Vendor collaboration in Microsoft Dynamics 365 for Finance and Operations

Vendor collaboration is a process where you, as a company, grant the access to your vendors in order to perform the following:

  • review, accept, and reject request for quotations (RFQs)
  • review, accept, reject, accept with the changes purchase orders (POs)
  • perform vendor invoicing
  • work with consignment stock

Since Microsoft Dynamics 365 for Finance and Operations is web-based application, you can easily allow vendors work directly in the Microsoft Dynamics 365 for Finance and Operations without having EDI.

Setup

You would need to complete the following configuration prior working with it.

Vendor collaboration setup

Let’s review those settings.

Information for vendors responding to POs

Navigate to Procurement and sourcing > Setup > Vendor collaboration > Information for vendors responding to POs

Click New to create new response.

Select Type of response.

Type in the Information message in the Details section.

Information for vendors responding to POs

User workflows

Navigate to System administration > Workflow > User workflows.

Create new workflow with the Vendor user request (new user or modify user) type. The below is an example of the workflow that is configured for the Contoso demo data.

User workflows

Vendor setup

Navigate to Accounts payable > Vendors > All vendors.

On the General FastTab select value in the Collaboration activation field. The possible values:

None:  Vendor collaboration functionality is inactive for the corresponding vendor.

Active (PO is auto-confirmed): Purchase orders are automatically confirmed if the vendor accepts them without changes

Active (PO is not auto-confirmed): Purchase orders are not automatically confirmed if the vendor accepts them without changes. Purchasing agent from your company must confirm purchase order manually.

Collaboration activation

On the Purchase order details FastTab select Purchase order prices/amount flag if you want your supplier to see price information.

Purchase order prices amount

Add vendor contact

Navigate to Accounts payable > Vendors > All vendors.

Click Contacts -> Add contacts on the Action pane on the Vendor tab.

Add contacts

Once you add new contact, click Provision vendor user button on the Contact tab in the Requests section.

Provision vendor user

Provision vendor user

By provisioning vendor user, you determine that contact which you are provisioning will be created as a user and will get the access into D365 and will do all activities from vendor side like approving purchase orders.

In the Provision vendor user form, set Vendor collaboration flag.

Select which roles should be assigned to the user.

Provision vendor user form

Click Submit button.

As the result new vendor user request will be created.

User request

Go to Vendor collaboration > Contacts > Vendor collaboration user requests.

Created request will be displayed with the Submitted status and workflow will be started.

Vendor collaboration user requests

Go into details and check the roles that will be assigned to the user.

User request details

Approve the request by clicking Workflow -> Approve button.

Workflow Approval

Once you approve the request, the status will be changed into Pending approval.

After workflow is executed, status will be changed to Azure AD B2B user invitation pending.

New button Export user invitation file will be available. It will export csv file with the connection information.

Export user invitation file

Complete the workflow by clicking Workflow -> Complete button.

Workflow Complete

Workflow Complete 2

And again, Pending approval status will be set and Approve creation of AX user task will be started.

Approve creation of AX user by clicking Workflow -> Approve button.

Workflow Approve

Workflow Approval 2

Workflow will be completed. Workflow activity will look like below and you can compare the activities with the workflow provided at the beginning.

  • Workflow activated (000746)
    • Conditional decision evaluation (Provision user OR modify roles)
    • Approval started (Approve new user request)
      • Approval completed (Approve new user request)
    • Task started (Send Azure AD B2B user invitation)
      • Task completed (Send Azure AD B2B user invitation)
    • Approval started (Approve creation of AX user)
      • Approval completed (Approve creation of AX user)
    • Automated task started (Automated provision user 1)
      • Automated task completed (Automated provision user 1)
    • Automated task started (Notify new user)
      • Automated task completed (Notify new user)

Workflow completed

Approved vendor request

If you go to System administration > Users > Users, you will notice that the new requested user has been created and 3 roles have been assigned.

Users

Let’s login under vendor contact person that we have just provisioned.

The following workspaces are available.

Vendor user workspaces

Only Vendor collaboration module is available.

Vendor user modules

Change management activation

Depends on the change management parameter, purchase order will go through one or another flow and statuses of the purchase order will depend on this parameter as well.

For our example, we will keep this setting off.

Change management functionality can be reviewed here: D365 Change management

Walkthrough

Create new purchase order by navigating to Accounts payable > Purchase orders > All purchase orders.

Status of the purchase order will be set to Approved.

Send for vendor confirmation by clicking Send for confirmation button on the Purchase tab in the Vendor collaboration section.

Send for confirmation button

Click OK on the Send purchase order for confirmation form.

Send purchase order for confirmation form

Status will be changed to In external review.

In external review

Login under vendor contact person.

Navigate to Vendor collaboration > Purchase orders > Purchase orders for review.

Purchase orders for review

Approve purchase order by clicking Accept button.

Click OK on the Accept form.

Accept

Notice that message is displayed based on the Information for vendors responding to POs setup.

Information for vendors responding message

Status will be changed to Confirmed.

Confirmed

In general, the status flow of purchase orders will be the next:

Status flow

That’s it!

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