AX40 ENUS FSI 08-Accounts Payable Daily Procedures part 2

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Chapter 8: Accounts Payable Daily Procedures

CHAPTER 8: ACCOUNTS PAYABLE DAILY PROCEDURES Objectives

The objectives are:

• Explain the Different Invoice Journals • Register an Invoice Journal • Approve an Invoice Register Journal • Create an Invoice excl. Posting • Create an Invoice Journal • Create a Payment Proposal • Run a Payment Proposal for a Marked Settlement • Create a Payment Journal • Generate a Payment • Edit Open Transactions • Reverse Closed Transaction

Introduction This chapter discusses the various Invoice Journals in the Accounts Payable module of Microsoft Dynamics™ AX. It describes what each Invoice Journal is used for and how to enter transactions into each of the journals. Purchasing goods for resale or as materials for manufacturing or services is a large responsibility. Keeping track of those purchases and paying the vendors supplying the goods is just as challenging. Accounts Payable must be monitored closely, and procedures must be put into place to enable management to easily obtain the financial information needed to stay informed about changes in the costs of goods. To give an accurate view of the financial condition of the business, all the expenses that affect the net profit are included in Accounts Payable.

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Microsoft Dynamics AX 4.0 Financials I

Invoice Journals in Accounts Payable The procedure for handling invoices varies from company to company, depending on the company's size, structure and organization. Typically the invoices are:

• Registered • Approved • Paid

Microsoft Dynamics AX 4.0:

• Supports several methods of handling incoming invoices to cater to different company procedures

• Has a different invoice journal depending on the need of the company

The different invoices available are:

• Invoice Register • Invoice Approval Journal • Invoice Pool excl. Posting • Invoice Journal

The following are a few examples of how a company may handle incoming invoices: INVOICE REGISTER→INVOICE APPROVAL JOURNAL→PAYMENT

• Employee A (in the Accounting Department) registers the incoming invoice in the Invoice register and posts the registration.

• Employee A sends the physical invoice to person B for approval. • Employee B approves the invoice − with a signature or a stamp −

and returns the invoice to person A in the Accounting Department. • Employee A registers and posts the approval in the Invoice approval

journal. • Now the invoice is ready to be paid.

INVOICE REGISTER EXCL. POSTING→INVOICE JOURNAL

• Employee A (in the Accounting Department) registers the incoming invoice in the journal Invoice pool excluding posting.

• Employee A sends the invoice to person B for approval.

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• Employee B approves the invoice − with a signature or a stamp − and returns the invoice to person A in the Accounting Department.

• Employee A creates a new Invoice journal, uses the Function button to fetch the invoice from the Invoice pool and posts the journal.

• Now the invoice is ready to be paid. INVOICE JOURNAL

• Employee A enters the invoice directly into a new Invoice journal, approves and posts the journal.

• Now the invoice is ready to be paid.

Invoice Register The purpose of the Invoice register journal is to pre-register invoices when they arrive at the company and transfer them to an invoice pool to be approved. In the invoice register journal, an employee registers the:

• Vendor account • Invoice number • Amount • Person who approves the invoice

The same employee validates and posts the journal to the accounts specified in the posting profile. Usually the accounts are "pending" accounts where the amounts await the manual approval and reclassification by the person specified in the journal line.

Procedure − Register an Invoice for Approval To activate the Invoice register and invoice approval journal it is necessary to select the Invoice register and the invoice approval journal configuration key. Follow these steps to register an invoice for approval.

1. Open ADMINISTRATION→SETUP→SYSTEM→CONFIGURATION→GENERAL LEDGER, select the Invoice register and invoice approval journal check box.

2. Open the invoice register form when the Invoice register and invoice approval journal check box is selected.

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ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE REGISTER

FIGURE 8−1: THE INVOICE REGISTER FORM

3. Select in the Show field, to view Open, Posted, or All journals − the

default is Open.

4. Press CTRL+N to create a new journal and enter the name of the journal in the Name field, or select the name from the selection list that contains journal names with the relevant Journal type. If only one journal name is defined for this type of journal, the field is automatically filled in. Create and define journal names in GENERAL LEDGER→SETUP→JOURNALS→JOURNAL NAMES.

5. The number of the current journal and the description are automatically filled in, in the Journal number field from the Journal names form, but can be overwritten. All subsequent ledger transactions created in this journal contain that journal number. This enables the printing of a list of ledger transactions created in a specific journal. Journal numbering is controlled by a number sequence.

NOTE: Most of the fields on the General and the Setup tabs are inherited from the Journal names form and the Exchange rate form. Explanations to these fields are covered in the topic about journal names and exchange rates.

