Tags: ERP

November 3, 2015

Poor Accounting Practices, Not the Skill of Thieves, Results in Financial Losses

Cyber Theft

A recent article in the Wall Street Journal titled ‘Hackers Trick Email Systems into Wiring Them Large Sums’ discusses losses estimated at $1B over the last two years from email hacking schemes. The gist is that thieves get control over email accounts and then direct company employees to pay possibly legitimate invoices to fraudulent bank accounts controlled by cyber thieves. The article goes on to say that these small companies have suffered these losses because they do not have the budget of larger companies for security and investigation.

It’s always frustrating to hear about legitimate businesses that suffer losses as result of a security breach. But, I would assert that poor accounting practices, which are an affordable necessity for businesses of any size, are the primary culprit. Consider the two cases noted:

In the first case, the targeted company received an email purportedly from a vendor to give wire instructions for a shipment that was legitimate. The company then proceeded to wire $100,000 to the “vendor” which was later identified to be cyber thieves hacking into their system.

In the second case, the CFO received an email, purportedly from the CEO, instructing her to wire $169,000 to a company for an investment. In this case, the CFO happened to speak with the CEO prior to sending the wire, which saved the company from a potential loss.

Both of these scenarios could have been avoided completely if they would have had proper accounting practices in place. Let’s take a minute to discuss a couple of simple accounting practices your company could implement to avoid email hacking losses. You can also refer to our checklist, Six Accounting Practices Companies Can Use To Avoid Email Fraud.

Set up bank payment information regarding where and how to pay vendors

At setup, your accounts payable department is dealing directly with the vendor that you want to contract with (so banking information given is provided by the legitimate vendor representative). Make sure you set up the vendor routing and bank account number in your accounting software as well as the legitimate vendor contact information.

When vendors request payment for legitimate purchases, never use wire instructions from an email. Go back to your accounting software and pull the authorized banking instructions you received from the vendor at vendor setup. If you have any questions or concerns about an email request for payment, use the legitimate vendor contact information from your accounting software to contact the vendor and verify the payment request. Again, if the request is legitimate, make payment to the account recorded in your accounting software; never make changes to vendor payment information without verifying it directly with the vendor contact listed in your accounting software.

Never make a payment based upon an email (only) from a higher authority

In the example with the CFO and the CEO, the CFO should have phoned the CEO, or gone to them in person (if proximity permits), regarding the payment and supporting details required before any payment can be made. Unfortunately, executives often believe the rules do not apply at their level, but because the losses can be so much greater at the executive level (due to the higher authority limits), rules should be enforced just as stringently for executives (perhaps more so).

Final Thoughts

Proper procedures govern sending payments of any kind, especially wire payments for which there is limited recourse to get funds back. Implementing proper procedures is a cheap and easy way to safe guard your company from cyber theft. Hiring a certified accountant to review your company’s accounting processes would cost only a few thousand dollars and would have completely prevented both of the above cases. Remember, emails do not send wires. People do.

For additional information on this topic, download the ‘Six Accounting Practices Companies Can Use To Avoid Email Fraud’. And to stay In The Know, connect with us via social media or check out more posts on our blog.

September 18, 2015

15 signs that it might be time to reevaluate your ERP solution

Outdated ERP Software

Implementing a new ERP solution is a decision that most companies choose to avoid until it becomes absolutely necessary. This is understandable when you take into consideration the sizable capital investment and time commitment that goes along with it. Not to mention the potential risk that companies are exposed to (unexpected delays & costs) during the implementation process.

However, ERP software eventually becomes obsolete, and running outdated ERP software can end up costing your company more money in the long run, than it would to just implement a new ERP solution. That’s just the hard costs. The ERP system is the informational brain of your company. The soft costs of having an outdated ERP system might be business decisions that are made based upon outdated or erroneous information, resulting in less profitability than expected.

With that in mind, below are 15 signs that indicate it might be time for you to replace your outdated ERP solution:

1.) If you’re still using a “green-screen” user interface

Most companies have moved away from the “green screen” user interface, but there are still companies that are reluctant to make a change. If you are one of the few still using an outdated ERP solution with a “green screen” interface, it’s time to upgrade your solution. Don’t get stuck in the past just because “it works well enough for now.” Think about the future and whether or not that solution is going to continue to scale with your growing business and if, in fact, your system might be impeding the growth of your business

2.) If the majority of your reporting is coming via Excel

Technological advancements, in terms of ERP reporting capabilities, will only continue to get more and more powerful. Take full advantage of the real-time reporting tools that are available on the market. These tools will ensure that your company has the most up-to-date information when you need it most, while also reducing redundancy and freeing up your IT resources to work on more value-added tasks.

3.) If your ERP solution is heavily customized

There is generally always going to be some level of customization when implementing a new ERP solution. However, there is such a thing as too much customization – Especially when there are new ERP solutions available that can meet most of your needs out of the box.

Looking at newer ERP solutions should give your company the opportunity to analyze your current business practices, to see if you’re adhering to industry best practices. This should eliminate the need for most customizations when the time comes to implement a new solution.

