Pricing Digits in Dynamics 365 for Finance & Operations

During implementation of Dynamics 365 Finance & Operations, most companies face situations when their pricing needs many more decimal places than available in the system. Right after realizing that usually comes the dilemma – to customize or not to customize. As a general rule, sticking to out of the box functionalities should always be the preference, as that will make upgrades in the future easier. Also, extending the decimal places for pricing will display all over the system, which might cause more annoyance with the users than the benefit. What is the solution, then?

Although Dynamics 365 Finance & Operations only displays 2 decimal places, behind the scenes there are many more and calculations are able to handle more. It just isn’t available for setup and for the user to see. So we have to find a way to set up our prices and let the system handle the calculation, right?

The solution is a setup forgotten way too often, called price unit (not to be confused with the default unit of measure). Although they both are available for sales, purchasing and inventory transactions, let’s follow through an example for purchasing.

Say a company buys miniature nuts and bolts in bulk, but the pricing from the vendor is $0.0355 per piece. Well that is easy, you say, then your unit has to be each, as best practice advises you to set up your units to be what your vendor price is for. Which is true, your purchasing unit has to be piece.

How do I handle the prices then? The initial reaction would be to set up the price as 0.0355, and that is when the age old question of customization comes up. But if you look a little more carefully on that Released product form, you see a field called ‘Price quantity’. The price quantity field is used to determine how many purchase units the price in the ‘Price’ field applies to.

So in the above example, setting up the price to be 3.55 and the price quantity to be 100, instead of having to specify the unit price up to four decimal places, we just utilize the two and instruct the system to do the math. And as mentioned above, it is capable of doing so.

So when creating a PO for 10 pieces, the system will calculate it based on the formula:

(3.55 / 100) * 10 = 0.355 and then will round it up for display to 0.36 for display purposes.

Please feel free to connect with us if you have questions about Dynamics 365 for Finance and Operations.