Dynamics 365 Vendor Master Overview

Summary

• Tutorial explains creating vendor master records in Microsoft Dynamics 365 (ERP).
• Covers direct vendor creation, vendor groups, global Party concept, releasing a Party to multiple legal entities.
• Demonstrates vendor collaboration options, address/contact entry, and changing Party association for restructuring.
• Mentions planned follow-up episode to cover additional mandatory and important vendor fields.

Action Items

• (Next Episode – Presenter) Fill and demonstrate all mandatory and important vendor master fields.
• (Ongoing – Admin) Configure vendor number sequence per legal entity (automatic or manual).
• (Ongoing – Procurement Team) Define vendor groups and optional default terms of payment at group level.
• (Optional – IT/Config) Decide vendor collaboration activation and PO auto-confirm behavior.

Vendor Creation (Procurement & Accounts Payable)

• Navigate: Breadcrumb → Procurement and Sourcing → Vendors → All Vendors → New.
• System auto-generates vendor account when number sequence set to automatic.
• Vendor Type: choose Organization or Person; most suppliers are Organizations.
• Key fields at creation: vendor name, vendor group (mandatory), size (employee count), registration numbers, language.
• Address and contact details can be added directly on the vendor record.

Vendor Groups

• Vendor group is required for vendor creation; limited code length (10 characters).
• Groups created via Procurement and Sourcing → Setup → Vendor Group.
• Vendor group can optionally contain default terms of payment; those can be inherited by purchase orders.
• Typical groups shown: Parts Vendor, Service Vendor, Intercompany Vendor, Other.

Party (Global Address Book) Concept

• Party is a global record in Organizational Administration → Global Address Book.
• Party holds shared master data: name, type (organization/person), addresses, contact channels.
• Party records can be used across multiple legal entities; Party ID is global and auto-generated.
• Creating a vendor from a Party releases the Party into a specific legal entity as a vendor account.
• When releasing, some fields (address, employee count, contacts) are inherited from Party into vendor.

Releasing Party To Multiple Legal Entities

• Create Party in Global Address Book once.
• In each legal entity, open Global Address Book and release Party as vendor.
• Vendor account numbers follow that legal entity’s number sequence: automatic in one entity, manual in another.
• Vendor groups are legal-entity specific; must select or create appropriate group per entity.
• Result: multiple vendor accounts (one per legal entity) linked to same Party record.

Vendor Collaboration (Overview)

• Vendor Collaboration module enables supplier portal access for purchase orders, RFQs, consignment statuses.
• Collaboration activation states:
  • Not Active: portal not enabled for vendor.
  • Active with PO Not Auto Confirm: vendor confirms in portal; system requires manual confirmation too.
  • Active with PO Auto Confirm: vendor confirmation on portal auto-confirms PO in system.
• Vendors can review/modify purchase orders and bids via portal; changes recorded in system.

Change Party Association (Vendor Restructuring)

• Use "Change Party Association" from vendor form to re-associate vendor to a different Party (e.g., after merger).
• Changing association updates vendor name, address, and other inherited fields to those of new Party.
• Useful for internal reorganization, mergers, or consolidations.

Decisions

• Vendor groups should be defined per legal entity for consistent classification.
• Choose PO auto-confirm option based on desired confirmation control (single vs. double confirmation).
• Maintain Party records centrally to support multi-entity vendor relationships.

Open Questions

• Which specific vendor fields will be covered in the next episode?
• Policy decision required: enable PO auto-confirm for vendors or keep manual confirmation for control?
• Should vendor group terms of payment be used globally or set per vendor master only?