4.) If you have more integrations than users

Don’t get me wrong, integrations can be great thing! They can help extend the capabilities of your ERP solution, and fill in gaps that your current ERP solution may not offer. But, when you have too many integrations it can lead to unwanted complexity, higher maintenance costs, and difficulty upgrading to the latest solution version. A new system could eliminate some of these integrations with base functionality out of the box and that is worth evaluating.

5.) If your ERP solution is no longer supported (maintenance, patches, etc…)

This one may seem obvious, but I know there are still companies running on ERP solutions that are no longer being supported  or no longer being invested in. If you’re one these companies, it’s time to make a change. Look for a new solution that’s heavily investing in R&D, and also releasing patches and updates. You want an ERP provider that’s dedicated to the longevity of their product.

6.) If your ERP maintenance fees are becoming cost-prohibitive

Many of the larger ERP providers will increase maintenance costs, annually, by as much as 6-7%. This adds up over the years and can eat up a large portion of your annual IT budget. If your company were to add up those maintenance cost increases, over a 7-10 year timeframe, it will often justify the implementation of a new ERP solution with lower annual maintenance fees, effectively lowering the annual IT cost run rate.

7.) If your ERP solution is not providing the KPI’s you need to make more informed business decisions

If you implemented your solution 5-7 years ago (or more), it’s likely that the information you are looking to get out of your ERP solution is not easy to find, or not available. Not having this information readily available for your executive team can make it a lot harder for your company to make solid business decisions based upon real data.

8.) If your legacy ERP processes don’t match up with your current business processes

Let’s face it, your company’s business processes have changed significantly over the past few years (at least I would hope so). So the question becomes: did your ERP processes change along with your newly implemented business processes? Sure, maybe you customized / reconfigured a few aspects here and there, but, does your current ERP solution align with the way your company does business today? If not, is it flexible enough to change with you in the future?

9.) If your IT infrastructure is “sun-setting”

This should not be a surprise, but having an outdated infrastructure can end up costing your company more money in the long-run. Finding IT resources that are knowledgeable about your infrastructure will become much harder to find as your system ages. If you are able to find these resources, they will likely charge a premium price for their services. Having an outdated infrastructure can also make integrations and customizations more difficult and costly.

10.) If you have outsourced solutions that a new ERP solution would allow you to bring back in-house

Bringing your outsourced software solution(s), in-house, will give your company more control of your data and can also be a lot more cost-effective. These applications might include payroll and HR. Outsourced HCM often looks good on paper, but once you get dinged for additional costs on every ‘custom’ report and tax interface, the total cost of the solution may not be as attractive as you expected. If you control the database and your infrastructure is updated, your internal developers can write custom reports as needed, without an ongoing add-on cost.

11.) If your ERP solution does not allow for electronic payments out of the box

If your company is still cutting physical checks to make payments and cannot accept electronic payment receipts, then it’s time to consider implementing an ERP solution that supports electronic payment functionality. It will make payment processing a lot easier for your end-users, and also allow your company to leverage ACH or direct debit functionality. Most importantly, electronic payments are more secure and eliminate the float on receipts, which can make a huge difference in your cash flow.

12.) If your ERP solution does not support sales and use tax compliance

Implementing an ERP solution that supports sales and use tax compliance is essential functionality, not optional. Your company could potentially get hit with penalties for not complying, which, in and of itself, could justify the cost of a new ERP system.

13.) If your approval process in controlled by paper, not electronics

Processes controlled by paper are more easily falsified and prone to inefficiency. Internal compliance teams love the traceability of electronic signatures and approvals. Newer ERP systems offer workflow functionality for common approval functions out of the box.

14.) If your company’s financial close process is impeding timely business decisions

If it takes longer than a week to give critical feedback about a period’s financial performance, your company runs the risk of repeating the same mistakes in the following period. Having  short month-end close processes allows for critical feedback to be communicated to the company. Timely reporting should be a business priority and if your ERP system gets in the way, it’s time for a change.

15.) If you have not upgraded in 5-7 years

Some ERP solutions, if implemented correctly and properly maintained, can last much longer than 5-7 years. But in most cases, solutions that are older than 7 years, don’t have the functionality and capabilities necessary to scale with your business. You could be missing out on business process functionality, based on industry trends and best practices, which have been implemented into the latest version of your preferred ERP software solution.

Also worth noting, you should annually monitor the ROI of your ERP investment to ensure that your solution is meeting your desired goals and objectives, both financially and operationally speaking. For a more in-depth discussion regarding the ROI calculation of your ERP investment, please refer to our recent blog post ‘Calculating the Post-Deployment ROI of your ERP Investment: 3 Step Process’.

if your company is looking for guidance during the evaluation process of your outdated ERP solution, feel free to contact us at info@itksolutionsgroup.com. And to stay In The Know, connect with us via social media and check out more posts on our blog!

September 10, 2015

Tips to “Lean-Out” the RFP Process for Software Selection

Create a more effective RFP for software selction

A crucial step to any software selection process is the creation of the Request for Proposal (RFP) documents. These documents help companies identify which product(s) / vendor(s) will be the best fit in terms meeting their pre-established requirements. However, most companies are not doing their due diligence when it comes to gathering requirements, which is big reason why software implementations tend to fall short of expectations.

