Punch-Out functionality in Dynamics 365 Enterprise Edition allows users to purchase through vendors without having to store their master data and information such as item numbers, descriptions, and prices. Through the use of external catalogs, purchasing becomes an easier and more streamlined process. To utilize this Punch-Out functionality, you will have to configure some prerequisite setup on the vendor itself, the vendor contact, and the procurement categories as well as the procurement catalogs.
How to Set Up an External Catalog for Punch-Out Procurement
The external catalog should allow a user entering a purchase requisition to redirect to an external site to order products. The products selected to purchase will then return to Dynamics 365 with current information and pricing. From there, you can add these products to the purchase requisition.
Please note that this functionality is not meant to allow users to place an order on an external site. You must set up the external catalog to collect quote information from an external site instead of placing a real order.
For more information on setting up external catalogs and configuring them, please see Microsoft’s documentation.
Setting up an external vendor catalog:
- Set up a procurement category hierarchy. For more information, see Set up policies for procurement category hierarchies.
- Register the vendor in Finance and Operations. Before you can set up configurations to access an external vendor’s catalog, you must set up the vendor and the vendor contact in Microsoft Dynamics 365. The external catalog’s vendor must also be added to the selected procurement category. For more information about registering vendors in Microsoft Dynamics 365, see Manage vendor collaboration users. For information about how to assign vendors to a procurement category, see Approve vendors for specific procurement categories.
- Make sure that the units of measure and the currency that the vendor uses are set up. For information about how to create a unit of measure, see Manage units of measure.
- Configure the external vendor catalog by using the requirements for your vendor’s external catalog site. (See how below)
- Test the vendor’s external catalog configurations to verify that the settings are valid and that you can access the vendor’s external catalog. Use the Validate settings action to validate the request setup message that you’ve defined. This message should cause the vendors external catalog site to be opened in a browser window. During validation, you can’t order items and services from the vendor. To order items and services, you must access the vendor’s catalog from a purchase requisition.
- Activate the external catalog by using the Activate catalog button on the External catalogs page. The external catalog must be activated before employees can use it. You can inactivate the external catalog at any time.
Configuring the external vendor catalog:
- Enter a name and description for the vendor’s external catalog. The name that you enter will appear on the cart that represents the external catalog that is shown to employees who creates a requisition. Employees can click on the cart to open the catalog on the vendor’s external catalog site.
- Add an image by using the External catalog image action. The image will appear on the cart that represents the external catalog that is shown to employees who create a requisition. Note that the image’s width and height must be equal. Otherwise the image won’t be displayed correctly.
- Select whether the vendor’s external catalog website should appear in the same browser window as the one where the employee has created the requisition, or if it should open in a new window.
- Select the vendor for the catalog. In the Legal entities list, there is a row for each legal entity where the vendor is set up. To allow users to request products directly from the vendor’s catalog in some legal entities but not others, you can use the Prevent access or Allow accessbutton for each legal entity where you want the catalog to be or not to be available.
- In the Default expiration (Days) field, enter the number of days that a quotation received from the external catalog is valid and can be used to purchase from the external vendor. When a quotation is created and retrieved from the vendor’s external catalog site, the quotation is valid as of the current system date and remains valid for the number of days that you enter in this field.
- Click the Add button to start mapping the procurement categories to the external catalog. Then, in the Category name list, select a category. The list of categories is a superset of procurement categories that the vendor has been mapped to in all the legal entities that are set up for the vendor. [!NOTE] Procurement policies are used to allow or restrict access to categories for the buying legal entity or receiving operating unit. Punchout to an external catalog requires that access be allowed to at least one of the procurement categories that is mapped to the catalog.
- Set up the cXML setup request message that will be sent to the vendor. The automatically generated message format is the minimal template that is required in order to start a session. Fill in values for the tags.
How to Use Purchase Requisitions with Punch-Out
With this setup and configuration in place, employees can now use the Punch-Out functionality with their purchase requisitions.
- From the Purchase Requisition lines in the Purchase Requisition tab, click the External Catalogs link. A new side window will open on the right.
- Select the vendor from this side window, which will transition you over to their website.
- From here, you can start searching for products and add them to your cart as you would if you were normally buying them.
- Go to checkout and click the Transfer Shopping Cart button. This will place all of the items from the cart into the Dynamics 365 purchase requisition.
- If the user chooses to do, they can update the procurement category with these items.
- Click Add to Requisition, and then the requisition is ready for you to submit it to the workflow for approval and processing into a purchase order.
As you can see, using the Punch-Out functionality with purchase requisitions can greatly expedite processing of the transaction as well as limit exposure to out-of-date information regarding products from vendors.
Check out our video below to see the purchase requisition process in full.