Introduction
This course describes the different Accounts Payable setup options in Microsoft Dynamics AX. It shows setup procedures and defaults used throughout the Accounts Payable module. This course explains topics such as payment options, vendor setup and posting profiles. Microsoft Dynamics AX offers extensive functionality for setting up different vendor payment options. These global payment options are used in the Accounts Payable and Accounts Receivable modules, and include the following: Payment schedules Payment days Terms of payment Cash discounts Methods of payment Payment fees
This course also explains the vendor setup for efficient management of vendors and vendor transactions.
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Payment Schedule
Use payment schedules to pay invoices in installments. Define the following to set up a payment schedule: Number of installments Amount of each installment Due date of each installment
A payment schedule consists of consecutive payments in set time intervals. The payments can be a: A set amount A specified number of payments in which the amount owed is divided to create equal payments
For example, an invoice of 10,000 USD is recorded. It is paid at 2,000 USD each month until the balance is paid. During this period the invoice is not considered past due if the scheduled payments are made on time. This is also known as a finance plan, or contract payments.
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Terms of Payment
Use the Terms of payment form to define all the terms of payment used by a company and the vendors. Use a term of payment for calculation of a due date based on the date of the invoice. Specify terms of payment for each of the following: Vendor in the Vendors form. Customer in the Customers form. Purchase order in the Purchase order form. Sales order in the Sales order form.
Scenario
Contoso has a standard vendor payment term of Net 30 days. If an invoice with a Net 30 payment term ships goods on September 15, and the invoice is dated November 15, then payment is due December 15. With a Net 30 Days settlement, Contoso must pay the net due within 30 days of the invoice date, according to the settlement. After that date, if the payment is not completed, an interest charge of a specified percent per month may be added to the invoice. Other services charges may also apply.
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Payment Days
Use payment days to define the payment day used for calculating due date. The due date always is rounded up to the nearest specified date. Payment day can be specified for one of the following: Day in the week Day in the month
Set up the payment day in the Terms of Payment form on the Setup FastTab to define the payment date used for calculation of the due date.
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Challenge Yourself!
Help Cassie create the new term of payment titled N012 and assign it to the vendor.
Step by Step
Create the new term of payment and name it N012. 1. Click Accounts payable, click Setup, click Payment, and then click Terms of payment. 2. Click the New button. 3. In the Terms of payment field, type N012. 4. In the Description field, type Net 12 days. 5. Click the Setup FastTab. 6. Click the Payment method arrow, and then click Net. 7. In the Days field, type 12. 8. Close the form. Assign the new term of payment to the vendor Southbridge Insurance Co. 1. Click Accounts Payable, click Common, then click Vendors, and then click All vendors. 2. Double- click the record for vendor 8004 (Southbridge Insurance Co.). 3. Click the Edit button on the Action Pane. 4. Click the Payment FastTab. 5. In the Terms of payment list, select the newly created term of payment N012. 6. Close the form.
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Cash Discounts
The following information applies to cash discounts: Accrue if a company meets the vendor payment terms on time, or are given to customers when they pay their invoices in a specified period. Link to the Customer tables and Vendor tables. Post to the ledger account specified for the cash discount automatically if an invoice is settled on time.
Scenario
Contoso obtains a cash discount if it pays vendor invoices within certain dates. Contoso has set up the following codes: 5D10% - cash discount of 10 percent when the amount is paid within five days. 10D5% - cash discount of five percent when the amount is paid within ten days. 14D2% - cash discount of two percent when the amount is paid within 14 days.
The three cash discounts occur sequentially as the cash discount date nears. However, only one cash discount is granted. To specify the cash discounts following the 5D10% code, the 10D5% code is selected in the Next discount code list. On the 10D5% code, the 14D2% code is selected in the Next discount code list. Finally, on the 14D2% code the Next discount code is left blank.
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Payment Fee
Use payment fees to do the following: Specify if any additional charges are added to the vendor invoice. For example, a vendor might add a fee for issuing a promissory note or a company might be charged a vendor bank remittance fee. Define fee identifications, specify bank relations, and identify how to generate fees.