6. If dimensions are designated on the Journal window, those dimensions can be defaulted on each line in the journal. These defaults can be changed when the line is entered.

7. Click the Lines button to create journal vouchers that can be validated, printed and posted in the Journal voucher.

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NOTE: Alternatively, use the Validate, Approval, Print and Post buttons in this form.

ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE REGISTER→LINES

FIGURE 8−2: INVOICE REGISTER LINES

8. Enter in the Date field, the posting date. The system date (day's date)

is proposed, but can be changed.

9. The Voucher series is automatically filled in, because it is attached to the journal name in the Voucher series field in GENERAL LEDGER→SETUP→JOURNALS→JOURNAL NAMES.

If the number sequence is set to Continuous and no user changes are enabled, the field is skipped.

10. Select in the Account type field, what vendor the invoice should be registered by.

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11. Enter in the Invoice field, the invoice number, and in the Transaction text list, select the text about the transaction. When an offset account is specified, the same text is used, until offset transaction text is specified. Alternatively enter the code for a journal text created in the Journal texts form in the Setup folder.

The invoice register cannot be posted, if an invoice number is not specified.

NOTE: To view the preset Journal texts available for use, click the Functions button and select Journal texts.

12. Enter in the Debit or Credit fields, the appropriate amount in given currency. By using the tab on the keyboard, the pointer automatically jumps to the Credit field. Enter an amount in the Debit field, if entering a credit note.

13. Select in the Sales tax group list, a sales tax group for the transaction. The value is defaulted from the Sales tax group field in Chart of accounts, Customers, Vendors, and so on according to account type.

14. Specify in the Item sales tax group list, the item sales tax group for each journal line. The value is defaulted from the Item sales tax group in the Chart of Accounts. If this field is empty, it is retrieved from the Item sales tax group field on the Sales tax tab page in the General ledger parameters. View the sales tax amount that is calculated on the invoice in the Sales tax amount field. To view, edit or enter additional sales tax to the transaction, click the Sales tax button. Edit or view the calculated taxes for the current line. To edit the sales tax, enter either an adjusted amount in the Adjusted amount in total field, or, open the Adjustment tab page and enter the corrections. To save the changes, click the Apply button. To cancel changes, click the Reset button. Close the window to return to the journal.

NOTE: If the Exempt field in the Chart of Accounts is selected, the field is never filled in, but it is possible to enter a value manually.

15. Specify in the Approved by list, the employee that approves the transaction. In the Approve field in the Journal names form on the Setup tab, restrict the approval function to a specific User group.

16. Enter in the Terms of payment list, the terms of payment for the current invoice.

17. Enter in the Due date field, the due date for the invoice that is calculated by the Terms of invoice payment, but can be changed manually.

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NOTE: The calculation only occurs if an Invoice number is entered.

18. Enter in the Payment ID field, the payment identification used upon payment. If payment proposal is used the payment id from the invoice/credit note is suggested, but can be changed.

19. Specify in the Purchase order list, the purchase order numbers pertaining to this invoice.

NOTE: The Purchase order field is only used for information.

20. Select in the Method of payment list, the payment method that is used on the current payment, invoice or credit note.

21. Specify in the Payment specification list, the payment specification, if any, for the current method of payment.

22. Specify in the Currency list this currency is being used. Usually, this field is automatically filled in if the currency is set up in Customers, Vendors, Journal names or in the Company information. If it is necessary, fill in other relevant fields in the Currency field group.

NOTE: In the Validate currency code in Chart of Accounts set up validation rules for the use of currency.

23. Select in the Cash discount list, the code for the cash discount for subsequent approval.

24. Enter in the Cash discount date field, the latest payment date to qualify for a cash discount, calculated based on the Cash discount field, but can be changed manually.

25. Enter in the Discount amount field, the cash discount amount included in the payment.

When payment is made before the deadline, the specified amount is redeemed and posted automatically by the open-post system. The cash discount information can also be set up on the Cash discount tab.

26. Identify in the Account identification list, bank account of recipient. Create the vendor's bank account in Bank accounts. Select ACCOUNTS PAYABLE→VENDORS→SETUP→BANK ACCOUNTS.

27. Select in the Posting profile list, on the General tab, the posting profile for the transaction, defaulted from the setup for the customer or vendor. A posting profile must be specified for every update of, for example, a vendor, customer, to fixed assets transactions.

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28. Select in the Offset account list, the account number for the current Offset account transaction type, and select an offset transaction text in the Offset-transaction text list.

NOTE: It is possible in the Chart of Accounts to set up a default Offset account that automatically appears in this field.

