Sebastian Gregory

California Software Company North American Tea & Coffee Inc. Business Modeling Report Version 1.3 Prepared by Sebastian Gregory Authorization Reviewed By Dinesh Mohan Date 06-Apr-05 Approved By Business Modeling Report – North American Tea & Coffee Inc. DOCUMENT CONTROL Amendements Version Date Added/ Deleted/ Modified (A/D/M) 1.0 09-Jan-05 Document for Approval 1.1 24-Feb-05 Addition of more details 1.2 1.3 28-Feb-05 06-Apr-05 Addition Additions Modifications Section # 14, 17 - California Software Company, India Brief description of change Additional details added to General Ledger, Purchase and Payables, Sales and Receivables, Inventory, Warehouse Management , Production. Additional sections of Quality, Maintenance, Human Resources are added Fixed Assets and Payroll Added 3 Business Modeling Report – North American Tea & Coffee Inc. INDEX 1.0 CUSTOMER ......................................................................................................10 2.0 IT SETUP ............................................................................................................11 3.0 INFRASTRUCTURE REQUIREMENTS .......................................................................11 4.0 SALES & RECEIVABLES – OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION....................................................................................................12 4.1 SETTING UP SALES MANAGEMENT .......................................................................15 4.1.1 BASIC SETUP ..............................................................................................15 4.1.2 OTHER OPTIONS UNDER SETUP ...................................................................18 4.1.2.1 CREATING CUSTOMER POSTING GROUPS .................................................18 4.1.2.2 PAYMENT TERMS .....................................................................................19 4.1.2.3 PAYMENT METHODS ................................................................................20 4.1.2.4 REMINDER TERMS ...................................................................................21 4.1.2.5 FINANCE CHARGE TERMS .........................................................................22 4.1.2.6. CUSTOMER PRICE AND CUSTOMER DISC. GROUPS................................23 4.1.2.7 STANDARD SALES CODES ........................................................................26 4.1.2.8 SALES PEOPLE ........................................................................................27 4.1.2.9 SHIPMENT METHODS AND SHIPPING AGENTS.............................................28 4.1.2.10 CUSTOMER TEMPLATES .......................................................................29 4.1.2.11 RETURN REASONS ...............................................................................29 4.1.2.12 REPORT SELECTIONS SALES AND REPORT SELECTIONS REMINDER AND FIN. CHARGE ..........................................................................................................29 4.2 CREATING CUSTOMER CARDS ..............................................................................30 4.3 SALES ORDER PROCESSING ................................................................................38 4.3.1 SALES ORDER FOR SHIPPING FROM NATC LOCATION ....................................39 4.3.2 SALES ORDER FOR DIRECT SHIPMENT FROM VENDOR LOCATION ....................43 4.4 RECEIVABLES MANAGEMENT ................................................................................45 4.4.1 4.4.2 5.0 ANALYZING RECEIVABLES.........................................................................45 ENTERING CASH RECEIPTS ..........................................................................45 GENERAL LEDGER – OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION.............................................................................................50 5.1 GENERAL LEDGER SETUP ....................................................................................52 5.1.1 SET UP A COMPANY .....................................................................................52 5.1.2 COMPANY INFORMATION ..............................................................................52 - - California Software Company, India 4 Business Modeling Report – North American Tea & Coffee Inc. 5.1.3 ACCOUNTING PERIODS ................................................................................53 5.1.4 GENERAL LEDGER SETUP WINDOW ..............................................................53 5.1.5 NO. SERIES.................................................................................................57 5.1.6 RESPONSIBILITY CENTERS ...........................................................................58 5.1.7 GENERAL POSTING GROUPS ........................................................................59 5.1.7.1 GENERAL BUSINESS POSTING GROUPS ....................................................60 5.1.7.2 PRODUCT POSTING GROUPS ....................................................................62 5.1.7.3 GENERAL POSTING SETUP .......................................................................63 5.1.8 SALES TAX SETUP .......................................................................................64 5.1.8.1 GROUPS..................................................................................................64 5.1.8.2 SALES TAX JURISDICTIONS .......................................................................65 5.1.8.3 SALES TAX AREAS ...................................................................................66 5.1.8.4 TAX DETAILS ...........................................................................................67 5.1.9 TRIAL CODES ..............................................................................................68 5.1.10 BANK ACCOUNTS POSTING GROUPS .........................................................68 5.1.11 GENERAL ................................................................................................69 5.1.12 USERS ....................................................................................................71 5.1.13 PRINTER SELECTIONS ..............................................................................72 5.2 THE CHART OF ACCOUNTS ...........................................................................73 5.3 DIMENSIONS .......................................................................................................77 5.4 JOURNALS AND BATCHES .....................................................................................80 5.5 BANK ACCOUNTS ................................................................................................82 5.6 ACCOUNT SCHEDULES.........................................................................................85 5.7 ANALYSIS BY DIMENSIONS ...................................................................................86 5.8 BUDGETS ............................................................................................................86 5.9 BANK RECONCILIATION ........................................................................................87 6.0 PURCHASE & PAYABLES - OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION...................................................................................88 6.1 BASIC SETUP ......................................................................................................91 6.2 OTHER OPTIONS UNDER SETUP ...........................................................................94 6.2.1 CREATING VENDOR POSTING GROUP ...........................................................94 6.2.2 PAYMENT TERMS .........................................................................................95 6.2.3 PAYMENT METHODS ....................................................................................96 6.2.4 PURCHASERS ..............................................................................................97 - - California Software Company, India 5 Business Modeling Report – North American Tea & Coffee Inc. 6.2.5 STANDARD PURCHASE CODES .....................................................................98 6.2.6 PURCHASING CODES ...................................................................................99 6.2.7 SHIPMENT METHODS AND SHIPPING AGENTS .............................................. 100 6.2.8 RETURN REASONS..................................................................................... 101 6.2.9 REPORT SELECTIONS ................................................................................ 101 6.2.10 REQ. W ORKSHEET TEMPLATES ............................................................... 101 6.3 CREATING VENDOR CARDS ................................................................................102 6.4 PURCHASE ORDER PROCESSING........................................................................109 6.4.1 CREATING PURCHASE ORDERS FOR RECEIVING IN NATC LOCATIONS....... 110 6.4.2 CREATING PURCHASE ORDERS FOR DIRECT SHIPMENT ............................... 112 6.5 PAYABLES MANAGEMENT ...................................................................................114 6.5.1 RECORDING VENDOR INVOICE .................................................................... 114 6.5.2 PAYMENTS TO VENDORS ............................................................................ 115 7.0 ITEM CHARGES - INTRODUCTION ........................................................................117 7.1 SETTING UP ITEM CHARGES...............................................................................118 7.2 PURCHASE ITEM CHARGES.........................................................................119 7.3 SALES ITEM CHARGES .................................................................................119 7.4 REGISTERING SALES/PURCHASE ITEM CHARGES ................................................120 8.0 INVENTORY MANAGEMENT - OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION.................................................................................122 8.1 INVENTORY SETUP.......................................................................................124 8.1.1 ITEM TRACKING CODES .............................................................................. 124 8.1.2 UNITS OF MEASURE ................................................................................... 125 8.1.3 ITEM CATEGORIES ..................................................................................... 126 8.1.4 PRODUCT GROUPS .................................................................................... 127 8.1.5 ITEM DISCOUNT GROUPS ........................................................................... 128 8.2 SETTING UP THE ITEM CARD..........................................................................129 8.2.1 GENERAL TAB ........................................................................................... 129 8.2.2 INVOICING TAB .......................................................................................... 129 8.2.3 COSTING METHODS ................................................................................... 129 8.2.4 THE PLANNING PARAMETERS ..................................................................... 129 8.2.4.1 SETTING THE TIME BUCKET ....................................................................130 8.2.4.2 SETTING THE INVENTORY LEVEL .............................................................131 8.2.5 REPLENISHMENT SYSTEM .......................................................................... 131 - - California Software Company, India 6 Business Modeling Report – North American Tea & Coffee Inc. 8.2.5.1 LEAD TIME CALCULATION .......................................................................131 8.2.5.2 REORDERING POLICY .............................................................................131 8.2.5.3 REORDER CYCLE ...................................................................................132 8.2.5.4 SAFETY LEAD TIME ................................................................................132 8.2.5.5 SAFETY STOCK QUANTITY ......................................................................132 8.2.5.6 REORDER POINT ....................................................................................132 8.2.5.7 REORDER QUANTITY ..............................................................................132 8.2.5.8 MAXIMUM INVENTORY ............................................................................132 8.2.5.9 MINIMUM ORDER QUANTITY ...................................................................132 - LOCATION TRANSFERS............................................................................... 134 8.2.6.1 SETTING UP IN-TRANSIT LOCATION .........................................................135 8.2.6.2 SETTING UP TRANSFER ROUTES .............................................................136 8.2.6.3 TRANSFERRING ITEMS BETWEEN LOCATIONS ..........................................137 8.2.7 9.0 MAXIMUM ORDER QUANTITY ...............................................................133 VIEWING ITEMS IN TRANSIT................................................................. 139 WAREHOUSE MANAGEMENT – OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION.................................................................................140 9.1 SETTING UP W AREHOUSE MANAGEMENT SYSTEMS .............................................147 9.1.1 LOCATIONS SETUP .................................................................................... 148 9.1.2 PUT-AWAY TEMPLATE SETUP ..................................................................... 149 9.1.3 BIN TYPES SETUP ...................................................................................... 150 9.1.4 BIN RANKING SETUP .................................................................................. 151 9.1.5 SETTINGUP FIXED BINS ............................................................................... 152 9.1.6 BLOCKING MOVEMENT ACTIVITY OF BIN ..................................................... 153 9.1.7 CREATING NEW BINS .................................................................................. 154 9.1.8 WAREHOUSE CLASS SETUP ....................................................................... 155 9.2 RECEIVE AND PUT-AWAY.............................................................................156 9.2.1 RECEIVING THE ITEMS ................................................................................ 157 9.2.2 PUTTING THE ITEMS AWAY ......................................................................... 158 9.3 INTERNAL W AREHOUSE PROCESSES ..................................................................159 9.3.1.1 MOVEMENT ........................................................................................ 160 9.3.1.1 BIN REPLENISHMENT..............................................................................161 9.3.1.2 BLOCKING W AREHOUSE MOVEMENTS .....................................................162 9.3.2 JOURNALS.............................................................................................. 163 - - California Software Company, India 7 Business Modeling Report – North American Tea & Coffee Inc. 9.3.2.1 WAREHOUSE ITEM JOURNALS .................................................................163 9.3.2.2 RECLASSIFICATION JOURNALS ................................................................164 9.3.3 COUNTING................................................................................................. 165 9.3.3.1 PHYSICAL INVENTORY COUNTING ...........................................................166 9.4 SHIPPING THE ITEMS ...................................................................................167 10.0 MANUFACTURING – OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION...........................................................................................171 10.1 INTRODUCTION .............................................................................................177 10.1.1 PRODUCTION ACTIVITY IN NATC MANUFACTURING UNIT........................... 178 10.1.2 PRODUCTION ACTIVITY FROM NAVISION POINT OF VIEW ........................... 180 10.2 PRODUCTION BILL OF MATERIALS .............................................................181 10.2.1 CREATION OF PRODUCTION BOM........................................................... 182 10.2.2 CREATION OF VERSIONS OF PRODUCTION BOM ...................................... 183 10.2.3 WHERE-USED FEATURE ......................................................................... 184 10.2.4 PHANTOM BILL OF MATERIAL .................................................................. 185 10.2.5 EXCHANGING PRODUCTION BOM ITEM ................................................... 186 10.2.6 DELETE EXPIRED COMPONENTS ............................................................. 187 10.3 ROUTINGS ........................................................................................................188 10.3.1 CREATION OF W ORK CENTER GROUPS ................................................... 189 10.3.2 CREATION OF W ORK CENTERS .............................................................. 190 10.3.3 MACHINE CENTERS ................................................................................ 191 10.3.4 SETTING UP THROUGHPUT TIME ............................................................. 192 10.3.5 ROUTING VERSIONS ............................................................................... 194 10.3.6 WHERE-USED FEATURE ......................................................................... 195 10.4.1 PRODUCTION ORDERS.............................................................................196 10.4.1 HANDLING VARIOUS CHANGES TO PRODUCTION ORDER .......................... 197 10.4.1.1 HANDLING DUE DATE CHANGES..........................................................198 10.4.1.2 HANDLING QUANTITY CHANGES ..........................................................199 10.4.1.3 HANDLING CHANGES TO REQUIRED COMPONENTS ...............................200 10.4.1.4 HANDLING ROUTING CHANGES ...........................................................201 - ORDER RELEASE ................................................................................... 202 CHANGING THE STATUS OF PRODUCTION ORDER ................................203 PRODUCTION ORDER PROCESSING ................................................................204 RECORDING THE MATERIAL CONSUMPTION ............................................. 205 - - California Software Company, India 8 Business Modeling Report – North American Tea & Coffee Inc. 10.5.2 RECORDING THE FINISHED GOODS OUTPUT ............................................ 207 11.0 QUALITY MANAGEMENT ......................................................................................209 11.1 QUALITY CONTROL – OVERVIEW ........................................................................209 11.1.1 QUALITY CONTROL BUSINESS PROCESSES ............................................. 209 11.1.2 ISSUES IN THE EXISTING SYSTEM............................................................. 209 11.2 MATERIAL RECEIPT QUALITY CONTROL ..............................................................210 11.3 WIP QUALITY CONTROL ....................................................................................211 11.4 FINISHED GOODS QUALITY CONTROL .................................................................212 11.5 RECURRING QUALITY INSPECTION ......................................................................213 12.0 MAINTENANCE MANAGEMENT.............................................................................214 12.1 MAINTENANCE – OVERVIEW ...............................................................................214 12.2 MAINTENANCE BUSINESS PROCESSES ................................................................214 12.3 ISSUES IN THE EXISTING SYSTEM ........................................................................214 12.4 SPARE PARTS MANAGEMENT .............................................................................215 12.5 PREVENTIVE MAINTENANCE ...............................................................................216 12.6 CORRECTIVE / BREAKDOWN MAINTENANCE ........................................................217 13.0 HUMAN RESOURCE MANAGEMENT .....................................................................218 14.0 PAYROLL ..........................................................................................................222 15.0 BARCODE.......................................................................................................223 15.1 BARCODE FOR THE BIN .....................................................................................223 15.2 RECEIVING OPERATION......................................................................................223 15.2.1 BARCODE PRINTING ............................................................................... 223 15.2.2 PUT AWAY OPERATION ........................................................................... 224 15.3 SHIPPING OPERATIONS ......................................................................................224 15.3.1 PICK OPERATION ................................................................................... 224 16.0 EDI INTERGARTION ...........................................................................................225 17.0 FIXED ASSET MANAGEMENT...............................................................................226 17.1 PURCHASING FIXED ASSETS ..............................................................................227 17.2 CALCULATING AND POSTING DEPRECIATION .......................................................228 17.3 FIXED ASSET DISPOSALS ...................................................................................229 17.4 FIXED ASSET RECLASSIFICATION ........................................................................230 17.5 FIXED ASSET MAINTENANCE ..............................................................................231 - California Software Company, India 9 Business Modeling Report – North American Tea & Coffee Inc. 1.0 CUSTOMER North American Tea & Coffee Inc. is a food manufacturer and distributor based in Vancouver, Canada. Some of the major business lines of NATC are Contract Manufacturing Dry Goods Manufacturing Buy/Sell – Trading Direct Sales NATC has opted Navision to fulfill all its daily business needs. Accounts Receivables Financial Management Accounts Payables Inventory Customer Service Shipping Dept. Receipt Dept. Purchase Dept. Production Planning Tea Manufacturing Manufacturing Delta Dry Goods Manufacturing Manufacturing Toronto Buy/Sell Manufacturing US - California Software Company, India Warehouse Delta Warehouse Toronto Direct 10 Business Modeling Report – North American Tea & Coffee Inc. 2.0 IT SETUP The current IT setup of NATC is that, it is running two different software packages to cater to its daily business needs. ACCPAC is the accounting package being used for the whole of the business. As the company acquired a dry goods manufacturing unit, that section of the business is still running on a package called INMAS, which is a manufacturing package. After Navision is implemented, all the data will be available in one centralized database. The Delta office can access the database through LAN itself and the Toronto office will access the database using terminal server. 3.0 INFRASTRUCTURE REQUIREMENTS Client 64 MB RAM 4 GB HDD hardware configurations OS Windows 98 or 2000 or XP IE version 5.5 Server 512 MB RAM 40 GB HDD hardware configurations OS Windows 2000 Office 2000 SQL Server 2000 (if not using Navision database) - California Software Company, India 11 Business Modeling Report – North American Tea & Coffee Inc. 4.0 SALES & RECEIVABLES – OVERVIEW REQUIREMENT WITH NAVISION APPLICATION & MAPPING OF NATC To survive, companies need to keep their customers satisfied. An instant and accurate response to inquiries concerning, for example, delivery time or the price of the product, is one of the key factors contributing to customer satisfaction. In addition, being able to efficiently handle special customer requests regarding shipping arrangements and invoicing preferences is most likely to ensure repeat orders. Typical examples of these requests include wanting to receive shipments in parts and/or to different addresses, to receive the orders before being invoiced, or being invoiced for several shipped orders at once. Companies also need to ensure that they can easily register sales transaction information. For example, adjusting customer balance and updating inventory availability and values are among the tasks that must always be carried out when handling sales. Additionally, companies may want to keep a record of the salespeople performing the sale. Moreover, as many aspects of a future sales agreement with a customer are negotiated and agreed upon in the presales stage, it is helpful for salespeople to be able to record the relevant agreement details once and then simply reuse this information when creating an actual sales order. There are several granules in Navision that support efficient sales transaction handling, offering a basic solution to companies that strive to achieve high customer satisfaction. These granules are: Sales Order Management: this granule includes documents (quotes, blanket orders and sales orders) that support salespeople in efficiently managing sales. The granule provides the facility for partial order shipment, separation between shipping and invoicing, and combined invoicing. Alternative Ship-To’s: this granule facilitates handling sales orders to customers with several alternative-shipping addresses. Drop Shipments: this granule enables salespeople to efficiently handle orders that are to be shipped directly from the vendor to the customer without involving the company’s operations. Salespeople/Purchasers: this granule allows collection of sales statistics at an individual salesperson level. Shipping Agents: this granule facilitates the management of carriers (shipping agents) and related information. - California Software Company, India 12 Business Modeling Report – North American Tea & Coffee Inc. Detailing of NATC business process and the mapping of each process with Navision product is provided Sales and Receivables Current Business Process Sales Orders for buy-sell items and manufactured items Direct Ship sales orders [When a customer orders for a product that has to be shipped directly to the Customer by a supplier/vendor] The customer service department creates the picking slip from the sales order that will be sent to the Shipping department for shipment After the shipping department sends the material out, the documents are sent to the inventory department to be updated in the system Mapping in Navision [Module >> Granule >> Form >> Functionality] Create Sales Orders directly in MBS Navision [Sales & Receivables >> Orders] Create Sales Orders directly in MBS Navision and use Drop shipment functionality as described in the Navision user manual [Sales & Receivables >> Orders] Create Warehouse shipment documents directly from the Sales Order [Sales & Receivables >> Orders >> Functions >> Create Warehouse Shipment] The system will automatically update the inventory when the shipping department registers the shipment in the system [Warehouse management >> Shipments >> Warehouse Shipments >> Post] Invoicing the Sales Order Create Sales Invoices directly by choosing the posted shipments or by posting a Sales order [Sales & Receivables >> Orders >> Posting >> Post] Accounting the Customer payments Use Cash receipt Journals for Accounting payments by all modes. [Sales & Receivables >> Cash receipt Journal] Verify the discounts taken by the customers against the actual discount granted to them. The system will automatically show the discounted payment value. User has to cross check with the payment from the customer manually. A warning letter could be sent through Reminder terms available [Sales & Receivables >> Cash receipt Journal] Customers sometimes sends debit notes along with the payment. Whenever a debit note is received from the customer, a credit memo has to be created in the - California Software Company, India 13 Business Modeling Report – North American Tea & Coffee Inc. system. Sales invoices were posted in the system already. After the discrepancy is resolved, a Credit memo would be created by authorised personnel for appropriate amount and discount values against respective Posted Sales Invoice. Post the credit memo. [Sales & Receivables >> Credit Memos] Account the Payment, using Cash receipt journals using apply entries function. [Sales & Receivables >> Cash receipt Journal] Customers return materials for damages Additional requirement: Provision should be made to trace back the details of goods returned Due to manual errors, sometimes less or more materials are sent to the customers Additional requirement: System to track errors made by employees and make a log by employee Customers return materials are handled through Sales Return Order. It is used for receiving the materials back in the warehouse and generating credit memo to adjust the payment. [Sales & Receivables >> Return Orders] For retriving details about the returned goods, a customised report could be provided. Introducing barcode guns would reduce these errors to a grater extent. Implementing good practices in place could also minimize such errors. For example, Pick by one person and packing by another person could reduce the wrong shipements. Errors committed by employees should be maintained as a log in the Employee data in Human resource module from Warehoue module A CCI [Canadian Customs Invoice] has to be issued for the materials shipped across the border. Facility to be provided for combining multiple customer orders and supplier pickup in one CCI required. Customized report for CCI would be provided. [Sales & Receivables >> Orders >> Print >> CCI] A Canada Customs Invoice which has to be generated for all export shipments Customized report would be provided. The chapter demonstrates the key features of the sales management functionality in Navision. The main section of this chapter focuses on the most common aspects of sales transaction handling. The sections are described as follows – Setting Up Sales & Receivables Customer Card Maintenance Sales Transactions Periodic Activities in Sales & Receivables - California Software Company, India 14 Business Modeling Report – North American Tea & Coffee Inc. 4.1 SETTING UP SALES MANAGEMENT The sales setup consists of the following elements: Sales & Receivables setup: Based on their established practices, companies must specify how they want the program to support them in managing different aspects of their sales transactions. These are the general setup options that the program applies to all sales transactions, irrespective of what item and customer are involved. Customer setup: Managing customer information is an important part of managing the total sales and finances of the company. Basic information (such as name, address, and so on) and details (for example, credit limit, invoicing, discount and payment terms, currencies, shipping schemes, and so on) are recorded for each individual customer on a customer card by authrised personnel only (for example, Accounts Receivables Supervisior or one of the Directors). The setup of customer posting groups defines a connection between a specific customer and accounts in the general ledger. This is done through assigning a customer to a posting group for which balance sheet and income statement accounts are then set up. Salesperson setup: Companies can set up codes to identify and describe their salespeople. This is done with the view to establishing a link between an individual salesperson and their performance in terms of, for example, the number of sales transactions (orders, invoices or returns) handled. NATC has multiple commissions and customer rebates per item in certain cases. Some customisation work would be done to incorporate this functionality. 4.1.1 BASIC SETUP In the Sales & Receivables Setup, you specify how you want the program to manage certain aspects of your sales and receivables. In the Sales & Receivables Setup window, you set up certain basic rules to be used in the Sales & Receivables application area. On the Sales & Receivables menu, click Setup, and then click Sales & Receivables Setup. The Sales & Receivables Setup window appears. The General tab On the General tab, you specify options such as how you want to calculate and post discounts and what warnings you would like to have displayed. The General tab contains the following fields: Discount Posting field - Here you can specify the type of sales discounts the program will post separately. Credit Warnings field – In this field, you can specify whether you want the program to give a warning about the customer' s status when you create a sales document. Stock out Warning field – By placing a check mark in this field, you can specify whether you want the program to warn you when a sale will result in a negative inventory for an inventory item. Shipment on Invoice field – Here you can choose to have the program automatically set up shipments in connection with sales invoices. Return Receipt on Credit Memo field – Here you can choose to have the program automatically set up sales return receipts in connection with sales credit memos. - California Software Company, India 15 Business Modeling Report – North American Tea & Coffee Inc. Note: Check marks in the Shipment on Invoice and Return Receipt on Credit Memo fields indicate that the company wants the program to automatically create posted shipment and posted return receipt documents at the time of posting sales invoices and sales credit memos respectively. If these fields are not activated, the program only creates posted invoices/credit memos. Having posted shipment (return receipt) documents is a necessary precondition for: Using the functionality of the Item Charges granule. Using the automatic package tracking function. Invoice Rounding field – A check mark in this field indicates that the program will round amounts for sales invoices. You specify the invoice rounding precision for local currency in the G/L Setup and for other currencies in the currency table. Ext. Doc. No. Mandatory – Here you can specify whether it is mandatory to enter an external document number in the following situations: In the External Document No. field on a sales header. In the External Document No. field on a general journal line, where the contents of the Document Type field = Invoice, Credit Memo or Finance Charge and the contents of the Account Type field = Customer. Appln. Between Currencies field – Here you can specify to what extent the application of entries in different currencies is allowed in the Sales & Receivables application area. Copy Comments Blanket to Order field – Here you can specify whether you want the program to copy comments from blanket orders to sales orders. Copy Comments Order to Invoice field – Here you can specify whether you want the program to copy comments from sales orders to sales invoices. Copy Comments Order to Shpt. field – In this field, you can specify whether you want the program to copy comments from sales orders to shipments. Copy Comments Ret.Ord to Cr. Memo field – Here you can specify whether you want the program to copy comments from sales return orders to sales credit memos. Copy Comments Ret.Ord to Ret. Rcpt field – In this field, you can specify whether you want the program to copy comments from sales return orders to sales return receipts. Allow GST Difference field – Place a check mark in the field if you want to allow the manual adjustment of GST amounts in sales documents. Calc. Inv. Discount field – Place a check mark in this field if you want the program to automatically calculate the invoice discount amount in connection with sales documents. If you do not place a check mark here, you can still calculate invoice discounts manually by going to the Sales & Receivables Setup and selecting Calculate Invoice Discounts. Calc. Inv. Disc. Per GST ID field – If you place a check mark in this field, the invoice discount will be calculated per GST Identifier. If you choose not to place a check mark here, the invoice discount will be calculated on the document total. Exact Cost Reversing Mandatory field - A check mark in this field indicates that the program will not allow a return transaction to be posted unless the Appl.-from Item Entry fields on the sales order line contains an entry. This function is used when the company wants to apply an exact cost reversing policy in connection with sales returns. This means that the sales return is valued at exactly the same cost as the original sale when being put back on inventory. If an additional cost is later added to the original sale, the program updates the value of the sales return respectively. - California Software Company, India 16 Business Modeling Report – North American Tea & Coffee Inc. The process flow of setting up the Sales & Receivables Setup will be as follows. This is a one time setup that has to be done during the setup of the database with the data being collected from the users and the concurrence of the top management. Any changes that have to be made to the setup will need approval from the concerned authorities. Sales & Receivables >> Setup Specify if the tax field can be edited in the sales documents Setup window appears Specify if automatic invoice discount has to be calculated Specify the type of discount to be posted in the system Specify if invoice discounts be calculated on invoice or GST ID Specify the credit warnings needed during sales order creation Specify if exact cost reversing policy has to be followed Specify if a stock out warning is required during sales order Exit Sales & Receivables >> Setup Specify if sales shipment has to automatically connected to invoice Specify if return receipt has to connected to credit memo Specify if invoice rounding has to be used in the system Specify if external document number is mandatory in sales Specify the extent of currencies used in the system - California Software Company, India 17 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2 OTHER OPTIONS UNDER SETUP Let’s look at some of the other items under Setup. 4.1.2.1 CREATING CUSTOMER POSTING GROUPS The financial value of any sales transaction must be posted to dedicated accounts in the general ledger. Where companies do not find it feasible to establish accounts per each customer, they can put several customers into one posting group and then specify accounts per such a group. After the company has decided on criteria for how its customers can be grouped, the respective groups must be set up in the program in the Customer Posting Group table. In this table, the user can assign a code to each identified posting group and then specify general ledger accounts for different amount categories, such as receivables, service charges, payment discount amounts, interest, additional fees, and so on. This is where you will set up what accounts your customers will post to on the Balance Sheet. We can set up multiple customer posting groups. Each customer-posting group can have different G/L accounts or the same accounts assigned. An advantage of having different groups with the same accounts is that it allows another way to group customers together for reporting purposes. For example, a report could be run displaying only DOMESTIC customers. Even though multiple groups can be set up as stated above, each customer will only be assigned one customer posting group on the customer card. Setup >> Customer Posting Group Specify the code of the customerposting group Specify the accounts to which sales transaction values will post Exit Customer Posting Group - California Software Company, India 18 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.2 PAYMENT TERMS You use the Payment Terms window to set up codes for each set of payment terms. The payment terms table will be used on both the Sales & Receivables side and the Purchases & Payables side. You can specify the due date and the discount date when you set up a payment term. The example in this case will be to setup a payment discount which will allow the customer a discount % of 2 if he pays within a period of 10 days from the date of the invoice and calculate a total credit period of 30 days from the date of invoice. Note: For NATC customers it is required to capture the shipment date or consignement receipt date from the customer depending on the type of shipmet. The payment terms should calculate from that date only. Setup >> Payment Terms Define the code of the payment term. Ex: 2(10) Net (30) Enter a description for the payment term Enter the due date calculation formula here. Ex: 30D Enter the Discount date calculation formula here. Ex: 10D Enter the discount %. Ex: 2% Specify Yes/No in Calc. Pmt. Disc. On Cr. Memo Exit Payment Terms - California Software Company, India 19 Business Modeling Report – North American Tea & Coffee Inc. The system accepts the date formula up to 20 characters and can also accommodate the abbreviations as D – Day, M – Month, Y – Year to specify a few. Before any changes can be made to the payment terms of any customer, prior approval has to be obtained from the accounts receivables supervisor. 