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Trade Agreement Journals in Dynamics 365

Trade Agreement Journals in Dynamics 365

“Trade agreements are fixed price or discount agreements that are set up for one or more customers or vendors for the sale or purchase of individual or multiple products. They are applied to quotes, orders, and invoices according to a set of built-in rules to determine the valid price and/or discount” (Trade Agreements). This blog takes you through different scenarios in which trade agreement journals (sales) could be used in D365.

 The various kinds of trade agreements most used for sales and purchases both, are:

  • Price
  • Line Discount
  • Multiline Discount
  • Total Discount

Setup

Before we can start creating trade agreements, some setups need to be done.

  1. Activate price/discount

    Procurement and sourcing > Setup > Price and discounts > Activate price/discount (for Purchase Orders)

    Sales and marketing > Setup > Price and discounts > Activate price/discount (for Sales Orders)

    Here you can decide if you want to apply different types of agreements at either customer level, customer group level or for all customers in the system.

  2. Set up trade agreements journal names

    Procurement and sourcing > Setup > Price and discounts > Trade agreement journal names


    Sales and marketing > Setup > Price and discounts > Trade agreement journal names

    Under ‘Relation’ column, you can define the different types of trade agreement journals you want to create.

  3. Set up vendor and customer price/discount groups

    Procurement and sourcing > Price and discounts > Vendor price/discount groups

    Sales and marketing > Price and discounts > Customer price/discount groups

    Here you can set various vendor/customer price/discount groups that can be used later to create group specific trade agreements.

    Create Sales Trade Agreement Journal

    Price Trade Agreements

    Price trade agreements are used to specify price rules specific to an item, item group or all items for a customer, customer group or all customers. Scenario: Trade agreement journal for an item such that for quantities greater than zero, the price of the item on sales order will be PKR 10. Base price of the item on product master is PKR 15 (product information management > released product > released product details > sell fast tab)

    1. Create trade agreement with default relation Price (sales)


    2. Click on lines



    3. Enter ‘account code’ = all to apply trade agreement to all customers
    4. Enter ‘item code’ = table to create agreement specific to an item and then select the item under ‘item relation’ field.
    5. Enter amount, e.g. 10 in ‘amount in currency’ field
    6. Post trade agreement
    7. Create sales order for that particular item



Result: On sales order unit price should be PKR 10.

Line Discount Trade Agreements

Line discount trade agreements are used to apply discount rules to individual sales order lines.

Scenario: Trade agreement journal for a particular item, such that for quantities greater than zero, 10% line discount will be applied.

  1. Create trade agreement with default relation Line discount (Sales)



  2. Click on lines



  3. Enter ‘account code’ = all to apply trade agreement to all customers
  4. Enter ‘item code’ = table to create agreement specific to an item and then select the item under ‘item relation’ field
  5. Enter discount percentage in ‘discount percentage 1’ field
  6. Post the agreement journal
  7. Create sales order for that particular item

Result: Line discount applies to unit price of each line fulfilling the criteria.

Net Amount = (Unit Price – (Unit Price x Discount %)) x Line Quantity

Multiline Discount Trade Agreements

These are used when multiple lines of a sales order contribute to qualify for the discount.

Scenario: Trade agreement journal for all items, such that for quantities >= 2, 10% multiline discount will be applied.

  1. Create trade agreement with default relation Multiline discount (Sales)
  2. Click on lines
  3. Enter ‘account code’ = all to apply trade agreement to all customers
  4. Enter ‘item code’ = table to create agreement specific to an item and then select the item under ‘item relation’ field
  5. Enter discount percentage in ‘discount percentage 1’ field



  6. Post the agreement journal
  7. Create sales order for that particular item

Result: Multiline discount applied at each line of the sales order

Total Discount Trade Agreements

Total Discount agreements are used to specify an umbrella discount for the whole sales order

Scenario: Agreement journal or all items, such that for quantities >= 500, a total discount of 10% is applied on the sales order

  1. Create trade agreement journal with relation Total disc. (Sales)



  2. Click on lines
  3. Enter ‘account code’ = all to apply trade agreement to all customers
  4. ‘Item code’ field is set at default = table (no other option can be selected here)
  5. Enter quantity, e.g. 500, in ‘from’ field
  6. Enter discount percentage in ‘discount percentage 1’ field



  7. Post the agreement journal
  8. Create sales order for any item
  9. Click on Total discount button under Sell tab (action pane)



  10. Click on Totals button under Sales Order tab (action pane)



Result: A 10% discount is given on the total amount of the sales order

References

Trade Agreements, Concept paper - May 2016 https://mbs.microsoft.com/files/public/CS/AX2012R3/TradeagreementsinAX.pdf

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Marvi Ahmad's picture
Marvi Ahmad has been working as a business analyst and functional consultant in the ERP competency at Systems Limited. She is a graduate from LUMS with an accounting and finance background. Also a marketing enthusiast, her core interests include keeping tabs on new media/ digital marketing techniques

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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