Typically, companies will start with an RFP template which covers some of the basic requirements (end-user training, security, cost structures, basic functionality, etc…). Then maybe they’ll add some more questions / requirements from team members in terms of what features they’re looking for in a new system. Unfortunately, this RFP development method is incomplete, and can lead to unexpected costs / delays when it finally comes time to implement the new software.

If you want to ensure that your company is selecting the best possible solution / partner, then the tips below might help you create a more effective RFP for software selection.

Ditch The Spreadsheets & Word Documents:

Tracking requirements for Enterprise Software products can be a lot to handle. There’s literally thousands of requirements that need to be accounted for, and tracking them with Spreadsheets and Word documents can become a nightmare. Instead, look to implement a system built to manage requirements for software purchasing. This will help reduce errors and also acts as a live document.

Be As Thorough As Possible When Gathering Requirements:

I can’t emphasize this point enough. Going beyond the standard requirements of any software evaluation is critical to a successful implementation. Meet with your team and discuss which requirements they are looking for in a new software product, and also have them rate the importance of each requirement.

After that, you’ll want to draw requirements from the software products being considered. Look at all the additional functionality each product has, rate the importance of each one, then add those to your list of requirements. Also, make sure you’re being as detailed as possible when specifying your requirements. It will help your company be more prepared and organized throughout the entire software selection process.

Attach A Value To Each Requirement:

There is definitely some opinions out there that would suggest not overcomplicating things by adding ratings to your requirements. And I’ll admit, there is validity to that argument. But, I think there’s a lot more upside to rating requirements than downside. Especially when it comes to complex software products like ERP and CRM.

Look at it like buying a house. For most of us, we’ll start with our list of “must-haves” and slowly begin to realize how unrealistic our expectations (requirements) really are. This is where rating requirements, before-hand, comes in handy. You can refer back to the items that were most important to you at the start, and then make a more informed decision based upon your previous rankings.

Focus On What’s Really Important:

Try not to overload your RFP’s with unnecessary / redundant requirements. Too often, companies will include requirements from team members that are more of a “want” rather than a “need”. Make sure your team members define which features they “need” and which features they “want”. Ask the important questions up-front, and make sure those needs will be met by the software / vendor, first and foremost.

Also worth noting, you may be missing out on the perfect candidate(s) if your RFP documents require a large time commitment to fill out. Keeping your RFP structured and lean will garner more quality responses, and give your company better visibility on the potential software products / services being considered. Plus, your internal team will thank you for reducing their workload when they finally have to sift through the digital stack of RFP’s submitted by potential vendors. If it’s time consuming for vendors to fill out, then imagine how your internal team will feel when they have to read through all those responses.

Attach Ownership To Each Requirement:

This one seems like a no-brainer, but it’s still worth mentioning. Including a name, or names, along with each requirement will help your company keep track of who wants what, and why. This will come in handy later down the road when you need to reevaluate your requirements against each software product and during the demo process, as well.


RFP’s are a critical step in the software selection process, and they have the potential to make or break your software implementation. Take your time with your RFP creation. Focus on what’s truly important. Make sure it includes all pertinent details, and ditch the rest. Both for your internal team, and the vendors responding to it.


If your company is looking for guidance during the RFP creation process, feel free to reach out to us at info@itksolutionsgroup.com. And to stay In The Know, connect with us via social media or check out more posts on our blog!

August 28, 2015

Calculating the Post-Deployment ROI of your ERP Investment: 3 Step Process

Last week we discussed the importance of Calculating the Pre-Deployment ROI of your ERP Investment, and also gave some insight into how to begin that process. For some of you, it may already be too late to calculate the pre-deployment ROI of your ERP solution. So this week, we’ll go over the steps necessary to calculate the post-deployment ROI of your ERP investment, and give you the core costs / benefits your company will need to consider when calculating your post-deployment ROI.

Calculating the actual ROI of any investment is never an easy task. Especially when it comes to ERP software. There are so many variables that need to be accounted for, and some of those variables, just cannot be measured (monetarily). So how can you get an ROI calculation that’s 100% accurate? The short answer: You don’t. But, following these three steps should help you get close enough to determine if your ERP implementation appears to have been a prudent investment.

Step 1: Calculate the Total Cost of Ownership (TCO)

First, take a step back and look at what it cost you to implement the software. Keep In mind, you should plan to look at your investment over a 3-7 year time frame. Review initial expenditures and also quantify what it’s costing you to maintain / run your ERP solution on an annual basis. This will include all costs (both direct & indirect) incurred over a 3-7 year timeframe.


+ Initial license costs + additional licenses + Annual software maintenance
+ Hardware + Hosting costs (if applicable)
+ System operation, personnel & Infrastructure + ISV costs: Implementation, Training and Maintenance
+ Helpdesk (if applicable) + Additional personnel / consulting needed
+ Training costs, initial and on-going + Implementation services

Incorporating the elements above, a sample TCO calculation might look something like this.