4.1.2.3 PAYMENT METHODS You set up payment method codes to select the different payment methods, for example check, cash, installment payment and so on. You need this information, when you receive a detailed overview about the outstanding entries. Furthermore, the payment method allows you to create a default balancing G/L or Bank account to each payment method e.g. cash. You use this for cash sale customers and not for normal accounts receivable processing. Setup >> Payment Methods Define the code of the payment Method Used Enter a description for the payment Method It is optional to specify the balancing account type If the balancing account type is selected, specify the a/c number Exit Payment Method The default balancing account type and number can be selected optionally. The default accounts specified here, determine the account to which the payment from the customer will be balanced with. The options for the balancing account type are GL Account or the Bank Account. The account number will then show either the chart of accounts or the bank accounts depending on the balancing account type. Currently, NATC is using payment methods viz Cash, Check, Credit card, Electronic Funds Transfer and Wire transfer. - California Software Company, India 20 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.4 REMINDER TERMS You use the Reminder Terms window to set up codes for reminder terms. Each line contains a set of reminder terms identified by a code. You can set up as many codes as necessary. These terms are then used to generate reminders to customers for payments. Setup >> Reminder Terms Define the code of the Reminder Terms Used Enter a description for the Reminder Terms Specify the maximum number of reminders to be generated Specify if the interest has to be posted to the GL Specify if the additional fee has to be posted to the GL Specify if the minimum amount to be charged Exit Payment Method If you are to use the Reminders and Finance Charge Memo features, you also need to select the appropriate codes in the Reminder Terms Code to use when generating these documents for this customer. - California Software Company, India 21 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.5 FINANCE CHARGE TERMS You use the Finance Charge Terms window to set up the conditions for finance charge calculations. Each line contains a set of finance charge terms identified by a code. You must set up a code representing each finance charge calculation. Setup >> Financial Charge Terms Specify the available grace period for the financial charge Define the code of the Financial Charge Terms Used Specify the due date calculation formula Enter a description for the Financial Charge Terms Specify the line that has to be shown in the charge line Specify if interest to be calculated on Open/Closed/All Entries Specify if the interest has to be posted Specify the interest calculation method Specify if the additional fee has to be posted Exit Financial Charge Terms Specify the interest rate for the financial term Specify the interest period of the Financial Term Specify the minimum amount to be charged Specify the additional amount to be charged - California Software Company, India 22 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.6. CUSTOMER PRICE AND CUSTOMER DISC. GROUPS You can set up price and discount groups for customers to be assigned to. This provides great flexibility in customer pricing and discounting while minimizing the data entry needed. Creating the Customer Posting Group – Setup >> Customer Price Groups Define the code of the Customer Price Group Used Specify if line discount has to be allowed for this price group Specify if invoice discount has to be allowed for this price group Specify if the prices for the group are inclusive of taxes Specify the tax business posting group of the of the group Exit Customer Posting Group Similarly to handle discounts, the system allows the creation of customer discount groups and allocation of the customers to the discount group so that the management of any special discount granted is easy in the system. A Customer Discount group is mainly used for specifying any line discounts given to the customers. - California Software Company, India 23 Business Modeling Report – North American Tea & Coffee Inc. Sales Prices With the possibility to specify price information for each individual item on the item card, companies are given a functionality that significantly facilitates the task of sales price management. The program automatically retrieves price information stored on an item card in order to copy it to the sales order line for the item in question. This price information is, however, of a universal nature – it is the same in all sales situations regardless of whether individual price agreements exists between the company and its customers or whether there are different pricing policies applied toward different customer profiles. These agreements and policies may be based on a number of conditions such as the item variant and quantity bought, currency paid, order date and so on. To manage and maintain these alternative sales prices, the company’s sales people need an extended pricing functionality that goes beyond the standard item card. In Navision, the Sales Line Pricing granule offers such comprehensive pricing functionality. This section includes explanation of the following subjects: Setting up alternative sales prices Using the pricing mechanism Maintaining sales prices Setting up Alternative Sales Prices To record alternative sales prices that the company has agreed with their customers/group of customers or uses to strategically segment their customer base, sales people must use the Sales Prices table. The Sales Prices window can be accessed from both the customer card and the item card. Authorised personnel only can have access for sales prices window. Proper costing and approval should be obtained before entering the Sales prices. An additional user screen would be provided for entering the costing details and stored in a separate table in the system. In sales price window, a sales person can specify the conditions that must be met before a customer can be offered an individual unit price for a specific item. For example, the conditions can require that the customer belongs to a particular customer price group or a purchase is made within a certain period. A special sales price can also depend on a unit of measure, item variant, minimum quantity and currency. In addition, the sales price table provides the option for defining whether the specified alternative prices should be combined with line and invoice discounts when a sales price is offered. The sales prices can be setup from both the item master and the customer master. When the sales prices are setup from the item master, the prices pertain to the selling of the item to various customers and when the prices are setup from the customer master, the prices are pertaining to the different items sold to one customer. The prices in the sales price table have a priority on the prices in the item master and it is suggested that if the sales price functionality is available, the sales prices be maintained in the sales price table instead of the item master. - California Software Company, India 24 Business Modeling Report – North American Tea & Coffee Inc. Creating Sales prices for customers/Items Before setting up Sales prices for customers, it is necessary to carry a costing procedure and obtain approval for the same. Setting up sales prices for items / customers Specify if the price is including tax or not Item >> Sales >> Prices or Customer >> Sales >> Prices Specify if line discount is allowed for this price Specify the sales type - customer, customer price group, etc Specify if invoice discount is allowed for this price Specify the sales code which depends on the sales type Specify the GST posting group by which the GST is calculated Select the Item number for which the price has to be entered Exit Sales Price Screen Specify the variant code if any for the item Specify the currency code in which the price is stated Specify the Unit of Measure of the item measure Specify the minimum qty below which the price is not applicable Specify the unit price of the item for the Unit of Measure Specify the starting and ending date for the price validity - California Software Company, India 25 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.7 STANDARD SALES CODES If you regularly post sales documents with the same sales line information; you can use standard sales codes. Each code can have one or more lines associated with it. You use the code to automatically insert the lines in sales documents. Setup >> Standard Sales Codes Specify the code of the standard sale Specify the description of the standard sales code Specify the currency in which the sales is normally done Specify the items that are sold in the sales lines Exit Standard Sales Codes - California Software Company, India 26 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.8 SALES PEOPLE You can create codes to identify the salespeople and purchasers in the company. The code for the salesperson or purchaser responsible for the sale or purchase is entered in documents. Setup >> Salespeople Specify the sales person code Specify the name of the sales person Specify the Job Title of the sales Person Specify the commission % for the sales person Specify the phone number and email ID of the sales person Exit Salespeople Screen All the details about the sales people can be specified here and this can be used up to specify the sales that are generated in by the person by linking the salespeople to the sales order. The salespeople can also be linked to the customers to specify the customers who are the leads of the sales person. The commission percentage specified in the salespeople card can also be used to generate reports to calculate the amount of commission to be paid to the sales people. - California Software Company, India 27 Business Modeling Report – North American Tea & Coffee Inc. 4.1.2.9 SHIPMENT METHODS AND SHIPPING AGENTS You can also set up codes to represent different shipment methods. These shipment methods are used in both sales and purchases documents. If you ship sold goods to your customers via internal or external agents, you can also set up service information about your shipping agents, such as shipping time. Creating Shipping Methods Setup >> Shipping Methods Specify the codes for the shipping methods used. Ex: Prepaid Specify the description for the shipping method Exit Shipping Methods Screen Shipping methods are used to specify the type of shipment being sent to the customer. Example: In NATC one of the shipping method is “Prepaid”. All such methods can be listed here and used in the sales documents. Creating Shipping Agents Setup >> Shipping Agents Specify the code of the shipping agent Specify the name and Internet address of the shipping agent Exit Shipping Agents Screen - California Software Company, India 28 Business Modeling Report – North American Tea & Coffee Inc. The shipping agents are also tagged in the sales transactions. The internet address of the shipping agent can be used to track the package by specifying the package tracking code in the posted sales shipment. 4.1.2.10 CUSTOMER TEMPLATES If you need to send a potential customer or contact a quote, you can use a customer template to create the quote rather than set up a customer card. This allows you to reduce the size of your customer list to only those customers that have made orders. The customer template also allows you to automatically create a customer card from a contact card in the Relationship Management application area. 4.1.2.11 RETURN REASONS You can use this window to set up codes that specify the reasons for returning items. These can be items that a customer returns to you or items that you return to a vendor. 4.1.2.12 Report Selections Sales and Report Selections Reminder and Fin. Charge In these windows, you set up the reports that will be printed when you use the Print and Post and Print functions in sales documents and reminders and finance charge memos. - California Software Company, India 29 Business Modeling Report – North American Tea & Coffee Inc. 4.2 CREATING CUSTOMER CARDS You use the Customer Card to set up information on all your customers. You must set up a card for each customer, on which you enter basic information, such as name, address and discount possibilities. To open a Customer Card, on the Sales & Receivables menu, click Customers. The Customer Card window appears. On the Customer Card we can see all the information that is available for a customer. Notice that there are multiple tabs available on the Customer Card. This allows similar information to be grouped on the same card without cluttering the main screen. Whenever a sales document is created, the customer information that is placed on the document header is retrieved from the card. The Customer Card also contains a Customer and a Sales button: Customer button – used to display further information on this customer e.g. dimensions for the customer. It is also used to access the list of all customers. Sales Button – used to show the different sales documents for this customer as well as standard invoice discounts, line discounts and prices relating to this customer. The step-by-step procedure of creating a customer is detailed in the following flow chart and the details of each of the functions are explained in the section following the flow chart. - California Software Company, India 30 Business Modeling Report – North American Tea & Coffee Inc. Steps for Creating a Customer Sales & Receivables >> customers In the general Tab, fill in the following In the Communication Tab, fill in the following Customer Number may be auto generated or manual Specify Phone & Fax Number of the customer Specify the name of the customer in the name field Specify the E-Mail address and the Home Page if any. Specify address of customer in address & address2 fields A Specify City, State and Postal Code of the customer Specify the sales person code responsible for sales to customer Specify Responsibility Center – Delta / Toronto Use “Blocked” field to block Invoice/Shipment/All transactions - California Software Company, India 31 Business Modeling Report – North American Tea & Coffee Inc. A In the Invoicing tab, fill in the following details Specify the discount group to which the customer belongs Specify Bill to Customer No, if Inv should be sent to other customer Specify if Line discounts are allowed to the customer Specify the number of copies of the invoice to be printed Specify if the prices to the customers include GST Specify the invoice discount code of the customer, if any Specify the discount group to which the customer belongs Specify if customer is liable to tax and the tax area code B Specify the Tax Registration and Exemption Number Specify the Gen. Business Posting Group of the customer * Specify the Customer Posting Group of the customer * Specify the GST Posting group of the customer Specify the Price Group to which the customer belongs - California Software Company, India 32 Business Modeling Report – North American Tea & Coffee Inc. B In the payments tab, fill in the following details Specify the application method. Options – Manual/Apply to Oldest Select the Payment terms code from the list Select the Payment method code from the list Select the Reminder Terms code from the list Select the Financial Charge Terms code from the list If negotiated terms not available – get approval from AR & proceed Specify if payment tolerance has to be blocked for the customer C - California Software Company, India 33 Business Modeling Report – North American Tea & Coffee Inc. C In the Shipping tab specify the following In the foreign trade tab specify the following Select the location code to which the customer belongs Specify the currency code of the customer Specify the shipping advice for the customer Specify the language for communication for the bank Select the shipment method code for the customer, if any. Exit Customer Master Screen Select the shipping agent code for the customer, if any. Select the shipping agent service code, if any. Specify the shipping time for the customer Specify the base calendar code if any for the customer - California Software Company, India 34 Business Modeling Report – North American Tea & Coffee Inc. General Tab On the General tab you find general information about the customer. We will look into the following fields: The Country Code field is used to specify the format for the GST Registration Number for the customer. You can also use the country code to sort customers in the customer list. This will let you see all the German customers, for example. The Search Name field – You use this field to set up an additional descriptive name for a customer which you can search by. The program copies the customer name to this field as a default. Credit Limit (LCY) - You can enter a local currency credit limit for sales transactions for this customer. A warning will be issued if any new transaction will exceed this credit limit. Blocked – If you wish to stop specific transactions being entered for this customer, choose the relevant level of blocking. The different options are as follows. Blank – The customer can be used in all types of transactions. Ship – The customer is blocked from having new orders and new shipments. Existing shipments not yet invoiced will still be able to be invoiced. Invoice – The customer is blocked from having new orders, new shipments and new invoices. Existing shipments not yet invoiced will not be able to invoiced if the customer if this option is chosen. All – The customer cannot be used in any type of transaction, including payments. For example, you may wish to prevent a sales person from entering an order for a customer with whom you have a dispute. However, you do not want to stop the invoicing of outstanding orders or stop payments from the customer being posted. In this case, you would choose the Ship option. Communication Tab On the Communication tab, you enter communication details on the customer. Next to the Phone No. field, you find the Make Phone Call button. On the Communication tab, you also find the E-mail field in which you can fill in the e-mail address for the customer. The e-mail address can be used to send quotes, orders, invoices, and/or statements directly to a customer. You have the possibility of referring to a Web site on the World-Wide-Web (WWW) and access it directly by clicking on the Hyperlink button. You find the Home Page field together with a Hyperlink button on all relevant windows for customers, vendors, bank accounts, prospects and contacts. Invoicing Tab On the Invoicing tab, you can find the fields relevant to the posting and invoicing of sales transactions for this customer: Bill-to Customer No.: It may be that when you ship to this customer, the invoice should be sent to a different customer. In this case, enter here the number of the customer who should be invoiced. The program will enter this customer number on quotes, orders, invoices and credit memos as a default, which you will be able to change. - California Software Company, India 35 Business Modeling Report – North American Tea & Coffee Inc. Invoice Disc. Code: When you set up a new customer card, the program automatically enters the customer number in this field. Any standard invoice discounts that you create for this customer will be assigned using this code. Customer Posting Group - You use this field to select the posting group that determines the balance sheet receivables accounts that sales transactions will be posted to for this customer. In our data, the customer posting groups are broadly based on customer location (For example SAFEWAY, CO-OP, ETC.,). Gen. Bus. Posting Group –You use this field to select the posting group that determines the revenue accounts that sale transactions will be posted to for this customer. In our data, the general business posting groups are broadly based on customer location (For example CANADA, US, and OTHERS). GST. Bus. Posting Group - You use this field to select the posting group that determines the GST accounts that transactions will be posted to for this customer. For NATC, the GST business posting groups are GST Applicable and GST Not Applicable. Price Group Code field: In the Item Prices window, you can enter unit prices for an item that are different for different price groups. If the customer belongs to a particular price group, the program will use the appropriate unit price on quotes, orders and invoices instead of the item’s standard unit price. Allow Line Disc. If this field contains a check mark, the program will calculate a line discount when the price is offered. Prices Including GST field: Here you can specify whether you want the price in the Unit Price field on the sales lines and in sales reports for this customer to include GST or not. Payments Tab On the Payments tab, you enter methods and codes for how to deal with payments from customers. You use the Application Method field to tell the program how you will apply payments you receive from the customer. You have two options: Manual – The program will apply payments only if you specify a document. Apply to Oldest – The program will apply payments to the oldest outstanding Invoice. The Payment Terms Code field is used to select the period this customer will have to pay their outstanding invoices and if any payment discounts will be granted to the customer for early payment. The Payment Method code is used to record whether this customer pays cash, check, bank transfer or any other payment method. The Block Payment Tolerance field is used to specify whether you will allow tolerance when applying payments and refunds to the customer’s outstanding amounts. If the field does not contain a check mark, you will not allow payment tolerance for that customer. If you are to use the Reminders and Finance Charge Memo features, you also need to select the appropriate codes in the Reminder Terms Code to use when generating these documents for this customer. You can also record if the customer receives printed customer statements and the number of the last statement. - California Software Company, India 36 Business Modeling Report – North American Tea & Coffee Inc. Shipping Tab On the Shipping tab, you find all kind of information related to the methods of shipping. The Location Code field: If the field contains a location code, the program will always suggest items from a particular inventory location when you invoice the customer. The Reserve field – In this field, you can determine whether the program will allow reservations to be made for this customer. The Shipping Advice field – This field contains advice about whether the customer will accept a partial shipment of the order or will only accept complete shipments. The Shipping Agent Service Code – This field contains a code that represents the shipping agent that is used as the default shipping agent for this customer. The Shipping Time field - This field contains the shipping time to the customer. That is, the time it takes from the moment the order is shipped from the warehouse to the moment the order is delivered at the customers address. The program uses the Shipping Time field to calculate the planned delivery date and the promised delivery date on the sales order. Foreign Trade tab The Currency Code field allows you to set a default currency code for the vendor. This value will be copied into documents and journals you create for this vendor. However, it is possible to overwrite the currency code in documents and journals to post the vendor entries with multiple currencies. GST Registration No. field: Here you enter the corresponding GST Registration No. of your customers. The program checks the contents of this field complies with any country specific GST registration numbers formats you have setup in the program. - California Software Company, India 37 Business Modeling Report – North American Tea & Coffee Inc. 4.3 SALES ORDER PROCESSING This section will elaborate on the program’s facilities that support the most common tasks in sales transaction management. The section takes you through a workflow; starting with registering a sales order for a customer and drop shipping a customer’s order. Sales documents in the program have two sections – the Sales header and the Sales Lines. The Sales Header is the top section of the Sales Document while the lines are the bottom section. Sales Header The Sales Header contains four tabs: General tab – Contains the customer details and date(s) for the sales document. Depending on the status of the customer, several warnings may be displayed as you enter sales documents: A credit limit warning is displayed if a customer’s balance is more than a customer’s credit limit. An overdue balance warning is displayed if a customer has an outstanding invoice amount that is past its due date. Note: Authorised personnel only can provide approval for such Invoices where warnings are generated by the system. Invoicing tab – Contains invoicing details for the sales document. The program automatically enters most of the information for the tab when the user selects the customer. Shipping tab – Contains information as to how the contents of the sales documents are to be shipped. Foreign Trade tab – Contains information related to foreign transactions such as the currency the invoice amounts are in. Sales Lines The sales lines contain the actual goods or services that are to be sold to the customer for this document. There are two types of sales orders created in the system by NATC – Sales order for shipping from NATC location – Normal Sales Orders Sales Order for Direct Shipment from vendor location – Direct Ship Sales Orders The procedure of creating each of these sales orders are detailed in the following sections, which is followed by specific details pertaining to the sales, orders in the system. - California Software Company, India 38 Business Modeling Report – North American Tea & Coffee Inc. 4.3.1 SALES ORDER FOR SHIPPING FROM NATC LOCATION Sales & Receivables >> Orders In the General Tab of the sales order, specify the following In the Invoicing Tab of the sales order, specify the following Sales Order Number can be automatic or manually generated Specify “Bill to Cust No.” when invoice be sent to other customer Select the customer in the “Sell to Customer No.” field Details are default from customer master, but can be changed All the details of the customer are displayed from the customer card Payment due date is calculated automatically by the system The Posting, Order & Document dates are defaulted as current date A Specify the Requested & Promised Delivery date Specify the customer PO Number as the External Document No. - California Software Company, India 39 Business Modeling Report – North American Tea & Coffee Inc. A In the Shipping Tab of the sales order, specify the following Details of the item are defaulted from the item master Specify “Ship to Cust No.” when material be sent to other customer Quantity of the item has to be entered in the sales line Details are default from customer master, but can be changed When the order entry is completed, Functions >> Release Specify Package Tracking Number from the Shipping Company After releasing the order Functions >> Create whse. Shipment In the Foreign Trade Tab, Specify the following details A warehouse shipment document is created for the warehouse Currency Code of the customer is default from the customer card After shipment, “Quantity Shipped” field is updated automatically In the sales lines, specify the following details After shipment the order can be invoiced Specify the type as “Item” for material sales Exit from the sales order screen Specify the item number from the item master drop down - California Software Company, India 40 Business Modeling Report – North American Tea & Coffee Inc. Features in Sales Orders Sales Header This section elaborates on various features that comprise the sales functionality. Features that support both the most common tasks found in sales management and more specific tasks are described. The General tab of the sales header specifies customer details and additional information that have been set up as default for the customer, for example, salesperson and responsibility center, which are copied from the customer card when the order is created. The fields on the Shipping tab provide the possibility to further detail all the shipping-related information, for example, the customer’s alternative shipping address, shipment terms, agents, advice, ship-from location, and so on. The values in these fields are copied as default by the program from the customer card. At the time when the carrier is picking up the shipment, the assigned package tracking number can be entered on the Shipping tab in the Package Tracking No. field. The Internet address of the shipping agent can then be used to access the agent’s package tracking scheme. If the company has set up a default location (that is, a site where inventory is physically stored, such as a warehouse, service car, showroom, and so on) the appropriate code will be copied to the sales order header in the Location Code field. Depending on the company, a default location for the order can be defined, for example, as their central warehouse, from where orders to all customers are shipped, or as a local warehouse, which serves customers within the nearby geographical area. Now, when the sales order header is complete, the salesperson can continue with entering details relating to the contents of the order – items. The major aspects and properties of the order lines are described in the following section. Sales Lines In principle, a sales order can be used to register both a physical and financial transaction. The choice of transaction is defined by one of the following line type options: G/L Account, Item, Resource, Fixed Asset or Charge (item). The line type Item represents a sale of physical goods. Transaction of a Charge (item) type is the section “Item Charges”. Quantity – Upon entering the quantity amount in the Quantity field, the program checks if there are enough items on inventory in the specified location to fulfill the current sales order. If this is not the case, the program gives a stock out warning (the Stock out Warning field in the Sales & Receivables Setup window must contain a check mark). Unit of Measures – The program automatically fills in the Unit of Measure Code field when the sales line is created. The value is copied from the Sales Unit of Measure field on the item card. The program uses the unit of measure code: When checking item availability. To determine the unit price amount. To validate if there are any alternative prices and/or line discounts applicable to the sale in question as based on the specified unit of measure. - California Software Company, India 41 Business Modeling Report – North American Tea & Coffee Inc. Unit Price – Upon selecting the item in the No. Field, the program also fills in the Unit Price field. The unit price is calculated and copied from either the item card or from the alternative sales prices applicable to the item and customer. The setup options and the mechanism of alternatives sales prices are addressed in the earlier part of the document. As NATC sells to retail consumers, you may want sales document prices to include GST information both on screen and when printed. To allow this option, the Prices Including GST field on the document header must contain a check mark. If the field is not checked, the program fills in the Unit Price and Line Amount fields excluding GST amounts and the field names reflect this choice. - California Software Company, India 42 Business Modeling Report – North American Tea & Coffee Inc. 4.3.2 SALES ORDER FOR DIRECT SHIPMENT FROM VENDOR LOCATION A drop shipment is the shipment of an item or a consignment of items from one of the company’s vendors directly to one of their customers. Drop shipments are relevant in situations where a company wants to avoid actual handling of the order, such as stocking and delivering, but still wants to fulfill the customer’s order request and include the transaction in a calculation of cost of goods sold and profit. To ensure the efficient handling of drop shipped orders in the program, companies can benefit from using the facilities offered by the Drop Shipments granule. In addition to facilitating a process that involves many tasks and people, the program also ensures the correct inventory value and item cost calculation. The latter becomes particularly important, as, even though the sales and purchase transactions of the drop shipment are registered in the program as any other regular order, the drop shipped items do not physically enter the company’s inventory. Handling of a drop shipment can be illustrated as follows: Specifically, drop shipping includes the following tasks: The customer places a sales order with the company. The company, in turn, places a purchase order with the vendor. The vendor delivers the ordered items directly to the customer. The vendor invoices the company for the shipment. The company invoices the customer. Note: Customs clearance is done for the above depending on the pick up done either by NATC or by the party. In the case of pick up byNATC, a CCI is created and accounted for the Customs clearance expenses aginst the invoice produced by the clearing agent. - California Software Company, India 43 Business Modeling Report – North American Tea & Coffee Inc. Procedure for creating a Direct Ship Sales Order Sales & Receivables >> Orders Sales header and line have to be created as detailed before Purchasing code in the order has to be marked as drop shipment Release the sales order functions >> Release After the Vendor confirms the shipment, Order can be invoiced Exit the sales Order Screen - California Software Company, India 44 Business Modeling Report – North American Tea & Coffee Inc. 4.4 RECEIVABLES MANAGEMENT 4.4.1 ANALYZING RECEIVABLES If you want to take a closer look at your customers and the business that you do with each of them, you can use the Customer Ledger Entries window. From this window, you can see all ledger entries relating to the selected customer. You cannot modify the customer ledger entries, but you can use the window for analytical purposes. 1. 2. 3. 4. From the Sales & Receivables menu, click Customers. Open up the Customer Card for whom you want to view the ledger entries. Click Customer, Ledger Entries. The ledger entries window opens showing all the transactions with the customer so far. If you select a regular invoice line and click Entry, Reminder/Fin. Charge Entry, you can access a list of all reminders and finance charge entries that have been issued in relation to the selected invoice. You can use this information to see how timely your customer is when it comes to paying the bills. Also from the Entry button, you can access the Detailed Cust. Ledg. Entry window, which shows you the details for the line you had highlighted in the Customer Ledger Entries window. In addition, you can drill down on some of the amounts on the customer ledger entry, to see the related detail. Detailed Customer Ledger Entries The customer entries consist of the Customer ledger entry and a “sub”- entry called the detailed customer ledger entry. There are identical vendor Ledger entries and detailed vendor ledger entries in the Purchases & Payables area. The detailed customer ledger entries will store the actual amounts of an invoice, credit memo, payment, discount etc. while the customer ledger entries will be a picture of the amounts as flow fields. Changes made to original customer entries can be analyzed using the detailed customer ledger entries. This entry type contains all entries related to the original document. Adjustments to customer ledger entries are common when you have international customers that have their ledger entries adjusted for changes in exchange rates or payments in foreign currency. When granting discounts, it is also necessary to adjust customer ledger entries if a customer makes a payment before the due date for a payment discount. Detailed Customer Ledger Entries also provides traceability of all payments and payment applications to invoices. 