Na2009 enus fin

MICROSOFT DYNAMICS® NAV 2009

FINANCE

Microsoft Official Training Materials for Microsoft Dynamics ® Your use of this content is subject to your current services agreement

Last Revision: November 2008 The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication. This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property. © 2008 Microsoft Corporation. All rights reserved. Microsoft Dynamics®, Microsoft® PowerPoint® Microsoft® SQL Server® and Microsoft Dynamics® NAV MorphX® are trademarks or registered trademarks of Microsoft Corporation. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. This course content is designed for Microsoft Dynamics® NAV 2009.


Table of Contents

i

Introduction 0-1

Welcome ............................................................................................................ 0-1 Microsoft Dynamics Courseware Contents ........................................................ 0-2 Documentation Conventions .............................................................................. 0-3 Student Objectives ............................................................................................. 0-4

Chapter 1: Financial Management Setup 1-1

Objectives ........................................................................................................... 1-1 Introduction ......................................................................................................... 1-1 General Ledger Setup ........................................................................................ 1-2 Accounting Periods .......................................................................................... 1-10 Lab 1.1 - Create a Fiscal Year ......................................................................... 1-14 Trail Codes ....................................................................................................... 1-14 Summary .......................................................................................................... 1-18 Test Your Knowledge ....................................................................................... 1-19 Quick Interaction: Lessons Learned ................................................................. 1-20 Solutions ........................................................................................................... 1-21

Chapter 2: General Ledger 2-1

Objectives ........................................................................................................... 2-1 Introduction ......................................................................................................... 2-1 Chart of Accounts Overview ............................................................................... 2-2 G/L Account Card ............................................................................................... 2-2 Lab 2.1 - Create a Revenue Account ................................................................. 2-9 Chart of Accounts Page ................................................................................... 2-11 Lab 2.2 - Create a VAT Account....................................................................... 2-15 General Ledger Budgets .................................................................................. 2-16 Budget .............................................................................................................. 2-17 Create Budgets Manually ................................................................................. 2-22 Lab 2.3 - Create a Budget ................................................................................ 2-28 Copy Budgets ................................................................................................... 2-30 Lab 2.4 - Copy a Budget .................................................................................. 2-34 Export and Import Budgets ............................................................................... 2-35 Summary .......................................................................................................... 2-40 Test Your Knowledge ....................................................................................... 2-41 Quick Interaction: Lessons Learned ................................................................. 2-43 Solutions ........................................................................................................... 2-44

Chapter 3: General Journals 3-1

Objectives ........................................................................................................... 3-1 Introduction ......................................................................................................... 3-1 Journal Overview ................................................................................................ 3-2 Creating and Posting Journal Entries ................................................................. 3-6 Lab 3.1 - Create a Journal Entry ...................................................................... 3-12 Recurring Journals Overview ........................................................................... 3-14 Processing Recurring Journals......................................................................... 3-21 Lab 3.2 - Create and Post a Recurring Journal ................................................ 3-26 Reversals and Corrections ............................................................................... 3-28 Summary .......................................................................................................... 3-31


Finance in Microsoft Dynamics® NAV 2009

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Test Your Knowledge ....................................................................................... 3-32 Quick Interaction: Lessons Learned ................................................................. 3-33 Solutions ........................................................................................................... 3-34

Chapter 4: Cash Management 4-1

Objectives ........................................................................................................... 4-1 Introduction ......................................................................................................... 4-1 Bank Account Overview ..................................................................................... 4-2 Lab 4.1 - Create a Bank Account ....................................................................... 4-8 Entering and Posting Receivables Payments..................................................... 4-9 Lab 4.2 - Apply and Post Cash Receipts .......................................................... 4-13 Entering and Posting Payables Checks ........................................................... 4-14 Lab 4.3 - Enter and Post Manual Checks ......................................................... 4-21 Lab 4.4 - Suggest Vendor Payments for a Single Vendor ................................ 4-23 Financially Voiding Checks .............................................................................. 4-26 Lab 4.5 - Financially Void a Check ................................................................... 4-29 Bank Reconciliation .......................................................................................... 4-30 Demonstration: Complete a Bank Reconciliation ............................................. 4-35 Summary .......................................................................................................... 4-46 Quick Interaction: Lessons Learned ................................................................. 4-49 Solutions ........................................................................................................... 4-50

Chapter 5: Receivables Management 5-1

Objectives ........................................................................................................... 5-1 Introduction ......................................................................................................... 5-1 Customer Card ................................................................................................... 5-2 Cash Receipt Journals Overview ....................................................................... 5-4 Applying Cash Receipt Payments ...................................................................... 5-5 Lab 5.1 - Apply and post a Cash Receipt ......................................................... 5-15 Lab 5.2 - Applying a Payment after posting...................................................... 5-17 Unapply Customer Ledger Entries ................................................................... 5-19 Lab 5.3 - Unapply Posted Ledger Entries......................................................... 5-20 Reversal of Posted Journals............................................................................. 5-23 Lab 5.4 - Reverse a Posted Journal Entry........................................................ 5-24 Set Up Payment Discounts .............................................................................. 5-26 Process Payment Discounts ............................................................................ 5-31 Lab 5.5 - Post a Payment with a Discount........................................................ 5-39 Lab 5.6 - Apply Posted Partial Payments with Discounts ................................. 5-41 Set Up Payment Tolerance .............................................................................. 5-43 Lab 5.7 - Set Up a Payment Tolerance ............................................................ 5-49 Process Payment Tolerance ............................................................................ 5-50 Lab 5.8 - Process a Payment Tolerance .......................................................... 5-56 Reminders and Finance Charge Memos .......................................................... 5-58 Set Up and Assign Reminder Terms ................................................................ 5-58 Lab 5.9 - Set Up a Reminder Term .................................................................. 5-65 Create and Issue Reminders ............................................................................ 5-67 Lab 5.10 - Create and Issue Reminders........................................................... 5-73 Set Up and Assign Finance Charge Terms ...................................................... 5-75 Create and Issue Finance Charge Memos ....................................................... 5-79 Lab 5.11 - Create and Issue Finance Charge Memos ...................................... 5-87


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Analyzing Receivables ..................................................................................... 5-89 Summary .......................................................................................................... 5-90 Test Your Knowledge ....................................................................................... 5-91 Quick Interaction: Lessons Learned ................................................................. 5-92 Solutions ........................................................................................................... 5-93

Chapter 6: Payables Management 6-1

Objectives ........................................................................................................... 6-1 Introduction ......................................................................................................... 6-1 Vendor Card ....................................................................................................... 6-2 Payment Journal Overview................................................................................. 6-3 Apply Vendor Entries Window ............................................................................ 6-4 Post Manual Payables Checks ........................................................................... 6-7 Lab 6.1 - Enter a Manual Check ....................................................................... 6-11 Suggest Vendor Payments Overview ............................................................... 6-13 Create Payments Using Suggest Vendor Payments ........................................ 6-16 Print and Post Payables Checks ...................................................................... 6-24 Lab 6.2 - Suggest, Print, and Post a Vendor Payment ..................................... 6-34 Void Unposted Checks ..................................................................................... 6-36 Lab 6.3 - Void a Check ..................................................................................... 6-38 Apply Payments after Posting .......................................................................... 6-40 Lab 6.4 - Apply a Credit Memo after Posting .................................................... 6-42 Unapply Vendor Ledger Entries ....................................................................... 6-43 Lab 6.5 - Unapply a Payment ........................................................................... 6-44 Reversal of Journal Postings ............................................................................ 6-45 Lab 6.6 - Reverse a Posted Journal Entry........................................................ 6-46 Set up Payment Discounts ............................................................................... 6-47 Process Payment Discounts ............................................................................ 6-51 Set Up Payment Tolerance .............................................................................. 6-56 Process Payment Tolerance ............................................................................ 6-61 Lab 6.7 - Adjust the Payment Discount Amount ............................................... 6-64 Analyze Payables ............................................................................................. 6-66 Summary .......................................................................................................... 6-67 Test Your Knowledge ....................................................................................... 6-68 Quick Interaction: Lessons Learned ................................................................. 6-69 Solutions ........................................................................................................... 6-70

Chapter 7: Prepayments 7-1

Objectives ........................................................................................................... 7-1 Introduction ......................................................................................................... 7-1 Prepayments Setup Overview ............................................................................ 7-2 Set Up Prepayment General Ledger Accounts .................................................. 7-3 Set Up Number Series for Prepayment Documents ........................................... 7-4 Set Up Prepayment Percentages for Customers and Vendors .......................... 7-6 Set Up Prepayment Percentages for Customer-Item and Vendor-Item Combinations ..................................................................................................... 7-7 Set Up Check Prepayment When Posting........................................................ 7-11 Lab 7.1 - Set Up Prepayments for Sales .......................................................... 7-13 Prepayments Processing Flows ....................................................................... 7-14 Prepayment Sales and Purchase Orders Overview ......................................... 7-14



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Process Prepayment Sales and Purchase Orders ........................................... 7-19 Process Prepayment Sales and Purchase Invoices ......................................... 7-21 Correct Prepayments ....................................................................................... 7-21 Summary .......................................................................................................... 7-23 Test Your Knowledge ....................................................................................... 7-24 Quick Interaction: Lessons Learned ................................................................. 7-26 Solutions ........................................................................................................... 7-27

Chapter 8: VAT and Intrastat 8-1

Objectives ........................................................................................................... 8-1 Introduction ......................................................................................................... 8-1 Display VAT Amounts in Sales and Purchase Documents ................................ 8-2 Adjust VAT Amounts in Sales and Purchase Documents and Journals ............. 8-4 Lab 8.1 - Adjust a VAT Amount in a Sales Document ...................................... 8-11 Lab 8.2 - Adjust a VAT Amount in a Purchase Journal .................................... 8-13 Import VAT ....................................................................................................... 8-15 VAT Correction ................................................................................................. 8-20 VAT Statements ............................................................................................... 8-24 VAT Settlement ................................................................................................ 8-31 Intrastat Reporting ............................................................................................ 8-34 Set Up Intrastat ................................................................................................ 8-34 Report Intrastat ................................................................................................. 8-41 Summary .......................................................................................................... 8-44 Test Your Knowledge ....................................................................................... 8-45 Quick Interaction: Lessons Learned ................................................................. 8-46 Solutions ........................................................................................................... 8-47

Chapter 9: Multicurrency 9-1

Objectives ........................................................................................................... 9-1 Introduction ......................................................................................................... 9-1 Currency Card and Currency Exchange Rates .................................................. 9-2 Set Up Multicurrency for Customers, Vendors, and Bank Accounts .................. 9-9 Process Sales and Purchase Documents ........................................................ 9-14 Lab 9.1 - Process a Sales Invoice .................................................................... 9-17 Process Cash Receipts .................................................................................... 9-19 Process Payments ........................................................................................... 9-22 Lab 9.2 - Post Expenses in Foreign Currency .................................................. 9-25 Use the Adjust Exchange Rates Batch Job ...................................................... 9-27 Lab 9.3 - Update the USD:GBP Exchange Rate .............................................. 9-35 Additional Reporting Currency ......................................................................... 9-37 Lab 9.4 - Adjust the ACY Exchange Rate ........................................................ 9-44 Consolidations with Multiple Currencies ........................................................... 9-46 Summary .......................................................................................................... 9-51 Quick Interaction: Lessons Learned ................................................................. 9-53

Chapter 10: Year End Closing Processes 10-1

Objectives ......................................................................................................... 10-1 Introduction ....................................................................................................... 10-1 Closing a Fiscal Year ....................................................................................... 10-2 Transferring Income Statement Account Balances .......................................... 10-5


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Posting the Journal ........................................................................................... 10-8 Lab 10.1 - Post an Entry into a Closed Fiscal Year ........................................ 10-11 Summary ........................................................................................................ 10-13 Test Your Knowledge ..................................................................................... 10-14 Quick Interaction: Lessons Learned ............................................................... 10-15 Solutions ......................................................................................................... 10-16



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Introduction

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INTRODUCTION Welcome

We know training is a vital component of retaining the value of your Microsoft Dynamics® NAV 2009 investment. Our quality training from industry experts keeps you up-to-date on your solution and helps you develop the skills necessary for fully maximizing the value of your solution. Whether you choose Online Training, Classroom Training, or Training Materials; there is a type of training to meet everyone's needs. Choose the training type that best suits you so you can stay ahead of the competition.

Online Training Online Training delivers convenient, in-depth training to you in the comfort of your own home or office. Online training provides immediate access to training 24 hours-a-day. It is perfect for the customer who does not have the time or budget to travel. Our newest online training option, eCourses, combine the efficiency of online training with the in-depth product coverage of classroom training, with at least two weeks to complete each course.

Classroom Training Classroom Training provides serious, in-depth learning through hands-on interaction. From demonstrations to presentations to classroom activities, you receive hands-on experience with instruction from our certified staff of experts. Regularly scheduled throughout North America, you can be sure you will find a class convenient for you.

Training Materials Training Materials enable you to learn at your own pace, on your own time with information-packed training manuals. Our wide variety of training manuals feature an abundance of tips, tricks, and insights you can refer to again and again:

Microsoft Dynamics Courseware The Microsoft Dynamics Courseware consists of detailed training manuals, designed from a training perspective. These manuals include advanced topics as well as training objectives, exercises, interactions and quizzes. Look for a complete list of manuals available for purchase on the Microsoft Dynamics website: www.microsoft.com/Dynamics.



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Microsoft Dynamics Courseware Contents Test Your Skills Within the Microsoft Dynamics Training Materials you find a variety of different exercises. These exercises are offered in three levels to accommodate the variety of knowledge and expertise of each student. We suggest you try the level three exercises first, if you need help completing the task look to the information in the level two exercises. If you need further assistance each step of the task is outlined in the level one exercise.

Challenge Yourself! Level 3 exercises are the most challenging. These exercises are designed for the experienced student who requires little instruction to complete the required task.

Need a Little Help? Level 2 exercises are designed to challenge students, while providing some assistance. These exercises do not provide step by step instructions, however, do provide you with helpful hints and more information to complete the exercise.

Step by Step Level 1 exercises are geared towards new users who require detailed instructions and explanations to complete the exercise. Level 1 exercises guide you through the task, step by step, including navigation.

Quick Interaction: Lessons Learned At the end of each chapter within the Microsoft Dynamics Training Material, you find a Quick Interaction: Lessons Learned page. This interaction is designed to provide the student with a moment to reflect on the material they have learned. By outlining three key points from the chapter, the student is maximizing knowledge retention, and providing themselves with an excellent resource for reviewing key points after class.


Introduction

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Documentation Conventions The following conventions and icons are used throughout this documentation to help you quickly and effectively navigate through the information. CAUTION: Cautions are found throughout the training manual and are preceded by the word CAUTION in bold. Cautions are used to remind you of a specific result of a specific action which may be undesirable.

HINT: Hints are found throughout the training manual and are preceded by the word HINT in bold. Hints are used to suggest time-saving features or alternative methods for accomplishing a specific task.

NOTE: Notes are found throughout the training manual and are preceded by the word NOTE in bold. Notes are used to provide information which, while not critical, may be valuable to an end user.

BEYOND THE BASICS: Advanced information found throughout the training manual is preceded by the words BEYOND THE BASICS in bold. Beyond the Basics provides additional detail, outside of standard functionality, that may help you to more optimally use the application.

EXAMPLE: Examples are found throughout the training manual and are preceded by the word EXAMPLE in bold. Examples bring to light business scenarios that may better explain how an application can be used to address a business problem.



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Student Objectives What do you hope to learn by participating in this course? List three main objectives below. 1.

2.

3.


Chapter 1: Financial Management Setup

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CHAPTER 1: FINANCIAL MANAGEMENT SETUP Objectives

The objectives are:

• Explain the fields on the General Ledger Setup window. • Explain and set up Accounting Periods. • Explain and set up Trail Codes, Source Codes, and Reason Codes.

Introduction Financial Management Setup describes in detail each area that needs to be set up to use financials in Microsoft Dynamics® NAV 2009.

• General Ledger • Accounting Periods • Trail Codes, including:

o Source Codes o Reason Codes

NOTE: There are other setup areas in the General Ledger, such as Currencies, No. Series, Dimensions, and Posting Groups. The setup of these areas is discussed in the Application Setup Microsoft Dynamics® NAV 2009 courseware.


Financials in Microsoft Dynamics® NAV 2009

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General Ledger Setup The General Ledger Setup window is used to specify default setting for the general ledger and all finance related application areas. The General Ledger Setup window must be completed for each company that is set up in Microsoft Dynamics NAV 2009.

The five FastTabs on the General Ledger Setup window are:

• General • Numbering • Dimensions • Reporting • Application

To access the General Ledger Setup window:

• Select the Departments button in the Navigation Pane. • Select Administration and click Application Setup. • Click Financial Management and then select Finance. • In the Finance window, under Tasks, select General Ledger Setup.

FIGURE 1.1 GENERAL LEDGER SETUP, GENERAL FASTTAB



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General FastTab

The General FastTab contains the basic setup defaults for General Ledger and has the following fields:

• Allow Posting From / Allow Posting To - Specify the company default posting dates; that is, the date range that all users can post transactions in. Because a period closing process is not required in Microsoft Dynamics NAV 2009, setting the posting date range prevents users from posting entries that can change prior period data.

NOTE: Specific user posting date restrictions are specified in the User Setup window. If there are no user restrictions, the company defaults are in effect. If there are no company defaults, there are no restrictions on dates for data entry and posting

• Register Time - Specify whether the system registers the user's time usage.

• Local Address Format - Specify the address format that is used on printed documents

• Local Cont. Addr. Format - Specify where the contact name has to appear in mailing addresses.

FIGURE 1.2 GENERAL LEDGER SETUP, GENERAL FASTTAB



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• Invoice Rounding Precision (LCY) - Specify the size of the interval to be used when users are rounding amounts in local currency (LCY).

• Invoice Rounding Type (LCY) - Specify if invoice amounts are rounded up or down. The option selected here is used with the rounding interval specified in the Invoice Rounding Precision (LCY) field.

• Allow G/L Acc. Deletion Before - The date in this field determines whether and when G/L accounts can be deleted. G/L accounts that have entries on or after the date specified in this field cannot be deleted.

• Check G/L Account Usage - If selected, the system prevents G/L accounts that are used in setup tables, such as posting groups, from being deleted.

• EMU Currency - Select this field if LCY is an EMU currency. Use this field only when applying entries in different currencies.

• LCY Code - Enter the currency code for LCY. The value is only used on printouts because the system uses <Blank> as the indicator for LCY when displaying information in tables.

• Pmt. Disc. Excl. VAT - Specify whether the payment discount is based on amounts including or excluding VAT.

• Adjust for Payment Disc. - If selected, the system recalculates VAT amounts when you are posting payments that trigger payment discounts.

• Unrealized VAT - Specify whether the system manages unrealized VAT.

• Prepayment Unrealized VAT - Specify whether the system manages prepayments for unrealized VAT.

• Max. VAT Difference Allowed - Enter the maximum VAT correction amount allowed for the local currency.

• VAT Rounding Type - Select how VAT is rounded when it is calculated for the local currency.

• Bill-to/Sell-to VAT Calc. - By default, this field is set to Bill-to/Pay-to No., which indicates that the VAT Business Posting Group is taken from the Bill-to customer or Pay-to vendor for orders/invoices. Select Sell-to/Buy-from No. to use the VAT Business Posting Group for the Sell-to customer or Buy-from vendor for orders/invoices.

• Print VAT Specification in LCY - If selected, a line is added on printed sales documents that specifies the VAT details in LCY, in addition to the invoicing currency. When not selected, VAT details will only print in the invoicing currency.



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Numbering FastTab

Bank Account Nos. is the only field on the Numbering FastTab. In this field, enter the code for the number series that will be used to assign numbers to bank accounts.

FIGURE 1.3 GENERAL LEDGER SETUP, NUMBERING FASTTAB

No. Series are described and set up in the Application Setup in Microsoft Dynamics® NAV 2009 courseware.

Dimensions FastTab

The Dimensions FastTab, specify the global and the shortcut dimensions to be used for financial reporting.



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The codes specified here are selected from the dimensions set up in the Dimension table, as described in the Dimensions section in the Application Setup in Microsoft Dynamics NAV 2009 courseware.

FIGURE 1.4 GENERAL LEDGER SETUP, DIMENSIONS FASTTAB

Global dimensions can be used as filters for G/L entries or on all reports, account schedules, and batch jobs.

Determine which two dimensions are likely to be analyzed most frequently and select these as the two global dimensions.

Shortcut dimensions offer a fast and convenient way to enter dimension information directly on the line in journals, sales and purchase documents. The system automatically creates the first two shortcut dimensions by using the Global Dimensions. The other six shortcut dimensions are available only if Advanced Dimensions are purchased.



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Global Dimensions

To change the Global Dimensions, click Actions, point to Functions and then select Change Global Dimensions

FIGURE 1.5 CHANGE GLOBAL DIMENSIONS

Use the drop-down list to change one or both of the global dimensions and then click OK to run the Change Global Dimensions batch job.

NOTE: Changing a global dimension code requires that the system change entries already posted. Carefully consider which dimension codes are designated as a global dimension to minimize the need for future changes.

Payment Tolerance

To change the Payment Tolerance, click Actions, point to Functions and then select Change Payment Tolerance

FIGURE 1.6 CHANGE PAYMENT TOLERANCE

The options for Change Payment Tolerance are:

• All Currencies: Insert a check mark to change the tolerance setup for both local and all foreign currencies.

• Currency Code: Enter the code of the currency for which to change the tolerance setup.



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• Payment Tolerance %: Enter the percentage by which the payment or refund can be less than the amount on the invoice or credit memo.

• Max. Payment Tolerance: Enter the maximum amount that the payment or refund can differ from the amount on the invoice or credit memo.

Reporting FastTab

The Reporting FastTab is used to determine whether and how additional reporting currency is used. Additional reporting currency is used when transaction information also must be available in a currency other than local currency.

FIGURE 1.7 GENERAL LEDGER SETUP, RAPORTING FASTTAB

The fields on the Reporting FastTab are as follows:

• Additional Reporting Currency - Specify the currency used as an additional reporting currency in the General Ledger area. If specified: o G/L and other entries that include VAT entries in both LCY and

additional reporting currency are automatically recorded. o Reports are printed in either LCY or the additional reporting

currency

• VAT Exchange Rate Adjustment - Used with the Additional Reporting Currency field to specify how the accounts set up for VAT posting in the VAT Posting Setup table are adjusted for exchange rate fluctuations between LCY and the additional reporting currency.

Application FastTab

The fields on the Application FastTab are used to specify:

• Currency rounding tolerance



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• How payments are applied to outstanding amounts. This includes the following: o Payments from customers o Payments to vendors

FIGURE 1.8 GENERAL LEDGER SETUP, APPLICATION FASTTAB

The Application FastTab contains the following fields:

• Appln. Rounding Precision - Specify the size of the interval for rounding difference for LCY when applying LCY entries to entries in a different currency.

• Payment Disc. Tolerance Warning, Payment Disc. Tolerance Posting, and Payment Discount Grace Period - Complete these fields to allow for tolerance on payment discount terms. More information about payment discount tolerance is available in the Receivables Management and Payables Management chapters in this Finance content.

• Payment Tolerance Warning and Payment Tolerance Posting - Complete these fields to close outstanding receivables and payables with payment amounts that differ from what is owed. More information about payment tolerance is available in the Receivables Management and Payables Management chapters in this Finance content.

• Payment Tolerance % - enter the percentage that the payment or refund can be less than the amount on the invoice or credit memo.

• Max. Payment Tolerance Amount - enter the maximum amount that the payment or refund can differ from the amount on the invoice or credit memo.



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Test Your Knowledge: General Ledger Setup Task Page

The following are characteristics of the General Ledger Setup window. Match the characteristic to the elements on General Ledger Setup window.

_____ 1. Contains only one field. _____ 2. Prevent entries that can change prior period data. _____ 3. Used to specify two globals and up to eight shortcuts. _____ 4. A function can be run to change this. _____ 5. LCY is the acronym for this. _____ 6. Determine whether and how additional reporting currency is used.

a. Allow Posting From / Allow Posting To fields

b. Dimensions FastTab c. Local Currency d. Numbering FastTab e. Reporting FastTab f. Payment Tolerance

Accounting Periods Before you can post in a fiscal year in Microsoft Dynamics NAV 2009:

• The fiscal year must be opened. • Accounting periods must be defined.

The shortest possible accounting period is one day and at least one accounting period must be set up for each fiscal year.

The Accounting Periods window is used to:

• Open new fiscal years • Define accounting periods • Close fiscal years

Accounting periods can be used as a time reference in Microsoft Dynamics NAV 2009. For example, when you are reviewing posted entries in a Balance/Budget window, the length of the accounting period, such as one month or one quarter, is specified.

Set Up an Accounting Period Manually

Accounting Periods can be created by using one of the following methods:

• Manually • Automatically, by using the Create Fiscal Year batch job.



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To manually set up an Accounting Period, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Finance.

2. In the Finance window, under Lists, select Accounting Periods. 3. Click New.

FIGURE 1.9 ACCOUNTING PERIODS WINDOW

4. In the Starting Date field, enter the date that the accounting period begins.

5. In the Name field, the system automatically updates the name of the month that corresponds to the Starting Date.

6. Select the New Fiscal Year check box to indicate the start of the year.

7. Repeat steps 4-5 for each month in the period.

The New Fiscal Year check box must contain a check mark if an accounting period is the first one in a fiscal year. Microsoft Dynamics NAV 2009 uses that period to determine which periods to close when the Close Year function is run.



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Set Up an Accounting Period Automatically

To run the Create Fiscal Year batch job, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Finance.

2. In the Finance window, under Lists, select Accounting Periods. 3. Click Create Year.

FIGURE 1.10 CREATE FISCAL YEAR

4. In the Starting Date field, enter the date on which the fiscal year starts.

5. In the No. of Periods field, enter the number of accounting periods the fiscal year will be divided into. There can be from 1 to 365 periods.

6. In the Period Length field, enter how long each accounting period will be, for example, 1M = 1 month, 1Q = 1 quarter, and so on.

7. Click OK.

Inventory Periods and Closing the Year

The Accounting Periods window contains two other options that are discussed in other Microsoft Dynamics NAV 2009 content:

• Inventory Period • Close Year

Inventory periods are discussed and set up in Trade in Microsoft Dynamics NAV 2009 courseware. The Close Year process is discussed in the chapter Year End Closing Processes of this courseware.



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Reports

The Accounting Periods window also has the option to print a Trial Balance by Period. Select the option and enter the parameters for the report

FIGURE 1.11 TRIAL BALANCE BY PERIOD



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Lab 1.1 - Create a Fiscal Year Scenario

As the controller at CRONUS International Ltd., you have to create a new fiscal year for 2011. Quickly create the new year by using the following information:

• The fiscal year begins on February 1, 2011 and ends on the January 31, 2012.

• The length of an accounting period is a month.

Challenge Yourself!

Create the fiscal year for 2011 as specified in the scenario.

Need a Little Help?

1. Open the Accounting Periods window. 2. Open the Create Fiscal Year batch job. 3. Use the criteria that is specified in the scenario. 4. Run the batch job.

Step by Step

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then click Finance.

2. In the Finance window, select Accounting Periods. 3. Click Create Year. 4. In the Starting Date field, enter 2/1/2011. 5. In the No. of Periods field, enter 12. 6. In the Period Length field, enter 1M. 7. Click OK.



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Trail Codes Audit trails in Microsoft Dynamics NAV 2009 begin with Trail Codes. There are three elements to set up in relation to Trail Codes:

• Source Codes • Source Code Setup • Reason Codes

When a new company is set up, the Source Code and Source Code Setup tables are automatically populated. Reason Codes must be set up manually.

Source Codes

Entries are created in the financial statements when:

• Journals, orders, invoices, or credit memos are posted. • Various batch jobs are run.

Use Source codes to help find the point of origin for an entry. Source codes are the basis for the audit trail in Microsoft Dynamics NAV 2009 and are assigned to transactions and journals.

Microsoft Dynamics NAV 2009 provides source code system defaults. As new journals or data entry points are added, source codes have to be added to determine where the transaction originated.

System defaults and access to the posted entries for each source code are available from the Source Code window. To open this window and review the entries, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Trail Codes

2. Select Source Codes. 3. Select Related Information and point to Source to select the

relevant register.