Scenario
Contoso electronically transfers invoice amounts (that are due to the vendor) to its bank. The bank then transfers the money directly into a vendor's designated banking account. After the invoice amount is transferred, a paper remittance invoice is sent automatically to each vendor explaining the specific account the payment is posted to and the amount of the payment issued. To manage the payment fees from the bank, Contoso decides to set up payment fees for vendor invoices.
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4. If the company agrees with the bank to specify the payment, select the payment specifications in the Payment specification field. 5. Select the currency that enables the fee in the Currency field. Only transactions with this currency can enable the fee. If you leave this field blank, all currencies enable the fee. 6. Select the calculation method in the Percentage/Amount list. Select among: o Amount o Percent o Interval 7. Enter the size of the fee in the percentage of the payment or the amount for one payment in the Fee amount field. 8. Select the currency code for the fee in the Currency field.
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Methods of Payment
Many companies offer several methods to pay due invoices, such as the following: Credit Cash in advance Bill of exchange Check and electronic payments
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Challenge Yourself!
Help April set up the method of payment. Attach the new terms of payment and cash discount to the vendor.
Step by Step
Create a new method of payment called SCD, Special Cash Discount. 1. Click Accounts payable, click Setup, click Payment, and then click Methods of payment. 2. Click the New button to create a new method of payment. 3. In the Method of payment field, type SCD. 4. Click the Period arrow, and then click Invoice.
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Assign the new method of payment to the vendor. Also assign the N014 Terms of payment to the vendor, which specifies that the balance is due in 14 days. 1. Click Accounts payable, click Common, and then click All vendors. 2. Double-click Vendor account 4103. 3. Click the Payment FastTab. 4. Click the Edit button on the Action pane. 5. Click the Terms of payment arrow, and then click N014. 6. Click the Method of payment arrow, and then click SCD. 7. Click the Cash discount arrow, and then click 2%D07. 8. Close the form.
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Vendor Groups
Use vendor groups to set up certain information that always defaults when you enter a new vendor. For example, use the vendor group to set up automatic posting to General Ledger accounts for consumption generated by vendor transactions. In the Vendor groups form, set up vendor groups. You must set up at least one vendor group, because a vendor group must be specified when you create a new vendor.
Scenario
Contoso has multiple vendors to monitor. To simplify the management of vendors, Contoso has set up several vendor groups to do the following: Specify ledger posting per vendor group - to specify accounts for each vendor group. You can specify accounts, that is, for vendor debts, an arrival account for a vendor with a corresponding offset account, a receipt account, item consumption account and account for vendor line discounts. Record sales budgets per vendor group - find additional information about how to set up budgets for each vendor group in Financials II training material. Generate trade statistics per vendor group - to generate sales statistics that, for example, show monthly consumption for each vendor group.
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Based on the kind of business that you run, decide which accounts you must set up. The focus of finance is related to consumption and revenue accounts, whereas the focus of logistics is the issue, receipt, and packing slip accounts.
Perform the following to further define parameter values: 1. To access the Accounts payable parameters form, click Accounts payable, click Setup, and then click Accounts payable parameters. 2. Click Ledger and sales tax on the left navigation pane. 3. Click the Posting FastTab and select whether the primary posting should be assigned to Item or Vendor in the Primary receipt posting field. For example, set up the Primary receipt posting list to prioritize the Item. If you buy some of item type B-R14 from vendor 3000, which is part of vendor group 50, the system posts the transaction to account number 510120, because the item relation is more specific than the account relation. Item code All All Table B-R14 Item relation Account code All Group All 50 Account relation Main account 510100 510800 510120
If the posting is set up as illustrated in the following table, and the Primary receipt posting list is set to Vendor, and you bought some of item type B-R14 from vendor 3000, the transaction is posted to account number 510100 because of the Accounts Payable parameter setup.
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Challenge Yourself!
Help April create a new vendor group that has automatic posting.
Step by Step
Create a new vendor group, which is titled 13 for cash vendors. Assign a cash terms of payment and COD settle period. 1. Click Accounts payable, click Setup, click Vendors, and then click Vendor groups. 2. Click the New button to create a new group. 3. In the Vendor group field, type 83. 4. In the Description field, type Cash Vendors for the description. 5. Click the Terms of payment arrow, and then click P007. 6. Click the Settle period arrow, and then click P007. Assign the automatic posting to the new vendor group. 1. 2. 3. 4. 5. 6. 7. From the Vendor groups form, click the Item posting. Select Purchase inventory receipt and click the Add button. Click the Item code arrow, and then click All. Confirm that the Account code field is set to Group. In the Account relation field, type 80 Other vendors. In the Main account field, type 141250. Close the form.