4.4.2 ENTERING CASH RECEIPTS When a customer pays an invoice, an entry must be made in the program to record that the invoice has been paid. In the program, you can use the receipt journal to enter your incoming payments. It is only a possibility not a must to enter payments in this journal. You can also do this in the General Journals. The Cash Receipt Journal window works similarly to the General Journal window. - California Software Company, India 45 Business Modeling Report – North American Tea & Coffee Inc. The step – by – step procedure of entering the cash receipt journal and applying the entry in the system to an invoice is shown below Sales & Receivables >> Cash Receipt Journal Select the correct batch in which the receipt has to be posted Posting date is defaulted as the current date Select the document type as Payment Select the account type as customer Select the customer number who is making the payment Enter the amount paid by the customer in the amount field Select the applies to doc type as Invoice Select the invoice number in the applied to doc number field If the customer is making one payment for multiple invoices This applies the payment to the invoice B A - California Software Company, India 46 Business Modeling Report – North American Tea & Coffee Inc. A System calculates the payment discount granted to the customer Grace period given to customer if payment is received late Grace periods are handled as a part of the Finance Setup Acceptable payment tolerance if the customer pays less Allowable payment tolerance is handled in the Finance Setup Post the Cash Receipt journal to affect the ledger entries Exit the Cash Receipt Journal Screen The above process explains the basic process of receiving the receipt from a customer for one invoice. If the customer pays by one cheque for multiple invoices, the receipt has to be applied to multiple invoices during posting the cash receipt journal. The following process elaborates on how to apply one payment to different invoices. - California Software Company, India 47 Business Modeling Report – North American Tea & Coffee Inc. B Enter the receipt journal line as detailed before Enter the amount of the cheque in the amount field Click Functions >> Apply Entries in the Journal Select each invoice for which payment is made one by one Click Application >> Set Applies to ID for each of them The Applies to ID field is filled with the Doc No of the Journal Apply the entries until the balance field shows zero Then post the cash receipt journal to affect the ledger entries Exit the Cash Receipt Journal Screen - California Software Company, India 48 Business Modeling Report – North American Tea & Coffee Inc. Handling Reclamations in the system The above procedure elaborates on the procedure of applying the payments during posting itself. But any way, the system allows the application of payments to invoices at a later point in time after the posting of the payments also. This can be used for the process of reclamations in case of NATC. All the payments that have to be subjected to some reclamation with the customer, the payment can be posted in the system to affect the ledger entries but the invoice under consideration will remain open until the issues with the payment are solved and the payment is applied to the invoice. The system allows the application of payments to invoices even after the posting to handle such situations. EDI The architecture of the working of EDI will be as follows Navision Navision Specific EDI Software EDI Service Provider Customers Vendors The Navision specific EDI software has to be procured by NATC. The service provider will be used for uploading all the purchase orders to be sent to NATC suppliers and also to download all the orders that have been placed by NATC customers. The download of the file from the service provider will automatically create sales orders for all the customers who have sent their purchase orders through EDI. - California Software Company, India 49 Business Modeling Report – North American Tea & Coffee Inc. 5.0 GENERAL LEDGER – OVERVIEW & MAPPING REQUIREMENT WITH NAVISION APPLICATION OF NATC The general ledger module in Navision consists all the necessary setups for running the rest of the program. Setups like the company setup, financial year creations, etc are a part of the general Ledger Module Setup. Detailing of NATC business process and the mapping of each process with Navision product is provided Current Business Process at NATC Mapping in Navision [Module >> Granule >> Form >> Functionality] Chart of Accounts, list of all the account heads and their details Account heads can be created, grouped and maintained in a hierarchical manner. [General Ledger >> Chart of Accounts] Bank accounts and their details Individual Bank Accounts can be created and maintained. [General Ledger >> Bank Accounts] Budgets Budgets can be created with different factors / projections that can be compared with actual from Ledger entries [General Ledger >> Budgets] Analysis tools for accounts department / MIS This is a built-in tool that is available to create various types of analysis from the Chart of Accounts [General Ledger >> Account Schedules] This is another tool that provides analyzing capability using dimensions. [General Ledger >> Analysis By Dimensions] Posting of journal entries [General Ledger >> General Journals] Posting of regular / periodic expenses Periodical expenses like rent, recurring bills, etc., can be paid through these journals, so that user need not enter the same information repeatedly. [General Ledger >> Periodic Activities >> Recurring Journals] - California Software Company, India 50 Business Modeling Report – North American Tea & Coffee Inc. Posting bank account reconciliation This is a built-in functionality of MBS Navision [General Ledger >> Periodic Activities >> Bank Account Reconciliation] Tax related journals and activities Navision has various reports for tax related operations. [General Ledger >> Periodic Activities >> Tax] NATC uses multiple currencies Navision can handle multiple currencies. Adjust exchange rate batch job is also available. This can be used to post any differences in the exchange rate in all the posted transactions [General Ledger >> Periodic Activities >> Currency] Closing of an account period or an income statement Accounting periods can be created, maintained or closed in MBS Navision. But the Income Statement has to be configured in Accounts Schedule granule with filters applied for period. [1. General Ledger >> Periodic Activities >> Fiscal year >> Accounting Periods / close Accounting period 2. General Ledger >> Account Schedule] Consolidation of business units MBS Navision has this functionality. [General Ledger >> Periodic Activities >> Consolidation] - California Software Company, India 51 Business Modeling Report – North American Tea & Coffee Inc. 5.1 GENERAL LEDGER SETUP Each of the options available in the General Ledger Setup is detailed below. 5.1.1 SET UP A COMPANY The first step you take when you set up a new company is to create a new company. In the program, the term company is used to designate a complete set of accounting information and financial statements for a business. You can set up more than one company in the program, for example a parent company and a subsidiary. To set up a new company, you must enter various types of information before the program can be used for daily work. You must set up most of the company specific information in the General Ledger setup. 5.1.2 COMPANY INFORMATION In the Company Information window, you set up a company' s general information. The program uses this information to print company information on document headers. To open the Company Information window, on the General Ledger menu Click Setup, Company Information. The Company Information window appears. The important fields to remember on the General tab are: Name field - Used on all reports generated by the program. Address and Address 2 fields - Used as default for all documents such as invoices if the document does not have a responsibility center attached. GST Registration No. field - Used on all statutory documents e.g. GST statements On the Communication tab, you can enter information on the company’s communication details On the Payments tab, you can fill in information for one primary bank. On the Shipping tab, you can enter the ship-to address that will appear on all purchase orders. Also, notice the Location Code field. Complete this field if you want a default delivery location when you purchase items. - California Software Company, India 52 Business Modeling Report – North American Tea & Coffee Inc. 5.1.3 ACCOUNTING PERIODS You use the Accounting Periods window to open new fiscal years, define accounting periods and close fiscal years. You must set up at least one accounting period for each fiscal year. Before you can post in a fiscal year, you must open the fiscal year and define its accounting periods. The number of accounting periods per year is limited to the number of days per year. There is no restriction on the length of periods, except they cannot be smaller than one day or larger than one year. You are allowed to have as many periods (or years) open as you wish. The program does not limit data entry. Even if a period is closed, data entry is allowed. The entry will be marked as a "prior period entry." Because there is no "hard close" or "buckets," the program is date sensitive and will allow you to make entries into any of the existing periods. GL >> Setup >> Accounting Periods Click on Create Year at the bottom of the screen Specify Starting Date, Number of periods and length of the period Click OK to create the new Accounting Period Exit the Accounting Periods Window 5.1.4 GENERAL LEDGER SETUP WINDOW You use the General Ledger Setup window to enter information about how you want to handle certain accounting issues in your company. For example, you use this window to specify invoice rounding details, the currency code for your local currency, address formats, and whether you want to use an additional reporting currency. You must complete the General Ledger Setup window for each company you set up in Microsoft Business Solutions–Navision. The window contains four tabs with different kinds of information on each tab. Some of the features available in the window are optional. Each of the step involved in completing the General Ledger Setup are detailed below - California Software Company, India 53 Business Modeling Report – North American Tea & Coffee Inc. General Ledger >> Setup Specify the dimensions to be used in the system Setup window appears Specify the additional reporting currency Specify the date from & to which the posting to GL is allowed Specify if payment discount tolerance has to be handled Specify if the User time has to be recorded in the system Specify the payment discount grace period for customers Specify the format of the local address in the system Specify if payment tolerance has to be handled in the system Specify the invoice rounding precision used Specify the Payment Tolerance % or Amount to be allowed Specify the invoice rounding type to be used. Exit General Ledger >> Setup Specify the date before which the GL account can be deleted Specify the Local Currency Code to be used in the system Specify if the payment discount has to be with or without tax Specify some of the numbering to be used in the numbering tab - California Software Company, India 54 Business Modeling Report – North American Tea & Coffee Inc. On the General Ledger main menu, click Setup, General Ledger Setup. General Tab You can control the date range that all users can use for posting by completing the Allow Posting From and Allow Posting To fields. You set up the company default posting dates and specific user posting date restrictions under the user setup options. If there are no user restrictions then the company defaults are in effect. If there are no company defaults, there are no restrictions on dates for data entry and posting. Why is this important? Since the program does not require "closing" as a part of its accounting cycle, you can use the posting date ranges to procedurally "close" periods, to prevent entries that could change prior period data. You can always adjust the dates temporarily to allow specific entries to be posted. Other fields on the General tab include: Register Time field - Here you can specify whether the program will register the user' s time usage. Local Address Format field - Here you can specify the format in which addresses must appear on printouts. Local Cont. Addr. Format field - Here you can specify where you want the contact name to appear in mailing addresses. Invoice Rounding Precision (LCY) field - Here you can specify the size of the interval to be used when rounding amounts in your local currency. Invoice Rounding Type (LCY) field - Here you can specify how the program will round an invoice amount. Allow G/L Acc. Deletion Before field – The date in this field determines if and when G/L accounts can be deleted. If you enter a date in this field, G/L accounts with entries on or after this date cannot be deleted. Check G/L Account Usage field - A check mark in this field indicates that you want the program to protect G/L accounts that are used in setup tables, for example posting groups, from being deleted. EMU Currency field - Place a check mark in this field if LCY is an EMU currency. This field is only used when you apply entries in different currencies. LCY Code field – In this field, you enter the currency code for LCY. The value is only used on printouts, since the program uses as the indicator for LCY when displaying information in tables. Pmt. Disc. Excl. GST field - Here you can specify whether the payment discount should be based on amounts including or excluding GST. Adjust for Payment Disc. field – In this field, you can place a check mark if you want the program to recalculate GST amounts when you post payments that trigger payment discounts. Unrealized GST field – In this field, you can specify whether you want the program to handle unrealized GST. Max. GST Difference Allowed field - In this field you can enter the maximum GST correction amount allowed for the local currency. GST Rounding Type field - In this field, you can select how the program will round GST when calculated for the local currency. - California Software Company, India 55 Business Modeling Report – North American Tea & Coffee Inc. Numbering Tab Click the Numbering tab. There is one field on the Numbering tab, the Bank Account Nos. field. Here you can enter the code for the number series that will be used to assign numbers to bank accounts. We will return to number series later in this section. Dimensions Tab Click the Dimensions tab. On this tab, you must select the two global dimensions that you will use the most frequently in your reports. You can also select your shortcut dimensions. You must select the dimensions from the dimension codes that you have already set up in the Dimension table. The fields on the Dimension tab include: Global Dimension 1 Code field and Global Dimension 2 Code field as well as eight different shortcut dimension fields. The program automatically creates first two shortcut dimensions using the Global Dimensions. You will only be able to use the other six shortcut dimensions if you have purchased the Advanced Dimensions granule. Reporting Tab Click the Reporting tab. There are two fields on the Reporting tab, the Additional Reporting Currency field and the GST Exchange Rate Adjustment field. In the Additional Reporting Currency field, you can specify the currency that will be used as an additional reporting currency in the General Ledger application area. If you specify an additional reporting currency in this field, the program will then automatically record G/L entries and some other entries, like GST entries in both LCY and the additional reporting currency. This enables you to print reports in either LCY or the additional reporting currency. Application Tab On this tab you enter setup information relating to how payments are applied to outstanding amounts. This includes both payments from customers and payments to vendors. Appln. Rounding Precision field - In this field, you can specify the size of the interval that will be allowed as a rounding difference for LCY when you apply entries in LCY to entries in a different currency. Payment Disc. Tolerance Warning, Payment Disc. Tolerance Posting and Payment Discount Grace Period fields – You should fill in these fields if you wish to allow tolerance on your payment discount terms. You will learn more about payment discount tolerance in the Financial Management training material. Payment Tolerance Warning, and Payment Tolerance Posting fields – You should fill in these fields if you wish to close outstanding receivables and payables with payment amounts that are different to what is owed. You will learn more about payment tolerance in the Financial Management training material. Payment Tolerance % and Max. Payment Tolerance Amount fields – You should fill in these fields if you wish to close outstanding local currency (LCY) receivables and payables with payment amounts that are different to what is owed. The fields are used to specify the difference allowed as a percentage of the invoice amount and/or a maximum amount of tolerance allowed. These fields can only be updated by clicking Functions, Change Payment Tolerance at the bottom of the window. - California Software Company, India 56 Business Modeling Report – North American Tea & Coffee Inc. 5.1.5 NO. SERIES You use the No. Series window to set up all the number series that you will use for your company. You can assign number series to certain tables (such as the Customer, Vendor and Item tables), sales and purchase documents (such as quotes, shipments and posted invoices), and journal templates and batches. You can set up a complete numbering system consisting of an unlimited number of number series for all types of basic information (except G/L accounts) and documents. You can combine this with manual numbering for specific areas or you can use manual numbering entirely. The document numbering functionality provides a flexible way of numbering all documents, journals, batches and journal lines. Documents include, but are not limited to orders, invoices, shipments and credit memos. In the setup table for each application area and in the journal templates, you specify which No. Series will be used for which purpose. For example, if you have set up a No. Series for customers, you would enter the code for this No. Series in the Customer Nos. field in the Sales & Receivables Setup table. Then when you create a new customer, the program will use the information associated with the code to assign the customer number. Setup >> No. Series Specify the code of the number series Specify the description of the number series Click Series >> Lines at the bottom of the screen Specify the Starting Number, Ending Number and Increment No. Specify if the No. Series has to be default or manual Exit the No. Series Screen - California Software Company, India 57 Business Modeling Report – North American Tea & Coffee Inc. 5.1.6 RESPONSIBILITY CENTERS On the General Ledger Menu, click Setup, Responsibility Centers. The Responsibility Center window appears. You can use the Responsibility Center window to record information about your responsibility center. A responsibility center can be a cost center, a profit center or an investment center. Examples of responsibility centers are a sales office, a purchasing department for several locations, and a plant planning office. In the program, you set up responsibility centers to help administer your business. For example, a responsibility center can administer sales and purchases for one or more warehouses or distribution centers, where goods are handled and stored prior to use. Setup >> Responsibility Center Specify the code for the responsibility center Specify the name and address of the responsibility center Specify the default location code for the responsibility center Specify the communication details of the responsibility center Exit the Responsibility center Screen - California Software Company, India 58 Business Modeling Report – North American Tea & Coffee Inc. Each responsibility center has a Name (for example, the address of the regional office) as well as a Code representing the name. On the General tab, you can enter an address for the responsibility center that may be different to the company address. You can also select default global dimensions for the responsibility center. To select additional default dimensions, click Resp. Ctr., Dimensions and enter them in the Responsibility Center - Default Dimensions window. Use the Location Code field to assign a default location to the responsibility center. If the responsibility center is entered on a sales or purchase document, the program will update the Location Code field on the document with the default location. On the Communications tab, you can set up phone, e-mail and website details for the responsibility center that may also be different to the company communication details. Once the responsibility center is created, the code can be used in the Responsibility Center fields elsewhere in the program. For example, when you enter a responsibility center code on purchase and sales documents it affects the address, dimensions, and prices on the documents. The address displayed in printed sales and purchase documents will be the responsibility center' s address not the company address. The program will automatically assign the default dimensions for the responsibility center to the document. Different item prices can be established for different responsibility centers. Entering a responsibility center code on a Location Card will mean that the location (for example, a warehouse or distribution center) is administered by the responsibility center represented by that code. If the location is selected on a sales or purchase document, the program will automatically fill in the Responsibility Center field on the document with the assigned responsibility center. 5.1.7 GENERAL POSTING GROUPS If you use other application areas in addition to General Ledger and therefore post to accounts such as Customers, Vendors, Items or Resources you need to set up a link between these accounts and the G/L accounts. If you only use the General Ledger application area, it is not necessary to set up posting groups. Posting Groups are used to create these links between the different application areas and the General Ledger application area. As a result, you must have set up the chart of accounts before you can create the posting groups. When sales, purchases, and other transactions are recorded and posted where a specific G/L Account is not specified directly, the Posting Groups provide the mapping to the correct accounts. For example, in the sale of an item to a Customer on a Sales Order, no general ledger accounts are specified directly. However, upon completing the Navigate function, the review of a posted invoice shows entries that were posted to the G/L. This result occurs because the customers and items were assigned Posting Groups to identify the G/L accounts. There are three major types of posting groups that deal with selling inventory and resources to customers and buying inventory from vendors: Specific Posting Groups General Posting Groups Tax Posting Groups – This is used for GST Specific Posting Groups The primary purpose for Specific Posting Groups is to identify the primary Balance Sheet Account for each supporting Ledger. For instance, the total outstanding accounts receivable balance of all of the customers should tie to the total balance of the Accounts Receivable accounts in the - California Software Company, India 59 Business Modeling Report – North American Tea & Coffee Inc. Balance Sheet. Therefore, specific posting groups are assigned to Customers, Vendors, Items, Bank Accounts, and Fixed Assets. These posting groups create the direct link to the primary Balance Sheet Account for each Master Item. The specific posting groups that should be set up are as follows: Customer Posting Group - This posting group will map the accounts receivable account, payment discount accounts, invoice and application rounding accounts, interest and fee accounts relating to customers. Vendor Posting Group - This posting group will map the accounts payable account, payment discount accounts, invoice and application rounding accounts, interest and fee accounts relating to vendors. Inventory Posting Group – This posting group is used to specify the inventory. Each Inventory Posting Group is then combined with each appropriate Location Code in the Inventory Posting Setup window. For each combination you can map the inventory accounts, WIP account and other variance accounts relating to inventory in the Chart of Accounts. Bank Account Posting Groups - This posting group is used to map a bank G/L account to a bank account in the program. General Posting Groups There are two kinds of General Posting Groups: General Business Posting Group – specifying “who we sell to” (Customers) and “who we buy from” (Vendors). General Product Posting Group – specifying, “what we sell” (Items and Resources) or “what we buy” (Items). 5.1.7.1 GENERAL BUSINESS POSTING GROUPS You assign business posting groups to customers and vendors. In the General Business Posting Groups window, you enter a code and a description for the posting group. - California Software Company, India 60 Business Modeling Report – North American Tea & Coffee Inc. On the General Ledger menu, click Setup, General Posting Groups, Business Posting Groups. Open the Business Posting Groups Screen Specify the code for the Business Posting Group Specify the description of the Business Posting Group Exit the Business Posting Group The procedure of creating the posting groups for general Product Posting Group is also the same. When setting up business groups, you must consider how many groups you need for breaking down sales by customers and how many groups you need for breaking down purchases by vendors. The business groups can be set up to group customers and vendors by geographical area (Domestic, EU countries, Overseas, and so on) or type of business (retail, industrial, wholesale, service) or to distinguish between private entities and government agencies. It is also possible to not set up any General Business Posting Groups if you do not wish to distinguish sales and purchases by location. The number of groups will be directly related to the chart of accounts. In the General Business Posting Groups window you can enter the following information: Code – The code that will be assigned to customers, vendors, and G/L accounts in the program. Description – A description of the general business-posting group. Def. GST Bus. Posting Group – Select a GST business posting group that will be used as a default for transactions involving this General Business Posting Group. If you change the contents of this field, you will be asked if you wish to update any G/L accounts, customers and vendors with the change. Auto Insert Default – If you place a check mark in this field, whenever you assign the General Business Posting Group to a customer, vendor or G/L account, the program will automatically fill in the GST Bus. Posting Group for the customer, vendor or G/L account with the Def. GST Bus. Posting Group. - California Software Company, India 61 Business Modeling Report – North American Tea & Coffee Inc. 5.1.7.2 PRODUCT POSTING GROUPS You assign product-posting groups to items and resources. In the Product Posting Groups window, you enter a code and a description for the posting group. On the General Ledger menu, click Setup, General Posting Groups, Product Posting Groups. When setting up product groups, you must consider: How many groups you need for breaking down sales by products (items and resources) How many groups you need for breaking down purchases by items. The Product Posting Groups as shown above are broken down into Raw Materials, Retail, Resources, Capacities, Miscellaneous with GST and Miscellaneous without GST. The Product Posting Groups provide the major product groups that will be reflected in the Chart of Accounts. Each Inventory Item and Resource set will be assigned a Product Posting Group. In the General Business Posting Groups window you can enter the following information: Code – The code that will be assigned to G/L accounts, items, resources, and item charges in the program. Description – A description of the general product-posting group. Def. GST Bus. Posting Group – Select a GST business-posting group that will be used as a default for transactions involving this General Product Posting Group. If you change the contents of this field, you will be asked if you wish to update any G/L accounts, items, resources and item charges with the change. Auto Insert Default – If you place a check mark in this field, whenever you assign the General Product Posting Group, the program will automatically fill in the GST Bus. Posting Group for the G/L account, item, resource or item charge with the Def. GST Bus. Posting Group. Open the Product Posting Groups Screen Specify the code for the Product Posting Group Specify the description of the Product Posting Group Exit the Product Posting Group - California Software Company, India 62 Business Modeling Report – North American Tea & Coffee Inc. 5.1.7.3 GENERAL POSTING SETUP The General Posting Setup window is a matrix that combines business and product posting groups. With each combination the user can determine to which accounts the program will post: Sales & Purchases Sales and Purchase Credit Memos Sales and Purchase invoice discounts and payment discounts Cost of Goods Sold and Inventory Adjustments Direct Cost Applied and Overhead Applied Purchase Variances On the General Ledger menu, click Setup, General Posting Groups, and General Posting Setup. The General Posting Setup window appears. Open the General Posting Setup Screen Select the Business Posting Group from the list Select the Product Posting Group from the list Specify a GL account for a combination of these Exit General Posting Setup For each combination of business and product posting groups you can assign a different set of G/L accounts. As a result, it is possible to post the sale of the same item to different sales accounts in the G/L due to customers being assigned different business posting groups. - California Software Company, India 63 Business Modeling Report – North American Tea & Coffee Inc. 5.1.8 SALES TAX SETUP Sales tax setup in the system has to be done in the General Ledger, but the relation of the setup extends to the Sales & Receivables, Purchase & payables and Inventory modules. Some of the definitions for Sales Tax to be setup are as follows Groups Jurisdiction Area Details Note: For Items consumed inside the factory by other departments from the Inventory has to be accounted for GST. The same could be addressed by self-invoicing those items consumed internally. 5.1.8.1 GROUPS Tax Groups are nothing but logical grouping of the items sold by the company. This is done when some of the items sold have different sales tax percentages or are not taxable. In other cases, there can be only one group and all the items can be assigned to the same group. As mentioned earlier, the groups extend to the inventory module and all the taxable and nontaxable items should have a group attached with them. Creating the Tax Groups Open the Sales Tax Groups Screen Specify the code of the tax group in the code field Specify the description of the group Exit Sales Tax Groups Screen - California Software Company, India 64 Business Modeling Report – North American Tea & Coffee Inc. 5.1.8.2 SALES TAX JURISDICTIONS Sales Tax Jurisdiction is a list of the all jurisdiction to which the tax has to be paid. It is a list of all the tax reporting authorities. This is used to define all the different types of taxes that the company deals with. Creating the tax Jurisdictions Open the Tax Jurisdiction Screen Specify the code of the tax Jurisdiction Specify the description of the tax jurisdiction Specify the sales & Purchase tax Accounts Specify the jurisdiction to which the tax has to be reported Exit Tax Jurisdiction Screen - California Software Company, India 65 Business Modeling Report – North American Tea & Coffee Inc. 5.1.8.3 SALES TAX AREAS Sales Tax areas are the different combinations of taxes that have to be collected from different customer based on to which jurisdiction the customer belongs to. Creating the Tax Areas Open the Tax Area Screen Specify the code of the tax area Specify the description of the tax area Select all the tax jurisdictions that apply to the area Specify the order of calculation of the taxes Exit Tax Area Screen The tax areas setup here are the link by which the taxes will be calculated in the sales and purchase documents. Based on the combination of the tax area code to which the customer belongs and the tax group to which the item sold belongs, the system calculates the tax based on the percentage of the tax specified in the tax details table. - California Software Company, India 66 Business Modeling Report – North American Tea & Coffee Inc. 5.1.8.4 Tax Details The tax details table is the one in which the tax percentage is specified for a combination of the tax group and the tax jurisdiction. Creating the Tax details Open the Tax Details Screen Select the tax jurisdiction code from the list Select the tax group code from the list Specify the date till which the tax is applicable Specify the maximum qty/amount if the tax depends on any of them Specify the tax above and below the maximum quantity Exit Tax Details Screen - California Software Company, India 67 Business Modeling Report – North American Tea & Coffee Inc. 5.1.9 TRIAL CODES This is where the program' s audit trails begin. Trail codes setup lets you set up source codes and reason codes that help define information to be assigned to transactions. On the General Ledger menu, click Setup, Trail Codes. There are three items to set up in relation to Trail Codes. Source Codes Source Codes are used to assist the user in finding the point of origin for an entry (audit trails). Source codes are assigned to transactions. Each journal can have a source code; the ones listed in the Source Codes window are the system defaults. As new journals or data entry points are added, then a source code should be added as well to identify where the transaction originated. Source Codes are the basis for the audit trail in the program. To see all posted entries with a particular source code, click the Source button in the Source Codes window and select the relevant register. Source Code Setup You assign source codes to the different journals and functions that post data by in the Source Code Setup Window. Reason Codes Reason Codes are used to explain why an entry exists. For example, if you must return items from a sale you can set up a reason code to denote the reason such as damaged, wrong color, wrong size, etc. After you set up reason codes, you can add the reason code field to the journal or other window. This allows you to filter the posted ledger entries by reason code. 5.1.10 BANK ACCOUNTS POSTING GROUPS You can manage any number of bank accounts across a variety of different banks. These accounts can be either deposit accounts or loan accounts. You can set up bank accounts in local or foreign currency. If you use Bank Accounts you will need to specify Bank Accounts Posting Groups to link the Bank Accounts to G/L accounts. On the General Ledger menu, click Setup, Bank Accounts, and Posting Groups. Here you specify the General Ledger accounts that will be used for the different Bank Account Posting Groups On the General Ledger menu, click Setup, Bank Accounts, and Report Selections. In the Bank Account Report Selections window you can select which reports you want printed out for Cash Management documents like Checks, Bank Statements and Bank Reconciliation Test Report. You will learn more about how to set up bank accounts in the Bank Account section of this chapter. - California Software Company, India 68 Business Modeling Report – North American Tea & Coffee Inc. Creating Bank Account Posting Groups Open Bank Account Posting Group screen Specify the code of the posting group Specify the GL Account to which the bank transaction should post Exit Bank Posting Group Screen 5.1.11 GENERAL Standard Text Codes You use the Standard Text Codes window to enter texts that you use often, such as "Shipping Charge" or "Monthly Depreciation." You assign a code to each text, such as SC for "Shipping Charge." Then, when you enter the code in the No. field on a document line where the Type field is Blank (for example, on an invoice), the program will enter the entire text in the Description field. You can also enter a question mark, followed by the code, in a text field (such as the Description field in a general journal), and the entire text will be entered in the field. For example, if you enter "? SC" in the Description field in a general journal, the program updates the contents of the Description field with the text "Shipping Charge." Extended Texts In the Standard Text Codes window, select the text you wish to enter extended text for and click Text, Extended Texts. This feature allows you to add more information (thereby supplementing the Description field) to an item, resource, G/L account or standard text. You can use extended text for an item if, for example, you sell an item at a special price for a limited period or a detailed description is necessary for an item. Extended texts are available with: G/L Accounts Item Cards Resource Cards Standard Texts - California Software Company, India 69 Business Modeling Report – North American Tea & Coffee Inc. You use the Sales, Purchase and Service tabs to select which documents the extended texts may appear in. For example, the extended text you create can be inserted on sales and purchase lines, which supplement the description for the relevant item. The text can be inserted manually or automatically. On the General tab, you can enter a specific language code on the extended text header. This ensures that the text appears only on documents created for customers or vendors with the specified language code. You can also define a time interval during which the text will be valid. You can create several texts for the same item. You decide exactly when and where the extended text will be used by the combination of language code, time interval and type of purchase or sales document you specify for the extended text. Post Codes You can use the Post Code window to set up links between specific postcodes and cities. When you enter the postcode in the Post Code field, the program will fill in the City field automatically. This can be useful when working with orders, invoices, vendor cards, customer cards, and so on. Territories You can use the Territory window to set up territory codes. After a territory code has been set up, you can enter it in the Territory Code field on a contact, customer, vendor or bank account card. In the Relationship Management application area, you can assign territory codes to your contacts and then use this information create segments. Languages You use the Languages window to set up language codes. The Languages window contains a line for each language. You can set up as many languages as necessary. The program is also multi-language enabled. You can change the language in which the program displays forms and tables, to match the language of your users. This can be done at the user level, which means that it is now possible, for example, for a US and a Danish worker to work on the same database. Countries You use the Countries window to set up a code representing information for each country. After a country code has been set up, you can enter it in the Country Code fields in forms throughout the program. Currencies The program makes it easy to handle different currencies. For example, you can invoice in foreign currencies, post in foreign currencies, record exchange rate differences and generate statements in foreign currencies. You can post to a customer or vendor in an unlimited number of currencies. The resulting ledger entries will show the currency of each transaction. Transactions that are not in foreign currency are called local currency or LCY transactions. Throughout the program, you will see fields containing local currency amounts will have LCY in their name. Local currency transactions always have the Currency Code field empty. - California Software Company, India 70 Business Modeling Report – North American Tea & Coffee Inc. 5.1.12 USERS In the User Setup window, you can set up users and specify posting date ranges. This gives greater control over data entry. The program can be set to track the amount of time a user is on the system, and a different Main Menu can be specified for each user so that a different menu path is followed. On the General Ledger menu, click Setup, Users, and then User Setup In the posting range fields you can specify user specific posting periods. These periods overwrite the company wide posting period specified in General Ledger Setup window. You can specify a different Main Menu than the default. If you have a user you want to access only the Sales & Receivables area you can specify the Form ID for the Sales & Receivables Menu. This way the user will see only the Sales & Receivables menu, when logging in to the system and not the default Main Menu. This can be very useful when setting up security. You can also enter a default sales, purchase or service responsibility center for a user. . Creating User Setups Open User Setup Screen Select the User ID of the user Specify the posting from and to dates for the user Specify the sales, purchase and service responsibility centers Exit User Setup Screen - California Software Company, India 71 Business Modeling Report – North American Tea & Coffee Inc. User Time Registers You use the User Time Register window to have the program register how much time an individual user works on the accounts. The User Time Register window is useful for accounting firms that want to register the amount of time spent working on each company. You may also want to see who has worked on the companies and in which period the work was carried out. The User Time Registers window displays the user ID, login date and amount of time spent in the program. This is not a full-fledged time billing program. It is, however, helpful in tracking general time in the program and is a good basis for modifications for time billing. 