About category hierarchies [AX 2012]

Category hierarchies are used to classify products or transactions for reporting and analysis. An organization can create more than one category hierarchy. For example, your organization might create one category hierarchy for classifying products that it buys, and another hierarchy for products that it sells. The number of category hierarchies that your organization uses, and the structure and number of subcategories in each category hierarchy, depend on the reporting needs of your organization.

There are several industry standard classification systems and commodity code systems for reporting to government agencies or industry organizations. Some of the more common examples are Intrastat, UNSPSC, NAICS, eCl@ss, eOTD, and NIGP. Your system administrator can import all or part of an external classification system into Microsoft Dynamics AX. You can also manually create the categories and commodity codes. For more information about how to import categories and commodity codes, see Import categories (form).

After you create a category hierarchy, assign a type to the category hierarchy. The type determines how the category hierarchy appears in Microsoft Dynamics AX. For example, when you assign the Procurement category hierarchy type to a hierarchy, the products from this procurement category hierarchy are displayed in procurement forms such as requests for quotations and purchase requisitions.

The following table lists the available category hierarchy types and the general purpose of each type.

Category hierarchy type	Purpose
Procurement category hierarchy	Use for procurement catalogs and purchasing activities. Only one active procurement category hierarchy can be defined for an organization.
Sales category hierarchy	Use for organizing products for sales activities. Only one active sales category hierarchy can be defined for an organization.
Commodity code hierarchy	Use for compliance with industry standards and government reporting requirements.
Derived financial hierarchy	Use for organizing financial categories that can be derived from account number dimensions. Note This control is available only if the Public Sector configuration key is selected.

When you create a category hierarchy, you can assign attributes to categories to define characteristics of the category. An example of a category attribute is Category manager. When you assign this attribute to a category, you enter the name of the person to contact about products or other items that are assigned to the category.

When you create a procurement category hierarchy you can assign vendors, products, product attributes, policies, and other parameters to each procurement category. For more information about procurement category hierarchies, see the Procurement categories (form).