Set up a new source code by selecting New and entering the new code and description in the line.

Source Code Setup

The Source Code Setup window is used to define or change source codes. Additionally, it contains several FastTabs, one for each application area. Each FastTab contains the source codes that are applicable for that application area.



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Typically, the default source code set up is not changed. However, if a different source code identification is required, the changes can be made from the Source Code Setup window.

To change a source code, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then click Trail Codes.

2. Click Source Code Setup.

FIGURE 1.12 SOURCE CODE SETUP

3. In the appropriate field, select the drop-down list. The Source Code window appears.

4. Select the new code in the Code field. 5. Press TAB or ENTER to commit the change to the field.

All the next posted entries will have the new source code.

Reason Codes

Reason codes are used to indicate why an entry was created. For example, if items from a sale must be returned, a reason code is set up to mark the reason, such as damaged, wrong color, or wrong size.



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Reason codes can be assigned on transactions, such as sales and purchase invoices, or to specific journal templates and journal batches.

When the codes are linked to a journal line or a sales or purchase header, Microsoft Dynamics NAV 2009 marks all entries with the reason code during posting. This allows for the posted ledger entries to be filtered by reason code.

To create reason codes, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Trail Codes.

2. Click Reason Codes. 3. Click New. 4. In the Code field, enter a unique identifier. 5. In the Description field, enter a short description of the Reason

Code. 6. Close the Reason Code window.

Navigate the Audit Trail

Sometimes, it may be necessary to trace information back to the entry source. Source Codes and Reason Codes are important pieces of this audit trail.

When activity is posted in Microsoft Dynamics NAV 2009, the transaction is assigned a Register Number, and each line within the transaction is assigned an Entry Number.

In addition to the Register Number, the following information is recorded for each transaction:

• Creation Date • User ID • Source Code • Journal Batch Name • If the journal was reversed • From Entry No. and To Entry No. • From VAT Entry No. and To VAT Entry No.

To open the window where this information is recorded, on the Navigation Pane, click the Departments button, click Financial Management, and then click General Ledger. In the General Ledger window, in the bottom of the window under History, select G/L Registers.

The G/L Register window is used to determine where transactions were posted in the system that is based on the assigned Source Code.



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In the Action Pane, the following sorting options are available:

• General Ledger • Customer Ledger • Vender Ledger • Reverse Register • Bank Account Ledger • Fixed Assets Ledger • Maintenance Ledger • VAT Entries

Test Your Knowledge: Trail Codes

Fill in the blanks to test your knowledge of this lesson.

7. Source Codes and Reason Codes are important parts of the _____ trail.

8. To view activity posted in Microsoft Dynamics NAV 2009, open the G/L ________ window.

9. ______ Codes identify where transactions originate. 10. ______ Codes are used to indicate why an entry was created. 11. To modify the default Source Codes used, changes are made to the

Source Code _____ window.

Summary Financial Management Setup describe the areas that must be set up to use Financial Management in Microsoft Dynamics NAV 2009.

The General Ledger Setup window, gives an quick and fast view of all the options there is in Microsoft Dynamics NAV 2009 when you have to setup the general ledger for a company.

Accounting periods helps manage to open and close the financial year, so all entries are in the correct periods.

Audit trails of Source Codes and Reason Codes gives the company a good documentation for the financial reporting.

The areas discussed in this content are the basis of the General Ledger Setup. There are many other areas that must be set up in Microsoft Dynamics NAV 2009, such as Posting Groups and Dimensions.



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Test Your Knowledge 1. Where are fiscal years defined?

( ) Fiscal Year window ( ) Accounting Periods window ( ) General Ledger Setup window ( ) Company Setup window

2. What is the basis of the audit trail in Microsoft Dynamics NAV 2009?

( ) Entry No. ( ) Reason Codes ( ) Source Codes ( ) Register No.

3. Where are posting restrictions set in Microsoft Dynamics NAV 2009? (Select all that apply)

( ) General Ledger Setup window ( ) Database or Windows Login window ( ) User Security window ( ) User Setup window

4. There are two types of dimensions specified in the General Ledger Setup Task Page. What are they? (Select all that apply)

( ) Department Dimensions ( ) Shortcut Dimensions ( ) Global Dimensions ( ) Project Dimensions

5. When activity is posted in Microsoft Dynamics NAV 2009, which of the following does the system assign to each transaction? (Select all that apply)

( ) Posting Date ( ) Register Number ( ) Creation Date ( ) Lines with Entry Numbers



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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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Solutions General Ledger Setup

Test Your Knowledge: General Ledger Setup Task Page

The following are characteristics of the General Ledger Setup window. Match the characteristic to the elements on General Ledger Setup window.

d 1. Contains only one field. a 2. Prevent entries that can change prior period data. b 3. Used to specify two globals and up to eight shortcuts. f 4. A function can be run to change this. c 5. LCY is the acronym for this. e 6. Determine whether and how additional reporting currency is used.

a. Allow Posting From / Allow Posting To fields

b. Dimensions FastTab c. Local Currency d. Numbering FastTab e. Reporting FastTab f. Payment Tolerance

Trail Codes

Test Your Knowledge: Trail Codes


1. Source Codes and Reason Codes are important parts of the audit trail.

2. To view activity posted in Microsoft Dynamics NAV 2009, open the G/L Register window.

3. Source Codes identify where transactions originate.

4. Reason Codes are used to indicate why an entry was created.

5. To modify the default Source Codes used, changes are made to the Source Code Setup window.



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Test Your Knowledge

1. Where are fiscal years defined?

( ) Fiscal Year window (•) Accounting Periods window ( ) General Ledger Setup window ( ) Company Setup window

2. What is the basis of the audit trail in Microsoft Dynamics NAV 2009?

( ) Entry No. ( ) Reason Codes (•) Source Codes ( ) Register No.

3. Where are posting restrictions set in Microsoft Dynamics NAV 2009? (Select all that apply)

(√) General Ledger Setup window ( ) Database or Windows Login window ( ) User Security window (√) User Setup window

4. There are two types of dimensions specified in the General Ledger Setup Task Page. What are they? (Select all that apply)

( ) Department Dimensions (√) Shortcut Dimensions (√) Global Dimensions ( ) Project Dimensions

5. When activity is posted in Microsoft Dynamics NAV 2009, which of the following does the system assign to each transaction? (Select all that apply)

( ) Posting Date (√) Register Number (√) Creation Date (√) Lines with Entry Numbers


Chapter 2: General Ledger

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CHAPTER 2: GENERAL LEDGER Objectives

The objectives are:

• Explain the use of the Chart of Accounts. • Explain the elements of the G/L Account Card. • Explain the Chart of Account elements. • Explain the Budgets feature in Microsoft Dynamics NAV 2009®. • Explain the G/L Budgets page elements. • Demonstrate the process of setting up budgets manually • Explain additional budget processes, such as deleting budget entries. • Explain the process of creating budgets by using the Copy Budget

function. • Explain the process of creating budgets by using the Export Budget

and Import Budget functions.

Introduction General Ledger is the central application area of Microsoft Dynamics NAV 2009. General Ledger is where financial information is:

• Posted • Summarized • Reported

Two main components of the General Ledger application area are Chart of Accounts and G/L Budgets. The Chart of Accounts provides quick access to G/L accounts and balances, and the Budgets feature provides a comparison between actual amounts and budgeted amounts, by using a combination of:

• G/L accounts • Periods • Global dimensions • Budget dimensions



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Chart of Accounts Overview A company's financial reporting consists of an Income Statement and a Balance Sheet.

Each account in the Income Statement and the Balance Sheet is called a G/L Account, and all of the G/L Accounts makes the Chart of Accounts list.

G/L Accounts is created in the Chart of Accounts list as a G/L Account Card.

G/L Account Card In the Chart of Accounts list, all G/L accounts are available and can be viewed at one time. However, there is also a G/L Account Card for each account that can be accessed from the Chart of Accounts list.

To open an account card page, follow these steps:

1. In the Navigation Pane, click the Departments button. 2. Click Financial Management and then General Ledger. 3. On the General Ledger page, select Chart of Accounts. 4. Select the relevant account to view. 5. Click Actions and then click View.

FIGURE 2.1 G/L ACCOUNT CARD



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NOTE: The fields on the Consolidation FastTab are explained in the Multi Site Operations in Microsoft Dynamics NAV 2009 courseware, and the field on the Reporting FastTab is explained in the Multicurrency lesson in this content.

G/L Account Card Action Pane

The G/L Account Card Action Pane has the following navigation accesses:

• Actions • Related Information • Reports

The following single-click accesses are also available:

• General Posting Setup • VAT Posting Setup • G/L Register • Detail Trail Balance • Trial Balance • G/L Register

Actions

The Actions button provides the most relevant navigation accesses for the G/L Account Card.

From the Actions button, it is possible to view, edit, delete, or create a new G/L Account.

It is also possible to Refresh or Clear Filters in the G/L Account Card. The Send To option makes it possible to attach the G/L Account Card to an e-mail or transfer the G/L Account Card to Microsoft® Word or Microsoft® Excel®.

From the Actions button's drop-down list, it is also possible to point to Functions.

Functions

The Functions option is always located under Actions. The Functions option on the G/L Account Card accesses the Apply Template function. This function is available when Master Templates are set up during the Rapid Implementation Methodology (RIM) process.



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Master Templates for G/L Accounts provide the ability to:

• Create multiple default G/L Account set ups for accounts that are frequently created, such as expenses.

• Use these templates as a basis when creating accounts of this type. • Eliminate the need for repetitive data entry for similar account

creation.

For more information about RIM and Master Templates, refer to the Application Setup in Microsoft Dynamics ® NAV 2009 courseware.

After you create accounts in the G/L Account Card, run the Indent Chart of Accounts function.

The Indent Chart of Accounts function automatically update or fill in the Totaling field for End-Total accounts instead of the user adding the numbers manually.

Account Button

The Account Button is listed under the Related Information menu on the action pane. The Account button contains the following options:

• Ledger Entries - Display all ledger entries for the account. • Comments - Display or enter comments that relates to the account. • Dimensions - Display or enter default dimensions for the account. • Extended Texts - Display or enter extended text for the account. • Receivables-Payables - Provides a summary of the following:

o Expected net operational cash flow from customers and vendors over time.

o Open customer and vendor ledger entries sorted by their Due Date instead of Posting Date.

This summary can be viewed by the:

o Period, such as daily, monthly, or quarterly. o Expected cash flow movement for a period by clicking the Net

Change option. o Expected net balance of outstanding customer and vendor

balances at any date by clicking the Balance at Date option.

• Where-Used List - Displays a list of tables where this G/L account is used.



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Balance Button

Use the Balance Button to display information about the balances and transaction amounts for the account. Each page accessed from this Quick Path contains filters to help in viewing the information more specifically.

To access the Balance button, click on Related Information and then click Balance.

The Balance button has the following options:

• G/L Account Balance - Displays the balance or net change for the G/L account over time.

• G/L Balance - Displays the balance or net change for all G/L accounts for a specific time period.

• G/L Balance by Dimensions - Displays balance or net change information for all accounts. The information displayed in columns and lines can be set to one of the following views: o G/L account o Period o Global Dimensions 1 and 2

General FastTab

The following fields appear on the General FastTab:

• No.: The Chart of Account number of the G/L Account. • Name: The Chart of Account name (description) • Income/Balance: Indicates whether the account is classified as an

Income Statement of a Balance Sheet account. This field is important in determining whether an account has to be closed in the fiscal year end or not.

• Debit/Credit: Indicates the type of entries that will usually be posted to this account. The selection made does not restrict the type of transaction posted to the account.

• Account Type: This field indicated the purpose of the account in the different list, journals, and reports. The options are as follows: o Posting: The only account type where entries can be posted. o Heading: Used for description purposes only. o Total: Used to total the accounts ranged in the totaling field. o Begin-Total: Marks the beginning of an account range in the

totaling field. o End-Total: Marks the end of an account range in the totaling

field.



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• Totaling: Determines the accounts to totaling from the Account Type Total window. This gives the option to totaling groups of accounts that are not in the same classification, such as Gross Income. The field also or the End-Total Account Type.

• No. of Blank Lines: Determine the number of blank lines before the account is displayed in a report.

• New Page: Determines whether a new report page is printed after the account is displayed in the report.

• Search Name: Used to search for a particular account when the account number cannot be recalled.

• Balance: Displays the current balance of the account. Click the balance amount to access the General Ledger Entries list.

• Reconciliation Account: Determines whether the G/L account is included in the Reconciliation list in the general journals. Use the Reconciliation list before posting to review the effect of posting the accounts in the journal.

• Automatic Ext. Texts: If selected, extended text set up on the accounts is automatically added to sales and purchase documentation in the Description field. If not selected, extended text can still be set up on the account and added to documents manually. To create the extended text, click Related Information, select Account, and then select Extended Text.

• Direct Posting: Indicate whether posting is allowed directly into this account from a journal line. Be aware that this field is automatically checked when new accounts are created.

• Blocked: If selected, prevents entries from posting to this account. Accounts can be blocked and reopened as needed.

• Last Date Modified: System generated field; displays the date when the G/L account was last modified.

Posting FastTab

The Posting FastTab contains the following fields that determine how the G/L and VAT transactions are recorded:

• Gen. Posting Type: Defines whether the account is used only for a Sale or Purchase transaction or with both types of transactions. This field is: o Used with the VAT Bus. Posting Group and VAT System

Prod. Posting Group fields to find where the account posts VAT.

o Filled in only for revenue and expense accounts where VAT is involved.



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• Gen. Bus. Posting Group: Identifies the default General Business Posting Group for the account. This field: o Indicates whom you sell-to or buy-from. o Is used with the Gen. Prod. Posting Group and Gen. Posting

Type fields to find the G/L accounts to post to for sales, purchases, discount amounts, COGS, and inventory adjustments.

• Gen Prod. Posting Group: Identifies the default General Product Posting Group for the account. This field: o Indicates the type of item sold or purchased. o Is used with the Gen. Bus. Posting Group and Gen. Posting

Type fields to find the G/L accounts to post to for sales, purchases, discount amounts, COGS, and inventory adjustments.

• VAT Bus. Posting Group: Identifies the default VAT Business Posting Group for the account. This field is used with the VAT Prod. Posting Group and Gen. Posting Type fields to: o Determine VAT percent and VAT calculation type. o Find the G/L accounts where the program posts VAT

• VAT Prod. Posting Group: Identifies the default VAT Product

Posting Group for the account. This field is used with the VAT Bus. Posting Group and Gen. Posting Type fields to: o Determine VAT percent and VAT calculation type. o Find the G/L accounts where the program posts VAT

• Default IC Partner G/L Acc. No.: Identifies the default IC Inter

Company G/L account number for this G/L account. When entering this G/L account in the intercompany general journal, the IC G/L account specified in this field is used as the default balancing account number.

After the posting types and the posting group codes are assigned to a G/L account, these codes are automatically inserted in a journal, sales, or purchase line when the G/L account is selected.

NOTE: If the general posting groups are set up with default VAT posting groups, the VAT posting group fields are automatically populated with the default values when the general posting group(s) is selected.



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Create an Account in the G/L Account Card

To create an account in the G/L Account Card, follow these steps:

1. In the navigation pane, click the Departments button and then click Financial Management.

2. In the Financial Management page, click General Ledger and then click Chart of Accounts.

3. In the Action Pane select the New button 4. On the General FastTab, in the No. field, enter the account number. 5. In the Name field, enter a description. 6. In the Income/Balance field, click the drop-down list and select the

relevant option. 7. In the Account Type, field, click the drop-down list and select the

relevant option. 8. If necessary, enter the range in the Totaling field. 9. If necessary, enter a value in the No. of Blank Lines field. 10. Place check marks in the check boxes as needed. 11. On the Posting FastTab, in the Gen. Posting Type field, click the

drop-down list and select the relevant option. 12. In the Gen. Bus. Posting Group field, click the drop-down list and

select the relevant option. 13. In the Gen. Prod. Posting Group field, click the drop-down list and

select the relevant option. 14. Enter information on the Consolidation and Reporting FastTabs as

necessary.

To assign a dimension to the G/L account, follow these steps:

1. Select Related Information on the action pane, point to Account, and then click Dimensions-single.

2. In the Dimension Code field, click the drop-down list and select the relevant dimension from the list.

3. In the Dimension Value Code field, click the drop- down list and select the relevant dimension value from the list.

4. If there are dimension posting requirements, in the Value Posting field, click the drop-down list and select the appropriate option.

5. Close the Default Dimension and the G/L Account Card.

To indent the new G/L account, follow these steps:

1. In the Chart of Accounts list, locate and select the new account. 2. Click Actions, point to Functions, and then click Indent Chart of

Accounts. 3. Click Yes to run the indent function. 4. Close the Chart of Accounts list.



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Lab 2.1 - Create a Revenue Account Scenario

A new revenue account must be created for miscellaneous sales. Because you are the accounting manager at CRONUS International Ltd., it is your responsibility to use the following information to set up the new account by using the G/L Account Card:

• Miscellaneous Sales, account number 6140, is an income statement account that is used to accumulate transactions.

• Direct posting is allowed. • The posting groups are as follows:

Field Value

Gen Posting Type Sale

Gen. Bus. Posting Group NATIONAL

Gen. Prod. Posting Group MISC

VAT Bus. Posting Group NATIONAL

VAT Prod. Posting Group VAT25

Make sure that the Account Types are formatted and the hierarchy is established.

Challenge Yourself!

1. Create the revenue account by using the information that is provided in the scenario.

2. Run the function to align the account display.

Need a Little Help?

1. Open a new G/L Account Card page. 2. Complete the General FastTab by using the information provided in

the scenario. 3. Complete the Posting FastTab by using the information provided in

the scenario. 4. Run the Indent Chart of Accounts function.



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Step by Step Solution

1. In the navigation pane, click the Departments button and then click Financial Management.

2. In the Financial Management page, click General Ledger, and then click Chart of Accounts.

3. In the Action Pane, select the New button.

In the General FastTab enter the following:

1. In the No. field, enter 6140. 2. In the Name field, enter Sales, Miscellaneous. 3. Make sure that the Income/Balance field displays Income

Statement. 4. Make sure that the Account Type field displays Posting. 5. Make sure that a check mark is in the Direct Posting field.

In the Posting FastTab enter the following:

1. In the Gen. Posting Type field, click the drop-down list and select Sale.

2. In the Gen. Bus. Posting Group field, click the drop-down list and select NATIONAL.

3. In the Gen. Prod. Posting Group field, click the drop-down list and select MISC.

4. Press ENTER or TAB. The VAT posting group fields are automatically populated based on the general posting group selections.

5. Close the G/L Account Card. 6. In the Chart of Accounts list, click Actions, point to Functions, and

then click Indent Chart of Accounts. 7. Click Yes to run the indent function. 8. Review the new account; notice that it is indented with the other

sales accounts in the same range.



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Chart of Accounts Page The Chart of Accounts page contains the same fields on the G/L Account Card page in a table format. In addition to the information on the individual account cards, the Chart of Accounts list displays the current Net Change and Balance information for the accounts.

FIGURE 2.2 CHART OF ACCOUNTS

If the account numbers are numeric only, they are sorted differently, depending on whether Microsoft Dynamics NAV Server or the Microsoft® SQL Server® is used:

• With the Microsoft Dynamics NAV Server, account numbers are sorted in ascending numeric order.

• With the Microsoft SQL Server, account numbers are sorted in ascending alphabetical order.

Therefore, care must be taken when setting up a numeric account number structure to make sure the correct ordering of accounts in the chart of accounts.



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The Chart of Accounts contains an Action Pane with options similar to the G/L Account Card:

• Actions o Functions

• Related Information

o Account o Balance

• Reports

And the following single-click accesses:

• New • Indent Chart of Accounts • G/L Register • Detail Trial Balance • Trial Balance • G/L Register

To use the options for an account in this page, select the line and then select one of the options.

Account Button

The Account button contains the following functions:

• Ledger Entries - Same functions as described in the G/L Account Card section.

• Comments - Same functions as described in the G/L Account Card section.

• Dimensions: o Dimensions - Single - The same function as the Dimensions

function on the account card. o Dimensions - Multiple - Used to assign the same default

dimensions to multiple accounts. Because the Chart of Accounts page is a list of accounts, it is possible to assign the same default dimensions to several accounts by selecting the relevant account lines. Therefore, reducing the entry time is needed for setting up default dimensions

• Extended Texts - Same functions as described in the G/L Account Card section



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• Receivables-Payables - Same functions as described in the G/L Account Card section

• Where-Used List - Same functions as described in the G/L Account Card section.

Balance Button

The Balance button contains the following options:

• G/L Account Balance - Same functions as described in the G/L Account Card section.

• G/L Balance - Same functions as described in the G/L Account Card section.

• G/L Balance by Dimension - Same functions as described in the G/L Account Card section.

• G/L Account Balance/Budget - Displays the actual and budgeted balance or net change for the G/L account over time.

• G/L Balance/Budget - Displays the actual and budgeted balances or net change for all G/L accounts for a specific time period.

• Chart of Accounts Overview - Displays the Chart of Accounts that have different levels of detail. Use the Expand and Collapse feature to view only header and footer accounts or all the accounts in between.

Functions

The Functions button contains a different function: the Indent Chart of Accounts function. This function is used to indent accounts according to the defined hierarchy.

Establish the hierarchy by using the account types Begin-Total and End-Total. Account numbers within this range are included in the End-Total range in the Totaling field.

NOTE: The Indent Chart of Accounts function is also available from the Action Pane.

Assign the Same Dimensions to Multiple G/L Accounts

To assign the same dimensions to multiple G/L Accounts, follow these steps:

1. In the Chart of Accounts page, select all the accounts to assign dimensions to.

2. Click Related Information and point to Account, point to Dimensions, and then click Dimensions - Multiple.

3. Click New to create a new dimension.



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4. Fill in the Dimension Code, Dimension Value Code, and Value Posting fields.

5. Close the Default Dimension-Multiple page. 6. Verify that the dimension is assigned to multiple accounts by

selecting an account, clicking Related Information, pointing to Account, and then clicking Dimensions - Single.

7. Close the Default Dimension page and repeat step 5 for a different account.



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Lab 2.2 - Create a VAT Account Scenario

A new 30 percent purchase VAT is introduced in the European Union (EU). As the accounting manager, it is your responsibility to set up the new account by using the following criteria:

• Purchase VAT 30 % EU, account number 5622. • A balance sheet account that is used to accumulate transactions. • Direct Posting is not allowed.

It has also been decided to assign an Area dimension of 30 with a Code Mandatory value posting to the following accounts:

• 5620 • 5621 • 5622

Make sure that the Account Types are formatted and the hierarchy is established.

Challenge Yourself!

1. Enter the new account as specified in the scenario. 2. Assign the dimension to the accounts as specified in the scenario. 3. Run the function to align the account display.

Need a Little Help?

1. Open the Chart of Accounts page. 2. Create the new account as specified in the scenario. 3. Mark the Direct Posting check box. 4. Assign the Area dimension to the VAT accounts as specified in the

scenario. 5. Run the Indent Chart of Accounts function.


1. In the Navigation Pane, click the Departments button and then click Financial Management.

2. In the Financial Management page, click General Ledger and then click Chart of Accounts.

3. In the Action Pane click New. 4. In the No. field, enter 5622 and then press enter.



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5. In the Name field, enter Purchase VAT 30 % EU and then press enter.

6. Make sure that the Income/Balance field is set to Balance Account. 7. Make sure that the Account Type field is set to Posting. 8. In the Direct Posting check box, click to remove the check mark. 9. Click OK. 10. Click to highlight the lines in the Chart of Accounts page for

accounts 5620, 5621, and 5622. 11. Click Related information and point to Account, point to

Dimensions, and then click Dimensions-Multiple. 12. Click New. 13. In the Dimension Code field, click the Drop-Down list and select

Area. 14. In the Dimension Value Code field, enter 30. 15. In the Value Posting field, click the Drop-Down list and select

Code Mandatory. 16. Click OK to close the Default Dimension-Multiple page. 17. Click the Indent Chart of Accounts in the Action Pane. 18. Click Yes to run the indent function. 19. Close the Chart of Accounts page.



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General Ledger Budgets In Microsoft Dynamics NAV 2009, the budget feature provides the opportunity to:

• Create multiple budgets for identical time periods by using separate names.

• Create simple or complex budgets by selecting a combination of G/L account, period, the two global dimensions, and four budget dimensions.

• Copy budgets from previous periods and revise budget figures by using an adjustment factor.

• Export budgets to and import budgets from Microsoft® Excel®.

Setting Up G/L Budget Names

Users can set up multiple budgets for identical time periods by creating budgets with separate names in the G/L Budget page. Global dimensions are available on all budgets, but users can specify four additional Budget dimensions on each budget.

Budget dimensions can be used to:

• Set filters on a budget • Add dimension information to budget entries

To complete the G/L Budget Names page, follow these steps:

1. In the Navigation Pane, click the Departments button and then click Financial Management.

2. In the Financial Management page, click General Ledger and then click G/L Budgets.

3. In the Action Pane in the G/L Budget page, select the New button. 4. In the Name field, enter a unique identifier for this budget. 5. In the Description field, enter a short description. 6. In the Budget Dimension 1 Code field, click the drop-down list and

select the relevant dimension, as needed. 7. In the Budget Dimension 2 Code field, click the drop-down list and



select the relevant dimension, as needed. 10. Click OK.



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Budget The G/L Budget page lists all the budgets that are set up for a company.

The budgets are set up in the Budget Matrix page. The Budget Matrix page displays budgeted amounts in various views. This includes the following:

• G/L accounts in different time periods • Dimensions in different time periods • Dimensions and G/L accounts • Dimensions and Dimensions

Budget Page

To set up the Budget Matrix page, access the G/L Budget page by clicking the Department button, click Financial Management.

In the Financial Management page, click General Ledger and then click G/L Budgets, select the budget to view and double-click.

FIGURE 2.3 BUDGET PAGE



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The Budget page contains four FastTabs:

• General • Filters • Options • Matrix Options

General FastTab

On the General FastTab, the following fields appear:

• Budget Name - Identifies the name of the budget. • Show as Lines - Determines how the lines are displayed. The

options are as follows: o Global Dimension 1 and 2 o G/L Account o Period o Budget dimensions, if they are specified for the selected budget

• Show as Columns - Determines how the columns are displayed. The

options are the same as in the Show as Lines field.

Filters FastTab

The Filters FastTab contains fields used to determine how the information in the Budget window is displayed. This includes the following:

• Date Filter - Used to filter amount fields by date. If this field contains starting and ending dates for a time period, the values in the: o Net Change and Budgeted Amount fields will display the net

change on an account during that period. o Balance at Date and Budget at Date fields will show the

balance from the starting to the ending dates of the filter.

• G/L Account Filter - Used to set a filter for G/L accounts so the values in the following fields are based only on the G/L accounts included in the filter: o Balance o Budget at Date o Budgeted Amount



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• Department Filters and Project Filters - Used to set a filter for a dimension so that the values in the following fields are based only on the dimension values included in the filter: o Net Change o Balance at Date o Balance o Budget at Date o Budgeted Amount

• Four other Budget Dimension Filters - Used to set a filter for a

budget dimension so that the amounts in the budget fields are based only on entries with the dimension values included in the filter.

NOTE: The more filters used in the G/L Budget, the more detail is included in management reporting. It is recommended that you enter and filter budget information in the same way as when you are recording G/L entries.

Options FastTab

The Options FastTab contains two fields:

• Rounding Factor - Determines how the amounts in the columns are rounded.

• Show Column Name - If selected, the descriptive names given to dimension values and G/L accounts are displayed instead of the corresponding codes.

Matrix Options FastTab

The Matrix Options FastTab contains two fields:

• View By - Use to adjust the period, such as days, months, years, and accounting periods.

• Column Set - the system automatically updated this field determined by the filter set in the View by field.



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Budget Matrix Page

To access the Budget Matrix page, click Show Matrix in the Budget page's Action Pane.

FIGURE 2.4 BUDGET MATRIX

In the lines, enter and view the budgeted amounts.

From the Action Pane, you have access to alternative views of the budgets and the ability to perform budget-related functions, such as:

• Reversing column and line displays • Copying and deleting budgets. • Importing from and exporting to Excel

Budget Lines

The budget lines are separated into two sections:

• The left pane defines the lines as selected in the Show as Lines field in the General FastTab.