5.1.13 PRINTER SELECTIONS In Printer Selections you can assign a default printer by user, report, or a combination of the two. You can set up reports such as invoices or checks to always be generated on a specific printer with the correct forms. - California Software Company, India 72 Business Modeling Report – North American Tea & Coffee Inc. 5.2 THE CHART OF ACCOUNTS The core of a company is the chart of accounts, that is, the list of the G/L accounts to which all G/L entries are posted. You use the Chart of Accounts window to enter and view your G/L accounts and account balances. Open Chart of Accounts Specify the number for the account Specify the Name of the account Specify if the account is a Income or Balance sheet account Specify the account type of the account Specify the Posting details of the account Specify if Exchange Rate Adjustment is required Exit Chart Of Accounts - California Software Company, India 73 Business Modeling Report – North American Tea & Coffee Inc. List of Accounts A list of all G/L accounts is available so that many accounts can be viewed at one time. However, there is also a G/L account card for each account that you can open by pressing SHIFT+F5: On the General Ledger menu, click Chart of Accounts. Find and select account number 6110, the Sales, Retail - Dom. account. Click Account, Card to display the Account Card. Alternatively, you can press SHIFT+F5. For the purpose of this course we will discuss only the fields on the General Tab and Posting Tab. You will learn more about the fields on the Consolidation Tab and Reporting Tab in the Financial Management Training Material. General Tab No. field - Here you can enter the number of the G/L Account you are setting up. You can enter a maximum of 20 numbers, both numbers and letters. The number identifies the account. Name field – Here you enter an account name of 30 characters or less. Income/Balance field – This specifies whether the account is an income or balance sheet account. This field is important in determining what accounts will be closed at the fiscal year end. Debit/Credit field - This field allows the user to determine the normal type of transactions that are made to this account. It does not restrict the type of transactions, only enhances the reporting ability. Account Type field – This field identifies the purpose of the account. Posting - Used to accumulate transactions. Heading - Used for descriptive purposes only. Total - Used to total a range of accounts. The user determines the ranges for these accounts. These accounts can be useful for totaling groups of accounts that are not in the same classification (Gross Income). Begin-Total and End-Total - The Begin-Total account marks the beginning of an account range and the End-Total account marks the end of the range. Each End-Total account has an account range in the Totaling field. The range can be calculated or entered manually. If you do not manually enter the range, the Indentation field is used to determine the beginning account for the range. The ending account for the range should always be the EndTotal Account that contains the range. You can also create a multi-level chart of accounts with Begin-Total and End-Total accounts nested within other Begin-Total and End-Total accounts. Totaling field - This field is used to determine which accounts will go into a Total or an End-Total entry. Reconciliation Account field - Here you can choose whether this G/L account will be included in the Reconciliation window in the general journal. You can find the Reconciliation window by clicking Posting, Reconcile or CTRL+F9 in journals. The Reconciliation window is used after you have filled in a general journal (but before you post it) to reconcile the accounts being posted to in the journal. Automatic Ext. Texts field – If you have placed a check mark in this field, any extended text description that has been added for the account will be added to sales and purchase documents in the description field. If you do not want to have the extended description added automatically, - California Software Company, India 74 Business Modeling Report – North American Tea & Coffee Inc. there is an option in the documents to add it manually. To create the extended text, click Account, Extended Text. Automatic Ext. Texts can be set up for accounts, items, and resources. Direct Posting field – This field indicates if it is allowed to post directly into this account from a journal line. Blocked field – Here you can choose to block the account so that entries cannot be posted to it. To block the account, place a check mark in the check box. Sometimes, for various reasons, you may want to block certain accounts so that entries cannot be posted to them. You can modify an account' s blocked or open status in this field. Posting Tab The Posting tab you contains the information the program uses for recording the G/L and GST transactions. Gen. Posting Type - The code defines whether the account will be used only in connection with a Sale or Purchase transaction or with both kinds of transactions. The program uses the Gen. Posting Type field, together with the GST Bus. Posting Group and GST Prod. Posting Group fields, to find the account to which the program posts GST. This field should be filled in only for revenue and expense accounts where GST is involved. For other accounts, select Blank. Gen. Bus. Posting Group – The default general business-posting group for the account. The general business posting group code indicates whom you sell to or buy from. The program uses this code together with the Gen. Prod. Posting Group and Gen. Posting Type fields, to find the G/L accounts to which the program posts sales, purchases, discount amounts, COGS and inventory adjustments. Gen. Prod. Posting Group – The default general product-posting group for the account. The general product posting group code indicates which type of item you sell or purchase. The program uses this code together with the Gen. Bus. Posting Group and Gen. Posting Type fields, to find the G/L accounts to which the program posts sales, purchases, discount amounts, COGS and inventory adjustments. GST Bus. Posting Group – The default GST business-posting group for the account. The program uses this code together with the GST Prod. Posting Group and Gen. Posting Type fields to determine GST % and GST calculation type and to find the G/L accounts to which the program posts GST. GST Prod. Posting Group – The default GST product-posting group for the account. The program uses this code together with the GST Bus. Posting Group and Gen. Posting Type fields to determine GST % and GST calculation type and to find the G/L accounts to which the program posts GST. After you have attached the posting type and all the posting group codes to a G/L account, these codes will automatically be inserted in a journal, sales or purchase line when you select the G/L account. - California Software Company, India 75 Business Modeling Report – North American Tea & Coffee Inc. The Account Button Each account card has an Account button with the following functions: List – Display a list of all accounts. Note, this is not the same as the chart of accounts since it does not include and balance or amount information. Ledger Entries – Display all ledger entries for the account. Comments – Display or enter any additional comments relating to the account. Dimensions – Display or enter default dimensions for the account. Extended Texts – Display or enter extended text for the account. Receivables-Payables This report provides a summary of expected net operational cash flow from customers and vendors over time. It is simply a summary of the open customer and vendor ledger entries sorted by their Due Date instead of Posting Date. You can specify the period you wish to view, such as daily, monthly, quarterly and so on. If you wish to see the expected net balance of outstanding customer and vendor balances at any particular date, you should choose the Balance at Date view. If you wish to see the expected cash flow movement for a particular period, you should choose the Net Change view. The Balance Button The Balance button is used to show information about the balances and transaction amounts for the account. G/L Account Balance – Displays the balance or net change for the G/L account over time. G/L Balance – Displays the balance or net change for all G/L accounts for a specific time period. G/L Balance by Dimensions – Displays balance or net change information for all accounts. You can choose the information shown in columns and lines from G/L account, Period or the two Global Dimensions. - California Software Company, India 76 Business Modeling Report – North American Tea & Coffee Inc. 5.3 DIMENSIONS A dimension is data that you can add to an entry as a kind of marker so that the program can group entries with similar characteristics and easily retrieve these groups for analysis purposes. Dimensions can be used throughout the program on entries in journals and documents, as well as budgets. The term dimension is used in the program to describe how analysis occurs. A two-dimensional analysis, for example, would be sales per area. However, by using more than two dimensions when creating an entry, you can carry out a more complex analysis at a later time, for example, sales per sales campaign per customer group per area. Each dimension can have an unlimited series of dimension values that are sub-units of that dimension. For example, a dimension called Department can have departments called Sales, Administration and so on as subunits. These departments are dimension values. Dimensions and dimension values are user-defined and unlimited, which means you can create dimensions tailored to your company' s needs and business processes. Usage of Dimensions A company' s accounts are made up of many entries from many different sources and are associated with numerous activities within the company. It is often necessary to create statements, statistics and analyses that are extracts of the complete financial statements. These extracts can be created using individual dimensions or combinations of dimensions. If you set up a dimension called Department, and then use this dimension and a dimension value when posting an entry, you can later retrieve information on, for example, which items have been sold by which departments. If more than one dimension has been used on posted entries, the user can create a richer analysis of a company' s activities. For example, a single sales entry can include multiple dimension information about which account the item sale has been posted to, where the item was sold, who sold it, and what kind of customer made the purchase. By using dimension, you can analyze trends and compare various characteristics across a range of entries. The analysis view functionality is particularly effective for this purpose when you are using multiple dimensions. However, even if you only use the two global dimensions, you can also use filters, account schedules and reports to create informative dimension analyses. - California Software Company, India 77 Business Modeling Report – North American Tea & Coffee Inc. Creating Dimension and Dimension Values Setup >> Dimensions >> Dimension Specify the code for the Dimension Specify the Name of the Dimension The code caption and the filter caption can be changed Click Dimension >> Dimension Values Specify the code of the Dimension Value here Specify the Name of the dimension value Exit Dimension screen - California Software Company, India 78 Business Modeling Report – North American Tea & Coffee Inc. Dimension Types Once you have set up your dimension codes and values, you can also attribute extra functionality to some of the dimensions. Global Dimensions You can select two global dimensions from the dimensions already set up. The dimensions that you select to be global dimensions are available for use throughout the program. This means that global dimensions can be used as filters for G/L entries, as well as on all reports, account schedules and batch jobs. Both global dimensions are also automatically made available by the program for use on entry lines and document headers as shortcut dimensions 1 and 2.Global dimensions are typically a company' s most used and important dimensions because of their availability throughout the program. Shortcut Dimensions With shortcut dimensions, the user can enter dimensions and dimension values directly on the lines in journals, and sales and purchase documents. You click View, Show Column, and select the shortcut dimension you use frequently in that particular document to be shown on the document line. You can specify a total of eight shortcut dimensions. The program defines the first two shortcut dimensions as being the same dimensions used as global dimensions. You can select the remaining six shortcut dimensions from among the dimensions your company has set up. These six shortcut dimensions can also be changed regularly to suit company needs. They are set up in the G/L Setup window. To enter dimension information for dimensions not selected as shortcuts, you must use a separate dimensions window. Budget Dimensions For each budget, you can define four dimensions in addition to the two global dimensions. These budget-specific dimensions are called budget dimensions. You select the budget dimensions for each budget from among the dimensions you have already set up. Budget dimensions can be used to set filters on a budget and to add dimension information to budget entries. - California Software Company, India 79 Business Modeling Report – North American Tea & Coffee Inc. 5.4 JOURNALS AND BATCHES Overview of Journals and Batches General journals enable you to enter data into general ledger accounts and other accounts, for instance, customer accounts, vendor accounts and bank accounts. The journal entry system has three layers: journal templates, journal batches and journal lines. Journal Templates Journals are typically used for different types or groups of entries, such as purchases, payments, sales and receivables. Each journal type is set up with its own journal template. Journal templates provide the basic journal structure where you can specify default settings and information for all batches created using the template. Journal Batches Journal Batches are created based on the journal templates. All journal batches created from a specific template will have the same structure, default settings and information defined in the template. However, as these settings are only defaults, it is possible to change them for a specific journal batch. Batches are typically used to separate one user' s entries from another. For example, Todd and Sue both work on general journal entries. Todd typically makes entries and posts them at a later time when they are approved. In order to keep Sue' s entries from becoming mixed with Todd' s entries, separate batches can be assigned to the two users. Journal Lines Journal lines are the journal entries that you wish to post. This information entered in the journal lines includes the account number, posting date and amount of the journal. Automatic Numbering for Journals To use automatic numbering, you must define number series codes and number series lines as described earlier in this chapter. Afterward, on each journal template or journal batch, you must enter a number series code in the No. Series field. If you specify the number series code on a journal template, the code will be copied to all journal batches you create under the template, but you can substitute or delete the code on individual batches. If you do not specify a code on a journal template, you must specify a code on each journal batch if you want to use automatic document numbering. Manual Numbering for Journals To use manual document numbering for a journal batch, leave both the No. Series field and/or the Posting No. Series field on the journal batch empty. You can decide to use manual numbering for one or more specific journal batches and automatic numbering for others. In the general journal batches, for example, you could choose to have documents in the CASH journal batch numbered manually and documents in the DEFAULT journal batch numbered automatically. This would mean that you must clear the No. Series field on the line with the CASH name, but leave the GNJL-GEN code on the line with the DEFAULT name. - California Software Company, India 80 Business Modeling Report – North American Tea & Coffee Inc. Creating Journal Entries Any Journal – General, Sales, Purchase, etc Select the correct journal template and batch Posting date is defaulted as current date Select the appropriate document type Document number can be automatic or manual Select the appropriate account type Select the appropriate account number Enter the amount to be posted in the account Enter the balancing account type and number Post the Journal Line Exit Dimension screen - California Software Company, India 81 Business Modeling Report – North American Tea & Coffee Inc. 5.5 BANK ACCOUNTS Each bank account has its own card containing different kinds of information. For each transaction you make using a bank account, the program will post a bank account ledger entry. If you make manual or computer check payments, the program also posts a check ledger entry to record the check transaction and the current status of the check. The bank account posting group assigned to the bank account enables the program to post the related G/L entries with the transaction. Creating Bank Account Cards GL >> Bank Accounts Specify the number of the bank account Specify the name and the address details of the bank Specify the communication details of the bank Specify the Currency code and the Posting group Specify the last cheque number Specify the last statement number and balance for reconciliation Exit Bank Account Screen - California Software Company, India 82 Business Modeling Report – North American Tea & Coffee Inc. General Tab This tab contains all the general information about the bank at which the account is held such as the name, address, and contact person at the bank and search name. In addition to this information, the general tab includes the following fields: No. – The alphanumeric code used to represent the bank account in the program. It does NOT have to be the account number used by the bank that is entered in the Bank Account No. field. Bank Branch No. – The alphanumeric code used to represent the bank branch number for the bank account. All banks have a number series that specifies the branch of the bank the account was opened at. Bank Account No. – The number of the bank account used by the bank. Balance and Balance (LCY) – These fields are flow fields that calculate the current bank balance based on the bank ledger entries. Min. Balance – The minimum balance that the bank account can have. The amount is in the currency of the bank account and can be positive or negative. Our Contact Code – The contact person in your company responsible for the bank account. In the program, this must be somebody set up in the Salespeople/Purchasers window. Blocked – Place a check mark in this field if you wish to block the account from being used to make transactions. Communication Tab This tab contains phone and fax numbers, e-mail and home page addresses for the bank. Posting Tab The Posting tab contains the following fields: Currency Code – The currency for the bank account. If you select a currency code in this field, you can only use this bank account to receive and make payments in the currency you have selected in this field. If you do not select a currency code, you can receive payments using any currency including LCY. You can make payments that are not checks using any currency including LCY. You can only make check payments in LCY. Last Check No. – If you use checks, you can specify the last check number used. The program will update this number every time a new check is created. Transit No. – An alphanumeric code used to represent the bank where the account is held, such as a transit number. Last Statement No. – This field contains the Statement No. of the last Bank Account Statement reconciled in the program. Balance Last Statement - This field contains the Statement Ending Balance of the last Bank Account Statement reconciled in the program. - California Software Company, India 83 Business Modeling Report – North American Tea & Coffee Inc. Bank Acc. Posting Group – The bank account posting group assigned to this bank account. The program uses this to post the related G/L entries for each transaction using the bank account. Transfer Tab The Transfer Tab contains the information needed to make transfers to and from the bank account. The Transit No, Bank Branch No and Bank Account No are shown on this tab. In addition to these fields, the tab also includes the following fields: SWIFT Code - This field contains the SWIFT code (international bank identifier code) of the bank where you have the account. IBAN - This field contains the bank account' s international bank account number. The program checks to see if the IBAN entered has the correct format and length. - California Software Company, India 84 Business Modeling Report – North American Tea & Coffee Inc. 5.6 ACCOUNT SCHEDULES Account schedules are intended for calculations that cannot be done directly in the chart of accounts. You can create as many Account Schedules as you like, each with a unique name. You can set up various report layouts and print the reports with the current figures whenever necessary. You use account schedules to analyze figures in G/L accounts or to compare G/L entries with G/L budget entries. For example, you can view the G/L entries as percentages of the budget entries. Account schedules also can be called financial statement layouts. They provide an easy way to format user-defined financial statements. While running the reports, columns in the report would be according to the Column Layout selected on the request form. It is also possible to export your Account Schedules to MS Excel. This allows other parties to use a copy of your data without requiring direct access to the program. The Account Schedule window is used to create the report lines based on your G/L information. In addition to defining which G/L accounts to include in the report, you can also use formulas to perform calculations based on other rows in the account schedule. In the Column Layout window, you can define criteria that relate to the amount that will be shown in each column. This can be the time period the amount relates to, whether you wish to see the balance or net change and whether the amount is an actual or budgeted amount. This means you can create reports such as: Monthly and Year to Date comparisons of actual balances to budgeted balances for selected G/L accounts. Comparisons of current year balances to prior year balances for selected G/L accounts. By separating the layout of rows and columns, you can easily create different reports by combining the same row layout with different column layouts. So if you have an Income Statement account schedule and two column layouts, one that shows department and another that shows months you can print the Income Statement and select if you want to show it per department or per month. Instead of having to create two complete reports, you only need to create one row layout and two different column layouts. - California Software Company, India 85 Business Modeling Report – North American Tea & Coffee Inc. 5.7 ANALYSIS BY DIMENSIONS As mentioned earlier, dimensions are also very useful for analyzing data. By using dimensions, you can analyze trends and compare various characteristics across a range of entries. The analysis view functionality is particularly effective for this purpose, but you can also use filters, account schedules and reports to create informative dimensions analyses. The primary purpose of using dimensions on G/L entries, budgets and so on is that at a later date you can analyze the dimension information you have posted. By using analysis views, you can retrieve information about dimensions according to the criteria you set. You can then investigate trends and analyze relationships based on the dimension information that you have posted. For each analysis view, you can specify up to four dimensions, as well as specify criteria for G/L accounts, dates and budgets. You can also set filters on dimensions not included in the analysis view, by clicking Analysis, Filters on the analysis view card. Different analysis views can therefore be created for different purposes. 5.8 BUDGETS The Budget window has the same look and feel as matrix windows elsewhere in the program. This means that the budgeting process is gathered in one intuitive form. Some of the features for budgets include: You can have multiple budgets for identical time periods by creating budgets with separate names. You can budget in the matrix window by selecting a combination of G/L account, period, the two global dimensions and four budget dimensions. It is simple to budget with dimensions and this allows comparisons with actual results. You can compare budgeted amounts with actual amounts per dimension, G/L account and period on the Analysis by Dimension form. You can easily copy budgets from previous periods and revise budget figures using an adjustment factor. You can attach an unlimited number of dimensions to a budget entry. You copy a budget by using an adjustment factor. You must apply the adjustment factor to either G/L entries or G/L budget entries. You can easily export budgets to and import budgets from Excel – this makes the budgeting process flexible and efficient. You can set filters on exported budgets and select which dimension information to export to Excel. When you import budget entries from Excel, these can be added to or replace existing budget entries in the program. - California Software Company, India 86 Business Modeling Report – North American Tea & Coffee Inc. 5.9 BANK RECONCILIATION When you maintain bank accounts in the program, you must reconcile them on a regular basis, that is, check the entries and the balance on your accounts against the statement from the bank. There are several steps involved in reconciling the bank accounts. Filling In the Bank Reconciliation. Correcting the Bank Reconciliation Lines and Applying Entries (if necessary). Recording Differences in Transaction Amounts. Posting the Bank Reconciliation. Customised report to be developed for the deductions summary from Bank reconciliation statement. 6.0 Periodic Activities >> Bank Reconciliation Select the bank account number Post the reconciliation to close the bank ledger entry Exit Bank Reconciliation Screen Enter the last date of the statement covered by the bank Enter the statement ending balance Click Functions >> Suggest Lines to pull all posted entries All the open lines are available for reconciliation Remove all transactions not contained in the bank statement Apply the lines to the relevant ledger entry - California Software Company, India 87 Business Modeling Report – North American Tea & Coffee Inc. PURCHASE & PAYABLES - OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION The setup consists of the following elements: Purchase & Payables setup: Based on their established practices, companies must specify how they want the program to support them in managing different aspects of their Purchase transactions. These are the general setup options that the program applies to all Purchase transactions, irrespective of what item and customer are involved. Vendor setup: Managing Vendor information is an important part of managing the total sales and finances of the company. Basic information (such as name, address, and so on) and details (for example, invoicing, discount and payment terms, currencies, shipping schemes, and so on) are recorded for each individual Vendor on a Vendor card. The setup of Vendor posting groups defines a connection between a specific Vendor and accounts in the general ledger. This is done through assigning a Vendor to a posting group for which balance sheet and income statement accounts are then set up. Purchaser setup: Companies can set up codes to identify and describe their Purchasers. This is done with the view to establishing a link between an individual Purchaser and their performance in terms of, for example, the number of Purchase transactions (orders, invoices or returns) handled. - California Software Company, India 88 Business Modeling Report – North American Tea & Coffee Inc. Detailing of NATC business process and the mapping of each process with Navision product is provided Mapping in Navision [Module >> Granule >> Form >> Functionality] Current Business Process Planning of products on a weekly basis [Availability planning of the products is done on a weekly basis. Stock is maintained for 2 months] After the availability of the items are planned, items to be purchased are identified and Purchase orders are raised There are fields in Navision that can maintain a reorder point and reorder quantity for each item, but these fields do not follow the logic of updating the sales figures. This has to be built in the system. Requires customised solution. [Inventory >> Items >> Planning (Tab)] The Requisition work sheet in Navision will identify items which are below required level and suggest to create purchase orders for the same [Purchase & Payables >> Requisition worksheet] The quantity suggested by the system can be cross checked against the actual sales in the corresponding period in the previous year An additional field in the requisition worksheet or a customized report could be provided in the system which is populated with projected sales forecast of subsequent months Quantity for which the items have to be ordered has to be finalized manually and the Purchase Orders would be finalized Follow previous steps. The quantity suggested by the system on the Requisition work sheet can be changed as desired and then PO' s can be created from the requisition worksheet [Purchase & Payables >> Requisition worksheet] A copy of the PO has to be sent to the receipt department for verifying the materials which are coming into the warehouse There is no need to send any document copies, as the items and quantity to be received by warehouse are identified by the system and available for creating warehouse receipts. [Warehouse >> Receipts >> Functions >> Get source documents] Once the material is received by the warehouse, this will reflect in the purchase order These received quantities are displayed in the Purchase order lines automatically. [Purchase & Payables >> Purchase Orders] Inspection of the material coming into the warehouse Recived goods are verified according to Specification sheet and then offereded to QC. The quantity accepted by the quality department via inspection sheets can only be received into the inventory. The rejected material is moved to QC rejection area. - California Software Company, India 89 Business Modeling Report – North American Tea & Coffee Inc. [Warehouse Management >> Receipts >> ] After the materials are received into the warehouse and the invoice can be posted in the system after the supplier sends the invoice. By this method, the system will not suggest the payment to a supplier unless the invoice has been received and registered in Navision. Payment to Suppliers Use built-in functionality to calculate and suggest payments which have to be made on a particular date and will also calculate the discount to be taken [Purchase & Payables >> Payment Journals >> Functions >> Suggest vendor payments] Printing cheques to suppliers Cheques can be printed from the payment journal [Purchase & Payables >> Payment Journals >> Functions >> Print Checks] Debiting the supplier for returns/damages/shortages etc Additional requirement: The debit cost should be the landed cost of the Item only Availability planning of the products is done on a weekly basis. Stock is maintained for 2 months Use Purchase Credit Memo functionality for this purpose [Purchase & Payables >> Credit Memos] Whenever there is a debit issued to a supplier, the system will prompt the actual amount taking the debit in account for landed cost [Customisation required] [Purchase &Payables >> payment Journals] Customized report is required. The annual sales report will be provided to cross check the quantity suggested by the system MBS Navision offers a powerful tool, MRP engine, to plan the materials requirement and reduce the inventory to be maintained - California Software Company, India 90 Business Modeling Report – North American Tea & Coffee Inc. 6.1 BASIC SETUP Before using the Purchases & Payables application area, you need to specify how you want the program to manage certain aspects of your purchases and payables. For example, you must define basic rules for ordering and invoicing as well as specify the number series that will be used for vendors, purchase documents, and so on. You must also specify other options such as how you want to calculate and post discounts and whether you want to round invoices. You use the Purchases & Payables Setup window to specify how you want the program to manage these aspects of your purchases & payables. To open the Purchases & Payables Setup window on the Purchases & Payables menu click Setup, Purchases & Payables Setup. The Purchases & Payables Setup window appears On the General tab of the Purchases & Payables Setup window, you specify options such as how you want to calculate and post discounts and whether you want to round invoices. The tab contains the following fields: Discount Posting – Here you can specify the type of purchase discounts the program will post separately Receipt on Invoice – Here you can choose to have the program automatically set up receipts in connection with purchase invoices. The program will automatically post a receipt when you post a purchase invoice. Invoice Rounding – A check mark in this field indicates that the program will round amounts for purchase invoices. You set the rounding precisions for LCY in the GL setup and for foreign currencies in the currency table. Ext. Doc. No. Mandatory – Here you can specify whether it is mandatory to enter an external document number in the following situations: In the Vendor Invoice No. field or the Vendor Cr. Memo No. field on a purchase header. In the External Document No. field on a general journal line, where the contents of the Document Type field = Invoice, Credit Memo or Finance Charge and the contents of the Account Type field = Vendor. Allow GST difference – You can place a check mark in the field if you want to allow the manual adjustment of GST amounts in purchase documents. You must then specify the “Maximum GST Difference Allowed” in the GL setup. Calc. Inv. Discount – Place a check mark in this field if you want the program to automatically calculate the invoice discount amount in connection with purchase documents. Calc. Inv. Disc. per GST ID. – If you place a check mark in this field, the invoice discount will be calculated per GST Identifier. If you choose not to place a check mark here, the invoice discount will be calculated on the purchase document total. Appln. between Currencies – Here you can specify to what extent the application of entries in different currencies is allowed in the Purchases and Payables application area. Copy Comments Blanket to Order – If you enter a check mark in this field, comments that you enter on a blanket order will be copied to the purchase orders that are created from the blanket order. - California Software Company, India 91 Business Modeling Report – North American Tea & Coffee Inc. Copy Comments Order to Invoice – If you enter a check mark in this field, comments that you enter on a purchase order will be copied to the purchase invoice that is created from the order. Copy Comments Order to Receipt – If you enter a check mark in this field, comments that you enter on a purchase order will be copied to the receipt that is created from the order. Copy Cmts Cr.Memo to Ret.Shpt – If you place a check mark in this field, the program will copy comments from the credit memo to the posted return shipment. - California Software Company, India 92 Business Modeling Report – North American Tea & Coffee Inc. The process flow of setting up the Purchase & payables Setup will be as follows. This is a one time setup that has to be done during the setup of the database with the data being collected from the users and the concurrence of the top management. Any changes that have to be made to the setup will need approval from the concerned authorities. Purchase & Payables >> Setup Setup window appears Specify the type of discount to be posted in the system Specify if Receipt has to automatically connected to invoice Specify if invoice rounding has to be used in the system Specify if external document number is mandatory in sales Specify the extent of currencies used in the system Specify if comments have to be copied from one doc. to another Specify if the tax field can be edited in the sales documents Exit Purchase & Payables >> Setup - California Software Company, India 93 Business Modeling Report – North American Tea & Coffee Inc. 6.2 OTHER OPTIONS UNDER SETUP Let’s look at some of the other items under Setup. 