Non-inventory related purchase order scenario

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Posted on by Greg Kujawa

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So we are using BC 365 SaaS v23.3. We have a use case for purchase order fulfillment, aside from standard inventory-related scenarios. In this case we have marketing/advertising agreements. For example, let's say we have agreed to purchase $100K USD of digital advertising from iHeartRadio. So we create a new purchase order for that. But iHeartRadio invoices us monthly for incremental usage of that initial $100K amount. What would be best practices in terms of how to implement this?

I'm thinking we look at the vendor's standard billing cycle. Let's say it's monthly. So we would create the purchase order for 12 quantity against the proper GL account code for digital advertising. For the $100,000 USD amount. And then each invoice we receive from the vendor we would receive one quantity for the invoiced amount. Does this make sense? Or is there another preferred method for handling this?

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Greg Kujawa 608 on at

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Non-inventory related purchase order scenario

I think I stumbled across a solution. I ran across a post on another Dynamics support site that proposed a more workable scenario.

Create a purchase order for the vendor who we have an agreed spend with.

Define the total spend as the quantity. In my example, this would be the iHeartRadio vendor and the quantity would be 100,000 units.

Define the unit cost as $1 USD.

Define the proper GL account code. In my example, this would be digital marketing expense.

As we consume from this vendor and are invoiced, we would receive/invoice against the purchase order. If we spend $25K on Valentine's Day advertising, we would receive/invoice 25,000 quantity.

Should work fine I think!
Greg Kujawa 608 on at

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Non-inventory related purchase order scenario

Reading up on things a bit more, wouldn't a blanket purchase order make more sense? The rationale behind this is that the billing cycles might be monthly, but not necessarily 100% of the time. And the monetary amounts wouldn't always be exactly the same each time. In my example I posted, with $100K committed to purchase advertising from iHeartRadio, we might purchase a big block of it in advance of Valentine's Day. So let's say we are invoiced $25K for February. Then we don't purchase anything from them for a few months. Let's say we get invoiced $25K in May for a Mother's Day ad campaign. And then we have our largest Christmas Holiday ad campaign heading into December. So we are invoiced $50K in December.

Then again we might have some vendors with regular invoice dates and amounts. Let's say we rent billboards and agree to pay Clear Channel $120K each year. We are billed out exactly $10K a month every month. Know what I'm getting at?
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YUN ZHU 73,339 Super User 2024 Season 2 on at

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Non-inventory related purchase order scenario

Hi, it looks like you can use deferreds posting. Below is a simple example, I hope it can give you some tips.

Business Central 2022 wave 1 (BC20) new features: More control over deferrals posting (Beginning of Next Calendar Year as the Start Date)

https://yzhums.com/24008/

PS: About Item Types

https://learn.microsoft.com/en-us/dynamics365/business-central/inventory-about-item-types?wt.mc_id=DX-MVP-5004336

Thanks.

ZHU

Non-inventory related purchase order scenario

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