29. Enter in the Document field, the number, or name, of the document that is the basis of the transaction.

30. Enter in the Date field, or view a date for the document, for example, for a purchase invoice, the date determines Due date and Cash discount date. Refer also to the Use document date for vendor field in the Purchase parameters.

31. Set up on the Dimension tab, the dimensions for the invoice register transaction. If dimensions are designated in the Journal form, they default on each transaction. Override any of those defaults at this time or enter dimensions if no defaults are set up in the Journal window.

32. Click Post when all the invoice journal lines are entered, to post the invoice journal.

HINT: To delete a journal line, highlight the line and either click the Delete button from the Toolbar or click the Functions button and select Delete journal lines. The lines posted in the Invoice register are transferred to the Invoice pool and the physical invoices are given to the person who must approve them. The person approves − with a signature or a stamp − and returns the invoices to the Accounting Department. When they return, the accountant registers the approvals in the Invoice approval journal and posts them. After that, the invoice is ready to be paid, and the amounts are posted to the real cost accounts. BEYOND THE BASICS: If the invoice register is not being used or if most of the incoming invoices do not have to be approved, just enter the vendor invoices directly into an invoice journal. Make sure that the invoice is approved. The relevant check box for this is located on the General tab page. Set the default value for the check box to be checked under Journal names in the Ledger module. Enter the invoice number of the incoming invoice under the Invoice. When the invoice is registered, the tax can be refunded by the tax authorities as long as the invoice is registered. This means the tax handling is associated with the invoice and not the actual payment. This is relevant for non-U.S. tax handling.

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Invoice Approval Journal After posting the lines of the Invoice register, the postings are shown in the Invoice pool. The Invoice pool form is located in Accounts Payable in Inquiries.

ACCOUNTS PAYABLE→INQUIRIES→INVOICE POOL

FIGURE 8−3: THE INVOICE POOL FORM

Working with the Invoice pool:

• The Invoice pool displays the relevant information about the invoices awaiting approval. – If it is necessary, run a report with a list of invoices awaiting

approval. Select ACCOUNTS PAYABLE→REPORTS→STATUS→ INVOICES NOT APPROVED. In the query window specify by: o Vendor account o Employee o Due date

– If the report is by employee, give the report to the relevant

persons, thereby reminding them to approve the invoices. NOTE: All tabs and fields on the Journal window are discussed in the Invoice Register section of this manual.

• The invoice pool holds invoices originating from a purchase order that originate from an invoice register. Click Purchase order to select and approve the purchase orders.

• Create an invoice approval journal to approve the invoices received from vendors and make them ready for payment. These invoices are posted to temporary accounts and are awaiting approval.

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Procedure − Approve an Invoice Register Journal Follow these steps to create an approval journal.

ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE APPROVAL JOURNAL

FIGURE 8−4: THE JOURNAL APPROVAL FORM

1. Select the approval journal in the Name list, and fill in the relevant

information about the different tabs. The procedure is similar to creating an invoice register. Refer to the procedure on how to Create an Invoice Register Journal to view the field explanations.

2. Click Lines to open the invoice approval lines form.

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ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE APPROVAL JOURNAL→LINES

FIGURE 8−5: THE INVOICE APPROVAL JOURNAL LINES FORM

3. To transfer the voucher to the journal for approval, click Fetch

vouchers.

4. Select the invoice vouchers that have been approved, click Select to move them to the lower pane, and then click OK. Or to select all the vouchers, click Select all, and then click OK.

HINT: To remove the voucher(s) from the window after selecting them in the Fetch vouchers window, click the Remove vouchers button.

5. In the Invoice approval lines form, select one of the vouchers in the upper pane of the Invoice approval journal form. In the lower pane, view the transaction lines that are created when the voucher is posted.

6. Ledger accounts from the temporary posting are already selected for these lines, but it is necessary to select the appropriate ledger account for the "open" line.

7. Click Validate and Validate voucher only to run a check that the invoice in the upper pane is ready for posting.

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8. Select the next invoice in the upper pane, and enter the account information in the lower pane.

9. Continue steps 5−7 until account information is entered for all the invoices.

HINT: Instead of validating each line, click Validate and Validate when the account information is complete for all the invoices.

10. Click Post, and the posted invoices can now be settled in the Payment journal.

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Lab 8.1 − Invoice Register Journal Scenario: As the accounts payable coordinator at Global Trade & Manufacturing Company, one of your tasks is to create invoice registers and approve invoices. Your typical workflow is to create invoice registers on Monday, view the invoices to be approved in the invoice pool on Tuesday, and if there are enough to process, approve the invoices using the invoice journal on Tuesday and Wednesday. These are the details: Field Value Invoice register Inv_R Vendor account 3002 Invoice number INV123 Transaction text Invoice Credit 150 Approved by BKD Terms of payment D30 Cash discount 7D4 Invoice approval Inv_A Invoice approval description Invoice approval Invoice offset account 601500

Challenge Yourself!