6.2.1 CREATING VENDOR POSTING GROUP You use the Vendor Posting Groups window to set up one or more vendor posting groups. For each posting group you set up, you must create links to the relevant G/L accounts. You can use the same G/L account numbers or different account numbers for each posting group. After you have set up the posting groups, you assign them to the relevant vendor accounts. When you post to a vendor account, the program will post to the G/L account that is specified by the vendorposting group linked to the vendor account. Setup >> Vendor Posting Group Specify the code of the Vendorposting group Specify the accounts to which sales transaction values will post Exit Vendor Posting Group - California Software Company, India 94 Business Modeling Report – North American Tea & Coffee Inc. 6.2.2 PAYMENT TERMS You use the Payment Terms window to set up codes for each set of payment terms. The payment terms table will be used on both the Sales & Receivables side and the Purchases & Payables side. You can specify the due date and the discount date when you set up a payment term. The example in this case will be to setup a payment discount which will allow a discount % of 2 if you pay within a period of 10 days from the date of the invoice and calculate a total credit period of 30 days from the date of invoice. Setup >> Payment Terms Define the code of the payment term. Ex: 2 (10) Net (30) Enter a description for the payment term Enter the due date calculation formula here. Ex: 30D Enter the Discount date calculation formula here. Ex: 10D Enter the discount %. Ex: 2% Specify Yes/No in Calc. Pmt. Disc. On Cr. Memo Exit Payment Terms The system accepts the date formula up to 20 characters and can also accommodate the abbreviations as D – Day, M – Month, Y – Year to specify a few. Before any changes can be made to the payment terms of any Vendor, prior approval has to be obtained from the accounts payables supervisor. - California Software Company, India 95 Business Modeling Report – North American Tea & Coffee Inc. 6.2.3 PAYMENT METHODS Will allow you to create a default balancing account to each payment method that will automatically close the invoice. Be careful when you handle balance accounts in payment methods, this will apply the invoice immediately, by posting. This is for cash purchases and not for normal accounts payable processing. Setup >> Payment Methods Define the code of the payment Method Used Enter a description for the payment Method It is optional to specify the balancing account type If the balancing account type is selected, specify the a/c number Exit Payment Method The default balancing account type and number can be selected optionally. The default accounts specified here, determine the account to which the payment to the vendor will be balanced with. The options for the balancing account type are GL Account or the Bank Account. The account number will then show either the chart of accounts or the bank accounts depending on the balancing account type. - California Software Company, India 96 Business Modeling Report – North American Tea & Coffee Inc. 6.2.4 PURCHASERS You can create codes to identify the salespeople and purchasers in the company. The code for the salesperson or purchaser responsible for the sale or purchase is entered in documents. Setup >> Purchasers Specify the Purchase person code Specify the name of the Purchase person Specify the Job Title of the Purchase Person Specify the commission % for the Purchase person Specify the phone number and email ID of the Purchase person Exit Purchasers Screen All the details about the Purchasers can be specified here and this can be used up to specify the sales that are generated in by the person by linking the salespeople to the sales order. The salespeople can also be linked to the customers to specify the customers who are the leads of the sales person. The commission percentage specified in the Purchaser card can also be used to generated reports to calculate the amount of commission to be paid to the Purchasers. - California Software Company, India 97 Business Modeling Report – North American Tea & Coffee Inc. 6.2.5 STANDARD PURCHASE CODES If you regularly post purchase documents with the same purchase line information, you can use standard purchase codes. Each code can have one or more lines associated with it. You use the code to automatically insert the lines in purchase documents. Setup >> Standard Purchase Codes Specify the code of the standard Purchase Specify the description of the standard Purchase code Specify the currency in which the Purchase is normally done Specify the items that are bought in the Purchase lines Exit Standard Purchase Codes - California Software Company, India 98 Business Modeling Report – North American Tea & Coffee Inc. 6.2.6 PURCHASING CODES This window contains the codes and definitions of the various purchasing activities that you can select from when you plan the purchase of any item, including non – stock items. Setup >> Purchasing Codes Specify the code of the standard Purchase Specify the description of the Purchasing code Tick mark the ones which is a drop shipment in the system Exit Standard Purchase Codes These purchasing codes are used for handling the drop ship sales orders in the system. The system automatically identifies the sales orders with this purchasing code which says drop shipment in the purchasing code and creates drop ship purchase orders for the same. - California Software Company, India 99 Business Modeling Report – North American Tea & Coffee Inc. 6.2.7 SHIPMENT METHODS AND SHIPPING AGENTS You can also set up codes to represent different shipment methods. These shipment methods are used in both sales and purchases documents. Creating Shipping Methods Setup >> Shipping Methods Specify the codes for the shipping methods used. Ex: Prepaid Specify the description for the shipping method Exit Shipping Methods Screen Creating Shipping Agents Setup >> Shipping Agents Specify the code of the shipping agent Specify the name and Internet address of the shipping agent Exit Shipping Agents Screen - California Software Company, India 100 Business Modeling Report – North American Tea & Coffee Inc. 6.2.8 RETURN REASONS You can use this window to set up codes that specify the reasons for returning items. These can be items that a customer returns to you or items that you return to a vendor. 6.2.9 REPORT SELECTIONS In these windows, you set up the reports that will be printed when you use the Print and Post and Print functions in sales documents and reminders and finance charge memos. 6.2.10 REQ. WORKSHEET TEMPLATES Here you can create templates and batches for requisition worksheets. - California Software Company, India 101 Business Modeling Report – North American Tea & Coffee Inc. 6.3 CREATING VENDOR CARDS You use the Vendor Card to set up information on all your Vendors. You must set up a card for each Vendor, on which you enter basic information, such as name, address and discount possibilities. To open a Vendor Card, on the Purchase & Payables menu, click Customers. The Vendor Card window appears. On the Vendor Card we can see all the information that is available for a Vendor. Notice that there are multiple tabs available on the Vendor Card. This allows similar information to be grouped on the same card without cluttering the main screen. Whenever a Purchase document is created, the Vendor information that is placed on the document header is retrieved from the card. The Vendor Card also contains a Vendor and a Purchase button: Vendor button – used to display further information on this Vendor e.g. dimensions for the Vendor. It is also used to access the list of all Vendors. Purchase Button – used to show the different Purchase documents for this customer as well as standard invoice discounts, line discounts and prices relating to this vendor. The step-by-step procedure of creating a vendor is detailed in the following flow chart and the details of each of the functions are explained in the section following the flow chart. - California Software Company, India 102 Business Modeling Report – North American Tea & Coffee Inc. Creating Vendor Card Purchase & payables >> Vendors In the general Tab, fill in the following In the Communication Tab, fill in the following Vendor Number may be auto generated or manual Specify Phone & Fax Number of the Vendor Specify the name of the Vendor in the name field Specify the E-Mail address and the Home Page if any. Specify address of Vendor in address & address2 fields A Specify City, State and Postal Code of the Vendor Specify the Purchase code responsible for this vendor Specify Responsibility Center – Delta / Toronto Use “Blocked” field to block Invoice/Receipt/All transactions - California Software Company, India 103 Business Modeling Report – North American Tea & Coffee Inc. A In the Invoicing tab, fill in the following details Specify Pay to Vendor No, if pay has be sent to other Vendor Specify if customer is liable to tax and the tax area code Specify the Gen. Business Posting Group of the Vendor Specify the Vendor Posting Group of the Vendor Specify the GST Posting group of the Vendor Specify the Invoice Disc Code if the vendor gives invoice discount Specify if the prices from the vendor include GST B - California Software Company, India 104 Business Modeling Report – North American Tea & Coffee Inc. B In the payments tab, fill in the following details Specify the application method. Options – Manual/Apply to Oldest Select the Payment terms code from the list Select the Payment method code from the list Specify the priority of the vendor that is a numeric number Select the 1099 code of the vendor from the list If negotiated terms not available – get approval from AR & proceed Specify the Federal ID and Tax registration of vendor Specify our account number at the vendor site Specify if payment tolerance to the vendor has to be blocked C - California Software Company, India 105 Business Modeling Report – North American Tea & Coffee Inc. C In the Receiving tab specify the following In the foreign trade tab specify the following Select the location code to which the vendor belongs Specify the currency code of the customer Select the shipment method code for the customer, if any. Specify the language for communication for the bank Select the shipping agent code for the customer, if any. Exit Vendor Master Screen Specify the lead-time for the vendor to supply Specify the base calendar code if any for the customer - California Software Company, India 106 Business Modeling Report – North American Tea & Coffee Inc. The General Tab You enter basic information such as the vendor name, address, post code and contact on the General tab. You can also see the vendor' s current balance on the General tab. Use the Search Name field to set up an additional descriptive name for a vendor which you can search by. The program copies the vendor name to this field as a default. Blocked – If you wish to stop specific transactions being entered for this vendor, choose the relevant level of blocking. The different options are as follows. Blank – The vendor can be used in all types of transactions. Payment – The vendor is blocked from being used in any transaction with a Document Type of Payment. All – The vendor cannot be used in any type of transaction. The Communication Tab Click the Communication tab. On the Communication tab, you enter the vendor’s telephone number, fax number, e-mail address and home page. Next to the Phone No. field, you find the Make Phone Call button. If the customer is also recorded as a contact in the Relationship Management application area, when you click this button, the Make Phone Call wizard appears. When you click FINISH in the wizard, the program automatically records the phone call as an interaction in the Interaction Log Entry table. On the Communication tab, you also find the E-mail field in which you can fill in the e-mail address for the customer. The e-mail address can be used to send quotes, orders, invoices, and/or statements directly to a customer. You also have the possibility of referring to a Web site on the World-Wide-Web (WWW) and access it directly by clicking the Hyperlink button. The Invoicing Tab Click the Invoicing tab. On the Invoicing tab, you can find the fields relevant to the posting and invoicing of purchase transactions for this vendor: In the Pay-to Vendor No. field you can enter a different vendor' s number. If invoices for items from this vendor on this card must be paid to a different vendor, you should enter the number of the vendor who must be paid. Gen. Bus. Posting Group –You use this field to select the posting group that determines the revenue accounts that sales transactions will be posted to for this vendor. In our data, the general business posting groups are broadly based on vendor location (NATIONAL, EU, and EXPORT). GST. Bus. Posting Group - You use this field to select the posting group that determines the GST accounts that transactions will be posted to for this vendor. In our data, the GST business posting groups are also broadly based on vendor location (NATIONAL, EU, and EXPORT). Vendor Posting Group - You use this field to select the posting group that determines the balance sheet payables accounts that purchase transactions will be posted to for this vendor. In our data, the vendor posting groups are broadly based on vendor location (DOMESTIC, FOREIGN). Invoice Disc. Code: When you set up a new vendor card, the program automatically enters the vendor number in this field. Any standard invoice discounts that you create for this vendor will be assigned using this code. - California Software Company, India 107 Business Modeling Report – North American Tea & Coffee Inc. Prices Including GST field: Here you can specify whether you want the price in the Unit Price field on the purchase lines and in purchase reports for this vendor to include GST or not. The Payments tab. Click the Payments tab. You enter the vendor’s application method, payment terms code and priority number on the Payments tab. In the Application Method field, you can choose how the program will apply entries for this vendor. You can choose between the application method Manual or Apply to Oldest. Notice, when you have selected the Apply to Oldest option, the program will automatically apply the open vendor entries when you post a payment. In the Payment Terms Code field, you can select a code that indicates the payment terms that you usually receive from this vendor. In the Payment Methods Code field, you enter a code to indicate the payment method to be used for this vendor - bank transfer or check, for example. The Priority field may be used if you have only a limited amount available for payments. In this case, you can assign a priority to each vendor. In the Our Account No. field, you enter your account number (if you have one) with the vendor. It is useful to have this information if you need to contact your vendor to discuss your account. The Block Payment Tolerance field is used to specify whether the vendor will allow tolerance when applying payments and refunds to the vendor’s outstanding amounts. If the field does not contain a check mark, the vendor will allow payment tolerance. The Receiving Tab Click the Receiving tab. On the Receiving tab, you specify how to receive items from this vendor. The Location Code field contains the default location you have set up for the receiving of purchases from this vendor. The Shipment Method Code field shows the agreed terms of delivery. You select a code for the method that you want the vendor to use when shipping items to you. The program will use the Lead Time Calculation field to calculate the lead time on purchase orders to this vendor, if you have not entered a lead time calculation on the item or stock keeping unit cards. The program uses the formula to calculate the Planned Receipt Date (the date the items will arrive at your location). The Foreign Trade Tab Click the Foreign Trade tab. The Currency Code field allows you to set a default currency code for the vendor. This value will be copied into documents and journals you create for this vendor. However, it is possible to overwrite the currency code in documents and journals to post the vendor entries with multiple currencies. GST Registration No. field: Here you enter the corresponding GST Registration No. of your EU vendors. The program checks the contents of this field complies with any country specific GST registration numbers formats you have setup in the program. - California Software Company, India 108 Business Modeling Report – North American Tea & Coffee Inc. 6.4 PURCHASE ORDER PROCESSING The Purchase documents in the program are virtually the same as the sales documents. They are made up of a purchase header section with five main tabs (General, Invoicing, Shipping and Foreign Trade) and a lower section of Purchase lines. Purchases Header The Purchases Header contains four tabs: General tab – Contains the Vendor details and date(s) for the Purchases document. Invoicing tab – Contains invoicing details for the Purchase document. The program automatically enters most of the information for the tab when the user selects the vendor. Shipping tab – Contains information as to how the contents of the purchase documents will to be shipped. Foreign Trade tab – Contains information related to foreign transactions such as the currency the invoice amounts are in. Purchase Lines The Purchase lines contain the actual goods or services that are to be purchased from the vendor in this document. There are two types of Purchase orders created in the system by NATC – Purchase order for receiving to NATC location – Normal Purchase Orders Purchase Order for Direct Shipment to the customer location – Direct Ship Purchase Orders The procedure of creating each of these Purchase orders is detailed in the following sections, - California Software Company, India 109 Business Modeling Report – North American Tea & Coffee Inc. 6.4.1 CREATING PURCHASE ORDERS FOR RECEIVING MATERIALS IN NATC LOCATIONS Purchase & Payables >> Orders In the General Tab of Purchase order, specify the following In the Invoicing Tab of the sales order, specify the following Order Number can be automatic or manually generated Specify, “Pay to Vendor No” if Payment sent to other vendor Select the Vendor in the “Buy from vendor No.” field Details are default from vendor master, but can be changed All the details of the vendor are displayed from the vendor card Payment due date is calculated automatically by the system The Posting, Order & Document dates are defaulted as current date A Specify the Vendor PO Number in the Vendor Order No. Specify the Code of the Purchaser in the Purchaser Code field - California Software Company, India 110 Business Modeling Report – North American Tea & Coffee Inc. A In Shipping Tab of the Purchase order, specify the following Details of the item are defaulted from the item master Specify “Ship to Code” when material be sent to other customer Quantity of the item has to be entered in the purchase line Details of the shipping address are defaulted but can be changed When the order entry is completed, Functions >> Release In the Foreign Trade Tab, Specify the following details After Receipt, “Quantity Received” field is updated automatically Currency Code of the vendor is default from the vendor card After Receipt the order can be invoiced Exit from the Purchase order screen In the purchase lines, specify the following details Specify the type as “Item” for material purchase Specify the item number from the item master drop down - California Software Company, India 111 Business Modeling Report – North American Tea & Coffee Inc. 6.4.2 CREATING PURCHASE ORDERS FOR DIRECT SHIPMENT Purchase & payables>> Requisition Worksheet Functions >> Drop Shipment >> Get Sales Orders All the sales orders marked for drop shipments are identified The details are also defaulted from the item master The quantity, vendor number and other details can be verified Functions >> Carry Out Action Message Purchase Order for Drop Shipments are created Specify the Code of the Purchaser in the Purchaser Code field Exit Requisition Worksheet - California Software Company, India 112 Business Modeling Report – North American Tea & Coffee Inc. The process of creation of purchase orders in NATC, is by calculating the need for the product based on the sales for the same period the previous year. This process will be changed by using sales forecast given by the sales people. The sales people can enter the forecasted amount of sales that will happen in the forth coming months. This has to be entered by the sales people, and the planning in the system will be as detailed. This is process is not available in Navision and will include to the customization effort. Purchase & Payables Run a program which will update planning parameters for each item Click on Planning worksheet in Manufacturing Click Functions >> Get Action Message System will automatically populate all the items which are out of stock Copy the lines into the Requisition worksheet Check the quanity and vendor to buy it from Click on Functions >> Carry Out Action Message PO are created automatically Exit Requisition Worksheet - California Software Company, India 113 Business Modeling Report – North American Tea & Coffee Inc. 6.5 PAYABLES MANAGEMENT After the purchase orders are generated, faxed and then the materials are received in the warehouse, the purchase order reflects the quantity that has been received. Then the purchase invoice is received from the vendor. 6.5.1 RECORDING VENDOR INVOICE The invoice number has to be entered in the vendor invoice number field and the purchase prices can be verified and then the purchase order can be invoiced by Posting >> Post >> Invoice (Option) Purchase & Payables >> Orders Enter the Vendor Invoice Number in the field Verify price and quantity in invoice against received quantity Posting >> Post >> Invoice (Option) Exit Purchase Order Screen - California Software Company, India 114 Business Modeling Report – North American Tea & Coffee Inc. 6.5.2 PAYMENTS TO VENDORS After the orders have been invoiced, the outstanding of a vendor can be analyzed from the vendor ledger entries. The total amount due to a vendor can also be viewed from the vendor card itself. The payments to the vendors can be processed from the payment journal screen. Purchase & payables>> Payment Journal Payments >> suggest Vendor Payments Specify, Relevant information in the Suggest Vendor Payments System suggests the payments due after the last payment The suggested amount can be changed if needed Discounts are calculated by the system automatically System also consolidates one payment per vendor Get approval for the payments and print cheque Post the Payment Journal to affect the Ledger entries Exit Payment Journal Screen - California Software Company, India 115 Business Modeling Report – North American Tea & Coffee Inc. The discrepancies with respect to the purchase prices and the quantity received are solved during the invoicing process itself, so they need not be taken into account during the payment stage. Other payments can be done manually by entering the lines in the payment journal screen. For regular and periodic payments like expenses for maintenance, rent, electricity, etc, the recurring journals can be used where the balancing accounts are default and the amount can be changed every time the journal is posted. This reduces the errors in the payment posting process. - California Software Company, India 116 Business Modeling Report – North American Tea & Coffee Inc. 7.0 ITEM CHARGES - INTRODUCTION You use the Item Charges window to set up item charge numbers. The item charge numbers represent combinations of general product posting groups, tax group codes, GST product posting groups and item charge numbers. You can set up as many combinations as you need. Item Charges are direct costs other than the actual purchase price such as transportation, packaging and so on. Accurate and relevant cost accounting information is an essential prerequisite to efficient and competent decision-making in any trading company. As a minimum, companies register and analyze cost records derived from invoice information of their purchase and sales transactions. However, as the cost of distributing, handling and transporting goods has in many industries started to represent a larger share in the total inventory cost as compared to that of direct purchase and manufacturing cost, there emerges a strong need to account for these costs. Examples of these additional costs are insurance, freight cost; custom duties or any other costs associated with delivering and transport services. Moreover, the possibility to collect detailed cost statistics at the item level becomes relevant when both determining cost of goods sold and accounting for additional sales expenses that affect profit calculations. In the first case, the company’s cost structure must have the facility to allow allocation of additional acquisition cost representing expenses (inventoriable costs) related to the purchase. In the second case, additional costs incurred as part of a sale transaction must be directly linked with the sale in question as expenses (non-inventoriable cost) to accurately calculate profit. In Navision, to account for both inventoriable and non-inventoriable cost incurred in connection with purchase and sale transactions respectively, accountants can use the Item Charges. Item charges represented by, for example, the cost of a purchase invoice from a transport agent for delivering a shipment from a supplier, can be assigned to a receipt document. Identified by its own category, this item charge – when posted – becomes a part of the total landed cost of the item(s) to which the charge was assigned. Furthermore, the item charges solution is flexible enough to incorporate a facility that allows the user to register and post additional cost independently of the posting time of the associated purchase or sales document. That is, item charges can be assigned to the delivery after it has been posted as received and invoiced and even after the respective items have been sold. The program’s costing mechanism then ensures that these costs are rolled into the inventory value and cost of goods sold calculations. The granule’s functionality supports allocating the charge cost amount based on quantity and amount. Last but not least, it should be pointed out that in addition to its primary goal of supporting companies in identifying and accounting for additional landed and sales-related cost, the functionality of the Item Charges granule is so versatile that it can be drawn upon when handling other sales and purchase situations. For example, in a sales return situation where items are not required to be physically returned to the company, an item charge can be used to easily register and post an allowance amount (in the form of a credit memo). Another example is represented by the practice of charging (selling) a customer transportation fees in relation to delivering shipments or charging restock fees in connection with returns. This chapter demonstrates the multiple possibilities incorporated in the Item Charges and explains how the program can support companies in their objective of achieving optimal cost control and creating a reliable basis for informed decision-making. - California Software Company, India 117 Business Modeling Report – North American Tea & Coffee Inc. Most important usage scenarios included in this chapter are grouped under the following headings: Purchase item charges Sales item charges Purchase and sales allowances 7.1 SETTING UP ITEM CHARGES The item charges setup is part of the general Purchases & Payables (Sales & Receivables) setup. Companies can set up different item charge numbers to distinguish charge types that they want to account for and create cost and sales statistics for. Sales / Purchase >> Setup >> Item Charges Specify the Number for the item charge Specify the Description of the Item Charge Select the General Product Posting Group for Item Charge Select the Tax Group Code of the Item Charge Select the Tax Prod. Posting Group of Item Charge Exit the Item Charge Screen As for an item, an item charge must have a general product-posting group and GST productposting group specified in order for the program to determine which account to post the charge amount to. - California Software Company, India 118 Business Modeling Report – North American Tea & Coffee Inc. Once set up, an appropriate item charge type can then be selected on a purchase (sales) document line. There are no limits as to what companies can include in the category of item charges. 7.2 PURCHASE ITEM CHARGES When purchasing goods from suppliers, NATC often incurs additional costs, such as freight, handling charges, import taxes, and so on, which make up the purchase’s total landed costs and thus must be included in the calculation of inventory value and cost of goods sold. On the other hand, depending on the nature of their sales agreements, NATC may also pay these costs when delivering shipments to the customers. In this case, these costs represent expenses that are non-inventoriable and that affect the company’s overall profit calculation. In both situations, accountants can use the program to register the additional costs as a separate cost category and link them directly to the items that they relate to. In Navision, these costs are referred to as item charges. Registering item charges can be done in two ways: As a separate document (purchase order/invoice) Typically, this is a feasible option when the invoice for the cost amount arrives some time after the original purchase document has been posted or it is the sales document that the charge must be assigned to. This is typical to the situation in NATC. In the same purchase document This option can be chosen when the charge amount is known at the time of posting the receipt of items to which the charge relates. As an additional help, the program can also suggest an assignment of the item charge to the selected document lines that can then be modified if needed. 7.3 SALES ITEM CHARGES The previous section introduced the functionality of item charges and illustrated how it can be used to handle additional (direct and non-inventoriable) costs – freight costs, packing, insurance, customs, and so on – that a company may incur as part of a purchase and/or sale transaction. When these additional costs are to be paid by a customer, this can be considered as a regular sales transaction with no physical items involved. The company can then record the cost amounts as sales item charges and link them to the relevant outbound document, that is, sales shipment and sales return receipts. In this way, the company can create detailed statistics of its sales and revenue figures. The principles of recording, assigning and posting sale item charges are identical to those applied for purchase item charges and therefore will not be repeated here in greater detail. - California Software Company, India 119 Business Modeling Report – North American Tea & Coffee Inc. 7.4 REGISTERING SALES/PURCHASE ITEM CHARGES The procedure for registering sales and purchase item charges is the same. Applying the charges to the lines is the only difference in the procedure. The step-by-step procedure of registering the item charges is detailed below Sales / Purchase >> Invoice Create the header the same way as detailed in the orders In the lines, select the type as Charge (Item) Specify the quantity as 1 for the item charge Specify the charge for the item in the unit cost/price field Then Line >> Item Charge Assignment For sales lines choose Get Sales Shipment Lines For Purchase Lines choose Get Receipts Assign the item charge to the lines selected Post the Invoice with the item charge Exit the Sales/Purchase Invoice Screen - California Software Company, India 120 Business Modeling Report – North American Tea & Coffee Inc. In case of NATC, the following charges can be assigned as item charges to the inventory Freight and Related Charges – For both Sales and Purchase Customs Charges – For both Sales and Purchase Any other cost incurred in material procurement or sales Freight Invoices and Customs Invoices have to be entered into the system as item charges and this will eventually lead to the landed costing of the item. An inventory valuation report will be available which will at any point I time calculate the total value of the inventory in the warehouse. If the freight cost details has to be maintained in the system and the system should suggest the cheapest freight vendor depending on various criteria, this will be an additional customization to the base product. - California Software Company, India 121 Business Modeling Report – North American Tea & Coffee Inc. 8.0 INVENTORY MANAGEMENT - OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION Inventory management is a backbone of any company within wholesale and manufacturing businesses. Inventory reliability at a low cost is the key factor to ensure the smooth functioning of all other related operations. NATC deals with various types of inventory starting from Raw material for manufacturing items, Finished goods from manufacturing, Buy / Sell items which are traded goods. Most of the items have food items having specific shelf life. Tracking of remaining shelf life of each item is one of the primary requirements of inventory management. Keeping the inventory data – an item’s description in terms of cost/price information, accounting properties, planning and replenishment parameters, and so on – logically structured and organized is an essential precondition for efficient inventory management. The greater challenge for many companies lies, however, in their ability to couple demand with supply in such a manner that guarantees superior customer satisfaction without increasing inventory carrying costs and that provides transparency. To meet such a challenge, most wholesalers and manufacturers would generally need: -To have reliable inventory availability figures calculated on a basis that excludes quantities already committed (allocated) elsewhere. - To be able to see the details of such allocations in order to locate alternatives that can satisfy urgent customer requests in situations of inventory being otherwise unavailable. - To gain an overview of inventory level in the future as based on expected supplies to be in a position to answer customer requests as to when to expect order delivery. - To be able to ensure that a specific demand can always be fulfilled through committing a corresponding supply to it. The Inventory functionality supports companies in achieving their goals of having accurate inventory data and reliable inventory availability. - California Software Company, India 122 Business Modeling Report – North American Tea & Coffee Inc. Detailing of NATC Receipt process and the mapping with Navision product is provided Current stock transfer Process Mapping in Navision [Module >> Granule >> Form >> Functionality] Picking List is created for required stock transfer Transfer Order created in Inventory Module Handed over to Shipment department for Stock Transfer Stock Transfer details are transmitted to warehouse module and can be handled for further process After successful shipment picking list is returned to Inventory dept. Inventory is reduced After confirming the receipt of stock at the destination, pick list is closed with out action Shipment is registered after successful shipment. [Inventory reduces automatically at origin of Transfer and credited to Transfer location] As soon as stock reaches destination, the transfer order will get closed when the receipt is posted. [Inventory at Destination is credited and the inventory at Transfer location is cleared] - California Software Company, India 123 Business Modeling Report – North American Tea & Coffee Inc. 8.1 INVENTORY SETUP 8.1.1 ITEM TRACKING CODES The program can track item movements. You must set up item tracking codes that you can then enter in the item card. In the Item Tracking Codes window you can specify several Item Tracking Codes for different tracking methods. You click Item Tracking Code, Card to enter the details for each code. Go to Inventory Module Click open Setup Click Open Item Tracking Codes Enter the Code and Description of each Item tracking codes Exit Setup - California Software Company, India 124 Business Modeling Report – North American Tea & Coffee Inc. 8.1.2 UNITS OF MEASURE You use Units of Measure to buy, store and sell your items. In the Units of Measure window you can enter codes and descriptions for the units of measure that are associated and used with the different items in your inventory. Each item will have a base unit of measure that has a quantity of 1 of the item. However, it is possible to set up different units of measure for the same item e.g. the base unit may be 1 piece but you normally sell a box of 200 pieces. Go to Inventory Module Click open Setup, Units of Measure Enter the code and description of Unit of Measure Translations in different language if required can be defined by clicking Unit, Translations Exit Setup - California Software Company, India 125 Business Modeling Report – North American Tea & Coffee Inc. 8.1.3 ITEM CATEGORIES The Item Categories window contains information about default values for posting groups, costing methods and tax groups. Item categories help reduce the amount of data entry involved with creating new items. You simply assign an item category to an item card. At the same time, the program automatically copies the Def. Gen. Prod. Posting Group, Def. Inventory Posting Group, Def. GST Prod. Posting Group, Def. Tax Group Code and Def. Costing Method fields to their related fields on the item card. Go to Inventory Module Click open Setup Click Item Category Groups Enter the Code and description of Item Category Exit Setup - California Software Company, India 126 Business Modeling Report – North American Tea & Coffee Inc. 8.1.4 PRODUCT GROUPS Within the Item Categories you can set up information about the product groups. After you assign an item to an item category, such as furniture, you can assign it to a product group within the item category, for example, chairs, tables or sofas. You enter the product group code on the item card. Go to Inventory Module Click open Setup Click Open Product Groups Enter the Code of Product Group and the description of Product Group Exit Setup - California Software Company, India 127 Business Modeling Report – North American Tea & Coffee Inc. 8.1.5 ITEM DISCOUNT GROUPS You use the Item Disc. Groups window to set up item discounts groups. You can then combine the item discount group with customers, or customer discount groups in the Sales Line Discounts window. Go to Inventory Module Click open Setup Click Open Item Discount Group Enter the Code of Item Discount Group and the description of Item Discount Group Exit Setup - California Software Company, India 128 Business Modeling Report – North American Tea & Coffee Inc. 8.2 SETTING UP THE ITEM CARD 8.2.1 GENERAL TAB The general tab contains descriptive information about the item as well as information about the base unit of measure for the item and whether it is a bill of materials or created from a non-stock item. The General tab also shows the quantity of the item on order and in inventory. 8.2.2 INVOICING TAB This tab contains the information relating to invoicing of transactions involving the item such as basic price and cost information for the item. The unit cost is dependent on the costing method selected in the Costing Method field. The Invoicing tab also contains the Price/Profit Calculation method for the sale of the item and the Sales Unit of Measure for the item. Discount information for the item, posting groups and the item category are also entered on this tab. The Net Invoiced Qty. gives a summary of all invoiced transactions for the item. 8.2.3 COSTING METHODS Click the Costing Method field on the Invoicing tab and press F6. The program provides 5 costing methods: FIFO: First In, First Out. LIFO: Last In, First Out. Specific: Specific cost for an item; must use a serial number. Average: Bases the item cost on all purchases and positive adjustments associated with the item. Standard: The unit cost is user defined. If the unit cost for a particular transaction differs from the standard cost, a cost variance arises. Basic information on inventory costing performed by the program will be provided in the Inventory Costing training material. However, you should refer to the Manufacturing training material if you wish to have detailed information about inventory costing. 8.2.4 THE PLANNING PARAMETERS The planning parameters refer to a group of fields that are located on the Replenishment and Planning tabs of the item card. Seen from a business aspect, the planning parameters should be set up so as to reflect the optimal inventory levels that a company wants to maintain with respect to market-preparedness, warehouse efficiency and costs. As such, they take into consideration various market factors such as replenishment lead time, seasonal demand, pricing discounts for quantity, freight weights, and delivery schedules, plus a company’s internal policy with respect to inventory management and control. Seen from a technical aspect, the planning parameters control the replenishment calculation. - California Software Company, India 129 Business Modeling Report – North American Tea & Coffee Inc. 8.2.4.1 SETTING THE TIME BUCKET The period of time defined by the Reorder Cycle field determines which requirements and which existing replenishment orders will participate in the availability calculation and which replenishment orders could potentially be used to fill additional requirements. This, in turn, determines which action message will be issued. Go to Inventory Module Click open Item Card In the General Tab Enter the descriptive information about the item . In Invoice Tab enter information for invoicing of transactions like Costing and Discounting In Replenishment tab enter the replenishment method and related Purchase/ Production info In Planning tab Enter reordering policy, reorder cycle, reorder quantity and reorder point Also enter Min/Max reorder quantities and safety stock, safety lead time and order multiple In Item Tracking tab enter the Item tracking code and lot number details In Warehouse Tab enter physical inventory counting period, put away unit of measure Exit Item Master - California Software Company, India 130 Business Modeling Report – North American Tea & Coffee Inc. 8.2.4.2 Setting the Inventory Level The inventory level, as defined by the Reorder Point and Safety Stock Quantity fields, determines when to replenish the item. When projected availability falls below the inventory level, the program recognizes the need for replenishment. · Determining Order Quantity The program will calculate order quantities to cover all gross requirements. This includes demand from forecast, sales orders, and also replenishment of the inventory level. At the minimum, order quantity will be sufficient to replenish the inventory level. If there are additional requirements, the program uses the value in the Reordering Policy field and the related fields to calculate order quantity. The order modifier fields will adjust the final quantity afterwards. 