It’s a good accounting practice to review and monitor changes made to vendor records. Specifically, review and approval may be needed when certain fields are updated. This may include fields on a Vendor such as Organization name, Vendor’s bank account, or Payment terms associated with a Vendor. How can we leverage Microsoft Dynamics 365 for Finance and Operations to monitor and react to these changes in a timely manner? The Proposed vendor changes workflow!
Vendor Approval Setup
Within the Accounts payable parameters page (Accounts payable > Setup > Accounts payable parameters), in the General section, there is a FastTab called Vendor approval. Within this FastTab, there is a toggle to Enable vendor approvals, which will tie the Proposed vendor changes workflow to any selected changes made on a Vendor record and allow a company to set up a review and approval process for any vendor changes. There is also a dropdown called Data entity behavior. Within Data entity behavior dropdown are the options Allow changes without approval, Reject changes, and Create change proposals:
- Allow changes without approval: Allows changes to be made to the Vendor record without review and approval through the workflow process.
- Reject changes: Will reject any change made to the Vendor record. This is beneficial if you work for an agency that creates a new Vendor any time a change is made to an existing vendor.
- Create change proposals: Creating a change proposal will use the Proposed vendor changes workflow to generate an approval process for any acceptable changes made to the Vendor.
Within the Vendor approval FastTab is a list of fields that are found on the Vendor that may need review when they are changed.
The fields listed within this section are as follows:
- Organization name
- Credit limit
- Method of payment
- Payment specification
- Vendor group
- Tax exempt number
- Bank account
- Cash discount
- Credit rating
- Terms of payment
- Vendor price tolerance group
- Invoice account
This is beneficial because it allows organizations to reduce the risk of fraud within an organization. For example, a user who has access to change a Vendor record may update a Vendor’s name, method of payment, and bank account information to their own, sending payments meant for vendor services to themselves. Likewise, users could set up different terms for a vendor without approval from their internal accounting team, which may upset the cash flow situation within an organization, changing how often cash goes out to a Vendor.
Proposed Vendor Changes Workflow
Within Accounts payable > Setup > Accounts payable workflows, there is a workflow used to assist Dynamics 365 F&O users with the review and approval process associated with Vendor changes.
The Proposed vendor changes workflow is a straightforward workflow that relies more on the parameter setup in Accounts payable parameters than it does on any setup within the workflow itself. The workflow is used to define the approval path when a change is made to the Vendor record.
How it Works
When making a change to a Vendor, the following must be true:
- The field has been defined as a field that requires approvals within Accounts payable parameters
- Enable vendor approvals is set to Yes
- Data entity behavior is set to Create change proposals
- The Proposed vendor changes workflow is enabled
In my example, the field Credit limit is set to require approval.
When I navigate to the Vendor record and find the Credit limit field, you will see that the Credit limit field name has been modified to indicate that this is a field that requires approval.
When I modify the Credit limit field, a window will open with my proposed changes.
If these changes are expected, close the screen. You can continue to make changes to the Vendor prior to submitting to workflow.
Once the Vendor changes have been made, you can review Proposed changes or submit to workflow. The status on the Vendor will state Changes not submitted until the workflow has been submitted. No changes will be made to the Vendor record until the workflow has been completed.
Once submitted to workflow, the Vendor status changes to Changes pending approval.
The approver will receive a notification and they can review the Proposed changes to the Vendor. Once the changes are approved, the Credit limit field updates with the new value and the Vendor change status is no longer visible on the Vendor record.
Conclusion
The Proposed vendor changes workflow is a powerful tool that helps Accounting departments control Vendor information and prevent potential for fraud within their purchasing and accounting departments. There are many reasons why a company may choose to implement this, whether it is best practice or an audit requirement.
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