- Feature
- Financial tags in procurement documents
- Availability
- Generally available in Supply Chain Management 10.0.49
- Industry focus
- Engineering, procurement and construction (EPC) contractors
An EPC contractor building a process plant, a substation or a desalination facility buys an enormous amount of material and equipment. Every purchase has to be traceable to the right work package, contract variation, client cost code or claim reference. Financial dimensions handle the main structure, but there is always a layer of detail that does not justify a new dimension and still matters a great deal.
The industry challenge
Financial dimensions in Dynamics 365 are powerful but deliberately controlled. Adding a new dimension affects account structures, reporting and every posting. EPC contractors therefore tend to keep dimensions for stable concepts like project, cost centre and discipline, and handle more fluid references elsewhere.
Financial tags were introduced to fill that gap: user-defined tags that can be added to transactions for tracking and analysis without changing the chart of accounts. The limitation has been where tags could be captured. If a tag such as a variation order number or client claim reference cannot be added on the purchase requisition or purchase order, it must be added later, typically when the invoice arrives, by someone who may not know the original context.
The result is incomplete tagging, manual rework and difficult conversations when a client asks for all costs related to a particular variation.
What Microsoft delivered in Supply Chain Management 10.0.49
Supply Chain Management 10.0.49 extends financial tags to procurement documents: purchase requisitions, purchase orders, purchase agreements, requests for quotation and ownership-change journals.
Tags can now be captured at the start of the procurement process, by the people who understand why the purchase is being made, and carried through the documents that follow.
Where the value shows up
| Business area | Impact |
|---|---|
| Cost tracking | Variation, claim or work package references captured when spend is committed |
| Client reporting | Easier to show all commitments and costs related to a specific variation or claim |
| Commercial management | Better evidence for change orders and claims |
| Accounts payable | Less manual tagging at invoice stage |
| Data model | Detailed tracking without adding financial dimensions |
A worked scenario
(An illustrative example.) An EPC contractor is building a gas compression station. Midway through construction, the client issues a variation requiring additional piping and valves. The contractor needs to track every cost associated with that variation to support its claim.
The project engineer raises purchase requisitions for the additional materials and adds the variation number as a financial tag. The tag flows into the RFQ sent to suppliers and onto the resulting purchase orders. When the commercial manager prepares the variation claim, she can pull all committed and actual costs carrying that tag directly, rather than asking procurement and accounts payable to reconstruct the list.
Adoption considerations
- Design your tags. Decide which references belong in financial tags and which in dimensions. Keep the list short and meaningful.
- Set validation rules. Where possible, use controlled values to avoid inconsistent spellings.
- Train requisitioners. The benefit depends on people adding tags at the start of the process.
- Check reporting. Make sure reports and analytics read financial tags from procurement documents.
- Pilot on one project. Test the end-to-end flow on a live project before rolling out across the portfolio.
The bottom line
For EPC contractors, the commercial value of good cost tracking is significant: variations and claims are won or lost on evidence. Capturing financial tags on procurement documents means that evidence is created when the spend is committed, not reconstructed afterwards. It is a practical improvement with direct commercial benefits. An experienced Dynamics 365 adviser can help you design a tagging approach that fits your contracts.
Source: Microsoft: What's new or changed in Dynamics 365 Supply Chain Management 10.0.49