• The right pane defines the columns as selected in the Show as Columns field in the General FastTab.



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The fields for the lines are static regardless of the selection in the Show as Lines field:

• Code, Name - Displays the code and name of the G/L Account, Dimension, or Period.

• Budgeted Amount - Displays the total budget of the selected G/L account, Dimension, or Period. This field is automatically calculated and updated. The underlying entries can be accessed by clicking the AssistButton in this field.

The column fields are dynamic and determined by the selection the Show as Columns field.

Balance Button

To access the Balance button, click Related Information in the Action Pane and point to Balance.

The Balance button contains two options:

• G/L Account Balance/Budget - Displays a summary of the following for the account selected on the Budget Matrix page: o Debit and credit balances o Budgeted amounts for different time periods

• G/L Balance/Budget - Displays a scrollable summary, for the time period selected, of the following for each account in the chart of accounts: o Debit and credit balances o Budgeted amounts

Functions

To access the Functions, click on the Actions button in the Action Pane and point to Functions.

Functions contains the following options:

• Copy Budget - Used to copy an existing budget to a new one. This function is explained in more detail in the Copy Budget lesson of this content.

• Delete Budget - Used to delete entries of the selected budget. This function is explained in more detail in the Delete Budget Entries lessonof this content.

• Export to Excel / Import from Excel - Used to export a budget from Microsoft Dynamics NAV 2009 to an Excel workbook and vice versa. These functions are explained in more detail in the Export and Import Budgets lesson in this content.



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Fill In the Blanks: Budget Name and Budget Pages

Fill in the blanks to test your knowledge of this section.

1. Go to ____________ to adjust the period, such as days, months, years, and accounting periods.

2. The ____ as Columns and ____ as Lines fields determine how columns and lines are displayed in a budget.

3. The column fields in the budget lines are ________. 4. Multiple budgets can be set up for identical time periods by creating

budgets with separate _____. 5. Budget __________ can be used to set filters on a budget.

Create Budgets Manually In Microsoft Dynamics NAV 2009, budgets can be created in many ways. This includes the following:

• Manually • Copying from an existing budget • Importing an exported budget or an Excel spreadsheet

This lesson includes a demonstration of creating a budget manually and also provides additional budget setup information, such as:

• Changing or Adding Dimensions • Budgeting with Begin-Totals and End-Totals • Deleting Budget Entries

Demonstration: Create a Budget

Scenario: Sara, the CFO at CRONUS International Ltd., must set a January 2011 sales budget by using Budget dimensions Business Group and Customer Group.

The Budget must be set to:

• Lines: G/L Account • Columns: Customer Group • Date filter: January 2011 • Department (Global Dimension 1) filter: Sales • Column Names are displayed • Monthly view



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The entries in the following table must be made for January 2011.

G/L Account

Intercompany Large Business

Medium Business

Private Small Business

6110 -20000 -15000 -10000 -5000 -1000

6120 -15000 -10000 -8000 -1000

6130 -10000 -5000 -3000

Steps

To enter the budget header, follow these steps:

1. In the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then click G/L Budgets.

2. In the G/L Budget Action Pane, click New. 3. In the Name field, enter 2011. 4. In the Description field, enter 2011 budget. 5. In the Budget Dimension 1 Code field, click the drop-down list and

select Business Group. 6. In the Budget Dimension 2 Code field, click the drop-down list and

select Customer Group. 7. Click OK. 8. Select the 2011 Sales Budget and double-click to open the Budget

page. 9. On the General FastTab, in the Show as Lines field, make sure that

G/L Account is selected. 10. On the General FastTab, in the Show as Columns field, click the

drop-down list and select Customer Group. 11. Click OK. 12. On the Filters FastTab, in the Date Filter field, enter

010111..013111. 13. On the Filters FastTab, in the Department Filter field, click the

drop-down list and select Sales. 14. Click OK. 15. On the Options FastTab, place a check mark in the Show Column

Name check box. 16. On the Matrix Option FastTab, in the View by field, click the drop-

down list and select month.



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To enter the budget lines, follow these steps:

In the Edit - Budget - 2011 window, click Show Matrix in the Action Pane.

1. In the lines section, locate and select G/L Account 6110. 2. Click in the field Budgeted Amount to see the G/L Budget Entries

for 6110. 3. Click New in the Action Pane to open a new journal. 4. The following information will automatically be in each line.

o Budget name: 2011 o Date 01-01-2011 o G/L account 6110 o Department code: Sales.

NOTE: Description is left blank, but can be used for additional information on the budget.

5. Enter the following information to be posted on account 6110: o In the Costumergroup field select Intercompany Customers ,

in the Amount field enter -20000. o In the Costumergroup field select Large Business, in the

Amount field enter -15000. o In the Costumergroup field select Medium Business, in the

Amount field enter -10000. o In the Costumergroup field select Private, in the Amount field

enter -5000. o In the Costumergroup field select Small Business, in the

Amount field enter -1000.

6. Click OK. 7. Locate and select G/L Account 6120 in the Budget Matrix. 8. Click in the field Budgeted Amount to see the G/L Budget Entries

for 6120. 9. Click New in the Action Pane. 10. Enter the following information for account 6120:

o In the Costumergroup field, select Intercompany Customers; in the Amount field enter -15000.

o In the Costumergroup field, select Large Business; in the Amount field, enter -10000.

o In the Costumergroup field, select Medium Business; in the Amount field, enter -8000.

o In the Costumergroup field, select Private field; in the Amount field, enter -1000.



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11. Click OK. 12. Locate and select G/L Account 6130 in the Budget Matrix 13. Click in the Budgeted Amount field to see the G/L Budget Entries

for 6130. 14. Click New. 15. Enter the following for account 6130:

o In the Costumergroup field, select Intercompany Customer; in the Amount field, enter -10000.

o In the Costumergroup field, select Large Business; in the Amount field, enter -5000.

o In the Costumergroup field, select Medium Business; in the Amount field, enter -3000.

16. Click OK.

The budget amounts for each customer group are now entered.

When you enter amounts directly in the Budget window, budget entries are created in the G/L Budget Entries window. Adjustments made to the budget are stored in this window.

To review the entries in the G/L Budget Entries, follow these steps:

1. In the Budget Matrix, select the line for either G/L account 6110, 6120, or 6130.

2. Click on the Budgeted Amount field and the G/L Budget Entries window will open.

3. Close the G/L Budget Entries.

Change or Add Dimensions to Budget Entries

After budget entries are created:

• Existing dimensions can be changed. • Dimensions not included in the G/L Budget page can be added.

To use all four dimensions when setting up a budget, you can enter budget entries with amounts for each budget row and column, with each dimension combination. You can set up a budget with all four dimensions by using either of the following methods:

• Change the filter every time for each combination. • Manually enter many budget entries with different dimension

combinations.



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NOTE: When you are creating a large multi-dimension budget for the first time, export the budget structure to Excel to complete the data entry. You can then import the budget into Microsoft Dynamics NAV 2009 by using the Import to Excel function.

Budget with Begin-Totals and End-Totals

A Begin Total account can be used for entering budget amounts for an account group.

For example, the following scenarios may happen if you are using the Sales of Retail accounts that include Begin Total account 6105, Accounts 6110-6190, and End total account 6195:

• If an amount is entered for Account No. 6105, this value is used as a budget for the account group for 6110 to 6190.

• If amounts are entered for the Begin Total account and for another account of this group, for example 6120, both amounts are added in the End Total account on 6195.

The total amount entered in each instance is not split into partial amounts to the existing G/L accounts of this group.

To compare budget entries with the G/L entries by individual account (and not by an account group), budget information must be entered account by account.

Delete Budget Entries

In the G/L Budget page, if a value in a column field is deleted, a negative budget entry is created in the G/L Budget Entry page to maintain the trace-ability of the budget changes.

To delete a budget entry in the G/L Budget page, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then select G/L Budgets.

2. Locate and select a budget with entries. 3. In the Budget Matrix, locate a column line with an entry, click

Actions, and then click Delete to delete the value. 4. Click Yes to delete the selected lines. 5. Close the G/L Budget Entries page.



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Lab 2.3 - Create a Budget Scenario

The Chief Financial Officer (CFO) Sara at CRONUS International Ltd. has asked you to set up a new January 2011 G/L Account budget by areas for the sales of medium-sized industrial customers.

Name the budget: Region11 - Sales by Region 2011 and use Budget Dimensions Business Group, Customer Group, and Area. The budgeted revenues are as shown in the following table.

Area G/L Account Budgeted Amount Europe North (EU) 6110 -400,000.00

Europe North (EU) 6120 -100,000.00

Europe North (Non EU) 6130 -80,000.00

Europe South 6120 -120,000.00

America North 6130 -90,000.00

America South 6130 -50,000.00

Challenge Yourself

1. Set up the Budget Name by using the criteria stated in the scenario. 2. Set up the Budget FastTabs by using the criteria stated in the

scenario. 3. Use a monthly view to enter the budget amounts for the sales

accounts.

HINT: It will help to view the description column names before entering the budget amounts.

Need a Little Help?

1. Open the G/L Budget page and access the G/L Budget Name page. 2. Set up the Budget Name by using the criteria stated in the scenario 3. Set the dimension filters, based on the information stated in the

scenario.



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4. Open the Budget page and set up the FastTabs as stated in the scenario.

5. Use the monthly view to enter the budget amounts as stated in the scenario.



2. In the G/L Budget page, click New. 3. In the Name field, enter Region11. 4. In the Description field, enter Sales by Region 2011. 5. In the Budget Dimension 1 Code field, click the drop-down list and

select Business Group. 6. In the Budget Dimension 2 Code field, click the drop-down list and

select Customer Group. 7. In the Budget Dimension 3 Code field, click the drop-down list and

select Area. 8. Click OK. 9. Select the Region11 budget and double-click. 10. On the General FastTab, make sure that the Show as Lines field,

shows G/L Account. 11. In the Show as Columns field, select Area. 12. Click to expand the Filters FastTab. 13. In the Date Filter field, enter 010111..013111. 14. In the Department Filter field, select Sales and click OK. 15. In the Businessgroup Filter field, select Industrial and click OK. 16. In the Customergroup Filter field, select Medium and click OK. 17. Click to expand the Options FastTab. 18. Make sure that there is no rounding set and then select the Show

Column Name check box. 19. Click to expand the Matrix Options FastTab. 20. In the View by field, click Month. 21. Click Show Matrix in the Action Pane. 22. In the lines, locate G/L Account 6110. 23. Click the area Europe North (EU) field. 24. Click New, in the Amount field enter -400000 and click OK. 25. Locate account 6120 and click the Europe North (EU) field. 26. Click New, in the Amount field, enter -100000 and click OK. 27. Locate account 6120 and click the Europe South field.



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28. Click New, in the Amount field enter -120000 and click OK. 29. Locate account 6130 and click the Europe North (EU) field. 30. Click New, in the Amount field enter -80000 and click OK. 31. Locate account 6130 and click the America North field. 32. Click New, in the Amount field enter -90000 and click OK. 33. Locate account 6130, and click the America South field. 34. Click New, in the Amount field enter -50000 and click OK. 35. Close the Budget Matrix. 36. Click OK in the budget - REGION11 window.



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Copy Budgets To avoid manually entering a new budget, use the Copy Budget function to copy from existing:

• G/L Budget entries • G/L entries

To access the Copy G/L Budget function from the Budget Matrix page, click Actions, point to Functions, and then click Copy Budget.

FIGURE 2.5 COPY G/L BUDGET

NOTE: The Copy Budget function is also available from G/L Account Balance/Budget and G/L Balance/Budget, which can be accessed from the Balance button on the Budget Matrix.



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The Copy G/L Budget batch job contains three areas that are used to specify:

• The Copy from source • The Copy to destination • How to Apply the copied information

Copy Budget Batch Job

The Copy from area is used to determine where the copied budget entries are coming from. The fields within this area are specified based on the selection in the Sourcefield:

• G/L Entry - The budget is based on actual G/L entries for a specified period. Specify: o An account range and a date range in the G/L Account No. and

Date fields to determine the information to be copied. o Whether to include Closing Entries.

• G/L Budget Entry - The budget is based on G/L Budget entries of

an existing budget. Specify the following: o Existing Budget Name to copy from. o Account range and a date range in the G/L Account No. and

Date fields to filter the information copied.

For both Source options, in the Dimensions field, click the AssistButton and then:

• Click to insert a check mark in the Selected check box for each dimension to be copied to the new budget entries.

• Set additional filters for the copying process by defining Dimension Value Filters.

The Copy to area is used to specify where the copied budget information is to be sent. The following fields are included:

• Budget Name - Enter the name of the new budget or click the AssistButton to select an existing Budget Name.

• G/L Account No. - Enter the G/L account number if one or more ledger entries must be copied to one G/L account.

The Apply area includes several calculation options you can use when copying budgets. This includes the following:

• Adjustment Factor - Enter an adjustment factor that the source entries are multiplied by during the copy process. For example, an adjustment of 1.1 increases the amounts by 10 percent and an adjustment of .89 decreases the amounts by 11 percent.



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• Rounding Method - Specify how the new budget entries are rounded.

• Date Change Formula - Enter a formula that calculates the date for the new entries based on the entries being copied, for example 1M for the next month.

• Date Compression - Compress the entries copied by a selected period to reduce the number of new entries created

For more information about the fields on this window, access the online help.

Demonstration: Copying Budget Entries

Scenario: Phyllis, the accounting manager at CRONUS International Ltd., is asked to prepare a sales campaign budget for February 2010. A sales campaign budget already exists for January 2010. The only difference between the January and February budgets is that the February campaign budget is half the amount of January.

To reduce the data entry time, Phyllis decides to copy the January budget entries for February by using the following criteria:

• New budget entries can be added to the 2010 budget instead of creating a new budget.

• Decrease the January amounts in half.

Steps


2. Select the budget to be copied and double-click. 3. Click Show Matrix. 4. Click Actions, point to Functions, and then click Copy Budget. 5. In the Source field, click the drop-down list and select G/L Budget

Entry. 6. In the Budget Name field, click the drop-down list and select 2010

budget. 7. In the Date field, enter 010110..013110. 8. Click OK. 9. Under Copy to, in the Budget Name field, click the drop-down list

and select 2010 budget. 10. In the Adjustment Factor field, enter 0.5. 11. In the Date Change Formula field, enter 1M. 12. Click OK. 13. Click Yes to start the copy process. 14. Click OK.



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15. Click Close and the Edit Budget page opens. 16. Make sure that the Show as Lines G/L Account and the Show as

Columns Period. 17. Set the View by to show Month. 18. Click Show Matrix and review the entries for February, noticing

that the amounts have been decreased by 50 percent.



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Lab 2.4 - Copy a Budget Scenario

Some weeks have passed since you created the January 2011 sales budget. You are now asked to create new sales budget entries for February 2011:

February sales are budgeted to be 10 percent greater than January.

You decide to use the Copy Budget function instead of manually entering the budget. Review the February entries after running the copy function.

Challenge Yourself!

1. Access the Copy G/L Budget batch job. 2. Use the January 2011 sales budget to copy from and to. 3. Include closing entries. 4. Set adjustment factors and date changes. 5. Open the February budget and review the entries.

HINT: Do not change the defaults for Closing Entries (Include) and Date Compression (Day).

Need a Little Help?

1. Open the G/L Budget and open the Copy Budget function. 2. Using budget entries, copy from the January 2011 sales budget. 3. Set the January date filters. 4. Use the January 2011 sales budget to copy to. 5. Set the 10 percent adjustment for the new budget. 6. Update the date formula for the new budget. 7. Run the batch job. 8. Open the 2011 sales budget. 9. Access and review the February entries.

HINT: Do not change the defaults for Closing Entries (Include) and Date Compression (Day).



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2. Double-click on REGION11 budget. 3. Click Show Matrix. 4. Click Actions, point to Functions, and click Copy Budget. 5. In the Source field, select G/L Budget Entry. 6. In the Budget Name field, select REGION11. 7. In the Date field, enter 010111..013111 and press Enter. 8. Under Copy to, in the Budget Name field, select REGION11. 9. In the Adjustment Factor field, enter 1.1 and press Enter. 10. In the Date Change Formula field, enter 1M and press Enter. 11. Click OK. 12. Click Yes to start the copy process. 13. Click OK. 14. Click Close. 15. In the Date field, enter 010111..022811 16. Set the View by field to show Month. 17. Click Show Matrix. 18. Review the entries, noticing that the filters are set and amounts have

been increased by 10 percent.



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Export and Import Budgets Microsoft Dynamics NAV 2009 provides the option of creating budgets by using export and import functions.

You can export budgets to Excel by using the Export Budget to Excel batch job. As soon as budgets are exported:

• Use Excel to modify and add to the budget. • Create new budgets based on the exported budget figures.

You can import budgets from Excel by using the Import Budget from Excel batch job. Imported budgets can be:

• Prevouis exported budgets from Microsoft Dynamics NAV • New budgets created in Excel • Budgets added in to an exisitng budget.

NOTE: Before creating a budget in Excel, it is recommend that you export a budget from Microsoft Dynamics NAV 2009 to obtain the correct format.

Export Budget to Excel Batch Job

Before opening the Export Budget to Excel batch job, make sure that the correct budget is selected in the Budget Name field.

NOTE: The settings in the Show as Lines and Show as Columns fields do not affect the budget export. The exported budget always displays the lines as G/L Accounts and the columns (displayed as dimensions and periods) are determined in the Export to Excel batch job.

The Export Budget to Excel batch job is accessed from the Budget Matrix page by clicking Actions, pointing to Functions, and clicking Export to Excel.

This batch job contains two sections:

• Options • G/L Budget Entry

The G/L Budget Entry FastTab is automatically populated with the Budget Name, Global Dimension, and Budget Dimension filters specified on the Filter FastTab.

These filters determine the entries exported to Excel and can be changed. However, only the budget dimensions contained on the selected budget can be used.



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CAUTION: If filters are set for dimensions on the G/L Budget Entry tab, the same dimensions must be specified in the Column Dimensions field on the Options tab. If the same dimensions are not used, dimension information is lost when the budget is imported into Microsoft Dynamics NAV 2009.

FIGURE 2.6 EXPORT BUDGET TO EXCEL

The Options FastTab contains the following fields:

• Start Date - Identifies the first date to be included in the exported budget.

• No. of Periods - Identifies the number of accounting periods to be included in the exported budget. The total time that the budget will consist of is determined by the combination of this field and the Period Length field.

• Period Length - Uses a formula to determine the length of the accounting periods to be included in the exported budget. For example, 1M for one month.



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• Column Dimensions - Determines which dimensions are shown as columns in the exported budget. These must include the dimensions set as filters on the G/L Budget Entry tab.

• Include Totaling Formulas - If selected, sum formulas are created in Excel based on the Totaling fields used in the Chart of Accounts window. Using this function means that if you alter budget figures in Excel, the Excel cells used as totaling fields are at the same time updated.

The Start Date, No. of Periods, and Period Lengths fields must be specified to run the export batch job.

Exported Budgets

Generate the Excel spreadsheet by using this base structure:

• The Budget Name and Dimension filters appear in the top left • The G/L Accounts appear in the rows • The dimensions, if they are specified, and periods appear in the

columns

To import budgets into Microsoft Dynamics NAV 2009, the base structure of the exported budget must not change. Therefore, it is recommended that you create the budget structure in Microsoft Dynamics NAV 2009 and then run the export process.

You can add additional dimension columns and dimension value filters after the export-but before importing the completed budget amounts-as long as these changes are made to both the excel spreadsheet and dudget dimensions in Microsoft Dynamics NAV 2009.

When all changes have been made, save the Excel spreadsheet.



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Import Budget from Excel Batch Job

Access the Import Budget from Excel batch job from the Budget Matrix page by clicking Actions, pointing to Functions, and clicking Import from Excel. This batch job contains two options:

• Import from • Import to

FIGURE 2.7 IMPORT BUDGET FROM EXCEL

The fields on the Option FastTab include the following:

• Workbook File Name - Specifies the path of the saved Excel budget.

• Worksheet Name - Identifies which worksheet from the Excel workbook to be imported.

• Budget Name - Specifies the budget in Microsoft Dynamics NAV 2009 that entries will be imported to.

• Option - Identifies the method that is used to import budget entries. The options are as follows: o Replace Entries: Imported entries replace existing entries with

the same dimension, date, and G/L Account combination. o Add Entries: Imported entries are added to existing entries with

the same dimension, date, and G/L Account combination. Use this option to create a single consolidated budget from several other individual budgets created in separate Excel worksheets.

• Description - Specifies a description that is assigned to the imported budget entries to help differentiate between other budget entries.

NOTE: Before importing the budget, close Excel.



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Summary Two main areas of the General Ledger in Microsoft Dynamics NAV 2009 are:

• Chart of Accounts • Budgets

As the core component of a company, the Chart of Accounts lesson covered the G/L Account Card and the Chart of Accounts page, and the process for creating G/L accounts from both pages.

The Budget sections explained the G/L Budget page and setting up budgets. The various processes available when working with Budget entries were also explained. This includes the following:

• Changing and adding dimensions • Deleting and copying budget entries • Exporting and importing budgets

Understanding Chart of Accounts is essential when users are working in Microsoft Dynamics NAV 2009. Although budgeting is not a required component of the program, this feature provides better insight into a company's financial status.



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Test Your Knowledge 1. What function is used to create multiple default G/L Account setups for

accounts that are frequently created, such as expenses?

( ) Assign Template ( ) Enter Template ( ) Import Template ( ) Apply Template

2. In the G/L Account Card, what field is used to determine which accounts are closed during the fiscal year end closing process?

( ) Reconciliation Account ( ) Debit/Credit ( ) Account Type ( ) Income/Balance

3. During the Import from Excel process for budgets, what option is best suited to create a single consolidated budget from serveral other individual budgets created in separate Excel Worksheets?

( ) Append Entries ( ) Add Entries ( ) Replace Entries ( ) Combine Entries

4. What types of Dimensions are available when you are creating budgets? (Select all that apply)

( ) Company ( ) Global ( ) Shortcut ( ) Budget

5. In the Copy Budget function, what Adjustment Factor is used to increase the budgeted amounts by 15 percent?

( ) .15 ( ) 1.5 ( ) 1.15 ( ) 15



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6. What is the Chart of Accounts page mainly used for? (Select all that apply)

( ) Viewing G/L Accounts ( ) Creating General Ledger entries ( ) Printing G/L Account/Budget Comparisons ( ) Viewing account amounts

7. From where can you run the Copy Budget function? (Select all that apply)

( ) Budget Matrix page ( ) G/L Account Balance/Budget window ( ) Chart of Accounts Overview window ( ) G/L Balance/Budget window



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1.

2.

3.



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Solutions Budget

Fill In the Blanks: Budget Name and Budget Pages


1. Go to Matrix Option to adjust the period, such as days, months, years, and accounting periods.

2. The Show as Columns and ____ as Lines fields determine how columns and lines are displayed in a budget.

3. The column fields in the budget lines are dynamic

4. Multiple budgets can be set up for identical time periods by creating budgets with separate names

5. Budget dimensions can be used to set filters on a budget.

Test Your Knowledge

1. What function is used to create multiple default G/L Account setups for accounts that are frequently created, such as expenses?

( ) Assign Template ( ) Enter Template ( ) Import Template (•) Apply Template

2. In the G/L Account Card, what field is used to determine which accounts are closed during the fiscal year end closing process?

( ) Reconciliation Account ( ) Debit/Credit ( ) Account Type (•) Income/Balance

3. During the Import from Excel process for budgets, what option is best suited to create a single consolidated budget from serveral other individual budgets created in separate Excel Worksheets?

( ) Append Entries (•) Add Entries ( ) Replace Entries ( ) Combine Entries



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4. What types of Dimensions are available when you are creating budgets? (Select all that apply)

( ) Company (√) Global ( ) Shortcut (√) Budget

5. In the Copy Budget function, what Adjustment Factor is used to increase the budgeted amounts by 15 percent?

( ) .15 ( ) 1.5 (•) 1.15 ( ) 15

6. What is the Chart of Accounts page mainly used for? (Select all that apply)

(√) Viewing G/L Accounts ( ) Creating General Ledger entries ( ) Printing G/L Account/Budget Comparisons (√) Viewing account amounts

7. From where can you run the Copy Budget function? (Select all that apply)

(√) Budget Matrix page (√) G/L Account Balance/Budget window ( ) Chart of Accounts Overview window (√) G/L Balance/Budget window


Chapter 3: General Journals

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CHAPTER 3: GENERAL JOURNALS Objectives

The objectives are:

• Explain the General Journal entry and posting system. • Create and post General Journal entries. • Describe Recurring Journals, including fields and allocations. • Demonstrate how to use Recurring Journals with allocations and how

to record accruals. • Explain the process of reversing and correcting journal entries.

Introduction In Microsoft Dynamics® NAV 2009, General Journals are used to post information into the general ledger and other accounts. The General Journal is also used to post cost allocations and other adjustments to the accounts.

General Journals have three layers: templates, batches, and lines. These layers help the user in the process of creating and posting journal entries. It also help the user track all postings.

The General Journal is also used to entering information into recurring journals, which is used when a company needs to allocate recurring entry lines.

In addition, General Journals enable users to reverse and correct incorrect entries, when necessary.



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Journal Overview General journals are used to enter data into general ledger accounts and other accounts, such as customers, vendors, and banks.

The journal entry system has three layers:

• Journal templates • Journal batches • Journal lines

The following figure, displays the journal structure.

FIGURE 3.1 JOURNAL STRUCTURE: TEMPLATES, BATCHES, AND LINES

Although all three layers are always present, only the journal lines and batch name display in a journal window.

Journal Templates

Journals are used for different types or groups of entries and can be applied to other application areas, such as:

• Sales • Purchase



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• Cash Receipts • Payment • Fixed Asset

Each journal type is set up with its own journal template. Use the journal template to provide the basic journal structure and to specify default information for all batches.

FIGURE 3.2 GENERAL JOURNAL TEMPLATES

In Microsoft Dynamics NAV 2009, there are several standard general journal templates set up in the application areas. These templates cover the most common routines that are used in the program, and in all these journal templates, entries can be posted to general ledger, customer, vendor, and fixed asset accounts. Some standard templates are also automatically set up with a default batch.

NOTE: Journal templates are set up in the Application Setup in Microsoft Dynamics® NAV 2009 courseware.



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Journal Batches

Journal Batches are created based on the journal templates. Batches that are created from a specific template have identical:

• Structure • Default settings • Information

These similarities are defaults that can be changed for each journal batch.

FIGURE 3.3 GENERAL JOURNAL BATCHES

Journal Batches are frequently used to separate one user's entries from another. For example, the following people at CRONUS International, Ltd. use general journals:

• Phyllis, the accounting manager • Cassie, the accountant

Cassie makes entries and posts them later upon approval. To keep Phyllis's entries from becoming mixed with Cassie's entries, separate batches are assigned to the two users.

Journal Lines

Journal lines are the entries that must be posted. Information entered in journal lines includes:

• Account numbers • Posting dates



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• Amounts • Offsetting accounts

FIGURE 3.4 GENERAL JOURNAL - CASH

The lines entered in a journal are temporary and can be changed as long as the journal has not been posted.

Journal Posting

Each journal has a series of posting routines called Codeunits. These codeunits are used during the posting process to post the information entered from the journal to one or more ledgers. For example, the sales journal uses Codeunits 11 through 15 to post the information entered into both the customer ledger and general ledger.

Because the program has a uniform data structure, the five Codeunits are also used to post the following journals:

• General • Cash Receipts • Purchases • Payments



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However the following journals have their own posting routines because of their significant differences:

• Item • BOM • Job • Resource

Test Your Knowledge: Journal Entry System

The following categories list the elements of the Journal Entry System. Based on information in the Journal Overview section, match these elements that have the listed attributes.