8.2.5 REPLENISHMENT SYSTEM This field indicates how the item is replenished and which type of order or order proposal the program will create. Purchase, Production or Transfer orders 8.2.5.1 Lead Time Calculation This is the amount of time that it takes to replenish the item. The program uses this field to calculate the date fields on order and order proposal lines: On the purchase order line, the Order Date + Lead Time Calculation = Planned Receipt Date. 8.2.5.2 Reordering Policy The program uses the reordering policy to calculate replenishment order quantity. Fixed Reorder Quantity - The program uses the quantity in the Reorder Quantity field as the standard lot size. Maximum Quantity- The program uses the quantity in the Maximum Inventory field to calculate the order quantity. Order- The program generates an order for each individual requirement, and does not use the Reorder Cycle. Lot-for-Lot - The program generates an order proposal with a quantity that meets the sum of the requirements that come due within the Reorder Cycle. Blank- With this option, the program does not calculate order proposals for the item. The user may plan for the item manually. Note: Certain items require fixed reorder quantity in pallets or a truckload in order to save transportation cost. These could be set as a unit of measure with proper conversion value with respect to Basic unit of measure in Item card. - California Software Company, India 131 Business Modeling Report – North American Tea & Coffee Inc. 8.2.5.3 Reorder Cycle This is the planning time bucket for the item. Requirements that are due within the reorder cycle are grouped together. A replenishment order that is due within the reorder cycle may be rescheduled to fulfill a requirement. 8.2.5.4 Safety Lead Time This is a buffer period that protects against delays in the purchase replenishment lead time. When calculating order and order proposal lines, the program will add the safety lead time to the lead time. On the purchase order line, the Planned Receipt Date + Safety Lead Time + Inbound Warehouse Handling Time = Expected Receipt Date. 8.2.5.5 Safety Stock Quantity This is a quantity of stock that you want to have in inventory to protect against fluctuations in demand and supply during the replenishment lead time for the item. When the projected inventory falls below the safety stock quantity, the program will create an order proposal that, at the minimum, replenishes the safety stock quantity. 8.2.5.6 Reorder Point This is a quantity that sets the inventory level, below which you want to replenish the item. When the projected inventory falls below the reorder point, the program recognizes the need to replenish the item and will create an order proposal that at the minimum, replenishes the reorder point. 8.2.5.7 Reorder Quantity This is a standard quantity to be used for all order proposals. This field is used with the reordering policy Fixed Reorder Quantity. 8.2.5.8 Maximum Inventory This is a quantity that you want to use as a maximum inventory level. The program will calculate order quantity as the maximum inventory minus the safety stock. This field is used with the reordering policy Maximum Quantity. 8.2.5.9 Minimum Order Quantity Once the order quantity has been calculated, it can be modified by a minimum allowable quantity for an order. - California Software Company, India 132 Business Modeling Report – North American Tea & Coffee Inc. 8.2.5.10 Maximum Order Quantity Once the order quantity has been calculated, it can be modified by a maximum allowable quantity for an order. Order Multiple Once the order quantity has been calculated, it can be modified by an order multiple. - California Software Company, India 133 Business Modeling Report – North American Tea & Coffee Inc. 8.2.6 LOCATION TRANSFERS Many large wholesale distributors and manufacturers have a number of branch warehouse locations, each servicing a specific area or region. To minimize their total inventory level, these companies often follow the strategy of having safety stock in one main warehouse, while maintaining minimum inventory in regional warehouses. This practice requires the transfer of inventory from the main warehouse to the regional ones. Companies also move inventory from one location to another to satisfy unexpected demand. If the company is large enough, a significant amount of inventory can be in transit at any given time. This creates problems from both a financial and a logistical perspective. Financially, it is difficult to determine the value of the inventory, because it is in transit. Logistically, it is not possible to accurately estimate total availability of the inventory. With the Location Transfers granule, companies use a transfer order to accurately track the movement of inventory from one location to another. To transfer items, they create a transfer order containing a line for each inventory item that is being transferred. When the inventory is shipped from the source location, it is considered to be in transit until it is received at its destination. In this chapter you will learn how to: · set up transfer procedures · transfer items between locations · view items in transit The location transfer setup consists of two elements: · In-Transit Location Setup: To use the transfer functionality, a company must define an in-transit location, which is a temporary location created for transferring items only. When the order is shipped from the transfer from location, the program assigns the items to the in-transit location. When the order is received at the transfer-to location, the program moves the items from the in-transit location to the transfer-to location. · Transfer Routes Setup: A company can choose to set up transfer routes between locations. This enables the company to assign a default in-transit location code, shipping agent and shipping agent service code to each route. With the shipping time defined, the program uses the information to calculate the receipt date for transfer orders at the target location. - California Software Company, India 134 Business Modeling Report – North American Tea & Coffee Inc. 8.2.6.1 Setting Up In-Transit Location With the in-transit location, companies can track the quantity and value of items in transit at any given time after they were shipped from the source location, called a transfer-from location, up until they are received at the target location, called a transfer-to location. They can set up as many or as few intransit locations as they like. Note: For tracking the values a customised report could be developed. Go to Inventory Module Click open Setup, Locations In the General Tab Enter the Code, Name and Address of the In-Transit Location In the General tab tick the check Mark Use As In-Transit. In the communication tab enter the contact and communication details Exit Locations Setup - California Software Company, India 135 Business Modeling Report – North American Tea & Coffee Inc. 8.2.6.2 Setting up Transfer Routes Typically, an authorized person, such as the company’s administrator, is in charge of setting up the transfer routes. A transfer route is the combination of a transfer-from location and a transfer-to location. It is used to validate location information when making transfer orders or entering lines in the requisition worksheet. Each transfer route can be assigned a default in-transit code, shipping agent code and shipping agent service code. The program will use the shipping time of the shipping agent service to calculate the receipt date at the transfer-to location. Go to Inventory Module Click open Setup, Transfer Routes Details of transfer from warehouse and transfer to warehouses are displayed as matrix select Intransit code. Now select the intransit codes for Warehouse From and Warehoue To. Select Shipping Agent. Now select default shipping agent for Warehouse From and To. Exit Transfer Routes Setup - California Software Company, India 136 Business Modeling Report – North American Tea & Coffee Inc. 8.2.6.3 Transferring Items Between Locations The transfer order is the key object of the transfer functionality. With the transfer order, a company can create a transfer, post the shipment of the items and post the receipt of the items. The transfer order contains information regarding how much has been shipped and received in the same manner as the purchase and sales documents, using quantity shipped, quantity received and so on. Go to Inventory Module Click open Transfer Orders , Transfer Order Window opens In the header enter the Origin Location detail, Destination Location details and Intransit details In the details column enter the item details and quantity to ship details Click Functions, Create Warehouse Shipment After shipment click Posting , Post and check mark Ship and click Ok. Shipment is complete After receiving the items at Destination location, record receipt by Posting, Post, Recive, OK End of Transfer Activity With the location transfers functionality companies can make transfers both manually and automatically. The need for a manual transfer occurs when there is lack of inventory at a certain location and this inventory is needed to fulfill a sales order. In this case, an initiator, for example a salesperson, decides to move items from a location where the required inventory is available to the location in question. Automatic transfer order creation is an outcome of the replenishment planning activity. To make automatic transfers, dedicated persons, typically purchasers, use the requisition (planning) worksheet. - California Software Company, India 137 Business Modeling Report – North American Tea & Coffee Inc. Creating a Transfer Order Creating the transfer order at the origin location is the first step in the transfer process. Shipping a Transfer Order After the transfer order has been released, an authorized person at the transfer-from location can ship the requested items. A warehouse administrator is typically responsible for shipping the transfer orders from the respective location. The warehouse administrator can only post one transfer order shipment at a time. Receiving a Transfer Order Receiving the transfer order at the target location is the final step in the transfer process. - California Software Company, India 138 Business Modeling Report – North American Tea & Coffee Inc. 8.2.7 VIEWING ITEMS IN TRANSIT Constant movement of inventory between different locations creates a need in companies with multiple locations to determine the status of a specific item(s). With the location transfers functionality in Navision, a multisite company is able to track quantity and value of inventory currently in transit at any time. Go to Inventory Module Click open Items, Item, Item by Location In the Items by location window click the check mark show items in transit Items held up in all the In-Transit locations are displayed Drill down for each item to find the details of all the intransiit transactions Exit Items - California Software Company, India 139 Business Modeling Report – North American Tea & Coffee Inc. 9.0 WAREHOUSE MANAGEMENT – OVERVIEW & MAPPING OF NATC REQUIREMENT WITH NAVISION APPLICATION The process of physical handling of goods, in and out of the warehouse, is an extensive and costly operation. To keep costs as low as possible, it is essential that quantity and placement of the items are accurate. In order to have efficient warehouse processes, it is necessary to setup the warehouse in terms of layout, put-away logic and pick logic, as well as internal replenishment information during implementation by Calsoft. Calsoft suggests setup floating bins and the system to suggest the put away and pick logic according to the bin selection procedure setup. Warehouse Management Module is aimed at not only with the need to receive and ship, but also to optimize space utilization. Goods can either be stored in prededefined (fixed) bins or in random (floating) bins, depending on the need for optimization. This provides functionality for handling more advanced warehouse processes such as handling items within a warehouse by zone and bin level, handling directed pick and put-away, and the development. The flow of inventory through the warehouse can be divided into three basic processes: Receiving items at the warehouse and making them available Handling items for internal distribution/ movement/ production Picking and Shipping items to customers or other locations Each process can consist of a series of warehouse handling activities. Receiving items involves the physical receiving of items when they arrive at a warehouse and then putting them away (from the receiving area into the stocking /handling area). Note: While receiving goods in Warehoue, consignment is checked for various parameters as per checklist. Then itmes in the consignement are subjected to receiving inspection and taken into inventory. Handling items involves repacking or completing items for sale, inventory counting, supplying production or simply moving for optimization of space. Shipping items involves picking items from inventory and handing them to the shipping agent who delivers them to customers. In order to have an efficient operation, warehouse managers must know which items have to be shipped / used in production, and which are expected to arrive. In this way Warehouse Manager/supervisor can estimate the expected workload and allocate warehouse resources (Labour) accordingly. Put away and pick worksheets provided in the warehouse module helps to plan and execute work and thus eliminating unnecessary movements in the warehouse. To eliminate shipment errors, different personnel shoud do receiving and checking. As an additional requirement, NATC wants to plan the activities like scheduling the freight handling and manpower required for the same. Employees in sales and purchase departments need to view their order status in the warehouse. The Warehouse Management module helps companies to manage all these activities in the most efficient way. The module provides companies with the necessary functionality to organize the receiving and shipping processes, and to assist warehouse employees in recording the receipt of goods, picking items for shipping or production, and making shipments. - California Software Company, India 140 Business Modeling Report – North American Tea & Coffee Inc. The module is used for communication between the sales, purchase, production, and warehousing functions. A release function ensures that only released inbound and outbound orders that can be viewed and processed by the warehouse supervisor. Ts document first describes how to set up Warehouse Management Systems. It then explains how the program manages warehouse-handling activities involved in the receiving, handling and shipping processes. Warehouse Layout – Current and Proposed The plan of NATC Delta warehouse is provided. The warehouse structure presently available and the warehouse structure after the implementation of the Navision are provided below. Also various tasks to be completed to refurbish the current warehouse are listed below. Current Layout - California Software Company, India 141 Business Modeling Report – North American Tea & Coffee Inc. - California Software Company, India 142 Business Modeling Report – North American Tea & Coffee Inc. List of activities to be carried out to alter the current warehouse- 8 All receiving docks to be identified and each provided with one Identification Code All Shipping docks to be identified and each provided with one Identification Code Areas nearer to each dock where shipping/ receiving materials are kept during shipping / receiving to be split into locations and labeled as DockID-1, DockID-2 etc All receiving locations will be having only Put away activity allowed All Shipping locations will be having only Pick activity allowed All racks will be having 1 to 10 bays (2 per level X 5 levels) except Centre racks (above Centre Path) which has only 9 bays (3 per level X 3 levels) All the current Bulk areas will be converted to Floor Racks. The Floors will be allotted spaces equivalent to spaces required for placing racks in future. These floor racks will be having ONE level instead of 5 levels of normal rack. This one level floor area can hold pallets equivalent to 5 level racks. These restrictions (otherwise it can hold infinity items) are provided for restricting the max volume that this floor pallet can hold. Racks in weighing area will be created theoretically but blocked for Inbound and Outbound transfer. - California Software Company, India 143 Business Modeling Report – North American Tea & Coffee Inc. Detailing of NATC Receipt process and the mapping with Navision product is provided Warehouse Management Current Receipt Process Mapping in Navision [Module >> Granule >> Form >> Functionality] Collating source documents as per the appointment of freight companies Additional requirement: Scheduling for receipt and shipment and manpower estimation All the required source documents (Purchase Orders, Sales returns, production orders and Transfer Orders) are filtered from the available source documents automatically from Navision Vehicle Inspection Report: After arrival of container the vehicle and the goods are inspected. Navision suggests the Vehicle inspection sheet to be used for this receipt. Inspection of vehicle and shipment are carried out and updated in Navision Receipt Quality Inspection: Only the quality accepted quantities could be registered as received. Remaining quantity goes to QC hold area. Navision suggests the quality inspections to be carried out for each item in the receipt. The inspection to be carried out for each item is specified in the Spec sheets provided in the Quality module Verification of Item and quantity with source document Assigning Lot number and Expiry Date Lot numbers and Expiry date to be assigned to all the received shipments When the consignment barcode label is scanned, it automatically reads the item name and total quantity of the consignment. Navision compares the details with source document details and validates the receipt. Navision to be updated with Lot number and Expiry date. (If Customization no 13, Expiry date calculation is carried out then Expiry date will be automatically captured by Navision) Registering of receipts Receipt details are registered in Navision. (All rejected quantities at Quality inspection stage are sent to quality department) Determining the location to put-away the consignment System suggests the location to put-away the consignment based on the put-away defined for the specific item. SKID Tag: Printing of SKID tag and affixing to the consignment Barcode Tag : Instead of skid tag, Navision prints a barcode tag containing Item details, Location details, Lot number details and Expiry date details. This information is transferred to barcode instrument Put-Away: Putting away material using Put away Document and registering of put away Put-Away: The consignment is moved to the specific location and barcode scanner is scanned both on barcode tag and location tag. System will confirm that correct item is put-away at correct location. After completion of put-away put-away is registered in Navision - - California Software Company, India 144 Business Modeling Report – North American Tea & Coffee Inc. Detailing of NATC Shipment process and the mapping with Navision product is provided Mapping in Navision [Module >> Granule >> Form >> Functionality] Warehouse Management Current Shipment Process Shipment details sent to Warehouse: Customer Service (Sales Department) physically hands over picking ticket (the source document) to warehouse department personnel The released sales orders are automatically visible in warehouse module of Navision. Warehouse personnel can work on these sales orders and plan for shipment. The same process can be used for raw material issues for production also. Book Appointment with Customer: Email Customer for appointment. In Navision emails can be sent to customer from respective sales orders Order Pulling: Creation of Picking sheets and distributing to pickers. Picking items from bin and placing it in shipment area Navision automatically creates the picking sheets based on the ranking of the bins. The complete To-Pick information is transferred to Barcode instrument. The picker has to go to the respective location and has to scan both the item barcode and location barcode. After acceptance by the system the items can be picked Order Checking: Pulled Orders are checked and approved for shipment Pulled Orders are checked by different person other than picker, and registered in Navision Short Item Confirmation Items that are short are checked for inventory availability Any item that is short will be notified during picking process. Availability of inventory at various bins can be listed out any point of time Bill Of Lading A Bill of lading is completed for every order (manually filled). Date, Customer Name and address, Shipment Warehouse No, Quantity, Total Weight, Picking Ticket Number, CPC Bill, PO, appointment (if there is one) and trucking Company details. From respective sales orders Bill of Lading can be automatically printed out with all the required information Vehicle Inspection Report This form to be prepared for all shipments. Contains Vehicle Details and Checklist for vehicle Inspection Navision automatically generates the vehicle inspection sheet containing the checklist of inspections to be carried out for the particular item. After inspection the details to be updated in the system - California Software Company, India 145 Business Modeling Report – North American Tea & Coffee Inc. Morning Invoices At times Invoice is sent along with Shipment and hence to be prepared and sent along with shipment documents Authorised and designated warehouse personnel can print the invoice document for the specific shipment if required and can sent along with other shipment documents COD document to be prepared. COD can be automatically printed out for required shipments Performa Invoice: Prepared for all export orders with relevant information printed and attached. The same document to be sent to various departments through email Performa Invoice can be automatically printed from the system for a sales order. The same can be attached and sent to various departments. Tea Manufacturing Orders: Additional document to be sent for above shipments (if any) or customized way in which specific documents to be modified for above orders For Tea Manufacturing orders, additional documents required are generated by the system automatically and can be attached with the shipment documents Customer Address is printed in BIG & BOLD using Power point to affix on every package being shipped The addresses can be automatically printed from relevant sales orders Items are shipped and updated in Navision. The status of shipment ca be viewed in the Sales orders by sales department directly. Customisation possibilities to be explored Shipment: Items are shipped out of warehouse Tracking: Tracking the consignments is done either by calling the shipment company or through their website. Full information about the order then entered in spread sheet and forwarded to appropriate personal - California Software Company, India Tracking of shipped consignment status can be automatically done from respective sales orders. Customisation effort is required which is complex 146 Business Modeling Report – North American Tea & Coffee Inc. 9.1 SETTING UP WAREHOUSE MANAGEMENT SYSTEMS The following section contains the details of following setups: 9.1.1 Locations Setup 9.1.2 Put-away Template Setup 9.1.3 I tem Setup 9.1.4 Bin Types Setup 9.1.5 Bin Ranking Setup 9.1.6 Creating Bins 9.1.7 Warehouse Class Setup - California Software Company, India 147 Business Modeling Report – North American Tea & Coffee Inc. 9.1.1 LOCATIONS SETUP Multiple locations provide the possibility to set up each location (warehouse) in a specific way. By defining different parameters for the individual location, work processes can be varied from one location to another, and thereby give more freedom of choice according to surroundings and/ or customs. Go to Warehouse Management Module Click open Setup >> Locations In the General Tab Enter the Code, Name and Address of the Location In the Communications Tab enter Phone, Fax, Email and Home Page Details In the Warehouse Tab select whether Receipt, Put away and Pick is required. Also enter Outbound and Inbound Warehouse handling time and base Calendar Code In Zones and Bins Tab tick zones and bins are required tick mark Also Enter Default Bin codes for Receipt, Shipment and Inventory Adjustment In Zone and Bin Policies Tab Select ‘Prohibit More than Max Capacity’ for Bin Cap. Policy In put-away Template Code Select default Put away template from list of Put away template Tick Always Create Put-aways and Picks Exit Locations Setup - California Software Company, India 148 Business Modeling Report – North American Tea & Coffee Inc. 9.1.2 PUT-AWAY TEMPLATE SETUP When setting up the warehouse, the company must define how the put-away process is to be prioritized. The company is able to make various templates to suit different needs. The Put-away template consists of a list of priorities, where requirements must be met and sorted in a specific way. Each line in the table represents a command with requirements the program should fulfill, or if they cannot be fulfilled, the program should go to the next option. Go to Warehouse Management Module Click open Setup >> Put away Template In the first line select the first rule for put away Enter the code and description for this Put away template Select ‘Fixed Bin’ if you want to put in bin specific to this Item Select ‘Floating bin’ if you want to put in any bin that is empty Select ‘Empty bin’ if you want to put in which is empty Select ‘Find Same Item’ if you want to put in bin which already contains the same item Select ‘ Find Unit of Measure Match ‘ to put in bin contains item with same UOM In the next line enter the next set of conditions to put away if first line conditions are not met Enter as many lines of conditions as required Exit Put Away Templates - California Software Company, India 149 Business Modeling Report – North American Tea & Coffee Inc. 9.1.3 BIN TYPES SETUP The warehouse management module allocates items according to the instructions provided in the setup, calculating space availability and taking many variables into consideration when performing the tasks according to how the user has set up the system. In warehouse the bin is the smallest unit in which to place and register items. The company is able to define the bin types, and thereby how and for what purpose the program should use them. The check marks in the bin type illustration indicate which action is allowed to be performed within the given bin type. For example, you are not able to put away in a bin carrying bin type “pick”, while the “putpick” bin type code allows both picking and putting away. The maximum numbers of combinations is eight. Go to Warehouse Management Module Click open Setup >> Bin Types Enter the Code and Description for first zone Select the required Combination from Receive, Ship, Put-away and Pick Allowed are 1) Receive, 2) Ship, 3) Put away 4) Pick, 5) Pick and Put away 6) No type Enter the Code and Description for second Zone Select the next Combination from Receive, Ship, Put-away and Pick Exit Locations Setup - California Software Company, India 150 Business Modeling Report – North American Tea & Coffee Inc. 9.1.4 BIN RANKING SETUP Bin ranking is a method of prioritizing replenishment movements, picks and put-aways, and indicating which bin should be replenished, picked or put-away first. A bin with a high-ranking number has a higher priority than one with a low number. When bins are created, they will inherit the ranking from the zone in which they are created, for example if a zone has the ranking of 100, the bins created within that zone will also be 100. Go to Warehouse Management Module Click open Setup >> Locations Select the Location in which Bin Ranking to be setup for bins Click Locations and Select Bins Bin Window Opens. In the Bin Ranking field fill the ranking of the bin Complete the ranking for all the bins Exit Locations Setup - California Software Company, India 151 Business Modeling Report – North American Tea & Coffee Inc. 9.1.5 SETTINGUP FIXED BINS The Fixed field indicates to the program that a certain item is fixed to this bin. Other items can and will be entered by the program according to the setup of the put-away template, but this item has priority over other items. Go to Warehouse Management Module Click open Setup >> Locations Select the Location in which Fixed bins to be setup for items Click Locations and Select Bins Bin Window Opens. Select Bin Contents Select the Item No and Tick Fixed to setup this bin as fixed bin for this item Exit Locations Setup - California Software Company, India 152 Business Modeling Report – North American Tea & Coffee Inc. 9.1.6 BLOCKING MOVEMENT ACTIVITY OF BIN The Block Movement field is used to block any movement within the specific bin. This functionality is usually used to prevent movement from or to a specific bin during bin replenishment. The feature could also be very useful as quarantine for the items within this specific bin. There are three options to select from, Inbound, Outbound or All. Go to Warehouse Management Module Click open Setup >> Locations Select the Location in which bins to be blocked for Movement Click Locations and Select Bins Bin Window Opens. Select Bin Contents Select Blocking Bin Movement for Inbound or Outbound or for all Exit Locations Setup - California Software Company, India 153 Business Modeling Report – North American Tea & Coffee Inc. 9.1.7 CREATING NEW BINS The Bin Creation Worksheet is an easy-to-use tool for creating a large number of bins within a given zone When you create new bins, the bin ranking is inherited by default from the zone ranking and manual changes can be made. When creating new bins remember to fill in Maximum Cubage and Maximum Weight. The field values entered are used by the program to calculate how many of each item there is room for when putting away, moving or calculating replenishment. Whenever companies would like to create multiple bins, for example, when setting up for the first time or for a new section in the warehouse, the bin creation worksheet provides the fastest and easiest method for doing this. Go to Warehouse Management Module Click Setup, Bin Templates. Fill in the template for the zone to which bins to be created From the Warehouse Management menu, click Periodic Activities, Bin Creation Worksheets. Click Functions, Calculate Bins. In the Calculate Bins request form, browse to the Bin Template Code field and select NSB. Calculate Bins menu opens . Fill the six fields Rack, Section and Level sections for each rack, section and level to create. Exit Setup - California Software Company, India 154 Business Modeling Report – North American Tea & Coffee Inc. 9.1.8 WAREHOUSE CLASS SETUP When setting up the warehouse, there are variety of options to define the specific conditions controlling the way items are received, stored, picked and shipped. An important parameter is the conditions for how items are stored. Not all items are stored under the same conditions. They may need different temperatures or be vulnerable to light. These can easily be defined and handled throughout the warehouse processes using warehouse class setup. Go to Warehouse Management Module Click Setup, Locations, Location , Zones Select the Zone for which warehouse class to be attached. Select the warehouse class for this zone in the Warehouse Class field Before Selecting Warehouse Classes, the same can be created in setup, Warehouse Classes Select the warehouse class for the other zones also If you want to attach Warehouse class only at bin level, then Locations, Location, Bins Select warehouse classes for the bins Exit Setup - California Software Company, India 155 Business Modeling Report – North American Tea & Coffee Inc. 9.2 RECEIVE AND PUT-AWAY This section explains how to manage the receipt of inbound orders and handle the process of putting the items away in an efficient way. Inbounds orders are purchase orders, inbound transfer orders, and sales return orders. Receiving orders provides new options for defining where and how the items are received and expedited further in the warehouse process. Prior to receiving, an inbound document must be created and released before the warehouse personnel are able to see the order lines. Apart from being a working document, the receipt can also work as an indication of what the warehouse should expect, and thereby be able to plan workloads more efficiently. The receipt can either be created from an inbound order or from the warehouse receipt menu. When items arrive to the warehouse, warehouse supervisor must handle and register the arrival and insert the exact received amount into the related document. As soon as the warehouse employee posts the receipt, the items become part of inventory available for sale (but not yet ready for picking). When posting the receipt document, a put-away document is created. A put-away document is an instruction to the warehouse personnel at the receiving area to take the (arrived and received) item and place it in a designated place suggested by the program. At this point, the suggested zone and bin placement can be altered if the placement suggested by the system is not convenient. And, finally, the put-away document can be registered, and both the receiving and the put-away can be viewed under Posted Receipts and Registered Put-aways. The items are now available for picking. When the warehouse has completed these tasks, the source document can be invoiced. - California Software Company, India 156 Business Modeling Report – North American Tea & Coffee Inc. 9.2.1 RECEIVING THE ITEMS Receiving is the first stage in the inbound warehouse flow, and the released purchase order is a request to the warehouse to expect arrival of items. These requests can be viewed in the warehouse receipt list. Collating docs as per freight companies appointment After arrival of container the vehicle and the goods are inspected Record the details by selecting the corresponding receipt document in Receipts Quality check as per procedure in Spec sheet [Click Warehouse, Receipts, Line, Inspection for generating inspection report for goods received. Only the QC accepted quantities could be registered. Remaining quantity goes to QC hold area. Enter the Lot numbers and Expiry date for the receipt in Receipts, Line, Item Tracking Lines Printing of SKID tag in Receipts, Print Registering of receipts in Receipts, Post Receipt End of Receiving Activity - California Software Company, India 157 Business Modeling Report – North American Tea & Coffee Inc. 9.2.2 PUTTING THE ITEMS AWAY When the warehouse receipt is posted, the system creates a put-away document. A put-away document is an instruction to the warehouse personnel to move received items from the receiving area to the storage area. In this process, the system is guided by the settings of the Put-away Template and by bin ranking in suggesting where to put the received items away. The Warehouse Put-away window contains the lines copied from the posted warehouse receipt document. The put-away activity must now be handled and quantities registered. The put-away document contains exact information on which zone and bin to find and take items from and in which zone and bin to place the items. On the Place lines, the program suggests that the items are put away in the BULK zone. Changes can be made to this line: you can keep the zone and choose another bin, or completely change where to store the items by changing the zone and finding a suitable bin. Posting of receipt activity created required Putaways In the Put away Sheets section putaway details such as zone and bin are displayed Print the put away sheets by Put-aways, Print Put away sheets are printed with bin addresses where receipt to be placed Put away the receipts in the specified location Register the putaway by Putaways, Registering, and Register Put aways Put away activity completed - California Software Company, India 158 Business Modeling Report – North American Tea & Coffee Inc. 9.3 INTERNAL WAREHOUSE PROCESSES This chapter contains the following sections: 9.3.1 Movement 9.3.2 Journals 9.3.3 Counting - California Software Company, India 159 Business Modeling Report – North American Tea & Coffee Inc. 9.3.1.1 MOVEMENT Warehouse Management Systems offers the opportunity to move items within the warehouse to optimize the use of space. Movements are done at bin level. Warehouse movement can be a manual process, If, for instance, the company wants to reallocate items elsewhere within the warehouse. It can also be automatically allocated by the system as the act of bin replenishment. A function would be setup in Job Scheduler for generating automated warehouse movement instructions through customisation. Start of Internal Movement Activity Click Open Movement worksheet in warehouse management module Enter the details of bin to take from and into move the item into Print out the details of all movement activities Do the physical Movement activity Register in movement worksheet Internal Movement activity completed - California Software Company, India 160 Business Modeling Report – North American Tea & Coffee Inc. 9.3.1.1 Bin Replenishment To achieve maximum usage of warehouse space, the company will need a tool to automatically detect unused space on bins, and calculate quantity to be filled in and suggest from where to take these items and at the same time update the system. Through the replenishment process, the system searches for a fixed bin content that needs to be replenished, whenever the bin has reached minimum quantity. The process of replenishment is only capable for fixed and unblocked bins and must be activated manually by a warehouse employee. The program tries to find bin content of the same item and item variant within the location. The bin ranking determines from where to take the items, always searching for lower ranking bins to take from. The calculation is made to fill fixed bins that are below minimum quantity. A Warehouse Movement document is created containing the replenishment lines from the requested location, zone or bin according to filter options used. Click Movement Worksheets, Functions, CalcBinReplenishment Calculate Bin Replenishment Window opens Select the item to which replenishment to be carried out All the bin replenishment for this specific item is displayed Click Functions, Create Movement Complete the Movement Activity and Register in movement worksheet Calculate Bin Replenishment activity completed - California Software Company, India 161 Business Modeling Report – North American Tea & Coffee Inc. 9.3.1.1 Blocking Warehouse Movements Blocking warehouse movements is done at the bin level, and eventually a company will experience the situation where items on a bin will have to be moved somewhere else in the warehouse. It is also possible that similar items placed at a specific bin should stay where they are. In situations like this, the company would block the bin, so that movement from this specific bin would not occur although the rest of the similar items elsewhere are moved. In the Bins, you can select a method for blocking the movement of the bin. A choice of Inbound indicates no items should be placed in the bin. A choice of Outbound indicates that no items should be taken from the bin. This will have impact on the availability to pick from the items stored on the blocked bins, as these items will be available for sale but not for picking. A choice of all indicates that no items should be either taken out of or placed in the bin. Click Setup, Locations, Location, Zones, Bins All the bins are displayed In the Block Movement field Select Inbound, Outbound or All Inbound block the bin for receipt activity, outbound block for Ship and All for both Block Movement Activity Completed - California Software Company, India 162 Business Modeling Report – North American Tea & Coffee Inc. 9.3.2 JOURNALS In Warehouse Management Systems, the program uses special journals to handle processes occurring inside warehouse parameters. When using Warehouse Management Systems, it is necessary to use the warehouse physical inventory journal and warehouse reclassification journal. 