• Remember to use the Invoice register, the Invoice pool, and the Invoice approval journal.

• Remember the workflow outlined in the scenario.

Need a Little Help?

1. The Invoice register and the Invoice approval journal are in Journals.

2. The Invoice pool is in Inquiries.

3. The approver must be specified in the Approved by field in the Invoice register.

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Invoice Pool excl. Posting Working with the Invoice pools excl. posting:

• The Invoice register excl. posting is another type of journal available in the Accounts Payable module.

• Using it represents another procedure for handling incoming invoices, although it is similar to the Invoice register with posting. – The difference is the lines cannot be posted − they go directly

into the invoice pool. – To post the lines, create a new Invoice journal, and then click

Functions. Then select Invoice pool and accept the individual invoices in the pool after approving them.

• If the Invoice pool is activated by accessing the Invoice pool excl.

posting item in the Accounts Payable menu, the invoices shown on the window are registered invoices not yet approved. Although the invoices are not posted they are registered in the system.

• Use the Invoice journal to transfer the invoices for approval and posting.

Procedure − Create an Invoice excl. Posting Following these steps to create an invoice without posting it.

ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE POOL EXCL. POSTING

FIGURE 8−6: THE INVOICE POOL EXCL. POSTING FORM

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1. Enter the information necessary to create an invoice excluding posting. The fields are the same as described previously in the Invoice register section.

2. Click ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE JOURNAL→LINES to open the Invoice journal lines form to transfer the invoice pool excl. posting record for approval and posting.

HINT: A report can be printed with information about the invoices not approved, this is a good reminder, and the report is activated through the Print button.

3. Click FUNCTIONS→INVOICE POOL in the Invoice journal lines form to fetch the invoice from the Invoice pool excl. posting form.

4. Select one or several invoices in the Invoice pool excl. posting form, and then click Accept to transfer the invoices to the invoice journal lines.

5. Verify the information is correct when the invoice is transferred to the Invoice journal lines form and then click Post to post the transactions.

When the invoice is posted, it is ready to be paid.

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Lab 8.2 − Invoice Pool Excl. Posting Scenario: You are the accounting manager at Global Trade & Manufacturing Company. You are training a new accounts payable coordinator on how to post invoices, and have asked he or she to enter invoices to the invoice pool. To review all his or her work, you ask the accounts payable coordinator to enter the invoice into the Invoice pool excl. posting. As soon as the invoices are entered, review and approve them in an Invoice journal. These are the details: Field Value Vendor account 3002 Transaction text Invoice Credit 1000 Invoice number INV777 Invoice journal name Vend_I Invoice journal description Vendor invoice Approver BKD Offset account 601500

Challenge Yourself!

• Complete the tasks of the accounts payable coordinator. • Then complete the tasks of the accounting manager.

Need a Little Help?

1. Designate an approver while in the Invoice pool excl. posting form.

2. Approve the invoice while in the Invoice journal.

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Invoice Journal A third option for processing incoming invoices is to enter them directly into the Invoice journal.

• The invoices are by default approved by the user who is logged in and who enters the journal lines.

Validate and post the lines after entering the necessary information. The invoices are now ready for payment.

• The Invoice journal is designed for entering the invoices received from vendors without using the approval journal. As soon as the incoming invoices are entered, they can be posted.

NOTE: All tabs and fields on the Journal window are discussed in the Invoice Register section of this manual.

Procedure − Create an Invoice Journal Follow these steps to create an invoice journal.

1. Press CTRL+N in ACCOUNTS PAYABLE → JOURNALS → INVOICES → INVOICE JOURNAL to create a new invoice journal.

2. Select a journal name in the Name list, and enter the other relevant information. Refer to the topic about invoice register for field explanations.

3. Click Lines to open the Invoice journal lines form.

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ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE JOURNAL→LINES

FIGURE 8−7: THE INVOICE JOURNAL LINES FORM

4. Select in the Account type field, what account type should be used

for the general journal transaction. The different account types are Ledger, Customer, Vendor, Project, Fixed assets, and Bank. Use Ledger, Customer, and Vendor when the transaction is posted in the respective account. For example, when recording a vendor invoice and specifying Vendor as Account type, posting occurs in the current vendor account. At the same time, posting occurs automatically in the vendor summary account in General Ledger.

5. Select in the Transaction text list, the text about the transaction. When an offset account is specified, the same text is used, until offset transaction text is specified. Alternatively enter the code for a journal text created in the Journal texts form in the Setup folder.

