Auto charges setup in Dynamics 365 Finance and Operations - Functional consultant series

Efficient management of additional costs is crucial for businesses dealing with complex procurement, sales, and logistics processes. In Dynamics 365 Finance and Operations, the Auto Charges feature offers a streamlined way to automate the allocation of extra costs—such as freight, handling, or customs duties—across various transactions. Whether you're managing sales, purchases, or transfers, setting up auto charges ensures that these additional costs are consistently and accurately applied, eliminating the need for manual adjustments and reducing the likelihood of errors. In this article, we will walk through the key steps involved in configuring auto charges.

*) Create a charge code

Go to Procurement and Sourcing module > Setup > Charges > Charge code

Handling charge code setup

Freight charge code setup

*) Turn on the parameters.

Auto charges are applied on both levels (Header and Line). If you are following this article, please turn on the below both checkboxes.

Create Auto Charges (Header level)

Scenario: The vendor charges a $20 processing or handling fee. Let's configure the necessary setup.

Step 1) Vendor charge group creation

Go to Procurement and Sourcing module > Setup > Charges > Vendor charges group

Click on the New button and create a charge group.

Step 2) Assign the Charge group

Assign this charge group to the Vendor. Go to Account payable module > Vendors > All vendors

Step 3) Create the Auto charges

Go to Procurement and Sourcing module > Setup > Charges > Automatic charges

First, set the Level to Header and click the New button to create the auto charge. Configure the settings as shown in the figure. For this example, I have set up the auto charge for a group of vendors.

Step 4) Create the Purchase Order

Navigate to the Accounts Payable module and go to Purchase orders > All purchase orders.

Click the New button and select the vendor to which the previously created vendor charge group is assigned.

Next, add the item to the purchase order line and save the order.

Then, go to the Purchase tab and select Charges > Maintain charges, as shown in the figure below.

Verify the auto charges are successfully added.

This is the end of the automatic charge setup on the Header level.

Now, we will move on to the next part and configure the line level auto charges.

Create Auto Charges (Line level)

Scenario: When purchasing goods from a vendor, we incur transportation charges paid to a third-party transportation company. To manage this, we need to configure automatic charges at the purchase order level

Step 1) Item charge group creation

Go to Procurement and Sourcing module > Setup > Charges > Item charges group

Click on the New button.

Step 2) Assign the Item charge group

Go the Product Information Management > Products > Released products. Assign the charge group under the Purchase tab.

Step 3) Create the Auto charges

Go to Procurement and Sourcing module > Setup > Charges > Automatic charges

First, set the Level to Line and click the New button to create the auto charge. Configure the settings as shown in the figure. For this example, I have set up the auto charge for an Item group against a single vendor.

Step 4) Create the Purchase Order

Navigate to the Accounts Payable module and go to Purchase orders > All purchase orders.

Click the New button and select the vendor to which the previously created vendor charge group is assigned.

Next, add the item to the purchase order line and save the order.

Then, go to the Financials option and select Charges > Maintain charges, as shown in the figure below.

Verify the auto charges are successfully added.

This is the end of this blog.

Happy Learning,

Syed Amir Ali.