9.3.2.1 Warehouse Item Journals The purpose of this journal is to make adjustments to an item on a specific bin in a specific zone. Click Periodic Activities, Warehouse Item Journal Enter the item details, bin details to which adjustment to be carried out Click Registering, Register Inventory Adjustment recorded Exit Item Journal Training would be provided for reallocation of empty bins of discontinued items in the warehouse module - California Software Company, India 163 Business Modeling Report – North American Tea & Coffee Inc. 9.3.2.2 Reclassification Journals The warehouse reclassification journal enables you to perform changes after the goods have been moved physically. This situation could occur if the workers had moved items from one place to another in the warehouse, and later informed the manager of where the items have been moved. This situation could arise when restructuring the warehouse or organizing the items during rearrangement, as the movement is done according to the instructions from Supervisior or Manager to rearrange the items in a particular zone and update the exact bin location after the movement is done. Click Periodic Activities, W/h Reclassification Journal Enter the Item details, From Zone, Bin details and To Zone, Bin details Click Registering, Register Inventory movement recorded Exit Reclassification Journal - California Software Company, India 164 Business Modeling Report – North American Tea & Coffee Inc. 9.3.3 COUNTING In order to keep an accurate record of inventory in the warehouse, physical counts of inventory must be performed regularly. Having the possibility of defining the count frequency for a specific item, and information displayed regarding to when last counting was done and when the next is due, makes the process of counting much easier. NATC requires physical count during fixed intervals and monitored for the date of expiry for the lots and damaged products. Reports required for • Damaged products and damaged by • Expiration of Goods Customisation is required for above reports - California Software Company, India 165 Business Modeling Report – North American Tea & Coffee Inc. 9.3.3.1 Physical Inventory Counting The process of counting inventory can be a very time-consuming procedure. Through this module companies to count at the zone and/or bin level in order to divide warehouse areas into smaller pieces, and to count specific areas of the warehouse. Because of this feature, counting can be made more regular or spread over a longer period or at different intervals. The blocking of bins can be a major advantage to ensure that no items are removed during the counting or between the counting intervals. Physical Inventory Counting is performed using Whse. Physical Inventory Journal. Click Periodic Activities, W/h Physical Inventory Journal Click Functions, Calculate Inventory Fill in the following details; zone code, bin code, and location code System provides the Calculated Quantity Inventory Counted physically and entered in Physical Quantity Field Register the details by Registering, Register The difference in quantity is adjusted and actual quantity recorded by the system Exit Reclassification Journal - California Software Company, India 166 Business Modeling Report – North American Tea & Coffee Inc. 9.4 SHIPPING THE ITEMS This chapter explains how to handle an outbound order from the warehouse. In order to handle outbound requests, the source document (sales order, purchase return order and outbound transfer order) must be released for the request to be visible to the warehouse personnel and to initiate the shipping process. The first step is to get an overview of the orders released for shipment. This can either be done from the shipment list or from the pick worksheet, showing all released shipping orders. A shortcut from the sales order has been added to create a request for a warehouse shipment. In order to continue the process of shipping, the items have to be picked. As an additional requirement, reports are required about pallets, is a part of customisation effort. Customer Service (Sales Department) provides picking ticket (the source document) to warehouse department Call, fax or send Email to Customer for appointment. Order Pulling: Create Picking sheets and distribute to pickers. Picking items from bin and placing it in shipment area Order checking: Pulled Orders are checked and approved for shipment Shortage Checking: Items that are short are checked for inventory availability A Bill of lading is completed for every order Pallet tracking info (CPC, CHEP, etc.,) Pallet tracking form filled in and sent to respective companies Vehicle Inspection reports. This form has to be prepared for all shipments. Contains Vehicle Details and Checklist for vehicle Inspection A - California Software Company, India 167 Business Modeling Report – North American Tea & Coffee Inc. A At times Invoice is sent along with Shipment and hence to be prepared and sent along with shipment documents COD document to be prepared. Performa Invoice to be sent for Export orders. Various documents to be printed and attached. The same document to be sent to various departments through email Additional document to be sent with Contract Tea Manufacturing shipments (if any) or customised way in which specific documents to be modifed for contract tea manufacturing Customer Address is printed in BIG & BOLD and affixed on every package being shipped along with Pallet tags Items are shipped out of warehouse Tracking the customers consignment by going through their website. End of Warehouse Shipping Activity - California Software Company, India 168 Business Modeling Report – North American Tea & Coffee Inc. - California Software Company, India 169 Business Modeling Report – North American Tea & Coffee Inc. Warehouse Management All the bins in the warehouse will have numbers to represent each of them. The bin number will be as follows Sl Area Number format Examples no Row Bin Level 1 Finished Single digit Two digit Single digit A-01-A, A-01-B, products alphabet number alphabet A-01-C, A-01-D, A-01-E, A-02-A, A-02-B…and so on 2 Ingredients / Two digit Two digit Single digit AA-01-A, AA-01Raw materials alphabet number alphabet B, AA-01-C, AA01-D, AA-01-E, AA-02-A, AA-02B…and so on 3 Bulk Area Three digit number with suffix ‘BLK’ As mentoned below Example of Bulk area identification system: BLK040 BLK039 BLK038 BLK080 BLK079 BLK078 BLK180 BLK179 BLK178 . . . . . . . . . BLK003 BLK002 BLK001 BLK053 BLK052 BLK051 BLK153 BLK152 BLK151 The bin number in which the material has to be put will be automatically suggested by the system based on the setup done and availability of the bins. The authrised user can change the suggested number of the bin during the time of processing the document. The bin number will be available as a part of Warehouse picks – Picking Ticket and Warehouse put away. Based on this the exact availability of the material in each of the bins can be known. The major operations that are addressed in the warehouse management area are • • • • • • Warehouse shipment Warehouse picks Warehouse receipt Warehouse put away Bin replenishment Material expiry management All the rows, Aisles and the bins will have tags for easy representation. - California Software Company, India 170 Business Modeling Report – North American Tea & Coffee Inc. 10.0 MANUFACTURING Production Process at NATC – Production Flow – Overview Planning department Based on Demand Production Order Created Order sent to shop floor for Production Picking Ticket Issued Raw Material Picked from Warehouse L Weighing QC check for correct ingredients picked 2 Weighing of Ingredients Excesses Raw Material returned to Warehouse Affix tags with batch numbers 1 Not OK 1 Formula check On hold OK Pre-blending checks by QC & Production Blending of Ingredients Blending 2 Not OK 1 Blend testing 2 L Packing of the blend into the finished goods Rework / Rejection Disposal Final Blend ready for Packing 2 Rework Rejection OK L Pre-op and in-process QC checks Packing Palletizing, Counting, wrapping and tagging 1 Not OK Quality Check OK Receiving by Warehouse L L - Lot tracking - California Software Company, India 171 Business Modeling Report – North American Tea & Coffee Inc. Planning Operation – Based on the planning done and also on the basis of demand for a product, the production orders are created for the finished goods. Each of the goods manufactured in the factory will contain a • • Formula/BOM Routing The formula is used for specifying the raw materials that are needed for manufacturing the finished good. Example: For manufacturing every unit of a Drink Crystal, the following ingredients would be used1. Flavoring Agent – 700 G 2. Sugar – 200 G 3. Coloring Chemical – 100 G Note: Lot number tracing is required for all the ingradients mentined above and packaging. This forms the formula of the drink crystal. The details of BOM are detailed in section 7.1 of the document. The routing is the stages through which the production order has to be taken, to manufacture the final finished good. In most of the cases, the stages through which the production order has to be taken through are the following including Quality check as per Spec sheets [both in process and stagewise] – Weighing Blending Packaging The above stages will be configured as the routing in the system in which the time taken for the material to process in each of the stages will be captured. For the material to be processed in each of the stages there will be many other processes involved as detailed in the later sections. The details of the rotting are available in section 7.2 of the document. The complete ingredient information for each of the finished goods will be available as a part of the formula/BOM and the routing. • • • • Each finished good that is manufactured will have a Formula/BOM, which will have details about the raw materials that will have to be used for the production of the finished good. Route is the sequence of the machines through which the materials have to be passed in order to complete the production order. The weighing, blending and packing machines will be configured as machine centers in the system that will be used to define the route. The nutritional values of the items will be captured as a part of the item master. - California Software Company, India 172 Business Modeling Report – North American Tea & Coffee Inc. Picking of Raw Materials – Based on the quantity of the formula, the raw material has to be picked from the warehouse. The system will automatically calculate the amount of raw material to be picked as per the quantity of the finished goods to be manufactured in the production order. The picking ticket can be created based on the quantity in formula and then the materials are picked and stacked in the weighing area. Quantity available in the production order Picking Ticket created L Raw material Picked and placed in weighing area Note: Lot number tracing is required for all the ingradients mentined above. Weighing of Ingredients – Once the raw materials are picked and stacked in the weighing area, the weighing staffs make the skids with the correct amount of raw materials weighed as per the production orders requirements. This will form the first stage of the production process. The excess raw material that has been picked for a production order can be returned back to the warehouse. Picked material placed in the weighing area Raw Materials checked for correctness based on production order by QC Ingredients are weighed and Skids made Excess materials returned to Warehouse Tags fixed containing the details of assembly no, Order no, Date of weighing and batch no Formula check conducted by QC Approved materials ready to be sent to the Blending Department in skids - California Software Company, India 173 Business Modeling Report – North American Tea & Coffee Inc. Blending of Ingredients – After the raw materials are weighed and individual skids prepared for each of the production orders, the skids are moved to the production floor. Based on the quantity of the raw materials to be blended, the decision on which blender to be used is made. Then the blending of the raw materials is done based on the sequence specified in the routing of the finished good. After the blending of the raw material is done, the blend is kept in storage bags until they are sent for packing. Hence blending forms the second stage in the production process. Check ingredients before blending by Production and QC Blending done based on the sequence in the Route Inspection and approval as per norms – New Lot number Assigned L Final Blend stored in Bags until packed Packing of the Blend – Packing is the final stage in the production process. Once the blend is ready for packing, the packing is done in any one of the automated packing lines. Then the finished goods are placed on pallets and stored in the warehouse. Blended Material to be used is picked L Final blend packed in the packing Inspection and approval as per Specifications [Pre-op and in-process Quality Checks] by QC Palletizing, counting, wrapping and tagging Finished Goods inspection Finished Goods received by Warehouse The following sections of the BMR detail the setup of the production modules and the business processes in Navision. - California Software Company, India 174 Business Modeling Report – North American Tea & Coffee Inc. Detailing of NATC business process and the mapping of each process with Navison product is provided Mapping in Navision [Module >> Granule >> Form >> Functionality] Manufacturing Current Business Process For Dry Goods items annual sales data details received from Computer section taken from INMASS inventory are analyzed. Based on the availability of finished goods on hand and the sales of the same finished good last quarter, required quantity to be produced is determined Receive capacity report from Tea manufacturing containing the quantity to be produced and Need/Finish date Based on the BOM details and the availability of raw materials, raw material requirement is determined In MBS Navision, powerful tools are available to calculate the materials requirement [MRP / MPS] for effective planning of materials and reduce unnecessary inventory. But for comparing with projected sales forecast, as mentioned in Purchase module, a customized report would be provided to adjust the plan suggested by system. Requirement for BOM constituents are taken into consideration by the system automatically. [Manufacturing >> Planning Worksheet] Purchase orders for all the raw materials that are less than required are initiated and sent to vendors Purchase orders could be created directly from the Planning worksheet or can be taken to Purchase requisition worksheet for further processing. [Manufacturing >> Planning Worksheet >> Carry Out Action Messages] Work Orders are released for producing the corresponding Items Production orders could be created directly as suggested by the system in Planning worksheet. [Manufacturing >> Planning Worksheet >> Carry Out Action Messages] Printing of work order [Manufacturing >> Released Production Order >> Print >> Job Card] Printing of raw material required, Moving raw materials needed from warehouse to production area and registering the same This functionality is directly available in manufacturing module to initiate Warehouse action to pick materials required from a Released production order Recording of Consumption [Manufacturing >> Released Production Order >> Functions >> Create Whse.Pick] [Manufacturing >> Consumption Journals] - California Software Company, India 175 Business Modeling Report – North American Tea & Coffee Inc. Quantity of finished goods produced is recorded Movement of Finished Goods to Warehouse This functionality is also available in Manufacturing module to move from production to Warehouse as Output. [Manufacturing >> Released Production Order >> Function >>Create Inventory Put-away/ Pick…] Warehouse receiving the material from production and storing in specified location Recording of Manpower and machine resource used for this production order [Capacity Requirements Planning >> Capacity Journal] Preparation of Production Analysis Sheet [Manufacturing >> Reports] - California Software Company, India 176 Business Modeling Report – North American Tea & Coffee Inc. 10.1 INTRODUCTION The Manufacturing activities of NATC can be grouped under three major groups viz. • Contract Manufacturing of Tea for companies like Tazo, Jayco, Flora and Zhena • In-house manufacturing of Tea items and • Manufacturing of Dry Goods At present Planning for contract manufacturing of Tea is on a regular basis by respective companies. The requirement for in house manufactured items such as Tea and Dry Goods are determined based on the historical sales of the same item in the subsequent months (next two or next three) during previous year. After calculating this and finding out the item currently available in stock, item to be produced is determined. The required production orders and purchase orders for raw material are released. Implementation of Navision brings in centralized planning and more streamlined processes in place keeping intact the basic requirements of the functionalities of the current manufacturing process in NATC. The subsequent sections of this document detail the various processes to be carried out by NATC Production Personnel in manufacturing department. It includes the setting up of the system and various processes to be carried out during production activities. The Macro level business flow of production activity of NATC manufacturing unit is mapped out in the following flow chart. - California Software Company, India 177 Business Modeling Report – North American Tea & Coffee Inc. 10.1.1 PROCESS FLOW OF PRODUCTION ACTIVITY IN NATC MANUFACTURING UNIT For manufacturing goods (Dry Goods items and In-house manufactured Tea products) quantity to be produced is determined based on the sales forecast and availability details Receive capacity report from Tea manufacturing Items contains the quantity to be produced and Need/Finish date Based on the BOM details and the availability of raw materials, raw material requirement is determined Purchase orders for all the raw materials that are less than required are initiated and sent to vendors Work Orders are released for producing the corresponding FG items Printing of work order Printing of raw material required, moving raw materials needed from warehouse to production area and registering the same A - California Software Company, India 178 Business Modeling Report – North American Tea & Coffee Inc. A Recording of Consumption registering the same area and Recording of Consumption Quantity of finished goods produced is recorded Recording of Manpower and machine resource used for this production order Movement of Finished Goods to Warehouse Warehouse receiving the material from production and storing in specified location Preparation of Production Analysis Sheet - California Software Company, India 179 Business Modeling Report – North American Tea & Coffee Inc. 10.1.2 Process Flow of Production Activity from Navision point of view Prod. Order Created Work Order, material requisition and material shortage document created Raw material pick activity generated, Materials picked and registered Output recorded for The first stage First stage in production completed Actual material Consumption and scrap details for the first Stage recorded Output recorded for The next stage Next stage in production completed Actual material Consumption and scrap details for the next Stage recorded Production Order Completed - California Software Company, India 180 Business Modeling Report – North American Tea & Coffee Inc. 10.2 PRODUCTION BILL OF MATERIALS We first define what a production BOM is and then demonstrate how to create and maintain different BOMs and their alternative versions. The section also deals with phantom BOMS and various periodic activities such as exchanging BOM items and deleting expired components. A production bill of material (BOM) is a document that describes the components used to make a product and the subassemblies at various stages of manufacture. The BOM is one of the most widely used documents in manufacturing companies. A production BOM can consist of multiple levels – the maximum being 50 levels deep. When we deal with production orders, we always refer to a singlelevel BOM versus a multilevel BOM. The structure of the BOM defines the number or depth of levels. A production BOM manages the material requirements of production by defining what materials have to be scheduled, as well as what components need to be purchased or made. A production BOM can only be defined after the items have been set up in inventory. - California Software Company, India 181 Business Modeling Report – North American Tea & Coffee Inc. 10.2.1 CREATION OF PRODUCTION BOM Data entered in the production BOM header applies to the entire BOM. To create a production BOM, you must complete the following fields in the header: You use the production BOM lines to enter data for items that you want to process and/or other production BOMs. To do this, you must fill in the following fields: Go to Manufacturing Module Click open Production BOM Enter the following details in BOM header: No, Description, UOM, Status and Versiion No Enter for each item in BOM Line. Item/BOM, Quantity per BOM and UOM Repeat the above step for all the items in the BOM - California Software Company, India 182 Business Modeling Report – North American Tea & Coffee Inc. 10.2.2 CREATION OF VERSIONS OF PRODUCTION BOM The Production BOM Version principle allows you to create different versions of a production BOM. This feature may be useful in managing engineering change orders. Each BOM version can have a unique starting date in the header, as well as a unique starting date and ending date for each line item in the BOM. Production orders that start after the version starting date will default to that version in planning which allows you to phase in new engineering change orders. It is possible to have two BOM versions with the same starting date. In this case, the correct version can be selected from the production order lines. Go to Manufacturing Module Click open Production BOM to which Version to be created Click Open Production BOM, Versions Production BOM Version form opens. Enter the details of new version and starting date of activeness of this version - California Software Company, India 183 Business Modeling Report – North American Tea & Coffee Inc. 10.2.3 WHERE-USED FEATURE The where-used feature indicates where a production BOM is used throughout the product structure. The single or multilevel features are helpful tools when performing maintenance or troubleshooting. Go to Manufacturing Module Click open Production BOM Click Open Production BOM >> where used Production BOM where used form opens Details of finished Goods to which this BOM is attached is displayed - California Software Company, India 184 Business Modeling Report – North American Tea & Coffee Inc. 10.2.4 PHANTOM BILL OF MATERIAL A phantom BOM is a bill-of-material coding and structuring technique used primarily for transient (nonstocked) subassemblies. For the transient item, lead-time is set to zero and the order quantity to lot-for-lot. A phantom BOM represents an item that is physically built, but rarely stocked, before being used in the next step or level of manufacturing. This permits MRP logic to drive requirements straight through the phantom item to its components, but the MRP system usually retains its ability to net against any occasional inventories of the item. This technique also facilitates the use of common bills of materials for engineering and manufacturing. Phantom BOMs are used to reduce the number of levels in the BOM and therefore in the product structure. They simplify what you view on the BOM. Used exclusively for determining dependent demand, phantom BOMs never lead to a finished product. This production BOM type does not have its own inventory master data. Go to Manufacturing Module Click open Production BOM to which Phantom BOM to be attached Drop down Type field in Production BOM Line Select Production BOM for Type Now the attached BOM becomes a phantom BOM during exploding of components. - California Software Company, India 185 Business Modeling Report – North American Tea & Coffee Inc. 10.2.5 EXCHANGING PRODUCTION BOM ITEM The periodic activity Exchange Production BOM Item enables you to replace items that are obsolete with replacement parts. Go to Manufacturing Module Click open Periodic Activities Click Open BOM >> Exchange Production BOM Item Replace the old item to be replaced with new item. Enter starting date and ticks recertify All the BOMs will be replaced with new item for the old item - California Software Company, India 186 Business Modeling Report – North American Tea & Coffee Inc. 10.2.6 DELETE EXPIRED COMPONENTS This periodic activity is a maintenance function for BOM lines whose ending date has expired. Go to Manufacturing Module Click open Periodic Activities Click Open BOM, Delete Expired Components Select the production BOM Header details and the delete before date All the expired components before expired are deleted - California Software Company, India 187 Business Modeling Report – North American Tea & Coffee Inc. 10.3 ROUTINGS Here we define how to create and maintain routings and routing versions. We also look at how and where routings should be used, and we discuss productive and non- productive time (components of throughput time) and routing Where Used function. A routing specifies the sequence of operations to manufacture a product. The operations can be performed at a work center or at a machine center. Work centers and machine centers are referred to as capacities or facilities. Manufacturing companies use routings to manage and show the production process. The routings not only form the basis overall; they are also the basis for process scheduling, capacity scheduling, and manufacturing documents. In order to be able to work with routings, you must set up the master data of capacity planning. The routings are then assigned to the articles on the item card. As discussed in Section 2, System Setup, the program distinguishes between three types of capacities arranged hierarchically. Each capacity level contains the following subordinate levels. - California Software Company, India 188 Business Modeling Report – North American Tea & Coffee Inc. 10.3.1 CREATION OF WORK CENTER GROUPS Work center groups are broad departments within an organization. A work center group is a reporting unit, such as a production or inventory department, rather than a facility in which work can be scheduled. A plant might have a production department and an inventory department as work center groups. Go to Capacity Requirement Planning Module Click open Setup Click Open Work Centre Groups Enter the Number and description of Work Centre Group Exit Setup - California Software Company, India 189 Business Modeling Report – North American Tea & Coffee Inc. 10.3.2 CREATION OF WORK CENTERS Work centers are specific locations (facilities) in which work can be performed. Production orders are scheduled in work centers via routings. Work centers may also have machine centers on a discrete basis, or have the machine centers roll up to include the availability of the work centers (consolidated calendar). Go to Capacity Requirement Planning Module Click open Work Centre Form Enter General Details (No, Name, Work Centre Group), Capacity Cost and Scheduling Details Enter Unit of Measure, Queue Time and Calendar details Exit Work Center Form - California Software Company, India 190 Business Modeling Report – North American Tea & Coffee Inc. 10.3.3 MACHINE CENTERS Machine centers are the lowest level of a facility in the hierarchy. They represent a machine, a group of machines with identical characteristics, a person, or a group of people. The user can define just how narrow a machine center needs to focus. In many operations, only those resources that need to be monitored, or tend to be bottlenecks, are designated as machine centers. When a production order is scheduled in a machine center, it consumes capacity (reduces availability). A machine center has only its own capacity, since there are no facilities beneath it in the hierarchy. Go to Capacity Requirement Planning Module Click open Machine Center Form Enter General Details (No, Name, Work Centre), Capacity Cost and Scheduling Details Enter Unit of Measure, Queue Time and Calendar details Exit machine Center Form - California Software Company, India 191 Business Modeling Report – North American Tea & Coffee Inc. 10.3.4 SETTING UP THROUGHPUT TIME There are two types of throughput time, productive and non-productive. It is important to understand the various components of throughput time or manufacturing lead-time. Productive Time – There are two types of productive time, setup time and run time. Setup Time – This is the time required to set up the machine or work center to convert from production of the last good item in a lot to the first good item of the next lot. Run Time – This is the time required to process or manufacture a piece or lot at a specific operation. Run time does not include setup time. Go to Capacity Requirement Planning Module Click open Routings Form Select the route to which Throughput times to be provided In the Routing lines enter the values for all the throughput times Exit Setup Non-Productive Time – There are three types of non-productive time, wait time, move time and queue time. - California Software Company, India 192 Business Modeling Report – North American Tea & Coffee Inc. Wait Time – This is defined as the time required between the processing steps (drying processes, for instance). APICS defines wait time as "the time a job remains at a work center after an operation is completed until it is moved to the next operation. It is often expressed as part of move time." Move Time – This is the time a lot or batch of an order spends in transit from one operation to another within the plant. Queue Time – This is the amount of time a lot or batch of an order spends waiting for setup and processing at a particular machine or work center. Increases in queue time mean direct increases to manufacturing lead-time and work-in-process inventory. Queue time is not included in the determination of the start or ending time for a routing operation. It is the amount of time between the end of one operation and the start of the next. - California Software Company, India 193 Business Modeling Report – North American Tea & Coffee Inc. 10.3.5 ROUTING VERSIONS The version principle allows you to create multiple versions of a routing. This feature may be used to manage engineering changes. Each routing version can have a unique starting date. All production orders that begin after the version starting date will default to that version in planning. It is possible to have two versions with the same starting date. When this occurs, select the correct version in the production order detail lines. The structure of the routing versions corresponds to the structure of the routings. This structure consists of the routing version header and lines, with the exception of the starting date, which controls the effective range of dates for the routing. Go to Capacity Requirement Planning Module Click open Routings Form to which routing to be created Routings >> Versions >> New Version windows opens Enter the details of new routing version and starting date of this version Exit - California Software Company, India 194 Business Modeling Report – North American Tea & Coffee Inc. 10.3.6 WHERE-USED FEATURE To assist in maintenance and troubleshooting, use the Where-Used feature to display where a routing is used throughout the product structures. Go to Capacity Requirement Planning Module Click open Routings Form Routings >> Where-Used Details of finished goods to which this Routing is attached are displayed Exit - California Software Company, India 195 Business Modeling Report – North American Tea & Coffee Inc. 10.4.1 PRODUCTION ORDERS Before creating production orders , we have to make sure that all of the original production BOMs and routings have a status of certified. The production orders include: • • • • • Production bills of material Items Machine centers Work centers Routings Production orders are used to manage the conversion of purchased materials into manufactured items. Production orders (job or work orders) route work through various facilities (work or machine centers) on the shop floor. Production orders are the central components of the programs manufacturing functionality and they contain the following information: • • • • • • Products planned for manufacturing Materials required for the planned production orders Products that have just been manufactured Materials that have already been selected Products that have been manufactured in the past Materials that were used in previous manufacturing Production orders are the starting points for: • Planning future manufacturing • Controlling current manufacturing • Tracking of finished manufacturing - California Software Company, India 196 Business Modeling Report – North American Tea & Coffee Inc. 10.4.1 HANDLING VARIOUS CHANGES TO PRODUCTION ORDER There may be various types of anticipated changes that need to be made to a production order prior to it being released to the shop floor. You may also need to make changes to a production order after work has begun. Now let’s discuss anticipated changes such as 10.4.1.1 Changes to the due date 10.4.1.2 Changes to quantity required 10.4.1.3 Changes to components required 10.4.1.4 Changes to the routing - California Software Company, India 197 Business Modeling Report – North American Tea & Coffee Inc. 10.4.1.1 Handling Due Date Changes The starting and ending dates will be automatically amended if you change the due date in the heading of a production order. Go to manufacturing Module Click open Released Production Order Change the due date of the production order in the production order header The starting and ending date gets amended in the lines Exit Released Production Order - California Software Company, India 198 Business Modeling Report – North American Tea & Coffee Inc. 10.4.1.2 Handling Quantity Changes If you make a change to the quantity in the heading, or to the Quantity field, on the line of a project production order type, you must run the Refresh function to reschedule the production order lines. Go to Manufacturing Module Click open Released Production Order Change the quantity of the required item in the production order Click and run Functions >> Refresh Production Order is rescheduled with the changed quantity Exit Released Production Order - California Software Company, India 199 Business Modeling Report – North American Tea & Coffee Inc. 10.4.1.3 Handling Changes to Required Components Components may often need to be changed in order to manufacture an item. This is usually the case in a Make To Order (MTO) company, where items are produced to customer specifications. A production order may be created for an MTO item with components from a standard template production BOM. Go to Manufacturing Module Click open Released Production Order Open Components window of the current production order by Item >> Components Replace old component with new component. Also enter Quantity per BOM of the component Production Order is updated with new components Exit Released Production Order - California Software Company, India 200 Business Modeling Report – North American Tea & Coffee Inc. 10.4.1.4 Handling Routing Changes Similar to the components, it may be necessary to modify the production order routing. In an MTO company, this is usually the case where items are produced to customer specifications. A production order may be created for an MTO item with operations from a standard template routing. The operations are then modified as needed. Go to Manufacturing Module Click open Released Production Order Open Routing window of the current production order by Item >> Routing Replace old route lines with new routings. Also enter other related details of the new routing Functions >> Replan. PO updated with new routing details and rescheduled accordingly Exit Released Production Order - California Software Company, India 201 Business Modeling Report – North American Tea & Coffee Inc. 10.4.2.1 ORDER RELEASE In this section, we will see how to change the status of a production order. The status of production order is changed from Planned Production Order to Released Production Order to Finished Production Order Planned Production Order – PPO • PPOs are like released production orders and provides input to capacity requirements planning by showing the total capacity requirements by work center or machine center. · A PPO represents the best estimate of the future work center or machine center load based on available information. Typically, they are generated from planning, but can also be created manually. Because they are erased during subsequent planning generations, manual creation is not practical. • Their generation in planning results in a suggested "planned order release" that includes quantity, release date and due date. The planning system logic is based on the replenishment system, reorder policies and order modifiers that it encounters in the net requirements planning process. • To view their impact in the program, look at the load for each work center or machine center on the planned production order' s routing. Released Production Order – RPO • When a production order has been released, it does not necessarily mean that materials have been picked or the job has physically moved to its first operation. • In a MTO environment, it is not unusual to create a released production order immediately after the entry of the sales order. • Actual material consumption and product output can be recorded manually with an RPO. In addition, automatic flushing of consumption and product output only occurs for RPOs. Finished Production Order – FPO • An FPO is an order that, for some reason, has been terminated. Usually, the order has been manufactured. · FPOs are used for statistical reporting and to maintain the ability to track back to other orders (sales, production and purchase, for example). The ability to track back to a finished production order allows you to review