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NOTE: To view the preset Journal texts available for use, click the Functions button and select Journal texts.

6. Enter in the Debit or Credit fields, the appropriate amount in given currency. Use the Debit field to make a credit note.

7. Specify in the Offset account type list, the account type as:

– Ledger – Customer – Vendor – Project – Fixed assets – Bank

Use Ledger, Customer and Vendor when the transaction is posted in

the respective account. When, for example, recording a vendor invoice and specifying Vendor in Account type, posting occurs in the current vendor account. At the same time, posting automatically occurs in the vendor summary account in General Ledger. Use Project and Fixed assets to post to a specific Project number or Asset number. Use Bank if a bank account transaction is involved, and the transaction is used later for reconciliation in the Bank management module.

8. Specify the offset account type selected in the Offset account type

list.

9. Press the Down Arrow key to create a new line, and then enter information about the next voucher.

10. Click Validate after entering all the voucher lines, and then click Validate (or Validate voucher only). This validates that all the lines (or the selected lines) are ready for posting.

The lines are now ready to be posted in the Journal voucher form or in the Journal form.

Validate and Post After transactions are entered into Microsoft Dynamics AX 4.0 they must be posted to update the Vendor Account and General Ledger Account balances. Validating and Posting can be done from two different forms in a journal.

• The Journal Header page • The Journal Voucher page

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The process is the same regardless of which window is used.

Validate The Journal should be validated before being posted. The Validate process makes sure that the journal is correct. For example, it checks that all mandatory fields are filled in and that the journal balances. To validate a journal, click the Validate button from either of the forms. ACCOUNTS PAYABLE→JOURNALS→INVOICES→INVOICE JOURNAL

FIGURE 8−8: EXAMPLE OF VALIDATE BUTTON IN THE INVOICE JOURNAL FORM If the Journal is:

• Correct, a window appears with the message: “Journal is OK.”

• Incorrect, a window appears with details of what is incorrect. If a Journal does not validate correctly, it cannot be posted.

Post After the Journal is validated, it is ready to be posted. To post the journal, click the Post button from either of the previous windows. There are two options to choose from:

• Post − Posts the journal (provided no errors). • Post and transfer − Posts all correct vouchers in the journal and

transfer the lines with errors to a separate journal.

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Lab 8.3 − Invoice Journal Scenario: You are the new accounts payable coordinator. The accounting manager has asked you to enter an invoice into an invoice journal, validate the journal, and then post it. These are the details: Field Value Invoice journal name Vend_I Invoice journal description Vendor invoice Vendor account 3002 Invoice number INV879 Transaction text Invoice Credit 1300 Offset account type Ledger Offset account 211320

Challenge Yourself! This entire lab is done in one journal.

Need a Little Help? Remember to validate the journal before posting it.

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Payment Journals When the invoice is registered, approved, and posted, it is time to pay the invoice. Working with Payment journals:

• Payments are created through the Payment journal. This is located in the Payments folder under Journals.

• Use the Payment journal to enter and post payments. Make payments and enter them into Microsoft Dynamics AX 4.0 according to the terms of payment established with the vendors. In the Payment journal there are several ways to create payment lines: – Click Payment proposal. – Click Functions and select Settlement. – Create a journal line and enter the payment details manually.

• There are two different methods for selecting the invoices to pay

through the Payment journal. – The Payment proposal option searches for invoice lines that meet

certain search criteria selected – The Settlements option is used to select the specific invoice lines

to pay

• When all the payment lines are created use the Generate payments command on the Functions button to generate the payment. This is the selected method of payment and the setup of controls if Microsoft Dynamics AX 4.0 should, for example, print checks or create a payment file.

NOTE: All tabs and fields on the Journal window are discussed in the Invoice Register section of this manual.

Payment Proposal Payments made to vendors must be posted to make sure Accounts Payable information is reconciled with General Ledger information.

• Payment proposal searches for payment lines that are either due or have a maximum date for receiving a cash discount.

• The Payment proposal function checks vendor transactions that are open and approved.

Only transactions with either a due date or a cash discount date are included in the search. As soon as the payment lines are generated, edit them in the payment journal.

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Procedure − Create a Payment Proposal Follow these steps to create a payment proposal.

1. Open the Payment proposal form by clicking ACCOUNTS PAYABLE→ JOURNAL→PAYMENT→PAYMENT JOURNAL→LINES→PAYMENT PROPOSAL→CREATE PAYMENT PROPOSAL.

FIGURE 8−9: PAYMENT PROPOSAL

2. Select in the Vendor payment proposal form, the type of payment

proposal to create in the Proposal type field. Choose to create the proposal by due date, cash discount date, or by both due date and cash discount date.

