Updated: Feb 24
Below written article will provide you great insight on Sales agreement in D365 and process step to complete it
What is Sales Agreement ?
A Sales Agreement is a contract that commits the customer to buy product in specific quantity or amount over a time in exchange of special price and discount.
Sales Agreements types in D365
Below are the four types of agreement types available in D365. The most popular among organization are product quantity or value commitments amount customers.
Sales Agreement Classification
Agreement Classification is a required field on the Sales agreement form. Classification help organization to group agreement into different types. It will not change the Sales agreement types but only available for or used for reporting and analysis.
Path :- Sales & Marketing > Setup> Sales Agreements > Sales Agreement Classification
Process Flow of Sales Agreement in D365
1. Create Sales Agreements
Path : Sales & Agreements > Sales Agreements> Sales Agreements
Users need to select Customer as mandatory tab and fill other options such as Sales agreement classification, document title etc.
And then click on Ok
Click on Ok will open below page where Header & Lines concept are there as like other forms such Purchase order, Sales Order etc.
Now lets first understand the different types of Sales Agreements and how can we select agreement types in this form
Sales Agreement Commitment Types in D365
1. Product Quantity
Here Customer Made Commitment to Organization to buy a Specific Quantity of Product in a Specific Period
Here User can define the Unit price also if price is also decided for the future sales, then Net amount is automatically calculated, other wise user can define Item, quantity and unit only.
2. Product Value Commitment
Here Customer made commitment to organization to Buy a Specific value or specific Currency amount of Product.
Here Commitment type are defined by an Item Number and Amount only. Here Quantity and Unit fields are inactive
3. Product Category Value Commitment
Here Customer made commitment to Organization to buy a Specific value or specific currency amount in a Sales Category or any specific sales category nodes
Here also Quantity and Unit Fields are inactive.
4. Value Commitment
Here Customer made commitment to organization to buy from Sales Category for a specific amount.
Here also quantity and Unit fields are inactive.
Other Important Setup or Policies for Sales Agreements
In Line Details, General Tab
1-Max is enforced
The total quantity or amount for all order lines can’t exceed the quantity or amount that is specified on the related document.
2- Release Limit
The Minimum release limit and Maximum Release Limit is defined other than zero then zero then the user will receive a warning that the line amount on the order is outside the range, however this will not prevent you from using the agreement
In Line Details, Price & Discount Tab
1. Price and discount are fixed
The price on an order line and the price on the related commitment must be the same. If the price is changed on the order line, the link to the commitment is broken. If the link is broken, the order line doesn't contribute to the fulfillment of the commitment.
In Lines detail, fulfillment tab
Fulfillment tab help user to know the status of Sales Agreement. Through this tab user can identify that how much quantity or amount are released, received, and invoiced.
The Agreement area shows the total quantity or the total amount that the sales agreement line is valid for.
2. Sales Order Confirmation
And now after choosing the default commitment and agreement lines were defined user need to click on confirmation in Sales Agreement tab
Now Sales Agreement will change from Draft stage to Effective
Now Lets Create Sales Order from Sales agreement only by clicking on Release order
Click on Release Order and in Sales Quantity enter the quantity want to sold
Now Suppose out of 1000 quantity, Organization want to create Sales order of 600 quantity now.
After Create Sales Order Detail can be check from Release Order lines
In Sales Agreement page, we can fulfillment tabs to know the status of order, where we can see the overall quantity, remaining, released, delivered and Invoiced details.
Here you see that overall Quantity is 1000, Remaining quantity is 400 and Released Quantity is 600.
Now lets check the Sales Order, Currently its in open order, we need to confirm it by Confirm sales order in Sell tab and can check journal in Sales Order confirmation
Sales Order Confirmation details
Now Suppose out of 600, only 400 want to delivered first. Then we will Create picking list of 400 Quantity and Post it. For detail process Please check out my blog on Order to Cash in D365
Posting slip journal can be viewed in Packing slip journal
Now again we can check our Sales agreement fulfillment tab to know the status
Now lets invoiced the delivered quantity in Sales Order and check again the fulfillment status in Invoiced tab.
Sales Order Invoice Tab
Now Invoice is completed and Journal can be seen in Invoice Journal
Now again let’s check the sales agreement fulfillment tab.
Hope this article provide you great insight on How Sales Agreement work in D365.
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