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When you post a vendor transaction automatically, the system searches for the ledger accounts shown in the previous order. Consider the following examples: A posting profile line exists for the vendor, this line is used. No posting profile line exists for the vendor, however, the line specified for the vendor group that the vendor is attached to is used. Neither of these exists, the posting profile line for all vendors are used.
In the Vendor posting profiles dialog box, you can set up many vendor posting profiles. If all vendor transactions are processed together, set up only one posting profile for all vendors.
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Challenge Yourself!
Help April create the new vendor posting profile for group 80.
Step by Step
1. Click Accounts payable, click Setup, and then click Vendor posting profiles. 2. Click the New button to create a new profile. 3. In the Posting profile field, type COD. 4. In the Description field, type Cash on delivery profile. 5. Click the Table restrictions FastTab. 6. Verify the Settlement check box is selected. 7. Verify the Cancel check box is selected. 8. Click the Setup FastTab. 9. Click the Account code arrow, and then select Group. 10. In the Account/Group number, type 80. 11. In the Summary account field, type 211100.
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The base data automatically appears as the default for all transactions involving the vendor. Default information can always be changed.
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NOTE: If alternative delivery addresses are in different states or countries, ensure that you enter the appropriate tax group for each alternative address. You must associate tax groups with a delivery address.
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Challenge Yourself!
Help April create a new vendor.
Step by Step
Create the new vendor. 1. Click Accounts payable, click Common, click Vendors, and then click All vendors. 2. Click the New Vendor button on the action pane to create a new vendor. A new vendor account number will be assigned automatically. 3. In the Name field, type Dakota Travel. 4. Tab to the Group field and type 80. 5. Click the General tab. 6. Click the Miscellaneous details FastTab and then type 10,000.00 in the Credit Limit field. 7. Click the Payment FastTab. 8. Click the Terms of payment arrow, and then click N015. 9. Click the Method of Payment arrow, and then click USAUSD_CHK. 10. Click the Cash discount arrow, and then click 4%D10. 11. Close the form.
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Summary
Payment options in Microsoft Dynamics AX are flexible to accommodate different business processes. You can do the following with payment options: Define terms based on the number of months and/or days, based on a current period (for example, current month or current quarter), and with or without additional months or days. Set up terms of payment for cash payment so that the payment posts automatically when you issue the invoice. Set up advanced payment schedules and use them as terms of payment based on many factors, including the following: o o o Percentage allocation of the actual invoice amount Allocation based on a fixed number of installments Combined amounts and percentages of the invoice amount
Set up cash discounts similar to the terms of payment, based on the following: o o The current period The number of net days
Set up the cash discounts as multiple (for example, ten days three percent and 30 days one percent). You can decide whether you want special ledger accounts to post. Set up Microsoft Dynamics AX to manage the cash discount with or without sales tax to comply with the tax legislation in various countries.
You also can group vendors to categorize information so that it is meaningful. By grouping vendors you can do the following: Set up automatic posting rules for vendor transactions to ensure that the transactions affect the correct accounts. Become aware of situations and trends more quickly by grouping vendors with a common identifier to view and analyze financial causes in more detail. For example, you can group vendors by the kinds of products you purchase from them or by the dollar volume of purchases.
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Solutions
Test Your Knowledge
1. A payment schedule consists of which of the following? ( ) Payments ( ) Consecutive time intervals ( ) Consecutive payments () Consecutive payments in set time intervals 2. What elements must be defined to create a payment schedule? (Select all that apply) ( ) Vendor account () Due date of each installment () Amount of each installment () Number of installments 3. Outline the steps to setting up a term of payment. Place the following steps in order. Step: 1 6 4 3 2 5 : Access the Terms of payment form in Accounts Payable. : Specify the days (or other time unit). : Enter a description. : Enter a terms of payment identifier. : Create a new record. : Select the payment method.
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