Sample TCO calculation

Sample TCO Calculation

Step 2: Calculate costs eliminated from legacy system

Next, look at the costs that were eliminated due to the implementation of the new ERP solution. This step should be a good (or bad depending on the circumstances) indication as to how well the new ERP system is doing in terms of meeting your desired goals and objectives.


+ License fees eliminated + Planned system costs saved (to upgrade / maintain old system)
+ Hardware costs reduced / eliminated + Hosting costs eliminated (if applicable)
+ Hours of labor eliminated + Planned training costs eliminated (upgrade)
+ Personnel eliminated + Annual software maintenance eliminated
+ Specialized helpdesk + Training costs eliminated (on-going)
Costs Eliminated Sample

Sample calculation of costs eliminated from legacy system







The savings of system conversion are (cost eliminated from legacy system) – (cost of new system). If the number is negative, a cost saving has resulted. If the number is positive, the new system has cost more than it’s saved. The example below shows a cost savings.

ROI Calculation - Steps 1 & 2

Interim ROI Calculation – Steps 1 & 2:

Step 3: Factor in Operational Impacts

This last step is probably the most difficult for companies because the benefits / cost savings can’t always be tracked monetarily (as mentioned above) or might be difficult to measure. Keep in mind, operational impacts should be wrapped into project objectives so that project success can be measured and tuned in areas where the project is falling short (allowing realization of full ROI potential).

To help your organization with this final step, reference the three sample calculations below.

Increased Manufacturing Capacity:

“The US production line is slowed or stopped for approximately thirty minutes three times daily (at the change of each shift) to enter machine data. Easing entry of this data (or capturing it electronically) could result in an increase in manufactured goods of approximately 2% (at a -0- labor increase).”

Calculation: 1 hour saved/24 hour production line = 4.2%. Note the conservatism in the estimate of savings.

Client manufactured goods = $108M. Impact = $2.2M

Out of stock reduction:

If out of stocks run 10% of all transactions and management estimates that half of those out of stocks could be converted to sales with better inventory integration and metrics, the expected increase to sales would be about 5% (if the new system fully realizes the potential).

Even a 50% realization of the potential capture would result in a 2.5% increase in sales, which would often fully fund a retail ERP project.

Sales = $160M. Impact = $4M

Reduction in discounting through better purchasing:

Discounting too deeply as a result of poor purchasing. How many items are sold at clearance for 50-75% off that should never have been purchased in the first place? Choosing styles contains some human judgment and art (rather than science), but a good system can increase the science side and improve the buyer’s chances of nailing down the art side.

If inventory is sold at 70% of suggested price, on average, and the new system could increase that to 75% by better anticipating demand flows and seasonality, a 5% increase in sales could be realized. Again, half the estimated benefit is used.

Sales = $80M. Impact = $2M

Final ROI Calculation

Final ROI Calculation:








If your company is looking for a seasoned partner to help you calculate the post-deployment ROI of your ERP investment, feel free to contact us at info@itksolutionsgroup.com. And, to stay In The Know, connect with us via social media, or check out more posts on our blog.

August 21, 2015

Calculating the Pre-Deployment ROI of your ERP Investment

Calculating the Pre-Deployment ROI of your ERP Investment

When the term ROI is brought up in relation to ERP investments, it’s often assumed that an ROI calculation can’t be derived until a solution is selected and implemented. But, according to Nucleus Research’s ‘The ROI for ERP: An Overall Approach’ calculating an estimated ROI, before-hand, can help establish a solid baseline for comparison with the actual ROI of your ERP investment. It will also give your company a more realistic appraisal of the ERP solution(s) being considered. So, where should you begin?

First, Establish Goals & Objectives

This will require your organization to establish measurable goals and objectives that the proposed ERP solution will ideally fulfill. Establishing these goals and objectives, ahead of time, will provide monetary indicators as to how well your ERP investment is working to achieve your desired outcomes. Now, there may be some goals and objectives that you can’t measure in terms of dollars and cents, but a good majority of your goals should be relatively easy to attach a financial value.

For example, let’s say one of your objectives is to improve the overall visibility of your on-hand inventory – across all sales channels – and one of your goals is to reduce clearance stock by 20%. You can see how that particular goal / objective can easily be tied back to a monetary value and measured over a 3-5 year time period.

Tactics should also be attached to your goals and objectives. In other words, how you plan to monitor progress. You’ll find that building reports around your goals and objectives is likely going to be the most efficient tactic for measurement.

Listed below, you’ll find some basic goals and objectives to help your organization think through, what specifically, you’re looking to get out of your ERP solution.

+ Reduce the number of integrations & customizations + More accurate demand forecasting
+ Decrease maintenance costs by 5% annually + Reduce infrastructure costs by 12%
+ Faster order entry and enhanced order fulfilment + Real-time reporting capabilities
+ Upsell / cross-sell capabilities to help sales staff maximize profit + Improved inventory visibility

Next, Construct the Worst & Best Case Scenario

Once your goals & objectives have been established, you’ll want to implement “what-if” scenarios, which will require you to make some assumptions regarding the worst / best case scenario. For the best results, try to be more conservative with your estimated ROI calculation and lean more towards the worst case scenario (highest costs and the lowest upside). This will allow your organization to go into the sales process with eyes wide open, fully understanding the potential obstacles that lie ahead, so that you can better mitigate the risk involved with a complex ERP implementation.

