Dear AX Gurus,
I have a new implementation that involves trade-ins of used parts that I would like some advice on, in terms of system process in AX 2012. (Apologies in advance for the length of this post.)
The current situation is that customers of large machinery have a requirement to purchase, at regular service intervals, major replacement parts, like an engine of a vehicle. We sell these parts (new or refurbished) to them, and we give them a trade-in value for their old part so that it may be refurbished and sold to them or other customers.
Presently, in the system we are replacing with AX2012, they only invoice the customer for the cost of the replacement part, less the trade-in value of the old part that will be returned. So for an $400K engine, we invoice them $100K, because the old part is still work $300K.
Of course, they are still using the old part when they purchase the replacement, so we allow them 28 days to return it. If they do not return the old part in 28 days, we charge them for the discount they received for the trade-in that his not materialised. (With flexibility and extensions, of course, but eventually...)
So that is the process currently... But how do we go about this in AX?
One thought is to create a single Sales Order, that has the new (or refurbed) part at $400K, as well as the trade-in credit of $300K, thus totaling the correct amount of $100K. At the time of shipment of the new part, only the new part is picked, shipped and invoiced, not the trade-in which will come in at a later stage. But the problem this creates (compared to current process) is that the customer is invoiced for $400K (initially) which may blow out their credit limit and also surpasses the PO authorisation limit of usually the service manager of our customer. A $400K invoice may require the approval of the CEO, while a $100K service invoice is passed right away. There is also some aspects of Australian GST law that might need to be considered, although I am not a finance wiz.
Can anyone think of any other way to do this in AX, and not trip up the credit limits or PO authority limits, yet still control and accurately report that the customer still owes us a returned trade-in? Of course, the client is open to changes to their processes, but mindful that they can't impact their customers too greatly in this competitive environment.
Your considered ideas would be much appreciated and thanks in advance.
- Mark