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Order Credit and Price Match in Microsoft Dynamics 365

Order Credit and Price Match in Microsoft Dynamics 365

In this blog, we will look at how to use call center functionalities of “Order Credit” and “Price Match” to give credit to customers without receiving return items.

Introducing Order Credit Functionality:

Call Center provides “Order Credit” feature to add to the Sales Order form. Using this feature, you can offer standalone credits to customers from invoiced orders (must have at least 1 invoiced line) without returning an item or creating a credit note. You simply need to enter credit amount with a reason code and post it.

Order credit functionality is used when an order is invoiced. Order Credit button is disabled when Sales Order status is "Open" or "Delivered" and enabled when the status is "Invoiced".

Setups:

To use order credit functionality in Dynamics 365, following configurations are required;

  1. Create journal name for order credit posting along with number sequence.
  2. Ledger account “Cash Discrepancy” with Type "Expense" will be created and attached as offset account for this journal name.
  3. Journal name will be attached in Call Center Parameter along with setting other parameters for order credit.

Process:

Perform these steps to use order credit functionality when an order is invoiced;

  1. Click “Order Credit”, enabled when order status is "Invoiced".

  2. Enter the amount of credit/refund to customer which is not more than the amount of Sales order invoiced or the maximum amount set in "Call Center Parameters".
  3. Credit type is auto selected as "Credit Card" and drop down option is available to select the reason code.
  4. Click ok to close the form.

     

  5. AX will automatically post “refund and payment” entry with the following ledger accounts;

    Journal 1:
    Ledger Account Type Comments
    Cash Discrepancies A/C Debit The ledger account which is attached as offset account in Journal name.
    Customer Balance A/C Credit The ledger account which is associated with Customer group in customer posting profile.

    Journal 2:
    Ledger Account Type Comments
    Customer Balance A/C Debit The ledger account which is associated with Customer group in customer posting profile.
    Cash Deposit A/C Credit The ledger account which is associated with payment method that is used during SO transaction.

  6. In this scenario, AX created 2 different journals in which customer balance is settled against Cash Deposit account (The ledger account which is associated with payment method)


    Order Credit

    Pros Cons
    If a refund is to be made for multiple items in a single sale order, this functionality is essential as the user does not have to select each line item of sale order to make a refund This order credit refund doesn’t create any link with the Sales Order
    User can record multiple entries (order credit) until he/she reaches the limit of Sale order invoiced amount or maximum amount set in "Call Center Parameters". User can see the refund (credit customer transaction) (order credit/refund) in "Transaction" form of Customer but cannot find link with refund posted entries
    User can add total refunded amount in a single entry as order credit calculates refund/credit amount on the header level At the time of using order credit functionality there is no "comments" box to add comments for reason of giving credit to customer and on what basis it is enabled when order is invoiced. This means the functionality can also be enabled on previous orders, creating a risk of giving credit on previously settled/invoiced orders.
    In case of on check/cash transaction, system will make one accounting entry At the time of return order creation, order credit amount is not excluded from sales order net amount
    In case of credit card transaction two counting entries will be made User can return only those line(s) against which price match was not recorded.

 

Introduction to Price Match Functionality:

Call Center provides a feature called “Price Match” to the Sales order form. Using this, you can perform standalone credits to the customer from invoiced orders by reducing product price from the sale order line. You simply need to enter a new price with a reason code and post it.

To match prices, a user creates a sales order that uses a regular product price to invoice an order. The price is then lowered to the requested amount by creating credit to the customer's account.

Setups:

Setup is the same as for Order Credit.

Process:

Perform these steps to use Price Match functionality when an order is invoiced;

  1. Click on the Price Match button which is enabled when order status is "Invoiced".
  2. Enter new price, credit amount field turns greys and updates automatically.
  3. Enter amount of credit/refund to customer per sales line which is not more than the Sale line net amount or maximum amount set in "Call Center Parameters"
  4. Credit type is auto selected as "Credit Card" and drop down option is available to select the reason code.
  5. Click ok to close the form.

  6. AX will automatically post the refund and payment entry with following ledger accounts;

    Journal 1:
    Ledger Account Type Comments
    Cash Discrepancies A/C Debit The ledger account which is attached as offset account in Journal name.
    Customer Balance A/C Credit The ledger account which is associated with Customer group in customer posting profile.

    Journal 2:
    Ledger Account Type Comments
    Customer Balance A/C Debit The ledger account which is associated with Customer group in customer posting profile.
    Cash Deposit A/C Credit The ledger account which is associated with payment method that is used during SO transaction.

  7. In this Scenario, AX creates two different journals where customer balance is settled against Cash Deposit account (The ledger account which is associated with payment method)


    Price Match

    Pros Cons
    In case of a credit card transaction, two counting entries will be made in system User needs to create multiple refund entries as price match functionality works at an item level
    Price match is recorded at Sales Line level. User enters new price and amount deduced with the following formula is credited to Customer's account in AX: Credit/Refund = Old Price - New Price Price match doesn’t create any link with the Sale Order
    In case of on check/cash transaction, system will make one accounting entry Although user can view the credit customer transaction (order credit/refund) in "Transaction" form of Customer but he will not find a link with refund posted entries At the time of using Price match functionality there is no "comments" box to add comments for reason of giving credit and on what basis.
      Price match is enabled when order is invoiced, meaning that the functionality will also be enabled on customer's previous orders, creating a risk of giving credit on previously settled/invoiced orders
      User cannot return the lines (return order creation) against which price match was recorded

References:

https://technet.microsoft.com/en-us/library/dn715953.aspx

https://community.dynamics.com/ax/b/axsupport/archive/2016/03/07/sales-order-refunds-for-credit-card-payments

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Adnan Anwar's picture
Advisory Business Analyst at Systems limited with 5 years of implementation experience in Microsoft Dynamics AX 2012 and Microsoft Dynamic 365. Adnan has implementation experience in Finance, Supply Chain Management and Retail & Commerce modules. Adnan is based in Lahore.

Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of Systems Limited, or any other entity related to Systems Limited.

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