Categories (Journal Entry System):

1. Templates 2. Batches 3. Lines 4. Posting

_____ Item 1: Provide the basic journal structure.

_____ Item 2: Use Codeunits.

_____ Item 3: Default information can be changed.

_____ Item 4: Specify default information.

_____ Item 5: Are temporary and can be changed before posting.

_____ Item 6: Separate one user's journal from another user.

_____ Item 7: Standards are in the application areas.

_____ Item 8: Only this and the Batch Name appear in journal windows.

Creating and Posting Journal Entries Users can create and post journal entries for:

• Single entry lines without a separate balancing account line • Multiple entry lines using a balancing account line • Entries with Dimensions



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Create and Post a Journal Entry

To enter lines in a general journal, follow these steps:

1. In the Navigation Pane, click the Departments button, click Financial Management, and then click General Ledger.

2. Under Task in the General Ledger Page, select General Journals. 3. In the Batch Name field, click the drop-down list and select the

relevant batch. 4. Click OK. 5. In the Posting Date field, enter the date of this entry. 6. In the Document Type field, click the drop-down list and select the

relevant document type for this entry. 7. In the Document No. field, leave the defaulted number or assign a

unique number if this field is empty. 8. In the Account Type and Account No. fields, click the drop-down

list and select the account this entry is to be posted to. 9. The Description field is automatically populated with the name of

the account. Update this field as necessary. 10. The Gen. Posting Type, Gen. Bus. Posting Group, and Gen. Prod.

Posting Group fields are populated based on the posting setup on the Account No. selected. These fields can be updated as needed.

11. In the Amount field, enter the amount of the entry. Positive and negative amounts in general journals are posted to the account specified in the Account No. field as follows: o A positive amount represents a debit to the account. o A negative amount represents a credit to the account.

When using the CASH batch name, the balancing account is automatically set to the cash G/L account. To insert a balancing account follow these steps:

1. In the Bal. Account Type and Bal. Account No. fields, click the drop-down list to select the balancing account for this entry.

2. The Bal. Gen. Posting Type, Bal. Gen. Bus. Posting Group, and Bal. Gen. Prod. Posting Group fields are populated based on the posting setup on the Bal. Account No. selected. These fields can be updated as needed.

3. Make sure that the pointer is no longer in the Bal. Account No. field. Notice that the Balance and Total Balance fields at the bottom of the window are zero (0). Because this line contains a balancing account, it is balanced and can be posted. Journal lines that do not balance cannot be posted.

4. In the Action Pane, click Post.



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5. Click Yes to post the journal lines. 6. Click OK. 7. Close the General Journal window.

There are additional hidden fields on the General Journal window. Use the Choose Column function to display these fields.

Create and Post Journal Entries with a Balancing Line

When a journal contains multiple entries that are all applied to the same balancing account, users can enter one final balancing line so that only one complete line is posted to the balancing account. This is helpful, for example, in the Cash Receipt Journal to represent a deposit amount.

To create journal entries with a separate balancing line, follow these steps:

1. On the Navigation Pane, click the Department button, click Financial Management, click General Ledger, and the select General Journals.

2. In the Batch Name field, click the drop-down list and select the relevant batch.

3. In the Posting Date field, enter the date of this entry. 4. In the Document Type field, click the drop-down list and select the

relevant document type for this entry. 5. In the Document No. field, leave the defaulted number or assign a

unique number if this field is empty. 6. In the Account Type and Account No. fields, click the drop-down

list and select the account this entry is to be posted to. The Description field is automatically populated with the name of the account. Update this description as necessary.

7. In the Amount field, enter the amount of the entry. 8. Press the DOWN ARROW key. Notice that many of the fields on

the new line are identical as those on the first line. 9. Repeat steps 6-8 for the second line.

To enter the balancing line and post the journal, follow these steps:

1. Press the DOWN ARROW key. 2. In the Account No. field, select the balancing account for these

entries. 3. In the Amount field, enter the total amount of the first two fields as

an offsetting amount. 4. Verify that the Total Balance field is zero. 5. In the Action Pane, click Post.



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6. Click Yes to post the journal lines. 7. Click OK. 8. Close the General Journal window.

Create and Post a Journal Entry with Dimensions

Dimensions can be assigned to journal entries. A dimension first must be displayed on the General Journal window.

To display the dimension and assign to entries, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then select General Journals.


3. Right-click the table-header to open the Choose Columns function. 4. Select the dimensions on the list and click add. 5. Click OK whan all the dimensions is added. 6. Click OK in the Information box. 7. Close the General Journal to avtivate the dimensions in the journal 8. Click General Journals. 9. Scroll to view that the dimension field(s) appears at the end of the

journal line. 10. Click OK to close the General Journal.

The dimensions can also be added to the lines without adding the fields to the window. Follow these steps to add dimensions:

1. Fill in a line in the General Journal window. Do not fill in any dimensions (if dimensions were added to the window).

2. With the line selected, click Related Information, point to Line and then click Dimensions.

3. In the Dimension Code field, click the drop-down list and select the relevant dimension.

4. In the Dimension Value Code field, click the drop-down list and select the relevant dimension.

5. To close the Journal Line Dimensions window, click OK. 6. If the dimension specified in steps 3-4 was added to the window,

notice that the dimension field is populated with the value entered in step 4.

7. Close the General Journal window.



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General Journal Posting Results

If a filter is set, only those lines that are within the filter and are in balance are posted. The entries hidden because of applying the filter are not posted, even if they balance.

NOTE: Several batches can be posted at the same time by clicking Post in the General Journal Batches window. All lines in all batches appearing in the General Journal Batches window are posted.

The results of a journal posting can be viewed in the G/L register. To access the entries, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then select Chart of Accounts

2. In the Action Pane click G/L Register. 3. Press CTRL+END to move to the bottom of the G/L Registers

window and select the relevant journal batch. Notice that today's date is listed as the Creation Date.

4. In the Action Pane click General Ledger. 5. Review the register and then close the open windows.

Preview a Test Report

To see the effect that the journal will have on the accounts set up as reconciling accounts, you can print a test report before posting. To preview the test report from a general journal, follow these steps:

1. Fill in a line in the General Journal window. 2. Click Actions and point to Posting and then click Test Report. 3. Click Preview. 4. Review the report and then close the Print Preview and General

Journal windows.

Demonstration: Post a Cash Payment for Cleaning Expenses

Scenario: On January 25, 2010, Cassie, the accountant for CRONUS International Ltd. has to post the amount 60.00 payment for a cleaning expense. Because this is a single entry, a separate balancing line will not be used.

This expense has to be posted to the Production department dimension. Notice that the Department dimension has already been added to the General Journal window.

Review the entry after posting.



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Steps

To post the journal entry, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and the click General Journals.

2. In the Batch Name field, click the drop-down list and select the Default Journal Batch.

3. Delete existing lines, if any. 4. In the Posting Date field, enter 01/25/10. 5. Do not change the Document No. field. 6. In the Account Type field, click the drop-down list and select G/L

Account. 7. In the Account No. field, enter 8110. 8. In the Amount field, enter 60.00. 9. In the Bal. Account No. field, enter 2910. 10. In the Department field, click the drop-down list and select

Production. 11. Verify that the Total Balance is zero. 12. Click Post. 13. Click Yes to post the journal lines. 14. Click OK. 15. Click OK to close the General Journal. 16. In the bottom of the General Ledger page, under History, click G/L

Registers. 17. Press CTRL+END to move to the bottom of the G/L Registers

window and select the DEFAULT journal batch. 18. Click General Ledger. 19. Review the entries and close the open windows.



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Lab 3.1 - Create a Journal Entry Scenario

As the accounting manager at CRONUS International Ltd., you have to create and post a debit journal entry that is divided between the Sales and Administration departments. But the credit entry must not be separated by department. Use the following criteria to complete this journal entry:

• Default Journal Batch • Posting Date January 1, 2010 • Debit to G/L account 8110

o 100.00 to the Sales department o 60.00 to the Administration department

• Credit to G/L account 2910

After posting, review your entries in the G/L Register and then close all open windows.

Challenge Yourself!

1. In the General Journal window, enter the debit and credit lines. 2. Post the lines. 3. Review the entries in the G/L Register. 4. Close the open windows.

Need a Little Help?

1. Open the General Journal window. 2. Select the Default journal batch. 3. Enter a line for the Sales department debit. 4. Enter a line for the Administration debit. 5. Enter a line for the credit posting. 6. Post the lines. 7. Close the open windows. 8. Review the entries in the G/L Register. 9. Close the open windows.



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Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then click General Journals.

2. In the Batch Name field, click the drop-down list and select the Default journal batch.

3. In the Posting Date field, click the drop-down list and select 01/01/10.

4. Do not change the Document No. field. 5. In the Account No. field, enter 8110. 6. In the Amount field, enter 100. 7. In the Department field, click the drop-down list and select Sales. 8. Press the DOWN ARROW key. 9. In the Account No. field, enter 8110. 10. In the Amount field, enter 60. 11. In the Department field, click the drop-down list and select

Administration. 12. Press the DOWN ARROW key. 13. In the Account No. field, enter 2910. 14. In the Amount field, enter -160.00 15. Click Post. 16. Click Yes to post the journal lines. 17. Click OK and close the General Journal window. 18. In the General Ledger page, under History, click G/L Registers. 19. Press CTRL+END to move to the bottom of the G/L Registers

window and select the DEFAULT batch. 20. Click General Ledger. 21. Review and then close the open windows.



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Recurring Journals Overview Recurring journals are useful for transactions that are posted frequently with few or no changes. A recurring journal:

• Is a general journal that contains special fields for managing recurring transactions

• Can be used to allocate single entries to multiple general ledger accounts

FIGURE 3.5 RECURRING GENERAL JOURNAL WINDOW

Recurring Journals can be accessed under Periodic Activities in the following application areas:

• Financial Management o General Ledger o Receivables o Payables o Fixed Assets

• Jobs • Resource Planning



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The Purchase application area contains two recurring journals, accessed from the Inventory & Costing page:

• Recurring Item Journal • Recurring BOM Journal

The following recurring journals do not post to the general ledger:

• Item • BOM • Job • Resource

Item, BOM, and Job journals use separate posting functions and Resource journals are never posted to the general ledger.

Recurring Methods

The Recurring Method determines how the amount on the journal line is treated after posting. The following table shows the various Recurring Methods.

Recurring Method

Description Examples

Fixed Use when the amount of the journal is the same each period. The amount on the journal line remains after posting.

Monthly expensing of prepaid annual insurance premium throughout the year. Recording fixed expense invoices if purchase documents are not used (for example, cleaning on a contract basis).

Variable Use when the amount of the journal is different each period. The amount on the journal line is deleted after the recurring journal is posted.

Recording variable expense invoices if purchase documents are not used (for example, stationary, maintenance). Recording regular customer sales if sales documents are not used.



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Recurring Method

Description Examples

Balance The balance of the account on the line is allocated among the accounts specified for the line in the Allocations window. Therefore, the balance on the account on the line is set to zero. Remember to fill in the Allocation % field in the Allocations window.

Periodic allocation of an expense account between departments. Periodic allocation of overheads posted to a single overhead account to several specific overhead accounts. Intercompany expense allocations.

Reversing Fixed

The amount on the journal line remains after posting, and a reversing entry posts on the following day.

Monthly accrual of contract cleaning invoice not received until the following month.

Reversing Variable

The amount on the journal line is deleted after posting, and a reversing entry is posted the next day.

Monthly accrual of electricity invoice not received until the end of the first week of the following month. Monthly income accrual for sales value of items shipped but not invoiced.

Reversing Balance

The balance of the account on the line is allocated among the accounts specified for the line in the Allocations window. The balance on the account is set to zero. A reversing entry posts on the following day.

The same examples as the Balance method but the allocations are only temporary. (For example, the allocations are temporary because they are only an estimate for periodic reporting.)

Recurring Frequency

The Recurring Frequency field contains a formula that determines how frequently the entry on the journal line will be posted. This formula can contain a maximum of 20 alphanumeric characters that the program recognizes as abbreviations for time specifications.

For example, if the formula 1M is entered with a Posting Date of 01/15/10, when the journal is posted, the date is changed to 02/15/10.



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Use one of the following methods to post an entry on the last day of every month after the current month:

• Post the first entry on the last day of a month and enter the formula 1D+1M-1D (1 day + 1 month - 1 day). With this formula, the program calculates the date correctly regardless of how many days are in the month.

• Post the first entry on any arbitrary day of a month and then enter the formula: 1M+CM. With this formula, the program calculates one full month plus the remaining days of the current month.

NOTE: If posting monthly accruals that must be reversed the following month (Reversing Fixed, Reversing Variable, and Reversing Balance methods), post them on the last day of the each month. The first entry must be posted on the last day of the current month and the Recurring Frequency must be either 1D+1M-1D or 1M+CM. This makes sure the reversal is always posted on the first day of the following month.

Document Number Formulas

Instead of using a number series to determine the Document No., Microsoft Dynamics NAV 2009 provides the option to enter a formula to create a document number for each posted entry that is then updated automatically every time that the recurring journal is posted.

NOTE: Posting No. Series specified on the batch overrides manual document numbers. To use the formulas, make sure that the Posting No. Series field on the batch is empty.

Simple text can be combined with the following text codes to form a number series:

• %1 - The current day number • %2 - The current week number • %3 - The current month number • %4 - The current month name • %5 - The current accounting period name

For example, if the entry's document number is R (rent) + current month, enter R%3 in the field. The document number for January will then be R1.

NOTE: The Document No. field supports up to 20 alphanumeric characters. Consider this limitation when creating formulas.



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If there is more than one line in the journal, the program:

• Automatically keeps the same number on the next lines until the balance for the journal is zero (0).

• Enters the next consecutive number on the next line.

Posting Group Fields

There are three fields on the Recurring Journal that are populated from the account card and that determine posting for the journal line:

• Gen. Posting Type • Gen. Bus. Posting Group • Gen. Prod. Posting Group

The values in these fields can be modified or deleted as needed.

Expiration Dates

Recurring journal lines can be set up with expiration dates. Use the Expiration Date field to limit the posting period by specifying the last date that an entry can be repeated.

By using this field, a line can be entered in the journal even though it will only be posted for a limited period. The line will not be posted after the date entered in the field.

The advantage of using this field is that the line will not be deleted from the journal immediately and the present expiration date can be replaced with a later one so that the line can be used additionally into the future.

If the field is blank, the line will be posted during each posting process until it is deleted from the journal.

Allocations

Allocations are used to allocate the amount on the recurring journal line to several accounts and dimensions. That is, the allocation is a balancing account line to the recurring journal line because recurring entries do not have balancing accounts.

Just as in a recurring journal, an allocation only has to be entered one time. The allocation remains in the allocation journal after posting. Therefore, you do not have to re-enter amounts and allocations every time that the recurring journal line is posted.



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Enter allocations for a journal entry by using one of the following methods:

• In the Allocated Amt. (LCY) field, click the drop-down list. • Select the line, click Related Information, point to Line, and then

click Allocations.

FIGURE 3.6 ALLOCATIONS WINDOW

Allocate the amount from the line to different accounts and dimensions by using one of the following allocation methods:

• Allocation Quantity - Allocate the amounts by quantities. An example is allocating by the number of people in each department.

• Allocation % - Allocate the amounts by percentage. • Amount - If you use the Allocation Quantity or Allocation% field,

the program calculates the allocated amount in this field. However, the field can be used to enter a manually calculated allocation amount.

After you enter the lines with the allocations, the Recurring General Journal window displays the following:

• The Allocated Amt. (LCY) field is now filled in. • If the recurring journal line is in LCY, the Allocated Amt. (LCY)

field will match the Amount field but have the opposite sign.

NOTE: The posting group fields can be filled in on either the recurring journal line or on the allocation line, but not on both. These fields are as follows: Gen. Posting Type, Gen. Bus. Posting Group, Gen. Prod. Posting Group, VAT Bus. Posting Group, and VAT Prod. Posting Group.



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Allocations can be used with all Recurring Methods. However, there are some rules for using the Balance method:

• Allocations must be used because this method cannot post only to a balance account in another journal line.

• Do not enter an Amount because, as part of the posting process, the program determines the amounts to post on the line from the account balance.

• The recurring journal must be posted before the allocated amounts can be viewed. The Test Report does not show the calculated allocation amounts.

Test Your Knowledge: Recurring Methods

Match the following Balancing Methods to the correct definition.

_____ 1. The balance of the account is allocated among the accounts specified in the Allocations window. The balance on the account is set to zero and a reversing entry posts on the following day. _____ 2. The amount of the journal is different each period and is deleted after posting. _____ 3. The amount of the journal is the same each period and remains after posting. _____ 4. The amount on the journal line is deleted after posting and a reversing entry is posted the next day. _____ 5. The balance of the account is allocated among the accounts specified in the Allocations window. Therefore, the amount on the line is set to zero. _____ 6. The amount on the journal line remains after posting and a reversing entry posts on the following day.

a. Fixed b. Reversing

Fixed c. Reversing

Balance d. Balance e. Reversing

Variable f. Variable

Test Your Knowledge: Recurring Journal Overview

Fill in the blanks to test your knowledge.

1. Allocations can be used with all Recurring _______. 2. The three fields populated from the account card determine _______

for the journal line. 3. The __________ is a balancing account line to the recurring journal

line. 4. Text code formulas can be used to form a number series in the

____________ field.



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5. The program recognizes the Recurring ________ formula as abbreviations for time specifications.

6. Use the ____________ Date field to limit the posting period.

Processing Recurring Journals Processing recurring journals allows users to save postings that are posted frequently to use as a recurring template for the general journal, this helps user save time, when posting in the accounts.

The demonstrations in this lesson show how to process recurring journals. Both demonstrations use a new recurring batch that is set up in the first demonstration, which shows how to post recurring payable entries that must be paid but do not require invoice documents. Different Recurring Methods are used and the costs are allocated to multiple departments.

The second demonstration summarizes income and expense accruals and shows how to post an accrual by using the Reverse Variable method.

Demonstration: Process a Recurring Journal with Allocations

Scenario: Cassie, the accountant at CRONUS International Ltd., must set up a recurring payables journal for monthly expenses. This includes the following:

• Cleaning: The amount 500.00, always due on the fifteenth of each month, and allocated between these three departments: o Administration - 50 percent o Production - 25 percent o Sales - 25 percent

• Advertising Expenses: variable, but always due on the twenty-fifth

of each month and allocated only to the sales department.

These expenses must be available for payment selection but do not require an invoice document.

For this demonstration, a new recurring journal batch is created so that manual document numbers can be used.

Steps

To enter the line for the cleaning expense, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click General Ledger, and then click Recurring General Journals.

2. In the Batch Name field, click the drop-down list. 3. Click New.



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4. In the Name field, enter Recurring. 5. In the Description field, enter Recurring Journals. 6. Remove the value in the Posting No. Series field. 7. Click OK. 8. In the Recurring Method field, click the drop-down list and select F

Fixed. 9. In the Recurring Frequency field, enter 1M. 10. In the Posting Date field, enter 11/15/10. 11. In the Document Type field, click the drop-down list and select

Invoice. 12. In the Document No. field, enter 2010Cleaning %3. 13. In the Account Type field, click the drop-down list and select

Vendor. 14. In the Account No. field, enter 20000. 15. In the Amount field, enter -500.00.

To enter the allocations for the cleaning expense, follow these steps:

1. Click Related information, point to Line and then click Allocations.

2. Right-click in the table-header and click Choose Column and add the Department Code.

3. In the Account field, enter 8110. 4. In the Department Code field, click the drop-down list and select

Administration. 5. In the Allocation % field, enter 50. 6. Press the DOWN ARROW key. 7. In the Account field, enter 8110. 8. In the Department Code field, click the drop-down list and select

Production. 9. In the Allocation % field, enter 25. 10. Press the DOWN ARROW key. 11. In the Account field, enter 8110. 12. In the Department Code field, click the drop-down list and select

Sales. 13. In the Allocation % field, enter 25. 14. Click OK to close the Allocations window.

To enter the line and allocations for the advertising expense, follow these steps:

1. In the Recurring Journal window, press the DOWN ARROW key. 2. In the Recurring Method field, click the drop-down list and select

V Variable. 3. In the Recurring Frequency field, enter 1M. 4. In the Posting Date field, enter 11/25/10.



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5. In the Document No. field, enter 2010Advert %3. 6. In the Account No. field, enter 60000. 7. For November, the advertising expense is -760.00. Enter this amount

in the Amount field. 8. In the Action Pane, click Allocations. 9. In the Account field, enter 8410. 10. In the Department Code field, click the drop-down list and select

Sales. 11. In the Allocation % field, enter 100. 12. Close the Allocations window.

To post the recurring journal, follow these steps:

1. Click Post. 2. Click Yes to post the journal lines. 3. Click OK.

Review the lines remaining in the window:

• The Posting Date on the first line is 12/15/10 and the second line is 12/25/10.

• The Amount field contains the following: o The first line still contains the -500 because it is a fixed amount. o The second line is empty because the method is variable.

• The Allocated Amt. (LCY) fields still display the allocation

amounts.

NOTE: To record the December expenses, update the amount on the second line and then post the journal. Because the Allocation % was set to 100 for the second line, the allocation always calculates based on the value entered in the Amount field on the recurring journal line; therefore, it does not have to be updated.

To finish this part of the demonstration, follow these steps:

1. Delete the journal lines because they will not be used again. 2. Close the Recurring General Journal window.

To review the posted recurring journal entries, follow these steps:

1. In the navigation pane, click the Departments button, click Financial Management, and then click General Ledger.

2. Scroll to the bottom, under History, click G/L Registers. 3. Press CTRL+END to move to the last entry. 4. In the Action Pane, click General Ledger.



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5. Review the entries in the register: o The Document No. field contains the results of the formula. The

11 represents November. o The amounts are allocated to the Departments.

6. Close the open windows.

Demonstration: Recording Accruals

The recurring journal is ideal for recording accruals.

• Income and expense accruals are entered at the end of an accounting period to make sure that all income and expenses for the period are included in the financial results.

• These accruals are reversed out of the ledger the day after the entry is posted.

Scenario: Starting in November 2010, Cassie, the accountant for CRONUS International Ltd. has to set up a recurring monthly accrual for bank interest of the amount 200.00. The interest is received the second day of the month following the month it is accrued.

The recurring journal with allocation is set up as follows:

• The interest is recorded in the month that it is earned and is posted to account 9110, Interest on Bank Balances.

• The Document No. field contains the current month name and the word Interest.

• The day after the interest is posted to 9110, the entry is reversed and the interest is posted to account 2330, Accrued Interest.

Review the entries after posting.

Steps

To enter the accrual and allocations, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click General Ledger and then Recurring General Journals.

2. In the Batch Name field, make sure that the RECURRING batch (created in the "Process a Recurring Journal with Allocations" demonstration) is selected.

3. In the Recurring Method field, click the drop-down list and select Reversing Variable.

4. In the Recurring Frequency field, enter 1M+CM. 5. In the Posting Date field, enter 11/30/10. 6. In the Document No. field, enter %4 Interest.



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7. In the Account No. field, enter 9110. 8. In the Amount field, enter -200.00. 9. In the Action Pane click Allocations. 10. In the Account field, enter 2330. 11. In the Allocation % field, enter 100. 12. Close the Allocations window. 13. Notice that the Allocated Amt. (LCY) field displays 200.00. 14. Click Post. 15. Click Yes to post the journal lines. 16. Click OK.

Review the line remaining in the window:

• The Posting Date is now 12/31/10. • The Amount field is empty because the method is variable. • The Allocated Amt. (LCY) field displays the allocation amount.

To record the December interest accrual, enter the amount and post the journal.

To complete this part of the demonstration, follow these steps:

1. Delete the journal line because it will not be used again. 2. Close the Recurring General Journal window.

To review the posted accrual, follow these steps:

1. In the navigation pane, click the Departments button, click Financial Management, and then click General Ledger.

2. Click Chart of Accounts, and in the Action Pane, click G/L Registers.

3. Press CTRL+END to move to the last entry. 4. In the Action Pane, click General Ledger. 5. Review the entries in the register:

o The two accrual entries posted on 11/30/10 and the two reversal entries posted on 12/01/10.

o The Document No. field contains the results of the formula. November is displayed because %4 was used.




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Lab 3.2 - Create and Post a Recurring Journal Scenario

On November 1, 2010, CRONUS International Ltd. signed a new vehicle repairs and maintenance contract for a fixed amount of the amount 1,000.00, due on the twenty-fifth of every month.

As the accountant, it is your responsibility to set up and post this expense starting November 2010 with an expiration date of November 1, 2011. You also want a document number to reflect an abbreviation of the expense (VRM) and the number of the month.

Use the RECURRING batch to credit this expense to the Cash account (2910) and allocate it to the company departments as follows:

• Administration: 18 percent • Production: 58 percent • Sales: 24 percent

You do not have to review the entries after posting.

NOTE: If the RECURRING batch has not been set up, refer to steps 2-7 in the "Process a Recurring Journal with Allocations" demonstration.

Challenge Yourself!

1. Use the Recurring Journal to set up the vehicle repair and maintenance expense.

2. Allocate to the departments specified in the scenario. 3. Post the journal.

Need a Little Help?

1. Open the Recurring Journal, RECURRING batch. 2. Enter a line for the cash account credit, starting November 25. 3. Set the expiration date. 4. Open the Allocations window. 5. Set up the department allocations to the vehicle repair and

maintenance expense. 6. Post the journal.



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1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click General Ledger and then click Recurring General Journals.

2. In the Batch Name field, make sure that the RECURRING batch is selected.

3. In the Recurring Method field, click the drop-down list and select Fixed.

4. In the Recurring Frequency field, enter 1M and press enter. 5. In the Posting Date field, enter 11/25/10 and press enter. 6. In the Document No. field, enter VRM %3 and press enter. 7. In the Account No. field, enter 2910 and press enter. 8. In the Amount field, enter -1000 and press enter. 9. In the Action Pane click Allocations. 10. In the Account No. field, enter 8530 and press enter.. 11. In the Allocation % field, enter 18 and press enter. 12. In the Department Code field, click the drop-down list and select

Administration and press enter. 13. In the Account No. field, enter 2910 and press enter. 14. In the Allocation % field, enter 58. 15. In the Department Code field, click the drop-down list and select

Production and press enter. 16. In the Account No. field, enter 2910 and press enter. 17. In the Allocation % field, enter 24 and press enter. 18. In the Department Code field, click the drop-down list and select

Sales and press enter. 19. Close the Allocations window. 20. In the Action Pane, click Post. 21. Click Yes to post the journal lines. 22. Click OK.



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Reversals and Corrections Occasionally, users will have to reverse or correct journal entry lines because changes or entries booked wrongly. Reversing journal entry lines helps users to reverse entries easy and correct.

Reversing Journal Entries

In Microsoft Dynamics NAV 2009, when an incorrect general journal is posted, the posted ledger entries can be reversed in the corresponding registers. However, to reverse an entry, the following must be true of the original entry:

• The Journal Batch Name field must be completed in the G/L Register.

• Customer Ledger Entries must not be applied. • Vendor Ledger Entries must not be applied. • Bank Ledger Entries must not be closed by reconciliation. • The total amount of the G/L Entries must equal zero. • The entry must not include any Item Ledger Entries. • The ledger entries must not have been created by a reversal.

After reversing entries, you can then post it in the same register.

To reverse posted ledger entries from a register, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, and then click General Ledger.

2. Scroll to the buttom under History and select G/L Registers. 3. Locate and select the register to be reversed. 4. In the Action Pane, click Reverse Register. 5. In the Reverse Register Entries window, click Reversing and then

Reverse. 6. Click Yes to reverse the entries. 7. Click OK to the message that the entries were reversed. 8. Review the fields on the reversing entry:

o The Source Code is Reversal. o The Creation Date is the system date. o The Posting Date is the original posting date of the entry.

9. Close the G/L Registers window.



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Posting Correction Entry Lines

Posted ledger entries cannot be changed or deleted in Microsoft Dynamics NAV 2009. However, you can correct the incorrect entries by posting one or more corrective entries using the general journal.

When you are correcting entries, selecting the Correction check box affects the way entries are posted.

To use the correction functionality, use the Form Designer to add the following fields to the General Journal window:

• Correction • Debit Amount • Credit Amount

If a check mark is not added in the Correction check box on the journal lines:

• The Amount field on the line must have the opposite sign of the original, incorrect entry.

• Positive amounts in the Amount field are posted as a positive amount in the Debit Amount field as usual.

• Negative amounts in the Amount field are posted as a positive amount in the Credit Amount field as usual.

If a check mark is added in the Correction check box on the journal lines:

• The Amount field on the line must have the opposite sign of the original, incorrect entry.