– Select Per due date to transfer the set of vendor payments that are due.

– Select By cash discount to transfer the set of vendor payments that fulfills the criteria for obtaining a cash discount.

– Select Due date & cash discount to transfer the set of vendor payments that fulfills the criteria for obtaining a cash discount and after that to transfer vendor transactions proposed after the due date.

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3. Click the Select button to select specific vendors or a range of vendors.

4. Select the Generate check box to open the Edit payment suggestions form with invoices to be paid.

5. Enter in the Amount limit field, the total amount to be selected for payment.

6. Enter in the Transaction limit field, the maximum lines to be paid.

7. Enter in the From date and To dates fields, the period for the customer transactions to be included in the payment proposal.

8. Enter in the Minimum date field, the lowest date for the payment.

9. Enter in the Total payment date field, the date the payment is requested.

10. Add other criteria as appropriate in the other fields on the Vendor payment proposal form, and then click OK.

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ACCOUNTS PAYABLE→JOURNALS→PAYMENTS→PAYMENT JOURNAL→ LINES→PAYMENT PROPOSAL→CREATE PAYMENT PROPOSAL→OK

FIGURE 8−10: THE VENDOR PAYMENT PROPOSAL FORM

– Payment proposal lines meeting the criteria appear in the lower

Payment proposal pane. – When selecting a payment proposal line, view the open invoice

transactions that contribute to the payment proposal line in the upper Open transactions pane.

– Inspect each proposal line and the associated open transactions, and make sure they are ready for settlement. For example, when deleting an open invoice from the open transactions lines if unsatisfied with the items and not wanting to pay the invoice. To delete a line, place the pointer on the line and press ALT+F9. To change certain fields on several lines in one operation, select the lines, click Multiple change, and fill in the values to be implemented.

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HINT: Select the Link check box to synchronize the two parts of the form. When checked the Open transactions pane only shows transactions related to the current payment suggestion. The open transactions are updated when moving between payment suggestions.

11. Click Transfer to move the proposal lines to the payment journal

when all the lines proposed are inspected.

12. Continue in the Payment journal lines form, to edit the lines in the payment journal if it is necessary.

13. Check the balances of company bank accounts to make sure the payments can be made. To view the balances, click INQUIRIES→ BALANCE CONTROL.

14. Click Validate when satisfied, to validate the payment lines, and then click Post to generate the payments.

Use the Settlement option as a second option for selecting invoice lines to pay.

Procedure − Mark for Settlements Follow these steps to run a payment proposal for a marked settlement.

1. Select a vendor account in the Account field in ACCOUNTS PAYABLE→JOURNAL→PAYMENT→PAYMENT JOURNAL→LINES.

NOTE: A Vendor account and Currency must be entered to choose the Settlements option.

2. Click FUNCTIONS→SETTLEMENT to open the Open transaction editing

form.

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ACCOUNTS PAYABLE→JOURNAL→PAYMENT→PAYMENT JOURNAL→LINES→FUNCTIONS→SETTLEMENT

FIGURE 8−11: SETTLEMENTS

3. Select the Mark check box to transfer the invoice to the Vendor

payment proposal form. Mark one or several invoices for settlement.

NOTE: A red mark shows in the Is marked field if a transaction is already marked for settlement.

4. Select the Payment proposal check box and close the form when

marking the invoices for payment. When closing the Open transaction editing form, the Vendor payment proposal form prompts and shows the payment proposal and the open transactions.

5. Modify the transactions in the Vendor payment proposal form. Click Transfer to move the payment suggestions to the payment journal lines to make the payment.

6. Verify in the Payment journal lines form, the information is correct.

After selecting the appropriate invoice lines to pay, generate the payments for these invoice lines. The Generate payment functionality settles the invoice lines and prints the checks to be sent to the vendor(s).

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Procedure − Create a Payment Journal A payment journal can also be created by manually entering the invoice information. Follow these steps to create a manual payment journal.

1. Press CTRL+N in ACCOUNTS PAYABLE → JOURNALS → PAYMENT → PAYMENT JOURNAL, to create a new line.

2. Select a payment journal in the Name field.

3. Enter information in other fields as appropriate and then click Lines.

NOTE: Some fields in the journal contain default values assigned to the journal from the Journal names form, and these fields are not usually edited.

4. Enter values in the relevant fields in the first line on the Overview

tab of the Journal voucher form. Some fields may be filled in automatically with values from fields in the Journal form.

NOTE: Some journals are more limited, such as the Invoice register form, and not all fields listed in the example are available.

5. Make entries in the following fields:

– Account Type – Account – Transaction Text (This is optional, but eases the entry of lines

in the journal because the pointer automatically goes to the appropriate Debit or Credit field.

