If you're anything like me, every time you see "extra charges" or "automatic fees" tacked onto something, you probably brace yourself for the pain in your wallet. But what if I told you that in the world of business, especially in Dynamics 365 Finance & Operations (D365 F&O), those extra charges can actually be a good thing? Let’s talk about Auto Charges and why businesses across various industries are thrilled to have this feature.
What Exactly Are Auto Charges? (The Beginner’s Guide)
Think of Auto Charges like that "service fee" you see when ordering takeout, but instead of grumbling about it, in D365, it's your best friend. Auto Charges automatically apply predetermined fees to transactions like purchase orders, sales orders, or even transfers. These could be for things like freight, handling, customs duties, or any other incidental charges that are regularly part of your operations.
Here's the magic: instead of manually calculating and applying these charges, D365 does the heavy lifting for you. Once configured, it applies the charges to every relevant transaction, ensuring that nothing gets missed. If you want to allocate charges based on specific criteria—like by quantity, volume, or value—you can set that up too.
Still with me? Good. Let’s get into some real-world examples.
Auto Charges in Action: Industry Examples
Whether you’re in retail, manufacturing, food & beverage, or any other industry, Auto Charges in D365 can save you time, money, and headaches. They ensure that your transactions are accurate and consistent, all while giving you a clearer understanding of your costs. So, instead of worrying about those “extra charges,” you’ll be celebrating how much easier your life has become.
Retail: The Fashionista’s Shipping Dilemma
Picture this: You’re a fashion retailer selling the latest trends, and you’re sourcing your stock from around the world. With each purchase order, you face shipping, insurance, and customs fees. Instead of manually adding these costs to every purchase, Auto Charges in D365 lets you define these fees upfront based on suppliers, locations, or items. When you create a purchase order, D365 applies the appropriate charges instantly. Now, instead of getting tripped up by missing fees, you’re free to focus on next season’s runway looks.
Manufacturing: Heavy Metal and Heavier Freight
Let’s say you’re in the manufacturing business, dealing with raw materials—think steel, aluminum, or even lumber. These materials are bulky and heavy, so shipping costs fluctuate wildly depending on order size and distance. By using Auto Charges in D365, you can automatically apply freight charges based on the order's weight or volume. It’s like having an assistant who’s really good at math, but never complains about working overtime.
Food & Beverage: Cold Storage Ain’t Free
In the food industry, cold storage fees can be a hidden killer. Imagine you’re a distributor managing various fresh and frozen goods. Auto Charges can be set up to apply cold storage fees automatically based on the temperature requirements of different products. Instead of calculating storage costs for each item manually, D365 handles it for you, so you can focus on keeping your products fresh—and your customers happy.
Why Should Businesses Care About Auto Charges?
Eliminate Manual Errors
Manual entry of charges is time-consuming, and time is money, as they say. Auto Charges automate the process, reducing the administrative burden on your team. More importantly, it decreases the chance for human error—because we all know that someone is going to forget to add that freight charge at some point.
Increased Efficiency (Consistency and Accuracy)
Ever been hit with an unexpected charge that wasn’t applied correctly? Auto Charges ensure that every transaction is handled consistently. You don’t have to worry about someone forgetting to add customs fees for international orders or freight costs for heavy shipments. D365 handles this for you with precision, so there’s no discrepancy when reviewing your financials.
Improved Margins and Cost Transparency
By consistently and accurately applying charges, you get a better understanding of your costs and, therefore, your margins. When you’re able to automatically capture every little cost—freight, customs, insurance—you gain a much clearer picture of profitability. In competitive industries, this transparency can make the difference between being in the red or black.
Scalability
As businesses grow, so do their transactions. When you’re manually applying charges, keeping up with the sheer volume of orders and shipments can quickly become overwhelming. Auto Charges make scaling your operations a breeze by automating routine processes, ensuring nothing slips through the cracks as your transaction volume increases.
How to Set Up Auto Charges in D365
If you’re ready to take the plunge, setting up Auto Charges in D365 isn’t as daunting as it sounds. You can assign charges at different levels—item, group, vendor, or customer. There’s even an option to allocate those charges across items based on volume, weight, or value, so you can customize it to fit your business model.
Understanding the Hierarchy of Auto Charges in Dynamics 365
As with any automation in D365, there’s a method to the madness. When you’re setting up Auto Charges, you can define them at various levels—Item, Group, Vendor, or Customer.
But what happens when you’ve set up multiple charges across these levels? Which one does the system choose?
In D365, the Auto Charges feature uses a hierarchy to determine which charge to apply when there’s overlap. It’s important to understand how this hierarchy works so you can prioritize your charges correctly and avoid unexpected results.
The Auto Charges Hierarchy in D365
The system follows a clear, logical order when determining which charge to apply. The closer the charge is to the specific transaction or item, the higher its priority. Here’s how it works, ranked from highest to lowest priority:
Item Level
Customer/Vendor Level
Group Level
Item-Level Charges: The Highest Priority
Item-level charges sit at the top of the hierarchy. If you’ve defined a specific charge for an individual item, D365 will always prioritize that charge over any others. This makes sense when you consider that item-level charges are the most granular and specific. These could include fees like special handling or packaging costs tied directly to a unique product.
Example:Let’s say you’re a food distributor dealing with both frozen and non-frozen items. For frozen items like ice cream, you might need to apply a cold storage fee. By setting up a charge at the item level for ice cream, D365 knows to apply this specific charge when that item is involved, regardless of any other charges you’ve set at the vendor or group level.
Vendor/Customer-Level Charges: Middle Priority
If there are no item-specific charges, D365 moves down the hierarchy to see if there are any charges applied at the vendor or customer level. Vendor-level charges are used for procurement scenarios, while customer-level charges apply to sales orders. These charges are often used for broad, general expenses related to a particular business partner.
Example:In the case of a manufacturing company that works with multiple suppliers, you might have shipping agreements with Vendor A to always cover shipping costs. This shipping charge would be applied at the vendor level. So, if you order 100 units of steel from Vendor A, D365 applies the agreed shipping charge from that vendor profile, unless there's an overriding item-level charge.
Group-Level Charges: The Lowest Priority
At the base of the hierarchy are group-level charges. Groups allow you to define charges that apply across a range of items, vendors, or customers. Group-level charges are often used when you want a standard charge applied across broad categories but don’t need the specificity of item- or vendor-level charges.
Example:Consider a logistics company that ships products for a wide range of customers. You could create a “Bulk Freight” group that automatically applies a bulk shipping fee for any large order over a certain volume. However, if one particular item or customer has specific shipping terms, D365 will prioritize those over the group-level charge.
How Does the System Choose?
Let’s take a scenario where you’ve set up charges at all three levels—Item, Vendor/Customer, and Group. The system follows this process:
Is there a charge defined at the item level?If yes, apply the item-level charge. Stop here.If no, continue to the next step.
Is there a charge defined at the vendor (for procurement) or customer (for sales)?If yes, apply the vendor/customer-level charge. Stop here.If no, continue to the next step.
Is there a charge defined at the group level?If yes, apply the group-level charge.If no, no charge is applied.
Essentially, the system is always looking for the most specific charge, and it will apply that charge as soon as it finds one. This hierarchical structure ensures that you have flexibility when setting up charges while still maintaining control over which charges take precedence in specific scenarios.
Here are two quick resources to guide you through this journey:
DynamicsDad Joke of the Day
What did the auto charge say to the D365 user?“Don’t worry, I’ve got this covered automatically!”
Later skater,
DynamicsDad
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