• Positive amounts in the Amount field are posted as a negative amount in the Credit Amount field.

• Negative amounts in the Amount field are posted as a negative amount in the Debit Amount field.

The Debit Amount and Credit Amount fields in the journal display the difference between corrections and usual postings.

• After you post a correcting entry in a journal, the effect on the account that is used for posting is as follows:



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• If a check mark is added in the Correction check box: o The original entry and correcting entry are posted to the same

side of the account, either as debits or credits. o The correcting entry has a negative sign. This is helpful when

you run reports such as the Cash Flow Statement.

• If a check mark is not added in the Correction check box, the original entry and correcting entry are posted to opposite sides of the account, one as a debit and the other as a credit.

Test Your Knowledge: Reversals and Corrections

1. To reverse a posted ledger entry, which the following condition(s) must be met?

( ) The Journal Batch Name field must be blank. ( ) Customer and Vendor ledger entries must not be applied. ( ) Bank ledger entries can be either open or closed by reconciliation. ( ) The total of the G/L entries must be greater than zero.

2. Regardless of whether the Correction check box contains a check mark or not, what must be done when you post a correcting ledger entry in the general journal?

( ) Enter positive amounts in the Debit Amount field on the line. ( ) Enter the same sign as the original, incorrect entry in the Amount field

on the line. ( ) Enter the opposite sign of the original, incorrect entry in the Amount

field on the line. ( ) Enter negative amounts in the Credit Amount field on the line.

3. Which of the following are results of posting a correction with the Correction check box checked? (Select all that apply)

( ) The original entry and correcting entry are posted to opposite sides of the account, one as a debit and the other as a credit.

( ) The original entry and correcting entry are posted to the same side of the account, either as debits or credits.

( ) The correcting entry has a positive sign. ( ) The correcting entry has a negative sign.



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Summary General Journals are the basis of many financial functions in Microsoft Dynamics NAV 2009.

General Journal can be posted with and without balancing lines and user can set up dimensions.

Recurring journals help user to record frequently posted entries and to allocate expenses to various departments.

The processes of reversing and correcting incorrect entries is useful in the everyday work and a full understanding of how journals are used is helpful in performing other finance related tasks, such as reconciling of accounts or for informational porpuses.



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Test Your Knowledge 1. Which of the following are the layers in the journal entry system? (Select all

that apply)

( ) Lines ( ) Templates ( ) Posting ( ) Batches

2. What type of journal does not have a balancing account on the line?

( ) Payment Journal ( ) Recurring General Journal ( ) General Journal ( ) Sales Journal

3. Which of the following journals do not use Codeunits 11-15 to post information to the relevant ledgers? (Select all that apply)

( ) Item Journals ( ) Job Journals ( ) Sales Journals ( ) BOM Journals

4. What does the following Document No. formula represent: %4?

( ) Current month name ( ) Current month number ( ) Current accounting period name ( ) Current day number

5. On a Recurring General Journal, which Recurring Method must use allocations?

( ) Variable ( ) Reversing Variable ( ) Balance ( ) Fixed



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1.

2.

3.



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Solutions Journal Overview

Test Your Knowledge: Journal Entry System

The following categories list the elements of the Journal Entry System. Based on information in the Journal Overview section, match these elements that have the listed attributes.

Categories (Journal Entry System):

1. Templates 2. Batches 3. Lines 4. Posting

1 Item 1: Provide the basic journal structure.

4 Item 2: Use Codeunits.

2 Item 3: Default information can be changed.

1 Item 4: Specify default information.

3 Item 5: Are temporary and can be changed before posting.

2 Item 6: Separate one user's journal from another user.

1 Item 7: Standards are in the application areas.

3 Item 8: Only this and the Batch Name appear in journal windows.

Recurring Journals Overview

Test Your Knowledge: Recurring Methods

Match the following Balancing Methods to the correct definition.

c 1. The balance of the account is allocated among the accounts specified in the Allocations window. The balance on the account is set to zero and a reversing entry posts on the following day. f 2. The amount of the journal is different each period and is deleted after posting. a 3. The amount of the journal is the same each period and remains after posting.

a. Fixed b. Reversing

Fixed c. Reversing

Balance d. Balance e. Reversing

Variable



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e 4. The amount on the journal line is deleted after posting and a reversing entry is posted the next day. d 5. The balance of the account is allocated among the accounts specified in the Allocations window. Therefore, the amount on the line is set to zero. b 6. The amount on the journal line remains after posting and a reversing entry posts on the following day.

f. Variable

Test Your Knowledge: Recurring Journal Overview

Fill in the blanks to test your knowledge.

1. Allocations can be used with all Recurring Methods

2. The three fields populated from the account card determine posting for the journal line.

3. The allocation is a balancing account line to the recurring journal line.

4. Text code formulas can be used to form a number series in the Document No. field.

5. The program recognizes the Recurring Frequency formula as abbreviations for time specifications.

6. Use the Expiration Date field to limit the posting period.

Reversals and Corrections

Test Your Knowledge: Reversals and Corrections

1. To reverse a posted ledger entry, which the following condition(s) must be met?

( ) The Journal Batch Name field must be blank. (•) Customer and Vendor ledger entries must not be applied. ( ) Bank ledger entries can be either open or closed by reconciliation. ( ) The total of the G/L entries must be greater than zero.



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2. Regardless of whether the Correction check box contains a check mark or not, what must be done when you post a correcting ledger entry in the general journal?

( ) Enter positive amounts in the Debit Amount field on the line. ( ) Enter the same sign as the original, incorrect entry in the Amount field

on the line. (•) Enter the opposite sign of the original, incorrect entry in the Amount

field on the line. ( ) Enter negative amounts in the Credit Amount field on the line.

3. Which of the following are results of posting a correction with the Correction check box checked? (Select all that apply)

( ) The original entry and correcting entry are posted to opposite sides of the account, one as a debit and the other as a credit.

(√) The original entry and correcting entry are posted to the same side of the account, either as debits or credits.

( ) The correcting entry has a positive sign. (√) The correcting entry has a negative sign.

Test Your Knowledge

1. Which of the following are the layers in the journal entry system? (Select all that apply)

(√) Lines (√) Templates ( ) Posting (√) Batches

2. What type of journal does not have a balancing account on the line?

( ) Payment Journal (•) Recurring General Journal ( ) General Journal ( ) Sales Journal

3. Which of the following journals do not use Codeunits 11-15 to post information to the relevant ledgers? (Select all that apply)

(√) Item Journals (√) Job Journals ( ) Sales Journals (√) BOM Journals



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4. What does the following Document No. formula represent: %4?

(•) Current month name ( ) Current month number ( ) Current accounting period name ( ) Current day number

5. On a Recurring General Journal, which Recurring Method must use allocations?

( ) Variable ( ) Reversing Variable (•) Balance ( ) Fixed



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Chapter 4: Cash Management

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CHAPTER 4: CASH MANAGEMENT Objectives

The objectives are:

• Describe the Bank Account Card. • Demonstrate the process for entering and posting payments received

from customers. • Demonstrate the process for entering and posting payments to

vendors. • Explain and demonstrate the process of financially voiding a check. • Review the Bank Account Reconciliation window and the options

for populating the bank reconciliation lines. • Demonstrate how to process a bank reconciliation.

Introduction Cash management in Microsoft Dynamics® NAV 2009 is used to manage the company's bank accounts.

One of the main features of cash management is the Bank Account Card, which contain all company's bank details, on the Bank Account Card, users can perform the following:

• Processing payments received from customers • Processing payments to vendors • Voiding posted checks (referred to as financial voiding)

In addition to these procedures, users must become familiar with the Bank Acc. Reconciliation window and the bank reconciliation process, this will ensure that transactions always are reconciled and the user can follow the balances on the bank accounts.

NOTE: To successfully perform all demonstrations in this course, a clean Microsoft Dynamics NAV 2009 database must be used.



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Bank Account Overview For each transaction made in Microsoft Dynamics NAV 2009 using a bank account, the system will post a entry in the bank account ledger. The bank account posting group assigned to each bank account enables the program to post the related G/L entries with the transaction.

In addition, if the user make a manual or computer check payments, the system post a entry to the check ledger to record the check transaction and the current status of the check.

Each bank account has its own card that contains information, such as the following:

• Name, address, and contact information • Account numbers • Posting specifications • International banking • Wire transfers

Bank Account window

To access the Bank Account window from the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then click Bank Accounts.

FIGURE 4.1 BANK ACCOUNT WINDOW



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Bank Account Card

Double-click on the bank account to see the Bank Account Card.

FIGURE 4.2 BANK ACCOUNT CARD

General FastTab

The General FastTab contains all the general information about the bank where the account is held such as the:

• Name • Address • Main contact person at the bank • Search name

In addition to this information, the General FastTab includes the following fields:

• No. - A unique identifier to represent the bank account. This field is not used to specify the bank account number.



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• Bank Branch No. - The alphanumeric code used to represent the bank branch number for the bank account. All banks have a number series that specifies the branch of the bank the account was opened.

• Bank Account No. - The bank account number that is used by the bank.

• Balance and Balance (LCY) - These fields are flow fields that calculate the current bank balance based on the bank ledger entries.

• Min. Balance - The minimum balance the bank account can have. The amount is in the currency of the bank account and can be positive or negative.

• Our Contact Code - The contact person in the user's company responsible for the bank account. In the program, this must be someone set up in the Salespeople/Purchasers window.

• Blocked - If selected, prevents the bank account from being used in transactions.

Communication FastTab

The Communication FastTab contains the following information:

• Telephone and fax numbers • E-mail • Home page addresses for the bank

Posting FastTab

The Posting FastTab contains the following fields:

• Currency Code - The currency for the bank account. Be aware that you can only make check payments in the currency of the bank account. o If the Currency Code field of a bank account is blank, you can

only make check payments in local currency (LCY) for that account. If a currency code is selected in this field, only use this bank account to receive and make payments in the currency selected in this field.

o If a currency code is not selected, you can receive payments by using any currency including LCY. Non-check payments can use any currency including LCY. You can only make check payments in LCY.

• Last Check No. - If you are using checks, specify the last check number that is used. The program updates this number every time that a new check is created.

• Transit No. - An alphanumeric code used to represent the bank where the account is held, such as a transit number.



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• Last Statement No - The statement number of the last Bank Account Statement reconciled in the program.

• Balance Last Statement - The statement ending balance of the last Bank Account Statement reconciled in the program.

• Bank Acc. Posting Group - The posting group assigned to this bank account. Microsoft Dynamics NAV 2009 uses this to post the related G/L entries for each transaction by using the bank account.

Transfer FastTab

The Transfer FastTab contains the following fields needed to make transfers to and from the bank account:

• Bank Branch No. - Defaults from the General FastTab • Bank Account No. - Defaults from the General FastTab. • Transit No. - Defaults from the Posting FastTab. • SWIFT Code - The international bank identifier code assigned to

the bank. SWIFT Codes are typically used in automatic payment transactions.

• IBAN - The bank account's International Bank Account Number (IBAN). The program checks whether the IBAN entered has the correct format and length.

Bank Account Card Action Pane

The Bank Account Card includes the following options on the Action Pane:

• Cash Receipt Journal - use to register and post payments from customers.

• Payment Journals - use to register and post payments to vendors • Statistics - displays the current balance for the account in the bank

account currency and LCY and comparative figures from prior periods

• Statements - displays the reconciled Bank Account Statements for this bank account.

• Bank Account Reconciliation - displays the Bank Acc. Reconciliation List, which is described later in this chapter.

• List - displays a list of all bank accounts in the system. • Detail Trial Balance - displays options to print a detail trial balance

for bank accounts. • Check Details - displays options to print a detailed trial balance for

selected checks.



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Bank Account Function

The Bank Account Card includes the function Bank Acc. To view the Bank Acc. function, click Related Information and point to Bank Acc. and the following options are available:

• Statistics - same function as on the Action Pane. • Comments - displays or enters any detailed comments that relates to

this bank account. • Dimensions - displays or enters default dimensions for this bank

account. • Balance - displays the Bank Account Balance window; it shows the

balance or net change in the bank account in the bank account currency and LCY over time.

• Statements - same function as on the Action Pane. • Ledger Entries - displays bank account ledger entries for this bank

account. • Check Ledger Entries - displays only the check ledger entries for

this bank account. Use this option to financially void checks, as described in the "Financially Voiding Checks" lesson in this course.

• Contact - displays the company contact card for this bank account. When you create a new bank account, the system also creates and links a Company contact card to the bank account.

• Online Map - displays information about what map to display in the online map. The online map is set up in the Online Map Parameter Setup Window.

Create a Bank Account

To create a bank account, follow these steps:

1. In the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then click Bank Accounts.

2. Click New. 3. In the No. field, enter a unique identifier for the bank account. 4. In the Name field, enter the name of the bank. 5. In the Adress field, enter the adress of the bank. 6. In the Post Code field, click the drop-down list and select the bank

account's postal code. The City field is automatically populated. 7. In the Country/Region Code field, click the drop-down list and

select the country/region where the bank account is located. 8. In the Phone No. field, enter the bank's telephone number. 9. In the Contact field, enter the name of the contact person in the

bank.



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10. In the Bank Branch No. field, enter the bank's branch number. 11. In the Bank Account No. field, enter the bank account number. 12. In the Our Contact Code field, click the drop-down list and select

the person responcible in the company. 13. On the Communication FastTab, complete the information in the

fields. 14. In the Currency Code field, click the drop-down list and select the

bank account's currency. 15. Complete the Last Check No., Last Statement No., and Balance

Last Statement fields. 16. In the Bank Account Posting Group field, click the drop-down list

and select the appropriate posting group for this bank. 17. Complete the Transit No., SWIFT Code, and IBAN fields. 18. Click OK.



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Lab 4.1 - Create a Bank Account Scenario

CRONUS International Ltd. recently opened a new account at the Super Krone Bank in Denmark. As the accounting manager, it is your responsibility to set up the bank account in Microsoft Dynamics NAV 2009 with the criteria shown in the following table.

Field Value

Bank No. SK Bank - DK

Address 1-3 Remouladevej

City Vedbaek

Postal Code DK-2950

Phone No. 46 75 75 34

Contact Name Anne Hellung-Larsen

Bank Branch No. 2396824

Bank Account No. 9652833

Additionally, Linda Martin is the resource responsible for all interactions with this bank. The bank's currency is Danish Kroner (DKK) and the bank must be assigned to the Currencies posting group.

Close the Bank Account Card when you have finished the setup process.

Challenge Yourself!

Create the bank account in the Bank Account Card window.

Need a Little Help?

1. Open the Bank Account Card. 2. Insert a new record. 3. Complete each FastTab using the criteria specified in the scenario.



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Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then click Bank Accounts.

2. Click New. 3. In the No. field, enter SK Bank / DK. 4. In the Name field, enter Super Krone Bank. 5. In the Address field, enter Remouladevej 1-3. 6. In the Post Code field, click the drop-down list and select DK-2950

and then click enter. 7. In the Country/Region Code field, click the drop-down list and

select DK from the list. 8. In the Phone No. field, enter 46 75 75 34 and then click enter. 9. In the Contact field, enter Ann Hellung/Larsen and then click enter. 10. In the Bank Branch No. field, enter 2396824 and then click enter. 11. In the Bank Account No. field, enter 9652833 and then click enter. 12. In the Our Contact Code field, click the drop-down list and select

Linda Martin. 13. On the Posting FastTab, in the Currency Code field, click the

AssistButton and select DKK. 14. In the Bank Account Posting Group field, click the drop-down list

and select CURRENCIES. 15. Click OK.



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Entering and Posting Receivables Payments In Microsoft Dynamics NAV 2009, payments received from customers are recorded in the Cash Receipt Journal.

The Cash Receipt Journal can be accessed from the following two areas on the Financial Management menu:

• Cash Management • Receivables

In this lesson, the Cash Receipts Journal is accessed from the Cash Management folder.

FIGURE 4.3 CASH RECEIPT JOURNAL

The "Enter a Cash Receipt Payment" demonstration shows the most frequently used cash receipt payment capabilities including posting a full and a partial payment and posting an amount to the customer account.

A comprehensive description of the Cash Receipt Journal window and cash receipt payment processing is provided in the "Receivables Management" course of this Finance in Microsoft Dynamics NAV 2009 courseware.

Demonstration: Enter a Cash Receipt Payment

Scenario: On January 14, 2010, Arnie, the accounts receivable administrator at CRONUS International Ltd. receives a payment from customer 10000, The



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Cannon Group PLC. The following table shows the breakdown of the 63,269.04 payment.

Invoice/Document No. Amount

00-16 30,000.00

103005 8,269.04

n/a 25,000.00

The 30,000 is a partial payment for Document No. 00-16 and the payment for Document No. 103005 is a full amount.

Because the 25,000 is not assigned to an invoice, Arnie decides to apply the amount to the customer account without applying it to a particular invoice.

The Cash Receipt Journal is used to post the payment.

Steps: Enter a Cash Receipt Payment

To enter the payment for this customer, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then click Cash Receipt Journals.

2. In the Batch Name field, click the drop-down list and select Bank and then click OK.

3. In the Posting Date field, enter 01/14/10. 4. In the Document Type field, click the drop-down list and select

Payment. 5. In the Account Type field, click the drop-down list and select

Customer. 6. In the Account No. field, enter 10000. 7. In the Amount field, enter -63,269.04. 8. In the Action Pane, click Apply Entries. 9. In the line for Document No. 00-16, select the Amount to Apply

field and enter 30000 10. Press TAB or ENTER. This is the partial amount applied to invoice

00-16. 11. Locate and select the line for Document No. 103005. 12. Click Set Applies-to ID. This is the full amount applied to invoice

103005. 13. Notice that the Amount field at the bottom of the window contains -

25,000.00. This is the open amount to be posted to the customer account without being applied to an invoice.

14. Click OK. 15. Notice that the Bal. Account No. field is populated with the WWB-

OPERATING bank account. This is set up on the Bank batch.



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To post the Cash Receipt Journal, follow these steps:

1. Click Post. 2. Click Yes to post the journal lines. 3. Click OK. 4. Click OK to close the Cash Receipt Journal.

To review the entry posted to the bank account, follow these steps:

1. In the Cash Management folder, click Bank Accounts. 2. Locate and select bank account WWB-OPERATING. 3. Click Related Information, point to Bank Acc., and then click

Ledger Entries. 4. Locate the payment line dated 01/14/10 in the amount of 63,269.04.

This entry represents the payment posted in the Cash Receipt Journal.

5. Close the Bank Account Ledger Entries.

To review the posted Customer Ledger Entries for this payment, follow these steps:

1. On the Financial Management menu, click Receivables and then click Customers.

2. Locate and select customer 10000, The Cannon Group PLC. 3. In the Action Pane click Ledger Entries. 4. Review the payment lines. Notice that the Remaining Amount field

for the: o Partly paid invoice (00-16) displays the unpaid amount of

3,852.35. o Fully paid invoice (103005) displays a zero balance. o Payment line dated 01/14/10 displays the open 25,000.00 credit

that was not applied to any invoice.

5. Click OK to close the Customer Ledger Entries.



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Lab 4.2 - Apply and Post Cash Receipts Scenario

On January 28, 2010, you receive a payment from customer 30000, John Haddock Insurance Co., in the amount of 154,251.63. This payment is for the following invoices:


00-10 76,167.75

00-13 40,000.00

n/a 38,083.88

As the accounts receivable administrator for CRONUS International Ltd., it is your responsibility to apply and post this payment to this customer's invoices. Use the Bank batch for this posting.

After posting, review the posted customer ledger entries.

Challenge Yourself!

1. Create the payment line for customer 30000. 2. Apply the full and partial payments. 3. Post the journal lines. 4. Review the customer ledger entries.

Need a Little Help?

1. Open the Bank batch in the Cash Receipt Journal. 2. Create the payment line for customer 30000. 3. Open the Apply Customer Entries window. 4. Apply the full amount to Document No. 00-10. 5. Apply the partial payment to Document No. 00-13. 6. Verify the unapplied amount to post to the customer account. 7. Close the Apply Customer Entries window. 8. Post the journal lines. 9. Open the Customer Card window. 10. Access the Customer Ledger Entries window. 11. Review the posted entries for this payment.



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Step by Step


2. Make sure that the Bank batch is selected. 3. In the Posting Date field, enter 01/28/10. 4. In the Document Type field, click the drop-down list and select


Customer. 6. In the Account No. field, enter 30000. 7. In the Amount field, enter -154,251.63. 8. In the Action Pane, click Apply Entries. 9. Locate and select the line for Document No. 00-10. 10. In the Action Pane click Set Applies-to ID. 11. Locate and select the line for Document No. 00-13. 12. Click the Amount to Apply field and then enter 40000. 13. Verify that the Balance field at the bottom of the window is

38,083.88. 14. Click OK. 15. Click Post. 16. Click Yes to post the journal lines. 17. Click OK. 18. Close the Cash Receipt Journal window. 19. On the Financial Management menu, click Receivables and then

Customers. 20. Locate and select customer 30000, John Haddock Insurance Co. 21. Click Ledger Entries. 22. Review the posted entries. Notice that:

o Document No. 00-10 has a Remaining Amount of 0.00. o Document No. 00-13 has a Remaining Amount of 40,399.29. o The payment line posted on 01/28/08 has a Remaining Amount

of 38,083.88.

23. Close the Customer Ledger Entries and Customer Card windows.

Entering and Posting Payables Checks In Microsoft Dynamics NAV 2009, payments to vendors are created and posted in the Payment Journal with the Payment Journal:

• Handwritten checks are quickly recorded and posted.



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• Printed computer checks for open invoices can be entered: o Manually o Using the Suggest Vendor Payments batch job

The Payment Journal can be accessed from the following two areas on the Financial Management menu:

• Cash Management • Payables

In this lesson, the Payment Journal is accessed from the Cash Management folder.

FIGURE 4.4 PAYMENT JOURNAL

The "Post Manual Checks" demonstration explains the most frequently used payment capabilities, specifically entering checks manually and using the Suggest Vendor Payments batch job. A comprehensive description of the Payment Journal window and payment processing is provided in the

"Payables Management" course of this Finance in Microsoft Dynamics NAV 2009 courseware.



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Scenario: April, the accounts payable coordinator at CRONUS International Ltd., is informed of two checks that were handwritten in January, as shown in the following table.

Vendor Date Check No. Amount Applies to

10000 01/21/10 1201 8245.76 Document No. 108019

50000 01/28/10 1203 1500.00 Deposit for future work

April enters and posts these checks in the Payment Journal as manual checks.

Steps: Post Manual Checks

To enter and apply the first manual check, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then click Payment Journals.

2. In the Batch Name field, click the drop-down list and select Bank. 3. Click OK. 4. In the Posting Date field, enter 01/21/10. 5. In the Document Type field, click the drop-down list and select

Payment. 6. In the Document No. field, enter 1201. 7. In the Account Type field, click the drop-down list and select

Vendor. 8. In the Account No. field, enter 10000. 9. Click Apply Entries. 10. Click the line for Document No. 108019. 11. Click Set Applies-to ID. 12. Click OK. 13. Notice that the Amount field is populated with the amount of the

invoice: 8245.76. 14. Make sure that the Bal. Account No. field contains the WWB-

OPERATING bank account. This is set up on the Bank batch. 15. In the Bank Payment Type field, click the drop-down list and select

Manual Check.

To enter the second manual check and post the Payment Journal, follow these steps:

1. Click the next line. 2. In the Posting Date field, enter 01/28/10. 3. In the Document No. field, enter 1203. 4. In the Account No. field, enter 50000.



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5. In the Amount field, enter 1500. 6. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 7. Click Post. 8. Click Yes to post the journal lines. 9. Click OK. 10. Close the Payment Journal.

To review the posted entries to the bank account, follow these steps:

1. In the Cash Management page, click Bank Accounts. 2. Locate and select bank account WWB-OPERATING. 3. Click Related Information, point to Bank Account, and then click

Check Ledger Entries. Check No. 1201 and 1203 represent the manual checks posted to this bank account.

4. Click Close in the Check Ledger Entries window.

To review the posted entries to the vendors, follow these steps:

1. On the Financial Management page, click Payables and select Vendors.

2. Locate and select vendor 10000. 3. Click Ledger Entries. 4. Locate the payment line dated 01/21/10 and the line for Document

No. 108019. Because a full payment was applied completely to the invoice, the Remaining Amount field on both lines display 0.00.

5. Close the Vendor Ledger Entries window. 6. Locate and select vendor 50000. 7. Click Ledger Entries. 8. Locate the payment line dated 01/28/10. Because this payment was

not applied to a specific invoice, the Remaining Amount field displays the full amount of the payment.

9. Close the Vendor Ledger Entries window.

Scenario: On the fifteenth of each month, April, the accounts payable coordinator, pays invoices for local vendors. Today is January 15, 2010, and she must run the Suggest Vendor Payments batch job:

• For all open entries that are due on or before January 25, 2010.



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• For local vendors. • To search for payment discounts.

The checks are printed to create a single check for each vendor.

Steps: Suggest Vendor Payments for Local Vendors

To run the Suggest Vendor Payments batch job for all local vendors, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then select Payment Journals.

2. Make sure that the Bank batch is selected. 3. Click Suggest Vendor Payments. 4. Open the Options FastTab. 5. In the Last Payment Date field, enter 01/25/10. 6. Click the Find Payment Discount check box. 7. In the Posting Date field, enter 01/15/10. 8. In the Starting Document No. field, enter CH001. 9. In the Bal. Account Type field, click the drop-down list and select

Bank Account. 10. In the Bal. Account No. field, click the drop-down list and select

WWB-OPERATING and then click OK. 11. In the Bank Payment Type field, click the drop-down list and select

Computer Check. 12. In the Vendor FastTab, click the Payment Method Code drop-down

list . 13. Point to Additional Columns and locate and select Country/Region

Code. 14. In the Enter a value field for the Country/Region Code line, drop-

down list and select GB. 15. Click OK. 16. Click OK to the message that asks if you still wants to run the batch

job, because the payment date is earlier tham 01/28/10. 17. Click OK to the message that suggested vendor payments lines for

all currencies that have been created.

To print checks to a file, follow these steps:

1. In the Payment Journal with the checks ready to print, click Print Check.

2. On the Options FastTab, in the Bank Account field, click the AssistButton and select WWB-OPERATING.



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3. Click the Last Check No. field and it is populated with the last check number that is used for the World Wide operating bank account.

4. Click the One Check per Vendor per Document No. check box. 5. Click Print. 6. In the Check - Print window, click the Print to file check box to

insert a check mark. 7. Click OK. 8. In the Output File Name field, enter 011510. 9. Click OK.

The printed check lines have been updated, depending on the printing set up, images of the printed checks may appear in the Microsoft Office Document Imaging window.

Review the printed checks (if applicable) and check lines:

• If the printed checks appear, notice that: o One check is printed for each vendor. o Document numbers and amounts of the entries are individually

displayed on the check stubs.

• On the check lines in Microsoft Dynamics NAV, notice that: o The Document No. field is updated with the next check numbers

from the selected bank account. o A balancing bank account entry is inserted for each vendor

payment for the full amount of the payment. o The Bank Payment Type on the suggested lines is blank and the

balancing bank account entry line is populated with Computer Check.

To post the printed checks, follow these steps:

1. Click Post. 2. Click Yes to post the journal lines. 3. Click OK. 4. Close the Payment Journal.

To review the posted entries to the bank account, follow these steps:

1. In the Cash Management page, click Bank Accounts. 2. Locate and select bank account WWB-OPERATING.



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3. Click Related Information, point to Bank Account, and then click Check Ledger Entries. Check no. 200 posted on 01/15/10 represent the printed computer check posted to this bank account.

4. Close the Check Ledger Entries.

To review the posted entries to the vendors, follow these steps:

1. On the Financial Management menu, click Payables and then select Vendors.

2. Locate and select vendor 10000. 3. Click Ledger Entries. 4. Locate the lines for document no. 5578 and 5672 and the payment

lines for check number 200 dated 01/15/10. Because both invoices were completely paid, the Remaining Amount field on all lines display 0.00.

5. Close the Vendor Ledger Entries window.

Bank Account Currency Restrictions on Payments

The currency of the bank account can limit the currency of payments that are made by using the bank account. The following table provides a summary of currency restrictions for bank accounts.