ERP vendors / partners can be valuable assets when trying to calculate the pre-deployment ROI of your ERP investment. Especially those vendors / partners that have implemented ERP solutions for companies similar to yours. They can provide valuable insight as far as what to expect, and help you attach realistic metrics to your desired goals and objectives.

If your company is looking to calculate the pre-deployment ROI for your upcoming ERP project, and you need an experienced partner to help you through the process, feel free to contact us at info@itksolutionsgroup.com. And to stay In The Know, connect with us via social media, or check out more posts on our blog.

July 30, 2015

Alerts in Microsoft Dynamics AX 2012 – Overview Guide

What is an alert?: An ‘alert’ is a system notification in Microsoft Dynamics AX to a user or a group of users. Alerts can be programmed to pop up in the lower right hand portion of the users’ screens in AX. Alerts can also be set to send an email.

Alerts can be triggered by: A date/time event – such as a report running every week at a certain time. An update event – such as when a posting job runs or a value in a field gets changed. A record create or delete event, which will trigger each time a specified record is created or deleted.

Set up an alert number sequence: Organization administration > Common > Number sequences > Number sequences. This is a system-wide step if the number sequence is ‘Shared’ in the scope parameters. In References, the ‘Area’ should be ‘Alerts’ and the ‘Reference’ should be ‘Rule ID’.

Number Sequences Form

Number Sequences Form

There are two types of batches that can be set up:

Due date alerts: System administration > Periodic > Alerts > Due date alerts.

Change based alerts: System administration > Periodic > Alerts > Change based alerts.

System Administration > Periodic > Alerts

System Administration > Periodic > Alerts


Changed based alerts batch parameters form

Changed based alerts batch parameters form

For each of these batch parameters forms: The ‘Recurrence’ button sets the schedule. (Batch job alerts can be set to run as frequently as every minute if processing power is not an issue).

Alerts Recurrence Form

Alerts Recurrence Form

The ‘Alerts’ button has IT administrative notification selections for the batch job status changes. (Recommended settings for Error and Canceled only)

Batch Jobs Alert Settings

Batch Jobs Alert Settings

*Batch processing selection on the alerts parameters form should be activated after creating a Batch group. Create a Batch group System administration > Setup > Batch group. On the Batch servers tab choose a selected server(s).

System Administration > Setup > Batch Group

System Administration > Setup > Batch Group

Next you need to create an email batch job. Go to System administration > Periodic > E-mail processing > Batch and set the Recurrence. Set Alerts on this form if you want to be notified of the batch status.

Email Processing > Batch Form

Email Processing > Batch Form

The users who should be notified by email should have an email configured in System administration > Users > Users and select Options from the Set up menu. You can only assign one email address per alert so if you need to notify multiple users you would need to create an alert rule for each user. (I haven’t tested the option of creating a “generic” user with a distribution email address as another option for creating 1 rule with multiple notifications. This would prevent the user from accessing the drill down from the email features to the transaction origin or disabling the alert to discontinue the alert emails.

User Options Form - Email Setting

User Options Form – Email Setting

Optional items for Email alert setup (1 of 2): Create email template for alerts. Organization administration > Setup > E-mail templates. Add a new record and enter ID, description, default language, as well as the sender’s name and email address that will be displayed in the message. Add a record in the bottom half of the form and specify the language, subject text (email subject line) , and Layout (format).

Email Template List - Overview Tab

Email Template List – Overview Tab

Select E-mail message and compose text for body of email. Layout options are either HTML or XLST. Select the General tab and attach email template to Batch group.

Email Templates List - General Tab

Email Templates List – General Tab

Optional items for alert setup (2 of 2): Drill down capability from alert emails. Navigate to System administration > Setup > System parameters. Select Alerts.

System Administration > Setup > System Parameters

System Administration > Setup > System Parameters

** In order to select “Alerts” E-mail ID in System parameters you need to create a ‘system e-mail’. When you check the Show system emails box there is no obvious way to create New so you must click anywhere in the grid and then Ctrl+N to create a new system e-mail record.

E-mail templates list – Show system e-mails only – Ctrl+N to add new record

E-mail templates list – Show system e-mails only – Ctrl+N to add new record

This allows users to click to access alerts, alert rules or the alert origin directly from the email message. To enable this, insert the email links in the template defined in System Parameters (above). More information on setting up drill down links can be found here.

A retry schedule for emails that the system has not been able to send can be defined in System administration > Periodic > E-mail processing > Retry schedule. More information regarding this and monitoring email messaging and statuses can be found here.

Setting up an alert: Alert rules can be created directly from the AX form that triggers them. Open the form, then use File menu> Command> Create alert rule. This will allow you to include a selection of <All fields> or select a specific field.

Alert rule created from form using File > Command > Create alert rule

Alert rule created from form using File > Command > Create alert rule

Alternatively, to trigger an alert from a specific field, right click on the field in the form and choose ‘Create alert rule’.

Alert rule created from field

Alert rule created from field

Either action opens both the ‘Manage alert rules’ and the ‘Create alert rule form’.

