurement category. You set up vendor selection (such as 'Allow only vendors that are preferred or approved for this category' or 'Allow only vendors that are preferred for this category') in Category policy rule' in purchasing policies form.

When a purchase requisition is created, there may be a requirement to select an approved or preferred vendor, depending on how the purchasing policies said above are set up.

organicax.com/.../

2.It is mandatory to assign a vendor group when create a new vendor. Every vendor must be assigned to a vendor group. The vendors in a vendor group have parameters that they share. For example, they might have the same terms of payment.

https://docs.microsoft.com/en-us/dynamicsax-2012//vendor-groups-form?redirectedfrom=MSDN

Regards,

QianQW

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Zain Mehmood 4,173 Most Valuable Professional on at

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RE: Vendor Status and Vendor Groups

Hi Sarath Pillai,

The purpose of the all three types you said is for audit and compliance purposes. You have multiple options for that.

You can get a purchase category and setup a purchasing policy on the basis of that.

In a group of approved vendors, your organization can always have a preferred vendor because of quality and delivery commitment fulfillment.

This is you can check for compliance and quality features when you can't buy specific materials from certain vendors so you specify those items for example Chemicals, fertilizers etc.

You can buy them from approved vendor list.

For item group prospective, you can group vendors in groups like foreign and domestic, raw materials and office equipment, service and goods etc.

This also depends on your Financials reporting that you want the same groups for your monthly or yearly reporting. This way you also set your GL accounts group wise as you can setup posting profile this way.

Also the reports in d365 support for group wise reporting, I have not seen any report which supports category for accounts payable.

Please mark YES against the answer that helps you. Thanks

Regards,

Zain

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