Bank Account Currency Code

Bank Payment Type = Computer Check or Manual Check

Bank Payment Type = Blank

Blank (LCY)

Checks are only printed for LCY payment lines. Only LCY payment lines post.

Payment lines with any currency code including LCY post.

Currency Code

Checks are only printed for payment lines with the same currency code as the bank account. Only payment lines with the same currency code as the bank account post.

Only payment lines with the same currency code as the bank account post.



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Lab 4.3 - Enter and Post Manual Checks Scenario

In January, two manual checks were written:

• To vendor 10000, London Postmaster: o On 01/08/10, check number 1200 o In the amount of 8,132.00 for Document No. 108018.

• To vendor 60000, Grassblue Ltd.:

o On 01/23/10, check number 1202 o In the amount of 2,850.00 for a delivery that required payment

on delivery.

The invoice for the check to vendor 60000 still has not been received but because it is nearing the end of the month, the check must be recorded.

As the accounts payable coordinator at CRONUS International Ltd, it is your responsibility to apply and post these manual checks to the world-wide operating bank account, by using the Bank batch.

Challenge Yourself!

1. Enter both manual checks in the Payment Journal. 2. Apply the second check to the invoice as stated in the scenario. 3. Post the journal.

Need a Little Help?

1. Open the Payment Journal. 2. Enter the first check and do not apply to any invoice. 3. Enter the second check. 4. Open the Apply Vendor Entries window. 5. Apply the payment to the invoice stated in the scenario. 6. Post the journal.

Step by Step

1. On the Financial Management menu, click Cash Management and then click Payment Journals.

2. Make sure that the Bank batch is selected. 3. In the Posting Date field, enter 01/08/10.



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4. In the Payment Type field, click the drop-down list and select Payment.

5. In the Document No. field, enter 1200. 6. In the Account Type field, click the drop-down list and select

Vendor. 7. In the Account No. field, enter 10000. 8. Click Apply Entries. 9. Click the line for Document No. 108018. 10. Click Set Applies-to ID. 11. Click OK. 12. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 13. Click the next line. 14. In the Posting Date field, enter 01/23/10. 15. In the Document No. field, enter 1202. 16. In the Account No. field, enter 60000. 17. In the Amount field, enter 2850. 18. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 19. Click Post. 20. Click Yes to post the journal lines. 21. Click OK.



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Lab 4.4 - Suggest Vendor Payments for a Single Vendor Scenario

On the twenty-fifth of each month, the Suggest Vendor Payments batch job is run for vendor 30000, CoolWood Technologies, for any credit memos and all payments due by the end of the month. It is January 25, 2008, and as the accounts payable coordinator, it is your responsibility to run the batch job by using the following criteria:

• Use the Bank batch. • Have the batch job search for payment discounts. • Use Starting Document No. CWT 012508.

After you run the batch job:

• Print a single check for all invoices to a file that is named CWTChecks 012508.

• Post the checks.

HINT: Filter the vendor on the Vendor FastTab of the Suggest Vendor Payments batch job.

Challenge Yourself!

1. Set up the Suggest Vendor Payments batch job as stated in the scenario.

2. Run the batch job. 3. Print the check as stated in the scenario. 4. Post the journal.

Need a Little Help?

1. Open the Bank batch on the Payment Journal. 2. Set the filter for vendor 30000, CoolWood Technologies. 3. Set up the Options tab as stated in the scenario, make sure that the

WWB-OPERATING bank account is used. 4. Run the batch job. 5. Print the check as stated in the scenario. 6. Post the journal.



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Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then click Payment Journals.

2. Make sure that the Bank batch is selected. 3. Click Suggest Vendor Payments. 4. Enter the following information on the Options FastTab.

o In the Last Payment Date field, enter 01/31/10. o Make sure that the Find Payment Discounts check box is

checked. o In the Posting Date field, enter 01/15/10. o In the Starting Document No. field, enter CWT 012508. o In the Bal. Account Type field, click the drop-down list and

select Bank Account. o In the Bal. Account Type field, clcik the drop-down list and

select the WWB-OPERATING bank. o In the Bank Payment Type field, click the drop-down list and

select Computer Check.

5. On the Vendor FastTab, click Add Filter and point to No. 6. In the Enter a value field, enter 30000. 7. Clear any other filters on this FastTab. 8. Click OK to run the batch job. 9. Click OK to the message about currencies. 10. Click Print Check. 11. In the Options FastTab.

o Make sure that the Bank Account field is set to WWB-OPERATING.

o Make sure that the One Check per Vendor per Document No. check box is checked.

12. Click Print. 13. In the Check - Print window, click the Print to file check box to

insert a check mark. 14. Click OK. 15. In the Output File Name field, enter CWTChecks 012508. 16. Click OK. 17. Close the Microsoft Office Document Imaging window if it

appears.



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18. In Microsoft Dynamics NAV 2009, click Post. 19. Click Yes to post the journal lines. 20. Click OK. 21. Close the Payment Journal.



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Financially Voiding Checks A posted check that must be voided is known as a financial void. When financially voiding a check, make sure that all financial transactions that result from the check payment are also cancelled. Microsoft Dynamics NAV 2009 provides functionality that enables users to:

• Unapply and void the check and transactions. • Void the check only. • Enter a date to use for the void.

In Microsoft Dynamics NAV 2009, financial voids are made from the Bank Account Card.

NOTE: Voiding unposted checks is described in the "Payables Management" course of this Finance in Microsoft Dynamics NAV 2009 courseware.

Demonstration: Financially Voiding a Check

Scenario: On January 31, 2010, April, the accounts payable coordinator at CRONUS International Ltd., posts a manual check to vendor 10000, London Postmaster, for invoice 108023.

Three weeks later, she receives a call from the accounts receivable clerk at London Postmaster, stating that payment on invoice 108023 is past due. April tells the vendor that check number 1204 was sent three weeks ago and must have been lost in the mail. She tells the vendor that a new check will be cut and sent by overnight delivery.

April contacts Phyllis, the accounting manager at CRONUS International Ltd., and asks Phyllis to financially void the check so that a new check can be issued.

As soon as the check is financially voided, Phyllis quickly reviews the entries to verify that all transactions have been successfully voided and notifies April that the check can be reissued.

NOTE: To provide a clean demonstration environment, most of the steps noted in this scenario are performed.

Steps: Financially Voiding a Check

In this part of the demonstration, the manual check for London Postmaster is posted.

1. On the Navigation Pane, click the Departments button. click Financial Management, click Cash Management, and the select Payment Journals.



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2. Make sure that the Bank batch is selected. 3. Click OK. 4. In the Posting Date field, enter 01/31/10. 5. In the Document Type field, click the drop-down list and select


Vendor. 8. In the Account No. field, enter 10000. 9. Click Apply Entries. 10. Click the line for Document No. 108023. 11. Click Set Applies-to ID. 12. Click OK. 13. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 14. Click Post. 15. Click Yes to post the journal lines. 16. Click OK to the message that the lines have been successfully

posted. 17. Close the Payment Journal window.

In this part of the demonstration, check 1204 to vendor 10000 is financially voided. The date that the check is voided is February 21, 2010.

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then select Bank Accounts.

2. Locate and select bank WWB-OPERATING. 3. Click Related Information, point to Bank Acc., and then select

Check Ledger Entries. 4. Locate and select check number 1204. 5. Notice that the Entry Status field is set to Posted. 6. Click Related Information, point to Check and then click Void

Check; the Confirm Financial Void window appears. 7. In the Void Date field, enter 02/21/10. 8. Verify that the Type of Void field has the Unapply and void check

option selected. 9. Click Yes. 10. Notice that the Entry Status field is set to Financially Voided. 11. Close the Check Ledger Entries window.



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In this part of the demonstration, the:

• Vendor Ledger Entries are reviewed to verify that the check was correctly voided on the vendor.

• Payment Journal is used to verify that the invoice (Document No. 108023) is available for repayment.

To review the vendor ledger entries and invoice availability, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Vendors.

2. Locate and select vendor 10000, London Postmaster. 3. Click Ledger Entries. 4. Notice that the line for check 1204 is displayed as voided on

02/21/10. 5. Close the Vendor Ledger Entries window. 6. In the Navigation Pane, click Payables and then select Payment

Journals. 7. In the Account No. field, click the drop-down list and select 10000. 8. Click Apply Entries, notice that Document No. 108023 is displayed

as an open invoice, ready for payment. 9. Close the Apply Vendor Entries window. 10. Delete the line and then close the Payment Journal window.



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Lab 4.5 - Financially Void a Check Scenario

In Lab 4.3, a manual check (number 1200) was posted to London Postmaster in the amount of 8,132.00 for invoice 108018. On January 29, 2010, the payables clerk at London Postmaster calls to find out the status of the payment. You review the payments for this vendor and say that the check was sent weeks ago. As a result, you are asked to resubmit payment.

As the accounting manager, you financially void the check in the World Wide Bank operating account by using the following criteria:

• Void date of 01/29/10. • Review the Bank Ledger Entries for the voided check, by using Field

filters.

The check is resubmitted by the accounts payable coordinator in the next check run.

Challenge Yourself!

1. Void check number 1200 by using the information specified in the scenario.

2. Access the Bank Account Ledger Entries. 3. Review the check and voided check entries. 4. Close the open windows.

Need a Little Help?

1. Open the Bank Account Card for the World Wide Bank operating account.

2. Access the Check Ledger Entries. 3. Void check number 1200 by using the information specified in the

scenario. 4. Access the Bank Account Ledger Entries. 5. Press F7 in the Document No. field to filter on check number 1200. 6. Review the check entries. 7. Close the open windows.



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Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then select Bank Accounts.

2. Locate and select bank WWB-OPERATING. 3. Click Related Information, point to Bank Acc. and then select

Check Ledger Entries. 4. Locate and select check number 1200. 5. Click Related Information, point to Check and then select Void

Check. 6. In the Void Date field, enter 01/29/10. 7. Verify that the Type of Void field has the Unapply and void check

option selected. 8. Click Yes. 9. Close the Check Ledger Entries window. 10. Click Related Information, point to Bank Acc. and then select

Ledger Entries. 11. Set the Filter field to Document No. 12. In the Type to filter field enter 1200 and press search. 13. Review the two check entries. Notice that the date for the line of the

voided check is 01/29/10. 14. Close the Bank Account Ledger Entries window.

Bank Reconciliation Bank accounts maintained in Microsoft Dynamics NAV 2009 must be reconciled regularly. The Bank Reconciliation feature is used to check the bank ledger entries and the balance on the accounts against the statement from the bank.

This lesson explains the Bank Account Reconciliation window and then describes the process of populating the Bank Reconciliation lines to prepare for the "Complete a Bank Reconciliation" demonstration.



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Bank Acc. Reconciliation Window Overview

The Bank Acc. Reconciliation window can be accessed by clicking the Departments button, clicking Financial Management, clicking Cash Management, selecting Bank Account Reconciliations, and then clicking New.

FIGURE 4.5 BANK ACCOUNT RECONCILIATION

This window contains three areas:

• Action Pane • General FastTab • Lines FastTab

The General FastTab on the Bank Acc. Reconciliation window is used to enter information about the bank account and the bank statement. This includes the following fields:

• Bank Account No. - bank account code of the account to be reconciled.



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• Statement No. - number of the bank account statement. After a statement number is entered and the bank reconciliation is posted, Microsoft Dynamics NAV 2009 updates the statement number with the next consecutive number the next time that a bank reconciliation for this bank account is performed.

• Statement Date - date on the bank account statement. • Balance Last Statement - ending balance shown on the last bank

statement that was used in the last posted bank reconciliation for this bank account.

• Statement Ending Balance - ending balance shown on the bank statement.

NOTE: The reconciliation lines cannot be posted unless the amount in this field agrees with the amount in the Total Balance field.

Bank Account Reconciliation Window - Lines

The lines in this FastTab are where users perform the actual reconciliation by entering and adjusting the posted transactions and the transactions on the bank statement until they agree with one another.

The lines include the following fields:

• Transaction Date - posting date of the bank account or check ledger entry on the reconciliation line when the Suggest Lines function is used.

• Type - type of ledger entry or a difference to be reconciled on this line. The options are as follows: o Bank Account Ledger Entry: Used to reconcile an entry from a

bank account ledger. o Check Ledger Entry: Used to reconcile an entry from a check

ledger. o Difference: Used to record an amount in the bank reconciliation

that is not posted in Microsoft Dynamics NAV to balance the reconciliation.

• Description - description for the transaction on the reconciliation line.

• Statement Amount - amount of the transaction on the bank's statement shown on the reconciliation line.

• Applied Amount - amount of the transaction on the reconciliation line that was applied to a bank account or check ledger entry.

• Difference - difference between the amount in the Statement Amount field and Applied Amount field for the reconciliation line.



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When you use the Choose Column feature, the following fields are available in the lines:

• Value Date - value date of the transaction on the bank reconciliation line.

• Document No. - document number that is specified on the original bank account ledger entry.

• Check No. - check number (specified as the Document No.) used on the original check ledger entry.

• Applied Entries - specifies whether the transaction on the bank's statement on this reconciliation line is applied to one or more bank account or check ledger entries

The Bank Acc. Reconciliation Action Pane contains the following buttons:

• Suggest Lines - provides access to Suggest Bank Acc. Reconciliation batch job.

• Transfer to General Journal - provides access to Trans. Bank Rec. to Gen. Jnl. batch job.

• Post - used to post the bank reconciliation. • Post and Print - used to print and post the bank reconciliation. • Apply Entries - used to automatically apply all the transactions on

the bank statement.

The action pane provides access to a window used to apply either bank account or check ledger entries. The window that is used is determined by whether you select the line Type when you click the Apply Entries button or not.

From the Related Information menu the Recon. button is available, which provides access to the Bank Account Card.

Populating Bank Reconciliation Lines

The transactions on the bank's statement must be entered on the reconciliation lines. There are two methods that are available to populate the lines:

• Manually • Using the Suggest Bank Acc. Recon. Lines batch job

Typically, the batch job is used to suggest open bank account and check ledger entries in Microsoft Dynamics NAV 2009 and entries not in the system are entered manually, including but not limited to:

• Bank fees • Interest earned or charged • Transaction adjustments



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All the transactions on the bank's statement must be applied to the bank account or check ledger entries on the relevant bank account. The batch job makes these applications automatically, whereas any manual entries must be applied by using the Apply Entries button.

Accessed from the Action Pane on the Bank Acc. Reconciliation window, the Suggest Bank Acc. Recon. Lines batch job includes the following fields:

• Starting Date - the starting posting date for the ledger entries to be reconciled. Leave blank to have the batch job suggest all open or unreconciled bank account and check ledger entries.

• Ending Date - populated automatically with the Statement Date entered in the header of the Bank Acc. Reconciliation window.

• Include Checks - if selected, the batch job suggests Check Ledger Entries instead of the corresponding bank account ledger entries. This option fills in the Check No. field on the reconciliation line.

FIGURE 4.6 SUGGEST BANK ACC. RECON. LINES

NOTE: Typically, the range that is specified in the Starting and Ending Date fields is the same as the date range of the bank statement.

Test Your Knowledge: Bank Reconciliation Window

1. To post the Bank Reconciliation, which fields must balance? (Select all that apply)

( ) Statement Ending Balance ( ) Balance ( ) Statement Balance ( ) Total Balance



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2. The amount in the Difference field is based on which two fields?

( ) Statement Amount ( ) Applied Amount ( ) Total Balance ( ) Balance

Test Your Knowledge: Bank Reconciliation Lines

What methods are used to populate the Bank Reconciliation lines and when is each typically used?

Demonstration: Complete a Bank Reconciliation The main steps in reconciling a bank account in Microsoft Dynamics NAV 2009 are as follows:

1. Fill in the Bank Reconciliation. 2. Update Bank Reconciliation lines. 3. Record incorrect transaction amounts. 4. Post the Bank Reconciliation.

In this demonstration, each step of the bank reconciliation process is completed.

April the Account Payable assistant is reconciling the bank accounts every fourteen days.

In this demonstration, April finishes each step of the reconciliation process for the WWB-OPERATING bank account for the period 01/14/10 through 01/31/10.

NOTE: To successfully perform this demonstration, each demonstration and Labs 4.2 through 4.5 in the Cash Management section must be completed.



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Step 1: Filling in the Bank Reconciliation

The first step of the bank reconciliation process is to fill in the bank reconciliation header and lines.

Scenario: April opens the Bank Acc. Reconciliation window, fills in the header, and then uses the Suggest Line function to populate the reconciliation lines.

To fill in the Bank Reconciliation header, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and the select Bank Account Reconciliations.

2. Click New. 3. In the Bank Account No. field, click the drop-down list and select

the WWB-OPERATING account. 4. In the Statement Date field, enter 01/31/10. 5. In the Statement Ending Balance field, enter -1,281,892.77.

The Statement No. and the Balance Last Statement fields are automatically populated based on the information on the Bank Account Card.

NOTE: If this is the first bank statement and reconciliation for the account, manually enter the statement number. The program automatically fills in the Statement No. and Balance Last Statement for all future reconciliations.

Populate and Review the Bank Reconciliation Lines

Use the Suggest Lines function to automatically populate the Bank Reconciliation lines with transactions posted to the bank account.

To fill in the Bank Reconciliation lines using the Suggest Lines function, follow these steps:

1. With the Bank Reconciliation header completed, click Suggest Lines; the Suggest Bank Acc. Recon. Lines window appears.

2. Leave the Starting Date field empty. 3. Do not change the Ending Date field. 4. Click the Include Checks check box to insert a check mark. 5. Click OK. 6. Use the Choose Column feature to add the following fields:

o Value Date o Document No. o Check No. o Applied Entries



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The suggested reconciliation lines consist of all open ledger entries on the bank account for the period specified in the Suggest Bank Acc. Recon. Lines batch job.

The Suggest Lines process also applied the reconciliation lines automatically to the corresponding ledger entries. To verify the applications for each reconciliation line:

1. Select the line to review. 2. Click the Applied Entries field to view the applied entries. 3. Close the Bank Account Ledger Entries or Check Ledger Entries

window. To review the bank ledger entry or check ledger entry that the reconciliation line is applied to:

4. Select the reconciliation line. 5. Click Apply Entries.

A check mark is automatically inserted in the Applied field on the ledger entry when the reconciliation lines are suggested.

6. Close the Apply Bank Acc. Ledger Entries or Apply Check Ledger Entries window.

Step 2: Updating the Bank Reconciliation Lines

If all the suggested reconciliation lines match the bank statement transactions for the corresponding date range, post the reconciliation.

In a typical business situation however, the following differences occur:

• Transactions entered into the bank account in Microsoft Dynamics NAV 2009 are not on the bank statement.

• Transactions on the bank statement are not in Microsoft Dynamics NAV 2009.

• Transactions in the bank account and on the bank statement correspond to one another but are recorded differently.

These differences must be reconciled before the reconciliation process can be completed.

Typically, the first step in reconciling these differences is to remove transactions entered in the program that do not appear in the bank statement. Examples of these transactions are as follows:

• Checks sent to vendors that have not been presented at the bank. • Cash or checks that have been received and entered in the system but

not deposited and cleared in your bank account.



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After removing transactions that do not appear on the bank statement, add the lines for bank-related transactions, such as fees or interest. Because these transactions are not in the program, they must be:

• Added manually to the bank reconciliation lines. • Posted using a general journal.

As soon as reconciliation lines have been removed or added, adjust any existing lines to match the bank statement as needed. For example, when a single entry appears on the bank statement for multiple entries in Microsoft Dynamics NAV 2009, it may be necessary to:

• Remove the lines from the bank reconciliation. • Enter a line to match the entry from the bank statement. • Apply the existing entries to the new line in the bank reconciliation.

To explain how to accommodate the differences between the entries recorded in Microsoft Dynamics NAV 2009 and the bank statement, this lesson includes the following processes of updating bank reconciliation lines:

• Removing transactions not in the bank statement. • Posting transactions recorded by the bank. • Applying bank transactions to multiple entries.

Removing Transactions Not in the Bank Statement

Scenario: After filling in the bank reconciliation header and lines, April compares the bank statement to the bank reconciliation lines to find entries in Microsoft Dynamics NAV 2009 that do not appear on the bank statement.

Date Description Amount Reason 01/03/10

Check No. 1200

-8,132.00 Check not received by vendor, was financially voided

01/17/10

Bank Transfer

-3,070.45 Posted as a single transfer; adjusted in a later step

01/17/10

Bank Transfer

-1,489.07 Posted as a single transfer; adjusted in a later step

01/23/10

Doc. No. 2603

-77,302.30

Not cleared by the bank by 01/31/10.

01/24/10

Doc. No. 2605

-121.57 Incorrect amount, check was cleared by the bank as 211.57



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Date Description Amount Reason

01/29/10

Doc. No. 1200

8,132.00 Voiding entry for check number 1200

01/31/10

Check No. 1204

-15,846.00

Not cleared by the bank by 01/31/10.

The following items are removed from the bank reconciliation:

• Document No. BANK1 and BANK2, because they do not match the transfer amount on the bank statement. These items are addressed in the Applying Bank Transactions to Multiple Entries section.

• Document No. 2603 in the amount of -77,302.30, because it has not cleared the bank account by 01/31/10. Then, it will appear in the next bank reconciliation.

• Check No. 1204 in the amount of -15,845.00, because it has not cleared the bank account by 01/31/10. This check was financially voided in February; therefore, it has to be available for the next reconciliation so you can assign it to the voiding check entry.

The following items are not removed from the bank reconciliation:

• Check No. 1200 and Document No. 1200. o The check did not clear in the previous bank reconciliation. This

is why it appears in this one. o Because the corresponding voiding check entry (Document No.

1200) does appear, these two entries will remain in the reconciliation so that they can be posted and closed.

• Document No. 2605 is an incorrect amount that will be corrected in the journal and has to remain in the reconciliation.

To remove the entries, follow these steps:

1. In the Bank Reconciliation window, select both bank transfer lines (Document No. BANK1 and BANK2).

2. Right-click the lines and point to Delete Lines. 3. Click Yes to delete the lines. 4. Locate and select the line for the -77,302.30 amount (Document No.

2603). 5. Right-click the lines and point to Delete Lines. 6. Click Yes to delete the lines. 7. Locate and select the line for the -15,845.00 amount (Check No.

1204).



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8. Right-click the lines and point to Delete Lines. 9. Click Yes to delete the lines.

The next step is to add bank transactions to Microsoft Dynamics NAV 2009.

Posting Transactions Recorded by the Bank

Scenario: April now looks at the entries on the bank statement that do not appear in Microsoft Dynamics NAV 2009. There is one for interest charged in the amount of 2,178.83. April must enter this interest charge in Microsoft Dynamics NAV 2009 to continue with the reconciliation process. This process includes the following:

• Entering the line in the bank reconciliation. • Transferring the line to a general journal. • Posting the general journal. • Applying the posted entry to the reconciliation line.

To enter the interest amount, follow these steps:

1. At the bottom of the Bank Acc. Reconciliation window, insert a new line.

2. In the Transaction Date and Value Date fields, enter 01/31/10. 3. Make sure that the Type is set to Bank Account Ledger Entry. 4. In the Description field, enter Interest, January 2010. 5. In the Statement Amount field, enter -2,178.83. 6. Press TAB or ENTER.

NOTE: If Document No.'s are not specified in the General Journal used by the bank reconciliation, enter a value into the Document No. field. If Document No.'s are specified in the General Journal, do not enter a value in this field because the general journal will not post.

The following fields are affected by this transaction line:

• The Applied Amount and Applied Entries fields are zero because it has not been applied to an entry in the Bank Account Ledger Entries.

• The Difference field on the line contains the amount entered in the Statement Amount field because it has not been applied to an entry.

• The Total Difference field at the bottom of the window also contains the difference.



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The bank reconciliation cannot be posted unless the contents of the Total Difference field is either:

• Equal to zero • The sum of the Statement Amounts from all reconciliation lines

with a Type of Difference

To achieve either of these results, the new transaction line must be transferred to a General Journal and posted.

The Trans. Bank Rec. to Gen. Jnl. batch job transfers all bank reconciliation lines that have a:

• Type of Bank Account Ledger Entry. • Nonzero balance in the Difference field.

To transfer the new lines to a General Journal, follow these steps:

1. In the Bank Acc. Reconciliation window, click Transfer to General Journal.

2. In the Gen. Journal Template field, click the drop-down list and select GENERAL.

3. In the Gen. Journal Batch field, click the drop-down list and select the DEFAULT and then click OK.

4. Click OK to transfer the entry to the General Journal.

The next step is to open the General Journal and post the interest entry. To post the line in the General Journal, follow these steps:

1. In the Navigation Pane, on the Financial Management menu, click General Ledger and then select General Journals.

2. In the Batch Name field, click the drop-down list and select DEFAULT.

3. Click OK. 4. If other lines appear in the batch, delete all lines except for the

interest entry with a Posting Date of 01/31/10. 5. In the Document Type field, click the drop-down list and select

Payment. This indicates that the journal involves a cash payment. 6. In the Bal. Account No. field, enter 9210, because this entry is

interest due on revolving credit. 7. Click Post. 8. Click Yes to post the journal lines. 9. Click OK. 10. Close the General Journal window.

The final step in posting the interest transaction is to apply the line in the bank reconciliation to the posted general journal entry.



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To apply the interest entry in the bank reconciliation, follow these steps:

1. On the Bank Acc. Reconciliation window, make sure that the interest entry line is selected.

2. Click Apply Entries. 3. Click the line for interest entry, posted on 01/31/10. 4. Click the Applied field to insert a check mark. 5. Click OK.

The following fields are affected by this process:

• The Applied Amount field now contains -2,178.83. • The Applied Entries field now contains a 1, specifying a single

application is made for this entry. • The Difference field for the line contains 0.00.

Because the Total Difference field is now zero, the interest reconciliation line no longer prevents the bank reconciliation from being posted.

Applying Bank Transactions to Multiple Entries

If a single transaction on the bank statement corresponds to multiple separate bank account ledger entries in Microsoft Dynamics NAV 2009, these ledger entries can be applied to the reconciliation line for the bank statement transaction.

Scenario: April notices that the bank recorded the two bank transfers dated 01/17/10 in the amounts of -3,070.45 and -1,489.07 as a single amount of -4559.52 on 01/20/10. To make the bank reconciliation entry match the bank statement, April creates a single bank transfer entry and then applies the existing bank transfer entries.

To apply multiple existing entries to a single entry, follow these steps:

1. In the lines of the Bank Acc. Reconciliation window, click New. 2. In the Bank Account No. click the drop/down list and select WWB-

OPERATING 3. In the Transaction Date field, enter 01/20/10. 4. Make sure that the Type is set to Bank Account Ledger Entry. 5. In the Description field, enter Bank Transfers 01/17/10. 6. In the Document No. field, enter BANK1, BANK 2. 7. With the new line selected, click Apply Entries. 8. Click the Applied field for both Bank Transfer lines. 9. Click OK.



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Both the Statement Amount and Applied Amount fields are populated with the amount of -4,559.52, the total of both transfer lines. The Difference field on the line and Total Difference on the window are still 0.00. The reconciliation line will not stop the bank reconciliation posting process.

Step 3: Recording Incorrect Transaction Amounts

If a bank statement contains an incorrect transaction:

• The transaction cannot be applied to a ledger entry. • The bank reconciliation cannot be posted.

Scenario: April also notices that the bank accidentally recorded the payment of 121.57 for the Accounting Systems Hotline as a payment of 211.57. Because of this error:

• When the bank reconciliation lines were suggested, the amount 121.57 was suggested and applied to the bank ledger entry entered correctly in the program.

• The Statement Ending Balance of -1,281,892.77 is based on a withdrawal of 211.57. Therefore, the reconciliation cannot be posted.

To resolve this issue, April decides to make adjustments in the bank reconciliation and contact the bank later to report the error.

To resolve the incorrect bank statement line, follow these steps:

1. In the Bank Acc. Reconciliation window, select the line for Document No. 2605 the Payment, Accounting Systems Hotline, 2010.

2. In the Type field, click the drop-down list and select Difference. 3. Click Yes to delete the application.

By removing the application:

• The ledger entry is still open when the bank reconciliation is posted, similar to usual outstanding deposit entries.