Alert rules define when alerts will trigger.

Example: Setting up an alert directly from a form – This alert rule starts by opening a customer record (Accounts receivable> Common> Customers> All customers), then right clicking on the ‘Credit limit’ field. This prompted the system to create an alert rule base upon that field. The subject and message fields contain information that will be included in the pop up alert. This is separate from the email message contents.

Create alert rule form

Create alert rule form

Due-date type event options: If the field you are on when selecting Create alert rule is a date field your Event options will include: (Is due in, Is due, Was due this amount of time ago)

Update-type event options: If the field you are creating an alert rule for is not a date field you will be presented with some combination of update-type event options: (Is set to, Has been postponed, Has been postponed until at the earliest, Is set to an earlier date, Is set to a date earlier than, Has decreased below, Has increased above.)

Create-type and delete-type events: There may also be event options for; Record has been created & Record has been deleted.

Alert me for: In the Alert me for area of the Create alert rule form, you can use conditions to control when you are alerted about events. Use the select button to create specific criteria for the conditions you wish.

Alert me until: In the Alert me until area of the Create alert rule form, you can specify how long you want the alert rule to be active.

Alert contents: In the Alert me with area of the Create alert rule form, you can specify the subject text and message text that you want the alert messages to use.

User ID: In the Alert who area of the Create alert rule form, you can specify which user you want to receive the alert messages. By default, your user ID is selected.

Delivery method: In the Other alerts area of the Create alert rule form, you can specify whether you want your alerts to be delivered as pop-up messages or email messages.

Pop up Alerts display: Pop up alerts will display in the lower right corner of the any active window.

Pop-up Alert

Pop-up Alert

Alerts are also indicated on the status bar by a number (#) next to the bell icon. Click on the alert (bell) icon to open. Selecting an alert gives access to 4 menu options:

Go to origin: Opens the form that contains the change that triggered the alert

Manage alert: Opens the rule that generated the alert and allows access to change some alert settings including disabling the alert.

Refresh: update the displayed alerts and their status

Change status: To read or To unread

E-mail message column indicates if an email was sent for the alert.

Alerts notification list – Overview tab

Alerts notification list – Overview tab

Additional information can be seen related to a pop up change based alert. Highlight the alert you want more information about and select the General tab.

Alerts notification list – General tab

Alerts notification list – General tab

Manage alert rules:

Organization administration> Setup> Alerts> Alert rules.

The ‘General’ tab displays details on the alert selected.

Alerts can be deleted from this form.

Alerts can only be added to this form by using an alert template.

Alert rules list form – Overview tab

Alert rules list form – Overview tab

Alert rules form – General tab

Alert rules form – General tab

For more information regarding Alerts in Microsoft Dynamics AX, check out the resources available on TechNet. And to stay In The Know, connect with us via social media, or check out more posts on our blog.

July 15, 2015

Vendor Price Protection in Microsoft Dynamics AX 2012

Overview: Vendor Price Protection is a topic Microsoft Dynamics AX 2012 Retail Customers often ask the best practice method using standard AX processes. Vendor Price Protections are agreements between the vendor and customer where in the event the on-hand inventory is devalued, the vendor will reimburse the customer for the loss of value. This is also referred to as a Funded Markdown. Inventory devaluation may occur for a number of reasons. One example would be, the new xPhone 7 is released today, which instantly reduces the value of any on-hand xPhone 6s. Another example would be inventory that did not sell as well as expected, which over time will hold a lower value than the original cost.

The first step is to provide the vendor a report of the on-hand inventory for the given item(s). The vendor or customer will calculate the adjustment total and generally take this amount as a vendor credit.

In the AX 2012 product, the Moving Average costing method is the best to accommodate the required transactions. The process is outlined simply as: Record Vendor Credit, CR to account defined as ‘Cost Revaluation for Moving average’ in Posting Profile. And adjust on-hand value of inventory, resulting in an automatic DR entry to ‘Cost Revaluation for Moving average’. The result is a reduced inventory valuation by means of a vendor credit.

Process: Together, we’ll walk through the end-to-end process including the following steps:

  1. Creating a new item
  2. Create a Purchase Order for the item, Receive, and Invoice Update
  3. Create Sales Order for item
  4. View remaining inventory
  5. Enter Credit for Vendor Price Protection adjustment
  6. Review Item Posting Profile for Cost Revaluation GL account
  7. Adjust the moving average value
  8. Review GL posting

An example of the end-to-end process for applying a Vendor Price Protection adjustment follows.

Adding a new item

Moving Average 1

Select the Item Model Group that has Moving Average defined as the costing method.

Moving Average 2

Next, we’ll enter a Purchase Order for 100 units @ $20.   Additionally, we’ll allocate $100 in freight to the lines.

Moving Average 3

Freight entered and allocated to the line.

Moving Average 4

The Purchase Order is received and invoiced. By viewing the On-Hand details for Item #9898 we can see that the inventory value (cost price) is $21 each.

Moving Average 5

We’ll now sell 10 of the items at $59.99.

Moving Average 6

By viewing the on-hand details, we can see our remaining physical inventory is 90 units at a value of $21 each.