– Enter an appropriate amount in the Debit or Credit field. – Select an Offset Account Type in the Offset account type list. – Select an offset account in the Offset Account list. – Press the Down Arrow key to create a new line, and then enter

information about the next voucher.

6. Click Validate after entering all the voucher lines, and then click Validate (or Validate voucher only). This validates that all the lines (or the selected lines) are ready for posting. Also validate all the journal lines in the Journal form. Post the lines in the Journal voucher form or in the Journal form.

7. Click Validate to validate the payment line, and then click Post.

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NOTE: Click INQUIRIES→BALANCE CONTROL to make sure the bank account can cover the payment to the vendor.

When the payment journal is created, it is ready to be paid. The procedure on how to generate payments is the same for:

• Payment proposals • Settlements • Manual payment journals

Procedure − Generate Payments Follow these steps to generate a payment. ACCOUNTS PAYABLE→JOURNALS→PAYMENTS→PAYMENT JOURNAL → LINES → FUNCTIONS→GENERATE PAYMENTS

FIGURE 8−12: GENERATE PAYMENTS

1. Select the method of payment for the invoice lines being paid in the Method of payment list. For example, if a check payment is being made, select the method of payment for checks. Alternatively, select an export format in the Export format list.

2. Select in the Bank account list, what bank account the payment should be withdrawn from.

3. Click Dialog if paying with checks, fill in the fields and then click Document to print the check.

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ACCOUNTS PAYABLE→JOURNALS→PAYMENTS→PAYMENT JOURNAL→LINES→FUNCTIONS→GENERATE PAYMENTS→DIALOG

FIGURE 8−13: PAYMENT BY CHECK

4. Click OK to print the checks.

5. View the status of the payment in the Status field in the Payment journal lines form. When the payment is generated the status is set to Sent.

6. Click Post to update the vendor account and General Ledger account balances.

NOTE: To print checks, before running Generate payments run the Create checks process in Bank management. For information about this refer to the Bank Management section of this manual.

CAUTION: Before checks are printed, make sure the printer has the correct checks ready to print.

NOTE: To void checks after they are printed, click Payment status and select Reject.

CAUTION: As soon as checks are printed, the journal lines cannot be deleted unless the checks are voided.

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Lab 8.4 − Payment Journals Scenario: You are the accounts payable coordinator at the Global Trade & Manufacturing Company. One of your colleagues has just returned from the annual Microsoft conference called Convergence. He or she has submitted their expenses using an outside travel agency called Desk World. Your task is to register and post the invoices in Microsoft Dynamics AX 4.0, each in a separate journal. These are the details:

A. Airfare for trip to Convergence

Date System date Invoice 1000 Amount $550 Approver Ezio Alboni

What is the due date of this invoice? How is this calculated? Validate and post this invoice.

B. Hotel for trip to Convergence


What is the cash discount date and amount available for this invoice? How is this calculated? Validate and post this invoice.

C. Car Rental for Trip to Convergence


Validate and post this transaction. What is the current vendor balance?

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D. Now that the above invoices are registered, the approvals must be posted. Post the approvals for all three of the above transactions in one journal. Enter the expense accounts to balance each line item:

• For the Airfare line use account 601500 • For the Hotel line use account 601500 • For the Car Rental line use account 601500

After completing the necessary steps, validate and post this journal. What happens when trying to validate the journal? Why? Make the appropriate edits and validate the journal again. Post the journal. Generate the payment(s) for this invoice. Print, validate, and post the payments.

Challenge Yourself! Remember to validate the journals before posting.

Need a Little Help?

1. Add the Approved by at the time that you register the invoice.

2. Validate the journals.

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Edit Open Transactions Use the Open transactions editing form to make changes in transactions for vendors or customers. Only unapplied transactions are available for editing. Use the Open transaction editing form for example, to settle invoices and payments that are not settled in the payment journal. The following procedures cover:

• Settling invoices and payments. • Specifying a cross rate between invoices and payments. • Reorganizing transactions with new due dates.

Settle Invoices and Payments When settling invoices and payments:

• If the amount paid is greater than the amount due: The invoice is settled and a payment transaction is created for the

amount by which the payment exceeded the amount due.

• If the payment amount is less than the amount due: The payment is subtracted from the amount due and the invoice

remains open.

• If the amount paid equals the amount due: A payment transaction is generated for the payment amount, and the

transaction is closed.

Follow these steps to settle invoices against payments or make corrections to open transactions.