• The Total Difference field shows an amount of -121.57, but as long as this amount is equal to the sum of all lines where the Type field is Difference, the bank reconciliation can be posted.

However, the bank reconciliation cannot post until the amount for the reconciliation line is equal to the incorrect amount in the bank statement. You can correct this by using either of the following methods:

• Adjust the Statement Amount to equal the amount on the bank statement, in this case, -211.57.

• Add a line for the difference of the two amounts.



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For this demonstration, a line is added for the difference of the two amounts.

To add a line for the difference between the two amounts, follow these steps:

1. In the lines right/click and select New Line. 2. In the Transaction Date and Value Date fields, enter 01/31/10. 3. In the Document No. field, enter 2605, the same as the original line. 4. In the Type field, click the drop-down list and select Difference. 5. In the Description field, enter Correction, Document No. 2605. 6. In the Statement Amount field, enter -90.00.

With either method, there is still an open ledger entry for -121.57 that must be applied when the bank corrects the error, typically during the next bank reconciliation.

When you record transaction differences with this method:

• The advantage is that the correct G/L bank account balances are retained in the program.

• The disadvantage is that as soon as the reconciliation is posted, users cannot determine whether the differences have been resolved or if subsequent errors in the bank statement are corrections of previous errors.

Step 4: Posting the Bank Reconciliation

The final step in the bank reconciliation process is posting. Before posting, you must verify the following information in the Bank Acc. Reconciliation window:

• The value in the Statement Ending Balance field must equal the value in the Total Balance field.

• The Total Difference field equals the sum of all lines with the Type field set to Difference.

You can confirm these requirements by printing the Bank Account Statement - Test report. To print this report, follow these steps:

1. Click Test Report. 2. Click Preview. 3. Review and then close the report.

Scenario: April finishes all the steps of the bank reconciliation process, and after running the test report to verify all posting requirements, she posts the reconciliation.

1. Click Post. 2. Click Yes to post the reconciliation. 3. Close the Bank Acc. Reconciliation window.



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Reviewing the Posted Bank Reconciliation

As soon as the reconciliation is posted:

• Related bank account ledger entries are modified by: o Removing the check mark in the Open field. o Adding the bank statement number. o Creating a posted Bank Account Statement.

Scenario: After posting the bank reconciliation, April reviews the bank account entries and the posted statement.

To view the bank account entries and statement, follow these steps:

1. In the Cash Management page, click Bank Accounts. 2. Locate and select the WWB-OPERATING account. 3. Click Related Information, point to Bank Acc., and then click

Ledger Entries. 4. Notice that the only entries marked as Open are:

o Those that were deleted from the Bank Acc. Reconciliation window.

o The incorrect entry for -121.57 that was unapplied. o The entry dated 02/21/10, which is not part of this reconciliation.

5. Close the Bank Account Ledger Entries window. 6. Click Related Information, point to Bank Acc., and then click

Statements. 7. Double-click the line for Statement No. 26. 8. Review the statement and then close the Bank Account Statement

and Bank Account Card windows.



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Test Your Knowledge: Bank Reconciliation

Put the following steps in order to complete a bank reconciliation in Microsoft Dynamics NAV 2009.

Step:

_____: Fill in the Bank Reconciliation lines.

_____: Enter corrections for any incorrect transaction amounts.

_____: Remove transactions not in the bank statement.

_____: Post the Bank Reconciliation.

_____: Fill in the Bank Reconciliation header.

_____: Enter and post bank-related transactions not in Microsoft Dynamics NAV 2009.

Test Your Knowledge: Posting Bank-Related Transactions

Put the following steps in order to post bank-related transactions in the bank statement that are not in Microsoft Dynamics NAV 2009.

Step:

_____: Transfer the new line to General Journal.

_____: Reopen the Bank Reconciliation window.

_____: Open the relevant General Journal.

_____: Apply the line to the posted entry.

_____: Enter the debit or credit in the Bank Reconciliation window.

_____: Complete and post the transferred journal line.



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Summary Cash Management is a important aspect of Microsoft Dynamics NAV 2009 because it manage all the payments in a company. Understanding how to use the banking features and reconciliation process provides an increased awareness of a company's financial status.

Cash Management is provide a Bank Account Card for each bank account in a company, from this card user can follow the payments process from customers and/or to vendors.

Using the Check functions in Cash Management, ensure a secure process when a company use checks for payment and also when a company have to void a check.

It is importent for a company always to know the company's financial status and that the bank accounts are reconciled, the bank reconciliation process in Microsoft Dynamics NAV 2009 ensure that transactions always are reconciled and the user can follow the balances on all the bank accounts.



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Test Your Knowledge 1. When you post a manual or computer check, what is posted to record the

check transaction and the current status of the check?

( ) Bank Account Ledger Entry ( ) Detailed Bank Account Ledger Entry ( ) Check Ledger Entry ( ) Detailed Check Ledger Entry

2. On the Bank Account Card, what enables the program to post the related G/L entries for each transaction by using the bank account?

( ) Posting Account No. ( ) Bank Acc. Posting Group ( ) Bank Account No. ( ) Bank Acc. G/L Group

3. What can be posted in the Payment Journal? (Select all that apply)

( ) Bank transfers ( ) Handwritten checks ( ) Electronic payments ( ) Computer checks

4. Which of the following must occur before you post a bank reconciliation? (Select all that apply)

( ) The Bank Account Statement - Test Report is printed. ( ) The Total Difference field equals the sum of all lines with the Type

field set to Difference. ( ) The value in the Statement Ending Balance field must equal the value

in the Total Balance field. ( ) All entries are applied.

5. Which of the following actions occur as soon as the bank reconciliation is posted? (Select all that apply)

( ) The check mark in the Open field is removed for all posted entries. ( ) A posted Bank Reconciliation Statement is created for the relevant

bank account. ( ) A new Bank Reconciliation Statement is automatically created for the

next bank reconciliation. ( ) The Bank Statement No. is registered on all posted entries.



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Fill in the Blanks


6. The _______ Vendor Payments batch job automatically populates the Payment Journal based on specified criteria.

7. A posted check that must be voided is referred to a _________ void.

8. If a bank account's Currency Code is blank, check payments can only be made in _____ for that account.

9. Payments from customers are entered as ________ amounts in the Cash Receipt Journal.

10. The Suggest _____ function is used to automatically populate the Bank Reconciliation with posted transactions.



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1.

2.

3.



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Solutions Bank Reconciliation

Test Your Knowledge: Bank Reconciliation Window

1. To post the Bank Reconciliation, which fields must balance? (Select all that apply)

(√) Statement Ending Balance ( ) Balance ( ) Statement Balance (√) Total Balance

2. The amount in the Difference field is based on which two fields?

(√) Statement Amount (√) Applied Amount ( ) Total Balance ( ) Balance

Test Your Knowledge: Bank Reconciliation Lines

What methods are used to populate the Bank Reconciliation lines and when is each typically used?

MODEL ANSWER:

Lines are entered manually or automatically by using the Suggest Lines function. Typically, the system populates the lines with open bank account and check ledger entries automatically by using the Suggest Lines function; lines not in Microsoft Dynamics NAV 2009 are entered manually.



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Demonstration: Complete a Bank Reconciliation

Test Your Knowledge: Bank Reconciliation

Put the following steps in order to complete a bank reconciliation in Microsoft Dynamics NAV 2009.

Step:

2 : Fill in the Bank Reconciliation lines.

5 : Enter corrections for any incorrect transaction amounts.

3 : Remove transactions not in the bank statement.

6 : Post the Bank Reconciliation.

1 : Fill in the Bank Reconciliation header.

4 : Enter and post bank-related transactions not in Microsoft Dynamics NAV 2009.

Test Your Knowledge: Posting Bank-Related Transactions

Put the following steps in order to post bank-related transactions in the bank statement that are not in Microsoft Dynamics NAV 2009.

Step:

2 : Transfer the new line to General Journal.

5 : Reopen the Bank Reconciliation window.

3 : Open the relevant General Journal.

6 : Apply the line to the posted entry.

1 : Enter the debit or credit in the Bank Reconciliation window.

4 : Complete and post the transferred journal line.



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Test Your Knowledge

1. When you post a manual or computer check, what is posted to record the check transaction and the current status of the check?

( ) Bank Account Ledger Entry ( ) Detailed Bank Account Ledger Entry (•) Check Ledger Entry ( ) Detailed Check Ledger Entry

2. On the Bank Account Card, what enables the program to post the related G/L entries for each transaction by using the bank account?

( ) Posting Account No. (•) Bank Acc. Posting Group ( ) Bank Account No. ( ) Bank Acc. G/L Group

3. What can be posted in the Payment Journal? (Select all that apply)

( ) Bank transfers (√) Handwritten checks ( ) Electronic payments (√) Computer checks

4. Which of the following must occur before you post a bank reconciliation? (Select all that apply)

( ) The Bank Account Statement - Test Report is printed. (√) The Total Difference field equals the sum of all lines with the Type

field set to Difference. (√) The value in the Statement Ending Balance field must equal the value

in the Total Balance field. ( ) All entries are applied.

5. Which of the following actions occur as soon as the bank reconciliation is posted? (Select all that apply)

(√) The check mark in the Open field is removed for all posted entries. (√) A posted Bank Reconciliation Statement is created for the relevant

bank account. ( ) A new Bank Reconciliation Statement is automatically created for the

next bank reconciliation. (√) The Bank Statement No. is registered on all posted entries.



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Fill in the Blanks


6. The Suggest Vendor Payments batch job automatically populates the Payment Journal based on specified criteria.

7. A posted check that must be voided is referred to a financial void.

8. If a bank account's Currency Code is blank, check payments can only be made in LCY for that account.

9. Payments from customers are entered as negative amounts in the Cash Receipt Journal.

10. The Suggest Lines function is used to automatically populate the Bank Reconciliation with posted transactions.


Chapter 5: Receivables Management

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CHAPTER 5: RECEIVABLES MANAGEMENT Objectives

The objectives are:

• Reference the Payments FastTab on the Customer Card. • Explain the Cash Receipt Journal, which is used to post payments

received. • Explain the process of applying cash receipt payments to customer

ledger entries. • Explain the process of unapplying entries to customer ledger entries. • Explain the process of reversing customer ledger entries posted with

using journals. • Set up Microsoft Dynamics NAV 2009 to use payment discounts. • Process transactions for various situations that benefit from payment

discounts. • Set up Microsoft Dynamics NAV 2009 to use payment tolerance. • Process transactions for various situations that benefit from using

payment tolerance. • Explain why and when Reminders and Finance Charge Memos are

used. • Set up Microsoft Dynamics NAV 2009 to use reminders. • Explain the process of creating and issuing reminders. • Set up Microsoft Dynamics NAV 2009 to use finance charge memos. • Explain the process of creating and issuing finance charge memos. • Review Customer Ledger Entries and Detailed Customer Ledger

Entries.

Introduction Microsoft Dynamics® NAV 2009 Receivables Management is used to manage the customers for a company. All information for a customer is kept in a Customer Card, which also includes all customer ledger entries and detailed ledger entries.

The basic functions in Receivables Management are:

• Applying and posting customer payments. • Unapplying and reversing posted entries. • Setup and processing payment discounts and tolerances.



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The system also has a collections management feature to keep track of reminders and other finance charge memos.

NOTE: To successfully perform all demonstrations in this course, a clean Microsoft Dynamics NAV 2009 database must be used.

Customer Card Managing customers is an important part of managing the total finances of the company. In Microsoft Dynamics NAV 2009, the Customer Card contains six FastTabs:

• General • Communication • Invoicing • Payments • Shipping • Foreign Trade

Each FastTab includes a function to manage the customers the best way. The customer card also has two FactBoxes with the Customer Sales History and Customer Statistics to help users gain information about a specific customer's account.

FIGURE 5.1 CUSTOMER CARD



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Customer Card and Receivables

The Payments FastTab on the Customer Card is used to define how customer's payments are managed.

FIGURE 5.2 CUSTOMER CARD - PAYMENTS FASTTAB

On this FastTab, the following payment requirements are specified:

• Payment application methods • Payment terms and methods • Reminder and finance charge terms • Whether payment tolerance is allowed



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Cash Receipt Journals Overview The Cash Receipt Journal is used to post payments received from customers.

The Cash Receipt Journal can be accessed from the following two areas on the Financial Management page:

• Cash Management • Receivables

FIGURE 5.3 CASH RECEIPT JOURNAL WINDOW

Use the following field selections when you post cash receipts:

• Document Type = Payment • Account Type = Customer • Bal. Account Type = Bank Account

The following fields are important when posting cash receipts:

• Batch Name - determines default balancing accounts and document numbers.

• Document No. - the batch selected for the Cash Receipt Journal is set up with a No. Series; this field is automatically populated. If the No. Series field on the journal batch is blank, manually enter a document number.

• Amount - entered as a negative amount.



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Applying Cash Receipt Payments Users can apply cash receipt payments to customer ledger entries using either of the following methods:

• At the time that a cash receipt is processed. • After a cash receipt is processed without an application to an entry.

The various methods of applying cash receipts in the Cash Receipt Journal are:

• Post a payment to a single invoice. • Post a payment to multiple invoices. • Post a partial payment to a single invoice. • Post a partial payment to multiple invoices.

NOTE: The instructions contained in the four processes that were discussed earlier do not reference specific customer payments or invoices. To avoid conflicts with demonstrations in this lesson, do not use customer numbers 10000-50000 when performing these procedures.

Application Methods

When users post payments without application to an entry, the option selected in the Application Method field on the Payments FastTab of the customer's card determines how the open payment is managed in the customer ledger entries.

The Application Method options are:

• Manual • Apply to Oldest

When the Manual option is selected, a payment posted to a customer's account is not applied to an invoice and remains an open payment in the customer ledger entries.

When the Apply to Oldest option is selected, a payment posted to a customer's account is automatically applied to the oldest of the customer's open entries.

The option selected does not affect how applications are made when users post a payment; however, the user must understand how the Application Method affects the unapplied entries.



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Apply Customer Entries Window Overview

The Apply Customer Entries window is used to apply open customer ledger entries for the relevant customer. This window can be accessed from various areas in Microsoft Dynamics NAV 2009, including from the following two windows:

• Cash Receipt Journal, to apply payments to entries before posting. • Customer Ledger Entries, after posting payments that have not

been applied.

To open the Apply Customer Entries window from either of these windows, click Apply Entries.

FIGURE 5.4 APPLY CUSTOMER ENTRIES

The Apply Customer Entries window contains five areas:

• General Header • ActionPane • Lines • Balancing application fields • FactBox

The General Header contains the applying entry information. This entry determines whether the following are offered for the entry:

• Payment discounts • Tolerances • Realized gains or losses on currencies



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The Lines area displays each open transaction and is used to determine the entries to be applied-to. The following fields can be edited:

• Applies-to ID-identifies who or what is making the application and is required to post the application.

• Amount to Apply - used for partial payments to specify the exact amount to apply to the applying entry.

• Due Date - indicates when an invoice is due to be paid • Pmt. Discount Date - indicates the date on which the amount in the

entry must be paid for a payment discount to be obtained. • Pmt. Disc. Tolerance Date - indicates the latest date on which the

amount in the entry must be paid for payment discount tolerance to be granted.

• Remaining Pmt. Disc. Possible - identifies the remaining payment discount that can be received if the payment is made before the payment discount date.

• Max. Payment Tolerance - identifies the maximum tolerated amount that the amount in the entry can differ from the amount on the invoice or credit memo.

Underneath the lines are the following balancing fields, used to track the application:

• Appln. Currency • Amount to Apply • Pmt. Disc. Amount • Rounding • Applied Amount • Available Amount • Balance

The Related Information menu in the Apply Customer Entries window includes the following options:

• Entry • Application

The Entry menu button provides access to additional information for the line selected.



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The Application menu includes the two options:

• Set Applies-to ID - used to set the Applies-to ID field on the line for each line that is applied against the Applying Entry in the General FastTab.

• Post Application - used to post the application when users are applying previously posted entries.

These can also be accessed from the Action Pane.

From the Actions menu, Navigate Menu, you can access the Navigate window for the selected line..

The FactBox on the Apply Customer Entries Card displays the Customer Ledger Entry Details.

Post a Payment to a Single Invoice

To enter a payment and apply the full amount to a single invoice, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then select Cash Receipt Journals.

2. In the Batch Name field, verify that the correct batch is used. 3. In the Posting Date field, enter the date the payment was received. 4. In the Document Type field, select Payment. 5. Update the Type field, select Customer. 6. In the Account No. field, click the drop-down list and select the

customer. 7. Click Apply Entries. 8. Click the line with the invoice to apply the payment to. 9. Click Set Applies-to ID. 10. Click OK. 11. Notice that the Amount field contains the amount of the invoice.

Verify that it matches the amount of the payment. 12. Make sure that the Bal. Account Type and Bal. Account Number

fields indicate the bank account. 13. Click Post. 14. Click Yes to post the journal. 15. Click OK. 16. Close the Cash Receipt Journal.



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Post a Payment for Multiple Sales Documents

To enter and apply a payment to multiple sales documents, follow these steps:


2. In the Batch Name field, verify that the correct batch is used. 3. In the Posting Date field, enter the date the payment was received. 4. In the Document Type field, select Payment. 5. Update the Type field, select Customer. 6. In the Account No. field, click the drop-down list and select the

customer. 7. Click OK. 8. In the Amount field, enter the full payment as a negative amount. 9. Click Apply Entries. 10. Click the line with the invoice to apply the payment to. 11. Click Set Applies-to ID. 12. Repeat steps 11-12 for the other invoice line(s). 13. Verify that the Balance field at the bottom of the window is zero (0). 14. Click OK. 15. Make sure that the Bal. Account Type and Bal. Account Number

fields indicate the bank account. 16. Click Post. 17. Click Yes to post the journal 18. Click OK. 19. Close the Cash Receipt Journal.

Post a Partial Payment to a Single Invoice

To enter a partial payment to a single invoice, follow these steps:


2. In the Batch Name field, verify that the correct batch is used. 3. In the Posting Date field, enter the date the payment was received. 4. In the Document Type field, select Payment. 5. Update the Document No. field, if necessary. 6. In the Account Type field, select Customer. 7. In the Account No. field, click the drop-down list and select the

customer. 8. Click OK. 9. In the Amount field, enter the full payment as a negative amount.



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10. Click Apply Entries. 11. Click the line with the invoice to apply the payment to. 12. Click Set Applies-to ID. 13. Click OK. 14. Make sure that the Bal. Account Type and Bal. Account Number

fields indicate the bank account. 15. Click Post. 16. Click Yes to post the journal lines. 17. Click OK. 18. Close the Cash Receipt Journal

Post a Partial Payment to Multiple Invoices

To enter a partial payment to multiple invoices, follow these steps:


2. In the Batch Name field, verify that the correct batch is used. 3. In the Posting Date field, enter the date the payment was received. 4. In the Document Type field, select Payment. 5. Update the Document No. field, if necessary. 6. In the Account Type field, select Customer. 7. In the Account No. field, click the drop-down list and select the

customer. 8. Click OK. 9. Click Apply Entries. 10. Click the line with the invoice to apply the payment to. 11. Click the Amount to Apply field. 12. Enter the amount of the partial payment for this invoice as a positive

amount. 13. Repeat steps 10-13 for the other invoice line(s). 14. Click OK. 15. Notice that the Amount field contains a negative amount totaling all

invoices. Verify that it matches the amount of the payment. 16. Click Post. 17. Click Yes to post the journal lines. 18. Click OK. 19. Close the Cash Receipt Journal.



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Applying Customer Refunds

Users can apply open credit memos to the same cash receipt line as open invoices when they are using the same process as when entering full or partial payments to multiple invoices.

Invoice and credit memo entries can also be applied to a customer refund in Microsoft Dynamics NAV 2009. The only differences and requirements in the application process are as follows:

• In the Cash Receipt Journal window: o The Document Type is Refund. o The Amount is entered as a positive.

• The total amount for the applied credit memos is larger than the total

applied invoice amounts.

Demonstration: Applying Entries After Posting

When a user posts a payment, credit memo, or refund without applying them to an open customer ledger entry, he or she can apply it later from the Customer Ledger Entries window.

Scenario: On January 18, 2010, Arnie, the accounts receivable administrator at CRONUS International Ltd., receives a payment from customer 10000 in the amount of 63,180.29. Because he does not know what invoices the payment applies to, he posts the payment to the customer account to be applied later.

Two days later, he is notified that the payments are for:

• Invoice number 00-11, 63,473.13 • Credit memo 104001, -292.84

In this demonstration, the payment is posted to the customer account and then the entries are applied.

Steps: Applying Entries After Posting

To post the payment for this demonstration, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then select Cash Receipt Journal.


Payment. 5. In the Account Type field, select Customer.



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6. In the Account No. field, enter 10000. 7. In the Amount field, enter -63,180.29. 8. Click Post. 9. Click Yes to post the journal lines. 10. Click OK. 11. Close the Cash Receipt Journal.

To apply the posted payment to the open invoice and credit memo, follow these steps:

1. In the Receivables folder, click Customers. 2. Locate and select customer account 10000. 3. Click Ledger Entries. 4. Locate and select payment line dated 01/18/10 in the amount of -

63,180.29. 5. Click Actions, point to Functions, and then select Apply Entries.

o Notice that the General Header is populated with the informations from the payment.

o All payments are removed from the lines so that they cannot be selected as an applied-to entry.

6. In the lines, click the line for invoice 00-11 in the amount of 63,473.13.

7. Click Set Applies-to ID. 8. Notice that the Balance field at the bottom of the window displays

292.84. This is the amount of the credit memo. 9. Click the line for credit memo 104001. 10. Click Set Applies-to ID. 11. Notice that the Balance field at the bottom of the window contains

0.00.

To post the application, follow these steps:

1. Click Post Application. 2. Review the Post Application window:

o The Document No. is the same as the Document No. of the payment in the header.

o The Posting Date is the same as the most recent entry included in the application.

3. Change these fields if it is necessary: o Apply entries in a closed period by changing the Posting Date to

a date in the current open period. o Change the Document No. to use a different document number

to determine the application postings.



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4. Click OK. 5. Click OK to the message that the application was posted.

To review the posted application, follow these steps:

1. In the Customer Ledger Entries window, review the applied lines. Notice the Remaining Amount field displays a zero balance for the: o Fully paid invoice 00-11 o Credit memo 104001 o Payment line dated 01/18/10

2. Click the payment line, click Related Information, point to Entry,

and then select Applied Entries. 3. Notice that both the invoice and credit memo are listed. 4. Close the Applied Customer Entries window. 5. Click the invoice line, click Related Information, point to Entry,

and then select Applied Entries. 6. Notice that only the payment line appears. 7. Close the Applied Customer Entries window. 8. Click the credit memo line, click Related Information, point to

Entry, and then select Applied Entries. 9. Notice that only the payment line appears. 10. Close the Applied Customer Entries window.

NOTE: If the payment tolerance features are not used, payment amounts are applied as follows.

If the payment is greater than the amount of the invoices applied to, the difference is recorded as a Remaining Amount on the payment line and all invoices are closed.

If the payment is less than the amount of invoices applied to, the invoices are fully applied and closed in order of date (oldest first). The difference is recorded as a Remaining Amount on the invoice(s) not fully applied to.

Apply a Partial Payment After Posting

To apply a partial payment after a cash receipt is posted, follow these steps:

Process a partial payment through the Cash Receipt Journal, but do not apply the payment to an invoice.

1. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then select Customers.

2. Locate and select the customer.



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3. Click Ledger Entries. 4. Click Actions, point to Functions, and then select Apply Entries. 5. Select the payment entry that has not yet been applied and then click

Related Information, point to Application, and then select Set Applying Entry.

6. Select the partial payment entry to be applied and then click Set Applies-to ID. Notice that the full amount of the entry is set in the Amount to Apply field.

7. Click the Amount to Apply field. 8. Change the amount to the partial amount that will be applied to the

invoice. The Balance at the bottom of the window is now zero.



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Lab 5.1 - Apply and post a Cash Receipt Scenario

On January 25, 2010, you receive a payment from customer 30000, John Haddock Insurance Co., in the amount of 116,167.75. This payment is for the following invoices:


00-10 76,167.75

00-13 40,000.00

As the accounts receivable administrator for CRONUS International Ltd. it is your responsibility to apply and post this payment to this customer's invoices. Use the Bank batch for this posting.

After posting, review the posted customer ledger entries.

Challenge Yourself!

1. Create the payment line for customer 30000. 2. Apply the full and partial payments. 3. Post the journal lines. 4. Review the customer ledger entries.

Need a Little Help?

1. Open the Bank batch in the Cash Receipt Journal. 2. Create the payment line for customer 30000. Do not enter the

amount of the check. 3. Open the Apply Customer Entries window. 4. Apply the full amount to Document No. 00-10. 5. Apply the partial payment to Document No. 00-13. 6. Close the Apply Customer Entries window. 7. Post the journal lines. 8. Open the Customer Card window. 9. Access the Customer Ledger Entries window. 10. Review the posted entries for this payment.



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Step by Step




Customer. 6. In the Account No. field, enter 30000. 7. In the Amount field, enter -116,167.75. 8. Click Apply Entries. 9. Locate and select the line for Document No. 00-10. 10. Click Set Applies-to ID. 11. Locate and select the line for Document No. 00-13. 12. Click Set Applies-to ID. 13. Click the Amount to Apply field. 14. Enter 40000. 15. Verify that the Balance field at the bottom of the window is 0.00. 16. Click OK. 17. Click Post. 18. Click Yes to post the journal lines. 19. Click OK. 20. Close the Cash Receipt Journal window. 21. In the Receivables folder, click Customers. 22. Locate and select customer 30000, John Haddock Insurance Co. 23. Click Ledger Entries. 24. Review the posted entries. Notice that:

o Document No. 00-10 has a Remaining Amount of 0.00. o Document No. 00-13 has a Remaining Amount of 40,399.29. o The payment line posted on 01/25/08 has a Remaining Amount

of 0.00.




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Lab 5.2 - Applying a Payment after posting Scenario

On January 31, 2010, you receive another payment from customer 30000 in the amount of 5,861.13. The payment does not reference any specific invoices; therefore, you contact the customer's payables department. Unfortunately, their payables clerk has the day off.

Because it is the last day of the month, you decide to post the payment to the account and apply it later.

The next week, the payables clerk from John Haddock Insurance Co. calls and tells you that the payment is for the full amount of invoice 103021 and a partial payment of 5,000.00 for invoice 103003. They have returned a part of the product and are expecting a credit for the remaining amount of that invoice.

As the accounts payable coordinator at CRONUS International, Ltd., it is your responsibility to post the payment to the account and then apply the invoices. Use the Bank batch for this posting.

Challenge Yourself!

1. Post the payment as specified in the scenario. 2. Apply the invoices to the payment from the Customer Card

window as specified in the scenario. 3. Post the application.

Need a Little Help?

1. Open the Bank batch in the Cash Receipt Journal. 2. Create and post the payment line for customer 30000. Do not apply

the invoices. 3. Open the Apply Customer Entries window. 4. Set the payment as the applying entry. 5. Apply the full invoice amount as specified in the scenario. 6. Apply the partial invoice amount as specified in the scenario. 7. Post the application.

Step by Step


2. Make sure that the Bank batch is selected. 3. In the Posting Date field, enter 01/31/10.



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4. In the Document Type field, click the drop-down list and select Payment.

5. In the Account Type field, click the drop-down list and select Customer.

6. In the Account No. field, enter 30000. 7. In the Amount field, enter -5,861.13. 8. Click Post. 9. Click Yes to post the journal lines. 10. Click OK. 11. Close the Cash Receipt Journal window. 12. Click Customers. 13. Locate and select customer 30000. 14. Click Ledger Entries. 15. Locate and select the payment from 01/31/10. 16. Click Actions, point to Functions, and then select Apply Entries. 17. Click the line for Document No. 103021, in the amount of 861.13. 18. Click Set Applies-to ID. 19. Locate and select the line for Document No. 103003. 20. Click Set Applies-to ID. 21. Click the Amount to Apply field. 22. Enter 5000. 23. Click Post Application. 24. Click OK. 25. Click OK to the message that the application was posted. 26. Close the Apply Customer Entries, Customer Ledger Entries, and

Customer Card windows.