Moving Average 7

Before we proceed with making the adjustment, let’s review Item Posting. Navigate to Inventory management > Setup > Posting > Posting). The Cost revaluation for moving average account will define the posting for any adjustments to the value of inventory. Notice the account defined as 510610.

Moving Average 8

Item 9898 has not been selling well. We have a Price Protection Agreement with the Vendor. The vendor has been notified of our on hand inventory is 90 units at $21. The terms of our agreement allow a $10 credit per unit on hand.

Moving Average 9

The vendor has approved the credit of (90 units @ $10) = $900. First we’ll record the vendor credit by entering an AP Invoice Journal. The vendor credit should be posted to account 510610.

Moving Average 10

The resulting entry will post a CR to 510610.

Next, we need to post the adjustment to the inventory value. Navigate to Inventory management > Periodic > Revaluation for moving average. Use the Select criteria to choose the item number and site.   Enter the new unit cost of $11.00.   The resulting entry will display in the Edit now field.

Moving Average 11

Post the adjustment which will result in an automatic DR entry to 510610. The net effect in account 510610 will be zero. We can confirm this entry by navigating to the GL account.

Moving Average 12

In summary, we have demonstrated in AX 2012 how to process a Vendor Price Protection adjustment using the Moving Average inventory costing method. For more information on this topic, a free whitepaper from Microsoft is available here for download.

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June 30, 2015

Importing Financial Dimension Values for Departments – Microsoft Dynamics AX

The following scenario occurred while I was uploading (via DIXF) the standard financial dimensions for a client in Microsoft Dynamics AX 2012 R3. To review, the standard financial dimensions in Microsoft Dynamics AX 2012 are Cost Center, Department and Business Unit.

I ran into a bit of a roadblock while I was using the DIEF (Data Import Export Framework) to import financial dimension values for Departments.

I was confused because the PartyNumber field (aka Party ID in the global address book) is a mandatory field. I had to have a value for this field. I tried leaving the values empty and got a null error. Now I wasn’t sure which values I should enter and I was nervous about making changes to a key field in the global address book.

When creating my Processing group and Generating a source file: I found the right Entity (Main account) and identified that there were 3 Mandatory fields. I also included a couple of additional fields (see screen shot below).

Import 1

Generate source file Wizard

So, here’s what you need to do. Create your processing group (I called mine DIM_VAL) and attach it to the Entity = Operating unit.

Import 2

Processing group list

Select your Source data format (your choice, I set up Tab Delimited). Run Generate source file and run Generate source mapping procedures.

import 3

Select entities for processing group form

Now here’s the solution to the global address book, mandatory field (Party ID) requirement: Select “Modify source mapping” from the menu bar under the select entities for processing group form (see screen shot above). On the Action pane, under the View section, select “Mapping details” (screen shot below).Next, find the Source field for PartyNumber and check the Auto-generated box.

Import 4

Modify source mapping form

You don’t need to enter any values in the fields of your source data for PartyNumber. When you Stage your data, AX 2012 will assign the next available Party ID(s) to your imported operating units.

Import 5

Sample of source data file for DIEF Department

Import 6

Successful import results showing auto-generated Party ID (PartyNumber field in Entity-Operating unit)

NOTE: Another point of caution when using DIEF/DIXF for operating units (Business unit, Department, Cost center) that have existing numeric references. E.g. Advertising is department 152 and Finance is department 226. These Operating units are also considered Organizations in the global address book and Number sequences. Make sure that the Number sequence for Orga_1 is set to Manual before importing your own numeric values. Otherwise, it will not import correctly and the records in the global address book will not appear in the General Ledger module.

Import 7

Kyle Rouzer, Applications Consultant

June 22, 2015

US Retail Operations Set-up – Six Compliance Laws & Regulations You Should Know

As a foreign retail entity using Microsoft Dynamics AX; moving your retail business overseas can be a daunting task if you don’t have the proper resources to help guide you through the process. Especially when it comes to United States business compliance laws & regulations. You’ll need to understand which areas of compliance Microsoft Dynamics AX is expected to cover, and what other areas of compliance you may encounter. Well, luckily for you, we have compiled a list of the most common compliance elements that we encounter when assisting our non-US clients with their US retail operations set-up.

Sales and use taxes:

  • Use taxes refer to taxes paid on purchases, where the entity is not charged tax and tax is required. This will occur when items are purchased for use by the entity and the vendor does not charge sales tax; the business entity is liable for a use tax in this scenario. Microsoft Dynamics AX supports identification and calculation of this sort of use tax.
  • Sales taxes are taxes that the entity will charge their customers, when items sold are taxable. Microsoft Dynamics AX can be set up to calculate these state/ city/ local jurisdictional taxes and to report on these liabilities.

Item import and export duties: These are taxes and fees related to importing products into the US and exporting products from the US. Most often, these fees are calculated and assessed by the freight company transporting items into and out of the country and remitted by the US entity to the freight company.