1. Select VENDORS→FUNCTIONS→OPEN TRANSACTION EDITING from the Accounts Payable module.

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ACCOUNTS PAYABLE→VENDORS→FUNCTIONS BUTTON→OPEN TRANSACTION EDITING

FIGURE 8−14: THE OPEN TRANSACTIONS FORM

2. Select the relevant postings to settle.

NOTE: In the Is marked field, a red icon appears if a transaction is already selected for settlement. When the transactions are settled they disappear from this form transfer to Closed-transaction editing.

3. Place the pointer on the primary payment line, if any, and select the

Primary payment check box. The purpose of a primary payment is to get a more correct history or select the basis currency used for cross rate.

4. Click Update. The selected vouchers offset each other. If a voucher is not settled in full, it is recorded as Open.

In some cases, it is convenient there is an automatic settlement of invoices and payments. For example, if a company must handle many small vendors with few payments.

5. Open ACCOUNTS PAYABLE→SETUP→POSTING PROFILES to make automatic settlement, select the relevant vendor posting profile and on the Table tab select the Settlement check box.

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Lab 8.5 − Edit Open Transactions Scenario: You are the accounts payable coordinator at the Global Trade & Manufacturing Company, and have placed an order with Desk World for 200 R-12 batteries (B-R12). A week later, you create and post a payment journal for $300.00, and during week-ending processing, edit open transactions, including this transaction. You mark and update the transactions.

Challenge Yourself! Remember to mark both the invoice and the payment lines.

Need a Little Help?

1. Create and post a purchase order.

2. Create and post a payment journal.

3. Edit open transaction lines.

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Reverse Settlements Working with reverse settlements:

• Use the Closed-transaction editing window to edit fully applied or settled transactions that are in history.

• Use reverse settlements if the bank does not honor a payment, or when the wrong date or settlement amount is used.

• A settlement is not a transaction, but a link between the payment and the invoice. A settled invoice finishes the job.

• An unsettled invoice is considered not paid, and is handled with collection letters.

Scenario − Reversing Settlements In the Global Trade & Manufacturing Company, the accounting manager reviews and approves the Accounts Receivables and Accounts Payables transactions. The accounting manager realizes that a consulting fee is paid two times and wants to reverse the settlement.

Procedure − Reverse Settlements Follow these steps to reverse a closed transaction.

ACCOUNTS PAYABLE→VENDORS→FUNCTIONS BUTTON→CLOSED-TRANSACTION EDITING

FIGURE 8−15: CLOSED TRANSACTION EDITING

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1. Select VENDORS→FUNCTIONS →CLOSED-TRANSACTION EDITING from Accounts Payable.

2. Place the pointer on the line that contains the settlement to reverse.

3. Select a line that contains the settlement to reverse.

4. Select the Mark field to reverse the invoice or payment that is associated with the settlement. The Mark field of the transaction that offsets the transaction marked is automatically selected.

5. Click Reverse.

As soon as the desired changes are made, the settlement amount is changed, corrections are made, and the status changes. History displays an overview of settlements for the current voucher.

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Lab 8.6 − Reverse a Closed Transaction Scenario: You are the accounts payable coordinator at Global Trade & Manufacturing Company, and realize the last transaction posted for Vendor account 3002 should have been posted to Vendor account 3020. You go back into Microsoft Dynamics AX 4.0, reverse the transaction, and check the history to make sure the transaction is reversed correctly. Then make a note to enter the transaction correctly in the morning.

Challenge Yourself! Use the Functions button.

Need a Little Help? Closed transactions can be reversed using the Closed transaction editing function.

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Conclusion Microsoft Dynamics AX 4.0 offers several important features for managing Accounts Payable. For example:

• Several options for recording vendor invoices including a two-step posting for separate handling of approved and unapproved invoices, and the option to match vendor invoices to physical deliveries of goods.

• Payment proposals. Microsoft Dynamics AX 4.0 enhances the preferred procedures for handling financial interactions with both simple and advanced options. If recording invoices for every date, do so in the invoice pools. Approved invoices can be recorded directly in the invoice journal. To know liabilities at any moment, be able to forecast cash flow and follow up on unapproved invoices, post unapproved invoices on special intermediate ledger accounts using invoice register. Approved invoices can be posted quickly in the second step of this procedure in the invoice approval journal.

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Test Your Knowledge − Accounts Payable Daily Procedures

1. Name three methods a company can use to handle incoming invoices using Microsoft Dynamics AX 4.0.

2. What are the different invoices available in Microsoft Dynamics AX 4.0?

3. What is the Invoice pool used for?

4. What does validation do?

5. Name three ways to create payment lines using the Payment journal.

6. What is the Open transactions editing functionality used for?

7. What is the Closed transactions editing functionality used for?

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Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter: 1.

2.

3.

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AX40 ENUS FSI 08-Accounts Payable Daily Procedures part 2

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