Financial dimensions defaulting logic on the purchase orders created from purchase requisitions (active dimension link, merge parameters) in Microsoft Dynamics 365 SCM

In this blog post I would like to explain what capabilities we have out of the box for financial dimension setup on the purchase order/lines when creating purchase order from purchase requisition. 

When Purchase requisition is being created (without project involvement), financial dimensions are set from the following setups and in the following priority: Dimension link -> Vendor -> Item.

When PO is being created from the Purchase requisition, financial dimensions on the created purchase orders are initialized in the following way:

• Purchase order header financial dimensions are set from the vendor
• Purchase lines financial dimensions are set from the purchase requisition lines

If Merge financial dimensions from the vendor that was added after purchase requisition approval = YES (Purchasing policies > Purchase order creation and consolidation rule > Manual purchase order creation), then financial dimension from the requisition line will be merged with the financial dimensions from the vendor and set it on the purchase order line.

• Purchase order header financial dimensions are set from the vendor
• Purchase lines financial dimensions are set from the purchase requisition lines. If any fin dims are blank on purchase requisition line -> then it will be taken from vendor. 

Imagine the following situation: 

You raised a Purchase requisition with Business unit = 001, Cost center = <blank> and submitted for approval. While waiting for approval, vendors financial dimensions Cost center gets defaulted to 007. Upon purchase order creation, purchase order line will get financial dimension: Business unit = 001, Cost center = 007. Without this parameter activated, it would have set to Business unit = 001, Cost center = <blank>.

Within 10.0.25 release, a new feature has been introduced that affects the financial dimensions merge logic.

Feature name: “Merge financial dimensions from the vendor with active dimension link financial dimension on the purchase order”

Feature description: This feature allows for the merge financial dimensions from the vendor with active dimension link financial dimension after purchase requisition approval if you set up a link between a financial dimension and the site inventory dimension. Purchase order creation and demand consolidation purchasing policy rule can be setup to drive the decision for merging financial dimensions from vendor with active dimension link financial dimension on purchase order header level.

Once this feature is enabled, new parameter will be displayed Merge financial dimensions from the vendor with active dimension link financial dimension on the purchase order (Purchasing policies > Purchase order creation and consolidation rule > Manual purchase order creation).

If this parameter is enabled, the financial dimension from the vendor and dimension link will be merged together and set on the purchase order header. 

Try out the following: 

1. Enable Dimension link (Inventory management > Setup > Posting > Dimension link).

• Select the financial dimension in the Dimension link page, for instance Cost center
• Go to Sites and set Cost center value for all sites (Inventory management > Setup > Inventory breakdown > Sites)
• Go to Dimension link page and select Activate link. Wait until completed. 

2. Set Business unit = 001, Cost center = <blank> on the vendor record. 

3. Create Purchase requisition with Business unit = 001, Cost center from the site, let's say 008. 

4. Submit and Approve requisition.

5. If parameter is disabled, Purchase order header financial dimensions will be defaulted to Business unit 001, Cost center = <blank>.

If parameter is enabled, Purchase order header financial dimensions will be defaulted to Business unit 001, Cost center = 008.

That's it!