Payroll tax withholding and payroll taxes: In the US, the payment of wages to employees generates two types of taxes: (1) taxes withheld from the employee’s wages and submitted to the government on behalf of the employee and (2) taxes the employer pays the government over and above wages. In addition, at year end, reports of taxes withheld and paid must be filed both with the employee and with governmental authorities. These taxes and reports include the following:

  • Withholding taxes:
    • Federal income tax, social security tax and Medicare (IRS Form 941)
    • State income tax (for each state where wages are paid to an employee who is a resident of that state)
    • Local/ city income tax (this is less common, but for some cities such as New York City, there are local income taxes as well, which must be withheld when paying wages to an employee who is a resident of that locality).
  • Payroll taxes:
    • Employer portion of social security and Medicare tax (Form 941)
    • Federal unemployment (Form 940)
    • State unemployment
    • Local/ city payroll taxes (less common, but in a few jurisdictions)
  • Reports due at year end:
    • W-2 information returns, filed with the employee, US government and some states (some states use the federal filing and don’t require a separate filing)
    • W-3 summary return for the above (government filings only)

If payroll is calculated using Microsoft Dynamics AX, reports to support these filings are produced by AX. If a payroll service is used for calculating payroll, the service often completes these tax filings.

Vendor reporting: The US government requires reporting of payments to vendors that are not exempt US legal entities. These payments are processed through accounts payable. Microsoft Dynamics AX supports a process to identify and process these payments. Related forms are 1096, 1099 and W-9.

Further, if an entity makes any payments to individuals that are non US based via accounts payable (Form 1042 Annual Withholding Tax Return for U.S. Source Income of Foreign Persons), Microsoft Dynamics AX supports a process to withhold the payments and to file that return.

Fixed assets: premise and property value: For office locations and stores, there are several reports and taxes for each geographic location the company has (including the headquarters). Note that these returns are not calculated by Microsoft Dynamics AX. The entity may choose to file this internally or outsource it.

  • Local jurisdiction occupancy tax. This is a fee assessed for an occupancy permit, usually minor and may be combined in some jurisdictions with the local business license (below). If not combined with the business license, the entity will receive a bill for this permit from the locality. The first occupancy permit is issued as part of the construction process for a store (and is completed by the landlord for office buildings).
  • Local business licenses. In most locations, these are filed annually with the local government. The fees charged are usually based upon revenue at the geographic location.
  • Local real and personal property tax returns. These are taxes based upon the fixed assets of the company. Real property is land or buildings. Personal property is leasehold improvements, furnishings, fixtures, equipment, etc. An annual report of the depreciated value of the fixed assets is required to calculate the tax. This return is filed with the county or city that has jurisdiction where the business is located. After processing that return, the authority will bill the entity for property taxes based upon the valuations listed in that report.

Corporation licensing and income taxes: The US requires a corporation to file an annual return each year to the Secretary of State in the state where the corporation was formed and to remit a small fee to keep the corporation active. This filing and fee are often completed by the attorney for the company.

Additionally, based upon income or investment, there are many corporation federal, state and local income taxes; these are calculated and remitted by the company or an accounting firm on behalf of the company (which is usually a ‘CPA’ or Certified Public Accounting firm in the US). All corporation licensing and income taxes can be calculated and filed by professional firms on behalf of the entity.

If you have any questions or suggestions for additions to this document, please reach out to us. We are all interested in supporting a vibrant business community and in making entry to do business in the US an easier process.

June 10, 2015

Leveraging Buyer Push Functionality in AX 2012

Microsoft Dynamics AX 2012 offers rich features when it comes to Buyer Push functionality. One scenario, with setup on using this functionality, is illustrated below.

Buyer push can be through a replenishment rule linked to the retail (merchandise) hierarchy; via a replenishment hierarchy using the warehouse location weights assigned or with a fixed quantity to all stores selected.

The second method would be a common retail scenario if regional distribution centers (DC) are being used to push inventory out to specific stores served by that DC. This is the method in bold above and also illustrated below.


A replenishment hierarchy has been set up in Organization Administration> Setup> Organization> Organization hierarchies.

The stores shown are for illustrative purposes only. The summary unit (in green) should be the DC and the stores that DC serves (in blue) would be beneath.

Each store is a warehouse with a default weight set on it. Default weights for stores come from the store warehouse setup (Inventory management> Setup> Inventory breakdown> Warehouses.


A store with a weight of ‘3’ will receive three times more of a product than a store with a weight of ‘1’. If using store weight to spread the buyer push, all stores are added up and each store receives a pro rata share.

With the setup completed above, the buyer push functionality is ready to use. Navigate to Retail> Common> Replenishment> Buyer’s push.


Steps to calculate a push:

  • Add a new record, with the from site/warehouse (which will be the DC for NTE).
  • Add a line(s) with the items to distribute and how many to distribute.
  • Select ‘Location weight’ and the replenishment hierarchy to use.
  • Click ‘Calculate quantities’

Stores calculated to receive quantity display in the ‘Warehouse’ area of the form (see below).


At this point, the user can:

  • Review and, if desired, adjust the ‘Pushed quantity’ manually on the lines below.
  • ‘Clear quantities’ allows the form to be reset for adjustment and recalculation.

Once the user is satisfied with the quantities displayed, the ‘Create order’ button creates AX transfer orders, which are then processed as any other transfer order.

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