the detailed history. • FPOs can never be changed (not even to post manual consumption or product output entries), nor can they be deleted. • The status of a production order is changed to Finished to maintain historical information and to complete accounting and/or automatic flushing entries. - California Software Company, India 202 Business Modeling Report – North American Tea & Coffee Inc. 10.4.2.1 Changing the Status of Production Order The status of production order is changed from Planned Production Order to Released Production Order to Finished Production Order Go to Manufacturing Module Click open Planned Production Order Click Functions , Change Status. Select the new status as Released Production Order status changed from Planning to Released Click open Released Production Order Click Functions , Change Status. Select the new status as Finished Production Order status changed from Released to Finished Exit Finished Production Order - California Software Company, India 203 Business Modeling Report – North American Tea & Coffee Inc. 10.5.1 PRODUCTION ORDER PROCESSING This section deals with the manual reporting of materials consumed, time spent on the order, and the quantity of the assembly (parent) produced. Also explained is the use of forward and backward automatic reporting of materials consumed, how much time was spent working on the production order, and the quantity of the parent (assembly) completed. Once a production order has been created and scheduled, it has to be released to the shop floor to be executed. During execution of the order, you record: • • • Materials picked or consumed How much time was spent working on the order Quantity of the parent item produced - California Software Company, India 204 Business Modeling Report – North American Tea & Coffee Inc. 10.5.1 RECORDING THE MATERIAL CONSUMPTION The program offers a variety of options on how a manufacturing company might want to record material consumption. For example, material consumption may be recorded manually, which might be desired if there are frequent component substitutions or greater than expected scrap that needs to be reported. The physical picking of material can be based on one of several reports, such as the Production Order Material Requisition report or the production order job card. With warehouse granules, special pick documents are used. Go to Manufacturing Module Click open Consumption Journal Select the Released Production Order to which consumption to be posted Select the item if the consumption to be entered by item by item Click Functions , Calculate Consumption. This will list out all the pending consumptions Select Posting , Post details to post consumption All material consumptions are posted Exit Finished Production Order If you are using routing link codes, the job card provides the advantage of indicating which components to pick according to the operation to which they are linked. Consumption of materials may be processed through the consumption journal, but also may be recorded automatically by the program. This is referred to as "automatic reporting". You could define automatic reporting for each item with the Flushing Method field on the Manufacturing tab. Let’s review the reporting methods: - California Software Company, India 205 Business Modeling Report – North American Tea & Coffee Inc. • • Manual – This method uses the consumption journal to specify material picking. Forward – This method assumes the expected quantity of all materials for the entire order is automatically consumed at the release of a production order, unless using routing link codes. When using routing link codes, the material is consumed after the start of the operational step is recorded in the output journal. To forward flush the entire production order, you need to do two things: All items in the top-level production BOM need to have forward flushing selected on their respective item card. All routing link codes on the production BOM must be removed. • Backward – This method is the actual quantity of all material automatically picked or consumed when the status of a production order is changed to Finished unless using routing link codes. When using routing link codes, the material is consumed after a quantity of the parent item is recorded for the operational step in the output journal. Backward flushing the entire production order requires the same setup as for forward flushing: The reporting method must be set to backward on each item card for all items within the parent BOM to be reported. In addition, all routing link codes must be removed from the production BOM. When the production order is refreshed, the flushing method is copied from the item card. Because the flushing method for each production order component controls how and when the consumption is recorded, it is important to note that you can change flushing method for specific items directly on the production order. The advantage of automatic flushing is that it greatly reduces data entry. (Most competitor systems auto flushes the materials only.) In fact, with the program’s ability to automatically flush an operation, the entire consumption and output recording process can be automated. The disadvantage of using automatic flushing is that you may not be accurately recording, or even aware of scrap. - California Software Company, India 206 Business Modeling Report – North American Tea & Coffee Inc. 10.5.2 RECORDING THE FINISHED GOODS OUTPUT The program provides users with the capability to track how much time is spent working on a production order, in addition to recording the quantity produced. This information can help a company to more accurately determine the costs of production. Also, manufacturers using a standard costing system may want to record actual information in order to help them develop better standards. As a production order is processed on the shop floor, the time and quantities produced may be recorded on one of a variety of production reports, such as the production order job card or the production order routing list. This information is then entered using the output journal. A third party shop floor data collection system may also be interfaced with the program in order to reduce the amount of data entry. As with material consumption, output may be recorded manually or automatically. While we have not yet looked at machine or work centers in detail, you can in fact define Go to Manufacturing Module Click open Output Journal Select the Released Production Order to which Output details to be posted Select the routing no if the consumption to be entered by each step of the routing Click Functions >> Explode Routing . This will list out all the pending routing steps of this order Select Posting >> Post details to post consumption All resource consumption are posted Exit Finished Production Order individual flushing methods on the machine and work center cards. The program copies the flushing method from the machine center or work center card to the production order routing when refreshing. As is the case with component consumption, there are three reporting methods for output: Manual – This method uses the output journal to specify time consumed and quantity produced. Forward – This method is the expected output (and time), which is automatically recorded at the release of a production order. Backward – This method is the expected output (and time), which is automatically recorded at the finish of a production order. - California Software Company, India 207 Business Modeling Report – North American Tea & Coffee Inc. You can use any combination of automatic flushing and manually recorded information for both consumption and output. For example, you may want to automatically forward flush components, but still use the consumption journal to record scrap. Similarly, you may want to automatically record output, but use the output journal to record scrap of the parent item or additional time spent on the order. Finally, if you enter consumption and output manually, you need to determine the sequence in which you are going to record this information. You can record consumption first and use a shortcut method to enter the information, which is based on expected quantity of output. Or, you can enter output first, using the Explode Routing function. You would then record consumption based on actual quantity of output. Go to Capacity Requirements Planning Module Click open Work Center or Machine Center In the Posting Tab select the required flushing method; Manual, Forward or Backward During release of the production order the time consumed is automatic if forward flush During finish of the production order the time consumed is automatic if backward flush Else the consumption to be manually posted through output journal Exit Work Center / Machine Center - California Software Company, India 208 Business Modeling Report – North American Tea & Coffee Inc. 11.0 QUALITY MANAGEMENT 11.1 QUALITY CONTROL – OVERVIEW The quality module will have features to maintain control of material movement into the warehouse. The feature is such that unless until the quantity is passed by quality the materials cannot be used by the system. Inbound quality control is the feature that helps maintain the quality of the material coming into the warehouse from the vendors. These materials can be inspected based on pre set parameters and also maintains control of not registering the quantity that is above the accepted quantity. WIP Quality Control will be designed to meet the needs of Work In Progress (WIP) Quality related functions and other activities and thus allows the control like the material inspection before the start of a process and also the inspection of the machines. This module is integrated with the existing Manufacturing module, Inventory management, and the Warehouse Management. 11.1.1 QUALITY CONTROL BUSINESS PROCESSES The business processes that are a part of the Quality process area are • • • • • Material Receipt Quality WIP Quality Finished Goods Quality Hold and disposition of Lots subjected to quaratine Other Time Bound Quality Process o Pest Control o Building Maintenance Lots subjected to Quarantine either received from Production process or purchased goods, subjected for hold and disposition. Decision will be taken according to the tests conducted and suggestions given to solvage the lots. Other related functions of quality can also be organised and fulfilled through the quality control module itself. 11.1.2 • • • • ISSUES IN THE EXISTING SYSTEM Manual intimation for any quality check to be conducted No pre set procedures for all the processes available at ease Manual record maintenance No control over the materials coming into the system - California Software Company, India 209 Business Modeling Report – North American Tea & Coffee Inc. 11.2 MATERIAL RECEIPT QUALITY CONTROL All the material coming into the warehouse has to under go a quality inspection before they can be registered in the system. This is done through the warehouse management module of Navision. The quantity that is accepted by QC only can be registered in the system and can be used for any further action like selling the material. All the other material will be stored in the quality reject location that can be sent back to the vendor at a later point in time. The Material Receipt Quality Control feature in the system will be as follows Inspection Parameters Attached to Item Item Received & Stacked in receiving area Required quality checks automatically generated Quality Check Performed & Completed Only accepted quantity can be Put Away QC Partly/Full y OK - California Software Company, India Rejected qty automatically moved to QC Location 210 Business Modeling Report – North American Tea & Coffee Inc. 11.3 WIP QUALITY CONTROL WIP quality control feature will be used for the inspection of the machines before the start of the process and also for the inspection of the material before every stage of the production process. This quality control process also enables the feature that without the approval of the quality department, the material cannot be forwarded to the next stage of production. The WIP can be checked before the packaging starts to check if the blend is approved by QC, until which the packing operation cannot be started. The process of WIP Quality control is as follows Inspection Parameters Attached to Item/Route Completion of a stage in production Required quality checks automatically generated Quality Check Performed & Completed Only accepted quantity moved to next stage QC Partly/Full y OK - California Software Company, India Rejected quantity can be scraped or reworked 211 Business Modeling Report – North American Tea & Coffee Inc. 11.4 FINISHED GOODS QUALITY CONTROL Finished goods quality control is similar to the material receipt quality control except that the material is received from the production floor and not the supplier. Finished goods, those are to be received by warehouse after packaging, can be inspected before being put away into the warehouse. The process of finished goods quality control is as follows Last Stage of production completed Required quality checks automatically generated Quality Check Performed & Completed Accepted quantity Posted as work order output QC Partly/Full y OK - California Software Company, India Rejected quantity can be scraped or reworked 212 Business Modeling Report – North American Tea & Coffee Inc. 11.5 RECURRING QUALITY INSPECTION The processes of NATC like the Pest control, building maintenance, inspection of tea samples every 15 minutes can be setup in the system and recorded. Any other recurring quality processes can also be configured. The process of the recurring quality inspection will be as follows Inspection Parameters Attached to Item/Route Inspection Parameters Attached to Item/Route Inspection Parameters Attached to Item/Route Completion of a stage in production Required quality checks automatically generated Quality Check Performed & Completed - California Software Company, India 213 Business Modeling Report – North American Tea & Coffee Inc. 12.0 MAINTENANCE MANAGEMENT 12.1 MAINTENANCE – OVERVIEW The application designed will provide utilities for the planning and management of activities and materials related to preventive and corrective maintenance. The planning of preventive maintenance is based on a series of maintenance plans for the machines. The activities, people who must do them, the consumption of materials and spares, the equipment, the measurements to undertake and the instructions for the maintenance activities are defined in these plans. From these plans the system generates a series of proposals with the dates of intervention for a period of time. The preventive Maintenance worksheets are generated automatically from the Maintenance Plans. The supervisor will generate the corrective Maintenance Orders manually. The preventive maintenance interventions are planned. Corrective ones don’t. The corrective ones are created in a simple way at the moment an incident or fault occurs. 12.2 MAINTENANCE BUSINESS PROCESSES The business processes that are a part of the Maintenance process area are • • • • Spare Parts Management Preventive Maintenance Planning Preventive Maintenance Work Orders Corrective Maintenance / Break Down Maintenance Other related functions like the management of needs of material for the maintenance works is also a part of the functionality for the Maintenance Module. 12.3 ISSUES IN THE EXISTING SYSTEM • • • Spares are not maintained The costs associated with the maintenance works are not tracked Preventive maintenance plans are not tracked - California Software Company, India 214 Business Modeling Report – North American Tea & Coffee Inc. 12.4 SPARE PARTS MANAGEMENT The spare parts associated with the maintenance of the machines have to be kept track off. The usage of the parts for different maintenance purposes and the availability of the spare parts will be maintained in the system. The spare parts maintenance feature in the system will be as follows Preventive Maintenance Work Plans Spare parts requirement based on planning policy Automatically suggests purchase of Spare parts Creation and release of Purchase orders Spare parts received and stocked in traceable bins Consumption of spare parts during Maintenance - California Software Company, India 215 Business Modeling Report – North American Tea & Coffee Inc. 12.5 PREVENTIVE MAINTENANCE The preventive maintenance work orders follow a plan that can be for any duration of time. These plans can be run on a daily basis to create the maintenance orders for the work to be done. Workers can also be allocated to the maintenance work orders and the load on each of the maintenance worker can be known. The process of preventive maintenance is as follows Preventive Maintenance Work Plans Setup Auto creation of the work Orders Work Order Released Activities, time & materials consumed recorded Work Order Finished costs Calculated - California Software Company, India 216 Business Modeling Report – North American Tea & Coffee Inc. 12.6 CORRECTIVE / BREAKDOWN MAINTENANCE Breakdown Maintenance is done when there is an emergency breakdown in any of the machines during the production process. The process of creating the corrective maintenance work order for a sudden breakdown is simple to facilitate fast creation of the work order. The process of Breakdown maintenance will be as follows Breakdown recorded and Work order created Work Order Released Activities, time & materials consumed recorded Work Order Finished costs Calculated - California Software Company, India 217 Business Modeling Report – North American Tea & Coffee Inc. 13.0 HUMAN RESOURCE MANAGEMENT Employees are important asset in every company. Administering employee information enables us to register and update personnel information effectively, and it gives us easy access to all employee information. This can be beneficial in providing department managers with useful information; for example, the names of employees with a certain qualification or the name of an employee' s closest relative in case of emergency. ! ! "# # ! "# # Employee leave accruals and other pay elements could be set in the Employee pay controls available in the Epmloyee card. Information about absentism and lateness is available in Navision. - California Software Company, India 218 Business Modeling Report – North American Tea & Coffee Inc. Mapping in Navision [Module >> Granule >> Form >> Functionality] Human Resource Management Current Process Registering and updating employee information Each NATC employee’s information is stored in separate card, on which we enter basic information. Provided below is the list of information we store about NATC employee’s in employee cards Employee Id , First Name, Middle Name, Last Name, Initials, Job Title, Address, City, Post Code, County, Phone No., Mobile Phone No., E-Mail, Picture, Birth Date, Social Security No., Sex, Country Code, Manager , Employment Contract Details, Employment Date, Status, Termination Date, and Grounds for Termination, Absence detail , Position and Job title Apart from the basic employee information the following information we can be added for each employee We can set up qualification codes for various qualifications, both academic and practical, that our employees have. After we have set up the codes, we can assign them to the relevant employees. We can set up relative codes for relatives and/or close contacts of our employees that we may want to contact in case of emergency. After we have set up the codes, we can assign them to our employees. We can set up miscellaneous article codes for employee benefits and miscellaneous articles (such as Uniforms, Boots, keys, computers, desks, and so on) in our employees’ possession. After we have set up the codes, we can assign them to our employees, and thus register the miscellaneous articles with the relevant employees. We can quickly get an overview of the miscellaneous articles that are in our employees’ possession. This can prove useful when employees resign and must return the - California Software Company, India 219 Business Modeling Report – North American Tea & Coffee Inc. company items in their possession. We can set up confidential information codes for confidential information (such as company pension, stock option plan, salary, and so on) related to our employees. After we have set up the codes, we can assign them to our employees, and thus register the confidential information with the relevant employees. We can set up various alternative addresses for an employee. Then we can assign an alternative address code to an employee in the Alt. Address Code field on the employee’s card and indicate the relevant starting and ending dates for the alternative address. We can use alternative addresses to keep track of our employees’ whereabouts; for example, stationed abroad, on longer business trips or residing at a summer residence. If we have to enter information about an employee (other than the information that we enter in the various fields on the employee card), we can enter additional information as text on comment lines. After we have set up all of our employees and the related information, we can view this information in various ways. Leave management : In Human Resources module we can register all employee absences. We can register employee absences on a daily basis or however we see fit. This provides us with updated information on employee absences and allows us to analyze them. Registering Employee Absences Overview of Employee Absences Navision Financials provides us with various ways to analyze and view employee absences if we register employee absences on a regular basis. We can view employee absences for an individual employee or for all employees in the company. This - California Software Company, India is to compare NATC’s rate of 220 Business Modeling Report – North American Tea & Coffee Inc. absenteeism with industry averages or take early notice of an individual employee’s excessive absenteeism. Getting Overview of All Employees'Absences by period or causes of absence We can view all employees’ absences, broken down by periods or causes of absence, from the Absence Registration window. The Absence Overview by Categories window shows all employees’ absences broken down by the various causes of absence. Getting overview of individual employee’s absence by period or cause of absence The Employee Absences window shows all the absences and the date on which they started and ended for each individual employee In the program, we can also view of an individual employee’s absences by categories Assigning Employment Contract Codes to Employees We can set up employment contract codes for the various contracts we use in our company. After we have set up the employment contract codes, we can assign a code to each employee - California Software Company, India 221 Business Modeling Report – North American Tea & Coffee Inc. 14.0 PAYROLL Navision has its own Canadian Version Payroll that has to be procured by NATC. As the payroll is developed to cater specifically to the Canadian industries, it has all the statutory requirements to run Payroll processes in Canada. Some of the reports, which are used in the Canadian industry, have to be developed in Navision to cater to all the requirements of Payroll in Canada. Some of the major process at NATC, which have to be performed in Payroll and their mapping on Navision, are listed below. Current Payroll Processes in NATC Mapping in Navision Maintaining employee Details Statutory requirements for termination of an employee temporarily/permanently Specific requirements of Canada like holiday pay, and payments under any government regulations Employee punches every morning The daily attendance punched detail is printed as report The details are verified by Production supervisor After verification the details are entered manually in prism (against each people name) The details are submitted to payroll centre through Modem The following to be reflected in the pay details Medical Benefit T4 CPP EI The pay is directly sent to bank under each employee head - California Software Company, India All the employees can be registered in Navision all relevant data pertaining to the working of the employee in the organization can be maintained. All the reports, which have to be generated during the termination of an employee, are available as a part of Navision. All the required rules and regulations according to the regulations in Canada will be available as a part of the Canadian Version of Payroll. Every day working hours of the employees has to be booked in Navision A report of the daily attendance of the employees has to be customized in Navision The details can be verified against the report from Navision In Navision you can register your employees’ absences in the Absence Registration window. Navision Local Version of Canadian Payroll has all the features to cater to the local requirements in Canada The Payroll Module offers the facility of a payment Journal that can be used to process payments to employees. For the direct deposit facility, the relevant granule in Navision has to be procured. 222 Business Modeling Report – North American Tea & Coffee Inc. 15.0 BARCODE This function will be used for tracking the materials within the warehouse. Barcodes will be printed during the receipt of materials into the warehouse and will also be used when material has to be picked up for shipment. The code will be used to validate the picking and putting of the material in the appropriate BIN. 15.1 BARCODE FOR THE BIN Barcodes will be printed in each of the BINs which will contain the BIN number and for fixed bins will also have the item number which can be placed in the BIN. These barcodes have to be scanned before the materials can be picked from and put into the BIN. After scanning the barcode on the BIN the barcode on the pallet also has to be scanned and an appropriate message will be displayed depending on the matching of the codes. 15.2 RECEIVING OPERATION The barcodes for the pallets will have to be printed during the receipt of the materials in the warehouse. The barcode will contain the item number, lot number, expiry date, etc which will be used for the identification of the material. 15.2.1 BARCODE PRINTING Receipt of Materials in the Warehouse Barcode will be printed during the receipt of material Barcode will be stuck to all the pallets for tracking End of Barcode Functionality for Receipt - California Software Company, India 223 Business Modeling Report – North American Tea & Coffee Inc. 15.2.2 PUT AWAY OPERATION Duing put away, the barcode in the BIN has to be scanned so that the validation of the BIN address as in the put away document. This will reduce human errors. Put Away Document generated in Navision Barcode in the BIN has to be scanned BIN Number validated and message displayed Message OK N Go to correct BIN Y Place the material in the BIN End of Barcode Function for Put Away 15.3 SHIPPING OPERATIONS 15.3.1 PICK OPERATION While shipping, the pickers will have to scan the barcode on the BIN and then scan the barcode on the pallet, which will be used for verifying if the correct material is being picked. The process is the same as the Put Away operation. - California Software Company, India 224 Business Modeling Report – North American Tea & Coffee Inc. 16.0 EDI INTERGARTION EDI is available as add on module to Navision. The working of EDI can be represented in the following way NATC Customers Navision EDI Service Providers Navision EDI Add On Single Order from NATC Vendors Orders segregrated Customer/Vendor wise Multiple Customers / Vendors EDI will be integrated with Navision when the EDI Add on software is procured by NATC. It has to be ensured that all the required functions are available in the module for EDI (These functions are not Navision dependent). - California Software Company, India 225 Business Modeling Report – North American Tea & Coffee Inc. 17.0 FIXED ASSET MANAGEMENT The Fixed Assets application area provides fully integrated fixed asset management functionality. This functionality will help NATC to effectively and efficiently manage their assets. You can keep track of all information relevant to fixed assets, such as maintenance costs and schedules, acquisition costs, etc. For each fixed asset, unlimited depreciation books can be maintained in order to track the depreciation expense reliably. In addition, you have all the normal methods of depreciation available, plus the ability to create custom depreciation methods. With the flexibility and real-time nature of fixed assets, all the periodic income and expense figures are always accurate and up-to-date. The basic fixed asset granule records, processes, and calculates acquisitions, depreciation, write downs/ups, and the disposal of assets. This granule is also ideally suited for use in the international arena because of the capability to handle multiple depreciation methods. This granule is fully integrated with the other areas of the application. The maintenance granule has the ability to record maintenance and service expenses for each asset. The allocation granule allows you to allocate different percentages of the periodic depreciation expense of a fixed asset to different G/L accounts or different dimensions and dimension values. The reclassification granule facilitates reclassification of a fixed asset or part of a fixed asset from one classification to another, for example from one department to another. It also allows assets to be broken down into several assets, or components of a main asset. If an asset is to be disposed of in part, you will need this granule to first separate the fixed asset into two or more parts. Some of the major business processes that will be carried out in the fixed asset business are • • • • • • • • Purchasing Fixed Assets Calculating and Posting Depreciation Write-Down of Fixed Assets Appreciation of Fixed Assets Fixed Asset Disposal Fixed Asset Reclassification Other processes o Documenting Fixed Asset Transactions o Budgeting Fixed Asset Transactions o Cost-Accounting Depreciation o Minor Assets - California Software Company, India 226 Business Modeling Report – North American Tea & Coffee Inc. 17.1 PURCHASING FIXED ASSETS Fixed assets that are purchased by NATC can be done through the Purchase & Payables Module of Navision. The option of selecting a type of transaction as “Fixed Asset” can be used to do this. By this all the Fixed Assets that are a part of NATC can be registered in the system. The processes of purchasing fixed assets in the system is as follows Purchase Order in Purchase & Payables Specify type as “Fixed Asset” Record the receipt of the Asset as receipt Pay the supplier using the Payment Journal The process of purchasing the fixed asset is the same as any other purchasing operation in the system, except for the type in the purchase order. This feature of Fixed Assets allows easy purchase processing of fixed assets. Location of the fixed asset could be set in the Fixed asset locations page. - California Software Company, India 227 Business Modeling Report – North American Tea & Coffee Inc. 17.2 CALCULATING AND POSTING DEPRECIATION Depreciation is used to allocate the cost of fixed assets such as machinery and equipment over their depreciable lives. For each fixed asset, a depreciation method is defined. There are two ways to post depreciation • Manually using the FA G/L journal or the FA journal • Automatically by running the Calculate Depreciation function By the method of calculating the depreciation manually, the user has to use one of the FA journals to post the depreciation into the General Ledger. By the method of automatic depreciation calculation, the Calculate Depreciation function can be run on a periodic basis. Assets that have been sold, assets that are blocked or inactive on the fixed asset card and assets using the manual depreciation method are ignored. After the calculation of the depreciation, the same can be posted into the general ledger using the journals or by the calculate depreciation function. Write Down of Fixed Assets A write-down is a decrease in the value of a fixed asset. This may be due to the asset becoming out-of-date or damaged. In many cases, a depreciation of an asset is brought about by a tax audit. A depreciation entry may be used as a correction to decrease an asset' s depreciable base when the depreciation of the asset has been too low in the past. This value will be posted like a loss in the financial statement. The write down can be posted into the correct account (write down account) in the general ledger using the FA posting groups setup, where in the default write down account has to be specified. Then using the General Journal or the FA general journal, the user can post the write down value. Appreciation of Fixed Assets Appreciation is an increase in the value of a fixed asset. It can also be used for a fixed asset such as an oil platform that increases in value because of an increase in demand for the item. In many cases, an appreciation of an asset is brought about by a tax audit. An appreciation entry may be used as a correction to increase an asset' s depreciable base when the depreciation of the asset has been too high in the past. This value will be posted like a gain in the financial statement. - California Software Company, India 228 Business Modeling Report – North American Tea & Coffee Inc. 17.3 FIXED ASSET DISPOSALS Salvage Value: Salvage value represents the residual value of a fixed asset when it can no longer be used. The salvage value of an asset can be posted from a purchase invoice or from the FA Journal at the same time as you post the acquisition cost. To post salvage value from a purchase invoice, you will first have to make sure you have added the Salvage Value field to your purchase lines. Enter the salvage value into the field as a positive or negative number and post the invoice as usual. To post salvage value with an acquisition cost through the FA Journal, you will need to enter the salvage value as a negative amount in the amount field. You will also have to add this field to the journal lines. Once you enter your journal lines, go ahead and post as normal. Final Ending Book Value: This feature will often be used to represent a fully depreciated asset that is still active. Using a salvage value allows a reduction in depreciation over the life of the asset. However, some provisions of national law only allow the reduction of the last depreciation amount. You can do this by inserting an ending book value in the FA depreciation book. If you use this feature with most of your fixed assets, you can set up a default ending book value in the selected depreciation book. Disposal of Fixed Assets: When you sell or otherwise dispose of a fixed asset, the disposal value along with any related gain or loss must be posted. A disposal entry must be the LAST entry posted for an asset, so if you have related disposal costs for that asset, you would want to record those in the FA G/L Journal before the actual disposal entry if you need that detail. You will post disposal entries through the FA G/L Journal, the FA Journal or the Sales and Receivables module via a sales invoice. The disposal method is set up for each depreciation book. You select the method in the Disposal Calculation Method field on the General tab of the Depreciation Book Card. The program can handle disposals with two different methods, either Gross or Net. When you use the Net method, you post to either a disposal loss or gain account. This is the most common method. When you use the Gross method, you post to a book value gain or loss account and to a sales gain or loss account. When you enter the sales price in a journal, the program calculates the gain or loss on the disposal and calculates all other required entries. The gain or loss amount will be calculated from the difference between the sales price and the book value. The disposal of the fixed asset can be posted using the FA general journal. Some of the other ways of disposing the fixed assets are as follows • • Partial Write Off Using the Sales Invoice or Sales Order Partial write off can be done using the FA journals itself and the sales invoices or the sales order can be used for the selling the fixed asset. - California Software Company, India 229 Business Modeling Report – North American Tea & Coffee Inc. 17.4 FIXED ASSET RECLASSIFICATION The Fixed Asset reclassification granule of Navision provides with some of the features which are useful for NATC. • • • • Asset Transfer Splitting Fixed Assets Partial Disposal of an Asset Combining Assets Asset Transfer When an asset is purchased in a particular location and then being moved to another location of the same company, then the Reclassification of fixed asset can be done to transfer the asset between locations. In case of NATC, if there is an asset that was bought in Delta and then is being moved to Toronto, then the reclassification feature of Fixed Assets can be used to register the transaction in the system. Splitting Fixed Assets If a fixed asset is bought which involves a number of sub components that can be bought and written off separately, then the reclassification can be used for the same purpose. Example: A tea bag machine could be bought in as a single asset, but later only one part of the machine could be damaged and so to replace the part, the part has to be bought individually and replaced. In that case the machine can be split and the replaced part can be treated as a single asset and accounted in the system. Partial Disposal of an Asset A partial disposal works in the same way as splitting an asset: • • • Set up the new asset for the partial disposal amount first Post a reclassification of the part you want to sell Post the disposal to the new asset This guarantees that the program will calculate the gain or loss of the partial disposal accurately. Combining Assets Similar to splitting of the assets, the system can also be used for combining of the assets. This will be useful when an asset is split up and needs to be considered as a single asset before a write off or any other similar operation on the asset. The reclassification can be used for these purposes also where in different assets can be combined. - California Software Company, India 230 Business Modeling Report – North American Tea & Coffee Inc. 17.5 FIXED ASSET MAINTENANCE Maintenance expenses are routine periodic costs undertaken to preserve the value of fixed assets. Unlike capital improvements, they do not increase asset values. Some of the facilities available in the maintenance function of fixed assets are that, it allows • • • • Setting up of maintenance data for each of that assets Maintenance of information like the maintenance vendor number, the next maintenance date Allocation of the maintenance cost to the fixed asset Maintenance of warranty information of the asset Maintenance Registration and Costs The features available in this application area allows • • • Keeping track of service visits Following up on service visits Recording maintenance costs - California Software Company, India 231 California Softw are Company North American Tea & Coffee Inc. and Navision Manufacturing & Warehouse Customers Sale orders & Forecast Receive Buy and sell items EDI Drop shipment Dry Goods Availability check and Order Planning Delta, Toronto [& US (proposed)] Vendors L Receipts Sales shipments, Sales Returns, Transfer Orders Vendor L Pick list L L L Quality Check? Return to Vendor O.K K Output Post Packing L Post output as finished goods O.K Quality Check? No L Hold L Ship Blending Debit Vendor Internal Pick & Put away Planning A Post consumption L No Production [MRP / MPS] Weighing Yes Is crossdock? Yes Pick list L O.K Put away L Purchase order No Quality Check? Make Buy No Is Product available in Warehouse? - Lot tracking Make or buy? A Manufacturing Items Contract Mfg L Warehouse Direct L Production order Disposal Post rejections No Salvage? Yes No