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Unapply Customer Ledger Entries The Unapply Customer Ledger Entries functionality allows users to reverse entries while making sure that the correct application is processed. This functionality is available from two windows:

• Customer Ledger Entries • Detailed Cust. Ledg. Entries

When users unapply already posted applications, they are able to reopen closed customer ledger entries. All G/L postings that may have derived from an incorrect application, such as payment discounts and currency gains/losses, are also corrected when an entry is unapplied.

The user must understand that it is only possible to unapply from the bottom up. Therefore, if an entry is applied by more than one application entry, the last application entry must be unapplied first.

Unapplying a Ledger Entry

To unapply a ledger entry from the Customer Ledger Entries window, follow these steps:


2. Locate and select the customer to unapply entries. 3. Click Ledger Entries. 4. Click the line with the entry to unapply. 5. Click Actions, point to Functions, and then select Unapply Entries.

The Unapply Customer Entries window shows the original detailed ledger entries that can be used to unapply the original entry.

6. Click Unapply. 7. Click Yes to unapply the entries. When the entry is unapplied, a new

entry is created by using an opposite sign in the Amount field. 8. Click OK to the message that the entries were unapplied. 9. In the Customer Ledger Entries window, review the unapplied

entries: o The Remaining Amount field contains the relevant unapplied

amount. o The Open check box is checked to indicate that the unapplied

entries are open.

It is now possible to apply the open amount to the correct entry by using the Apply Customer Entries functionality.



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Lab 5.3 - Unapply Posted Ledger Entries Scenario

In late January, you receive a payment from customer 20000, Selangorian Ltd., for Document No. 00-8, in the amount of 50,778.50. As you start to apply the payment, you notice that a temporary employee incorrectly applied two credit memos to this invoice.

After additional investigation, you realize that these credit memos are to be applied to the invoices that correspond to the credit memo amounts. The following table shows these credit memos and invoices in the order in which they were applied.

Credit Memo Invoice/Document No. Amount

104002 103008 787.40

104003 103014 1,145.33

As the accounts receivable administrator, it is your responsibility to correct this error. Use the Unapply Customer Entries function to reverse the application and then correctly apply the credit memos to the invoices.

The payment for Document No. 00-8 is not posted in this lab.

Challenge Yourself!

1. Unapply the credit memos from invoice 00-8 as specified in the scenario.

2. Apply the credit memos to the correct invoices as specified in the scenario.

Need a Little Help?

1. Open the Customer Ledger Entries for customer 20000. 2. Select the last credit memo applied and open the Unapply Customer

Entries window. 3. Unapply the entry. 4. Select the first credit memo applied and open the Unapply

Customer Entries window. 5. Unapply the entry. 6. Open the Apply Customer Entries window for credit memo 104002

and set as the applying entry. 7. Set Document No. 103008 as the Applies-to ID.



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8. Post the Application and close the Apply Customer Entries window.

9. Open the Apply Customer Entries window for credit memo 104003 and set as the applying entry.

10. Set Document No. 103014 as the Applies-to ID. 11. Post the Application and close the Apply Customer Entries

window.

Step by Step


2. Locate and select customer 20000. 3. Click Ledger Entries. 4. Click the line for credit memo 104003 in the amount of -1,145.33. 5. Click Actions, point to Functions, and then select Unapply Entries. 6. Click Unapply. 7. Click Yes to unapply the entries. 8. Click OK to the message that the entry was unapplied. 9. Click the line for credit memo 104002 in the amount of -787.40. 10. Click Actions, point to Functions, and then select Unapply Entries 11. Click Unapply. 12. Click Yes to unapply the entries. 13. Click OK to the message that the entry was unapplied. 14. Click the line for Document No. 103008. 15. Click Actions, point to Functions, and then select Apply Entries. 16. Click the line for credit memo 104002. 17. Click Set Applies-to ID. 18. Click Post Application. 19. Click OK to post the application. 20. Click OK to the message that the application was posted. 21. Click the line for Document No. 103014. 22. Click Actions, point to Functions, and then select Apply Entries. 23. Click the line for credit memo 104003. 24. Click Set Applies-to ID. 25. Click Post Application. 26. Click OK to post the application. 27. Click OK to the message that the application was posted. 28. Click the line for credit memo 104003 29. Click Apply Entries.



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30. With the line for credit memo 104003 selected, click Related Information, point to Application, and then select Set Applying Entry.

31. Click Set Applies-to ID. 32. Click Post Application. 33. Click OK to post the application. 34. Click OK to the message that the application was posted. 35. Close the Customer Ledger Entries.



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Reversal of Posted Journals In Microsoft Dynamics NAV 2009, incorrect customer ledger entries posted from a journal, such as the Sales Journal or Cash Receipt Journal, can be reversed to correct the entries.

The following are conditions of using this reversal functionality:

• Entries must be generated from a general journal line or from a previous reversal.

• Customer Ledger Entries cannot be applied. • Bank Ledger Entries must not be closed by reconciliation. • The total amount of G/L Entries must equal zero.

Before reversing an applied customer ledger entry, you must unapply the entry.

During the reversal process, you can create and post correcting entries with the same document number and posting date as the original entry for each line in the entry. After reversing an entry, you can enter and post the correct entries manually.

Reverse a Posted Journal Entry

To reverse a journal posting, follow these steps:


2. Locate and select the relevant customer. 3. Click Ledger Entries. 4. Click Yes to unapply the applied entries 5. Click the relevant entry to reverse. 6. Click Actions, point to Functions, and then select Reverse

Transaction. The Reverse Transaction Entries window displays the posted entries connected by the same transaction number.

7. Click Related Information, point to Reversing, and then select Reverse.

8. Click Yes to reverse the entries. 9. Click OK to the message that states the entries were reversed. 10. In the Customer Ledger Entries window, review the original and

reversed entries: o A new entry that reverses the selected posted entry appears. o The Remaining Amount field for both entries is a zero amount. o The Open field does not contain a check mark. This indicates

that both entries are closed.



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Lab 5.4 - Reverse a Posted Journal Entry Scenario

When beginning balances were posted on 12/31/09 for customer 10000, an error was entered for invoice 00-1. The 5 and the 3 were transposed. Therefore, the incorrect amount of 25,389.25 was posted instead of the correct amount of 23,589.25.

This invoice was paid on 01/17/10 with Document No. 2596 and must be reversed because it was entered through a journal.

Cassie, the accountant, asks you to make the reversing entry and she will later post the correction and refund the customer. Before you can reverse the entry, you must unapply the payment.

NOTE: Do not reapply the other invoices unapplied during this process. These unapplied invoices are used in demonstrations later in this content.

Challenge Yourself!

1. Unapply the invoice as specified in the scenario. 2. Reverse the journal entry as specified in the scenario.

Need a Little Help?

1. Open the Customer Ledger Entries window for customer 10000. 2. Use the Unapply Customer Entries window to unapply invoice 00-

1 from payment 2596. 3. From the Customer Ledger Entries window, reverse the 00-1

journal entry.

Step by Step


2. Locate and select customer 10000. 3. Click Ledger Entries. 4. With the line for Document No. 00-1 selected, click Actions, point

to Functions, and then select Unapply Entries. 5. Click the first line for Document No. 00-1. 6. Click Unapply. 7. Click Yes to unapply the entry. 8. Click OK to the message that the entry was unapplied.



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9. With the line for Document No. 00-1 selected, click Actions, point to Functions, and then select Reverse Transaction.

10. Click Related Information, point to Reversing, and then select Reverse.

11. Click Yes to reverse the entries. 12. Click OK to the message that the entry was reversed. 13. Close the Customer Ledger Entries and Customer Card windows.



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Set Up Payment Discounts The purpose of granting payment discounts is to provide an incentive for customers to quickly pay their outstanding amounts in full. The following are the different methods available when you set up payment discounts for an invoice:

• If the payment discount is known at the time when the invoice or sales order is entered, either: o Select an existing payment term. o Enter a new payment term for the invoice or sales order.

• If the payment discount is not determined until the invoice is paid:

o The customer may reduce the payment without negotiating a payment discount.

o If the discount is acceptable, adjust the payment term for the invoice after it posts.

It is also possible to calculate payment discount amounts on credit memos. This enables users to automatically reduce the payment discount given on invoices that the credit memo is applied to.

Determine Payment Discount Calculations on Amounts

The G/L Accounts for payment discounts must be set up differently depending on whether payment discounts are calculated on amounts:

• Including VAT • Excluding VAT

The setup is determined by the fields selected in the General Ledger Setup window:

• Pmt. Disc. Excl. VAT • Adjust for Payment Disc.

NOTE: In the General Ledger Setup window, the Pmt. Disc. Excl. VAT and the Adjust for Payment Disc. check boxes are mutually exclusive. This means that only one can contain a check mark. However, both can be empty at the same time.

Therefore, payment discount accounts cannot be entered in the Customer Posting Groups window if the Adjust for Payment Disc. check box contains a check mark. Similarly, payment discount accounts cannot be entered in the General Posting Setup window if the Pmt. Disc. Excl. VAT check box contains a check mark.



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Set Up Payment Discounts Calculated on Amounts Excluding VAT

To set up payment discounts calculated on amounts excluding VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.

2. Place a check mark in the Pmt. Disc. Excl. VAT field to calculate payment discounts on: o The Amount field in Sales documents. o The Sales/Purch. (LCY) field in General Journals.

3. Leave the Pmt. Disc. Excl. VAT check box cleared to calculate

payment discounts on: o The Amount Including VAT field in Sales documents. o The Amount field in General Journals.

4. Close the General Ledger Setup window.

NOTE: If journals are used to enter sales transactions and the Pmt. Disc. Excl. VAT field is checked, an amount must be entered in the Sales/Purch. (LCY) field in the journal. If an amount is not entered, the payment discount is zero.

If the Pmt. Disc. Excl. VAT check box contains a check mark, the following two payment discount accounts must be set up in the Customer Posting Group window:

• Payment Disc. Debit Acc. - G/L account that is used to post granted payment discount amounts when you are posting sales payments for the selected Customer Posting Group.

• Payment Disc. Credit Acc. - G/L account that is used to post reductions in payment discount amounts when you are posting sales payments for the selected Customer Posting Group.

To set up the payment discount accounts for Customer Posting Groups, follow these steps:

1. In the Financial Management Application Setup page, click Posting Groups and then select Customer Posting Groups.

2. For each Customer Posting Group using payment discounts: 3. In the Payment Disc. Debit Acc. field, click the drop-down list and

select the payment discount account.



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4. In the Payment Disc. Credit Acc. field, click the drop-down list and select the payment discount account.

5. Close the Customer Posting Group window.

Set Up Payment Discounts Calculated on Amounts Including VAT

If payment discounts are calculated on amounts including VAT, then VAT recalculations may have to be made if the payment discount is taken.

To set up the program to recalculate tax amounts when payment discounts are posted, follow these steps:


2. Place a check mark in the Adjust for Payment Disc. field to enable the feature.

3. Close the General Ledger Setup window. 4. On the Financial Management Application Setup folder, click VAT

Posting Group and then select VAT Posting Setup. 5. Use the Choose Columns feature to add the Adjust for Payment

Discount field. 6. For each relevant VAT Posting Group combination, place a check

mark in the Adjust for Payment Discount field. 7. Close the VAT Posting Setup window

If the Adjust for Payment check box contains a check mark, the following two sales payment discount accounts must be set up in the General Posting Setup window.

• Sales Pmt. Disc. Debit Acc. - G/L account that is used to post granted payment discount amounts when you are posting payments for sales with the selected combination of general business and product posting groups.

• Sales Pmt. Disc. Credit Acc. - G/L account that is used to post reductions in payment discount amounts when you are posting payments for sales with the selected combination of general business and product posting groups.

To set up the payment discount accounts in the General Posting Setup window, follow these steps:

1. In the Financial Management Application Setup page, click Posting Groups and then select General Posting Setup.



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2. For each general posting group combination using payment discounts: o In the Sales Pmt. Disc. Debit Acc. field, click the drop-down list

and select the payment discount account. o In the Sales Pmt. Disc. Credit Acc. field, click the drop-down

list and select the payment discount account.

3. Close the General Posting Setup window.

Payment Terms with Discounts

Payment discounts granted to customers are determined by the Payment Terms Code set up on the customer card and/or entered in the header of the sales order or invoice.

To access the Payment Terms window, on the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Payment Terms.

FIGURE 5.5 PAYMENT TERMS

The only Payment Term currently set up with discount capabilities is 1M(8D). This Payment Term is set up as follows:

• Payments are due within one month of the Document Date specified on the posted invoice.



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• If payments are received within eight days of the Document Date specified on the posted invoice, a 2 percent discount is available.

• A payment discount cannot be calculated on credit memos with this payment term because the Calc. Pmt. Disc. on Cr. Memos check box does not contain a check mark.

Set Up Payment Discounts on Customers and Sales Documents

When payment discounts have been granted for specific customers, Payment Terms are set up on the Customer Card. Then, when a sales order or invoice is created:

• Payment terms are transferred to the header. • Applicable discount terms are automatically applied to the order

during posting.

To set up Payment Terms for a customer, follow these steps:


2. Locate and select the customer to assign a Payment Term. 3. Click the Payments FastTab. 4. In the Payment Terms Code field, click the drop-down list and

select the relevant Payment Term. 5. Close the Customer Card.

Alternatively, Payment Terms can be assigned on the sales order or invoice header if:

• Payment Terms are not specified on the customer. • A different term has to be assigned to a specific sales order or

invoice.

Test Your Knowledge: Set Up Payment Discounts

1. On the General Ledger Setup window, what check box must contain a check mark so you may enter payment discount accounts in the Customer Posting Groups window?

( ) Adjust for Payment ( ) Pmt. Disc. Incl. VAT ( ) Pmt. Disc. Excl. VAT ( ) Use Payment Disc.



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2. On the General Ledger Setup window, what check box must contain a check mark so you may enter payment discount accounts in the General Posting Setup window?


3. What do you select in the Payment Terms window, to grant a payment discount of 3 percent if payment is received within ten days of the document date?

( ) Enter D10 in the Discount Date Calculation field, and 3 in the Discount % Field.

( ) Enter 10D in the Discount Date Calculation field, and 3 in the Discount % Field.

( ) Enter 10D in the Discount Date Calculation field, and .03 in the Discount % Field.

( ) Enter D10 in the Discount Date Calculation field, and .03 in the Discount % Field.

Process Payment Discounts Microsoft Dynamics NAV 2009 checks the Pmt. Discount Date field of the applied customer ledger entry or entries when users apply:

• Payments • Refunds • Credit memos

If the posting date of the application is the same or earlier than the Pmt. Discount Date of the applied entry, a discount amount is calculated if the applied entry is fully applied.

After the sales document is posted, the payment discount possible for a sales invoice or sales credit memo is recorded on the customer ledger entry in the following fields:

• Original Pmt. Disc. Possible • Remaining Pmt. Disc. Possible

Demonstration: Post a Payment with a Discount

Scenario: The Cannon Group PLC, customer 10000 in CRONUS International Ltd, is set up with payment terms that allow for a 2 percent discount if they pay within eight days of the Document Date on their invoices.



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On January 30, 2010, Arnie, the accounts receivables administrator at CRONUS International Ltd., receives a payment from customer 10000 in the amount of 8,018.70 for invoice 103001.

The full amount of invoice 103001 is 8,182.35. But because The Cannon Group PLC paid within eight days, they have taken the 2 percent discount and reduced their payment by 163.65.

Steps: Post a Payment with a Discount

To enter and apply the discounted payment, follow these steps:




Customer. 6. In the Account No. field, enter 10000. 7. In the Amount field, enter -8,018.70. 8. Click Apply Entries. 9. Click the line for invoice 103001. 10. Click Set Applies-to ID. 11. Notice that the Pmt. Disc. Amount field on the bottom of the

window contains the discount amount of -163.65 and the Balance field contains a zero balance because the discount was subtracted from the payment amount.

12. Click OK.

To post the discounted payment, follow these steps:

1. Click Post. 2. Click Yes to post the journal lines. 3. Click OK. 4. Close the Cash Receipt Journal.

To review the posted Customer Ledger Entries for this payment, follow these steps:

1. On the Receivables page, click Customers. 2. Locate and select customer 10000. 3. Click Ledger Entries.



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4. Review the line for invoice 103001: o The Original Amount and Amount fields contain the full

amount of the invoice. o The Remaining Amount is zero.

5. Review the line for the payment dated 01/30/10: 6. The Original Amount contains the amount of the payment. 7. The Amount field contains the amount of the payment plus the

discount amount. 8. The Remaining Amount is zero. 9. Close the Customer Ledger Entries and Customer Card windows.

Demonstration: Posting Partial Payments with Discounts

Scenario: Customer 40000, Deerfield Graphics, has an outstanding invoice in the amount of 1,328.88. If the invoice is paid by December 18, 2009, they can take a discount in the amount of 26.58.

On December 12, 2009, they send a payment of 651.15, which is half of the discounted amount (1,328.88 - 26.58 / 2 = 651.15). On December 18, 2009 they send the remaining half of the payment.

Arnie posts both payments, successfully by using the discount because both payments were received by December 18, 2009.

NOTE: Entries are posted in the year 2009 in this demonstration.

Steps: Posting Partial Payments with Discounts

To post the first partial payment on an invoice with an available discount, follow these steps:

1. On the Navigation Pane, click the Departments Button, click Financial Management, click Receivables, and then select Cash Receipt Journals.



Customer. 6. In the Account No. field, enter 40000. 7. In the Amount field, enter -651.15. 8. Click Apply Entries. 9. Click Set Applies-to ID.



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10. At the bottom of the window, notice that: o The Pmt. Disc. Amount field contains a zero balance. o The Balance field at the bottom of the window is out of balance

by 677.73, the amount of the other half due and the full discount amount.

11. Click OK. 12. Click Post. 13. Click Yes to post the journal lines. 14. Click OK.

To post the remaining partial payment on an invoice with an available discount, follow these steps:

1. In the Cash Receipt Journals, in the Posting Date field, enter 12/18/09.

2. On the Document Type click the drop-down list and select Payment 3. On Account Type click the drop-down list and select Customer 4. In the Account No. field, enter 40000. 5. In the Amount field, enter -651.15. 6. Click Apply Entries. 7. Click Set Applies-to ID. 8. Click OK. 9. Click Post. 10. Click Yes to post the journal lines. 11. Click OK. 12. Close the Cash Receipt Journal window.

Since both payments were received by the date specified in the Pmt. Discount Date field, the partial payment structure is acceptable.

NOTE: If an invoice is not fully paid within the discount date period, the discount is not available.

Demonstration: Add Discounts After Posting Sales Transactions

Scenario: On January 21, 2010, customer 20000 set up a payment discount agreement with CRONUS International Ltd., to take a 2 percent discount if payments are received within eight days of invoicing.

That same day, invoice 103002 was posted before the terms were changed on the customer card. On January 29, 2010, Arnie receives a payment in the amount of 6,832.34, which is 139.44 less than the invoice amount.



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When he reviews the invoice, he realizes that the correct payment terms were not applied and that the difference is the 2 percent discount. Arnie changes the discount fields on the customer ledger entries for this invoice and then posts the discounted payment.

NOTE: Make sure that the year 2010 is used, as opposed to 2009 from the previous demonstration.

Steps: Add Discounts After Posting Sales Transactions

To change the customer ledger entries to specify acceptable discounts, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and the select Customers.

2. Locate and select customer 20000. 3. Click Ledger Entries. 4. On the line for Document No. 103002, click the Pmt. Discount

Date field. 5. Enter 01/29/10. 6. In the Remaining Pmt. Disc. Possible field, enter 139.44. Notice

that this amount must be entered in the same currency as the invoice. 7. Close the Customer Ledger Entries.

To enter and post the discounted payment, follow these steps:

1. On the Receivables page, click Cash Receipt Journals. 2. Make sure that the Bank batch is selected. 3. In the Posting Date field, enter 01/29/10. 4. In the Document Type field, click the drop-down list and select


Customer. 6. In the Account No. field, enter 20000. 7. In the Amount field, enter -6832.34. 8. Click Apply Entries. 9. Click the line for invoice 103002. 10. Click Set Applies-to ID. 11. At the bottom of the window, notice that:

o The Pmt. Disc. Amount field contains -139.44, the discount amount.

o The Balance field contains a zero balance because the discount was available within this posting date range.



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12. Click OK to close the Apply Customer Entries window. 13. Click Post. 14. Click Yes to post the journal lines. 15. Click OK. 16. Close the Cash Receipt Journal window.

Demonstration: Apply Posted Payments to Sales Documents with Discounts

When you apply a payment or refund to entries at the same time that the payment or refund is posted, Microsoft Dynamics NAV 2009 automatically includes payment discount information on both invoice and credit memo entries when it calculates the amount of the payment or refund.

NOTE: When you are applying posted payments and refunds to entries with payment discount amounts, it is recommended to only apply one payment or refund with each application of posted entries.

Scenario: On January 25, 2010, a payment from customer 10000 is received in the amount of 4,019.83. It is the end of the day and Arnie cannot match this exact amount with an invoice in the customer ledger entries; therefore, he decides to post the payment to the account and post the application when he can determine the difference.

After posting the payment, he realizes that the payment is for invoice 103018. The payment applies as follows:

• Invoice amount: 4,101.88 • A 2 percent discount amount of 82.04 was incorrectly taken as 82.05 • Payment amount then is 4,019.83 (4,101.88 - 82.05)

Arnie also notices that the payment is one day past the discount date. He discusses the situation with Phyllis, the accounting manager, who instructs him to give the discount because this is one of the company's best customers.

Because CRONUS International Ltd. is currently not set up with payment tolerance percentages, Arnie adjusts the Remaining Pmt. Disc. Possible amount to match the discount taken and also changes the Pmt. Discount Date to January 25, 2010.

To save time, Arnie changes the payment discount values in the Apply Customer Entries window and then applies and posts the application.



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Steps: Apply Posted Payments to Sales Documents with Discounts

To post the payment to the account, follow these steps:




Customer. 6. In the Account No. field, enter 10000. 7. In the Amount field, enter -4,019.83. 8. Click Post. 9. Click Yes to post the journal lines. 10. Click OK. 11. Close the Cash Receipt Journal window.

To adjust, apply, and post the payment discount, follow these steps:

1. On the Receivables page, click Customers. 2. Locate and select customer 10000. 3. Click Ledger Entries. 4. On the line for Document No. 103018, click the Pmt. Discount

Date field, enter 01/25/10. 5. In the Remaining Pmt. Disc. Possible field, enter 82.05. 6. Click the payment line dated 01/25/10 in the amount of -4019.83. 7. Click Actions, point to Functions and then select Apply Entries. 8. Click the line for Document No. 103018. 9. Click Set Applies-to ID. 10. At the bottom of the window, notice that:

o The Pmt. Disc. Amount field contains -82.05, the discount amount.

o The Balance field contains a zero balance because the discount was adjusted to match the discount and to be available within this posting date range.

11. Click Post Application. 12. Click OK. 13. Click OK to the message that the application posted. 14. Close the Customer Ledger Entries window.



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Applying Credit Memos with Payment Discounts

When you are posting a credit memo with a payment discount amount that is applied to an invoice, the Remaining Pmt. Disc Possible amount for the invoice is reduced by the payment discount amount for the credit memo.

To apply a posted credit memo with a payment discount amount to an invoice, follow these steps:


2. Locate and select the relevant customer. 3. Click Ledger Entries. 4. Click Apply Entries. 5. Click the line with the relevant credit memo and then click Set

Applying Entry. 6. Click the line for the invoice to be applied to the credit memo and

then click Set Applies-to ID. 7. Click Post Application. 8. Click OK to apply the entries. 9. Click OK to the message that the entries were posted. 10. Close the Apply Customer Entries window. 11. Review the applied entries in the Customer Ledger Entries

window. Notice that the amount in the Remaining Pmt. Disc. Possible field on the invoice line is reduced by the payment discount amount on the credit memo.

12. Close the Customer Ledger Entries window.



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Lab 5.5 - Post a Payment with a Discount Scenario

On January 8, 2010, the accounts payable clerk for customer 10000 contacts you, asking whether the 2 percent discount can still be taken on Document No. 00-9 if the payment is received on 01/09/10, even though that is one day past the payment discount date. You say that is acceptable, since this is one of your best customers.

On January 9, 2010, you receive a payment in the amount of 49,762.93. Adjust the payment discount date while applying the payment.

Challenge Yourself!

1. Enter the information as specified in the scenario. 2. Adjust and apply the invoice as specified in the scenario. 3. Post the Cash Receipt Journal.

Need a Little Help?

1. Enter the payment in the Cash Receipt Journal as specified in the scenario.

2. Open the Apply Customer Entries window. 3. Adjust the payment discount date as specified in the scenario. 4. Apply the invoice to the payment. 5. Post the Cash Receipt Journal.

Step by Step




Customer. 6. In the Account No. field, enter 10000. 7. In the Amount field, enter -49,762.93. 8. Click Apply Entries. 9. In the line for Document No. 00-9, click the Pmt. Discount Date

field.



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10. Enter 01/09/10. 11. With this line selected, click Set Applies-to ID. 12. Notice that the Balance field at the bottom of the window contains a

zero balance. 13. Click Post. 14. Click Yes to post the journal lines. 15. Click OK. 16. Close the Cash Receipt Journal.



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Lab 5.6 - Apply Posted Partial Payments with Discounts Scenario

On January 8, 2010, you receive a payment from customer 10000 in the amount of 33,174.35. Even though you cannot determine what the payment applies to, you post the payment to the customer account.

Afterward, you learn that the payment is for Document No. 00-16. Because the payment was made 01/08/10, the full discount of 677.05 is available; however, a small error was made in the discount calculation, which has resulted in the customer taking a larger discount. Because this is a good customer, adjust the discount to match the amount taken: 678.00.

First, post the payment but do not apply it to an invoice. Then, adjust the discount amount while applying the invoice to the payment.

Challenge Yourself!

1. Post the payment as specified in the scenario. 2. Apply the posted payment to the invoice as specified in the scenario.

Remember to adjust the payment discount amount. 3. Post the application.

Need a Little Help?

1. Post the payment in the Cash Receipt Journal as specified in the scenario. Do not apply the payment to an invoice.

2. Open the Apply Customer Entries window. 3. Set the applying payment entry. 4. Adjust the payment discount amount on Document No. 00-16. 5. Set the applies-to ID to the posted payment. 6. Post the application.

Step by Step




Customer.



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6. In the Account No. field, enter 10000. 7. In the Amount field, enter -33174.35. 8. Click Post. 9. Click Yes to post the journal lines. 10. Click OK. 11. Close the Cash Receipt Journal window. 12. In the Receivables folder, click Customers. 13. Locate and select customer 10000. 14. Click Ledger Entries. 15. Locate and select the payment line dated 01/08/10 in the amount of -

33,174.35. 16. Click Action, point to Functions, and then select Apply Entries. 17. Locate the line for Document No. 00-16 and then click the

Remaining Pmt. Disc. Possible field. 18. Enter 678.00. 19. With line for Document No. 00-16 selected, click Set Applies-to

ID. 20. Notice that the Balance field at the bottom of the window contains a

zero balance. 21. Click Post Application. 22. Click OK. 23. Click OK to the message that the application posted. 24. Close the Customer Ledger Entries window.



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Set Up Payment Tolerance Occasionally, a customer may underpay or overpay an invoice amount. When this occurs, there are two options available:

• Post the payments with a remaining amount. With this option, you must keep the remaining amount closed by using other methods, such as posting an adjustment and/or contacting the customer for additional payment.

• Set up payment tolerances to close entries where there is a difference between the amount owed and the amount paid. With this option, parameters of acceptable differences are used to post the amounts to G/L accounts.

The features of using payment tolerance include the following:

• The ability to set the payment tolerance percentage, payment discount grace period, and the maximum payment tolerance amount.

• Determining whether to receive a warning when an application is made within the payment tolerance parameters set.

• Determining to which account to post the difference to keep track of amounts and their frequency.

• The ability to set up different payment tolerances for different currencies.

• Working with payment tolerance on invoices and payments, in addition to credit memos and refunds.

• Determining customers who can be allowed to use or be blocked from payment tolerances.

In Microsoft Dynamics NAV 2009, there are two kinds of payment tolerance:

• Payment Discount Tolerance: Allows a customer to take a payment discount even though the payment discount date has passed.

• Payment Amount Tolerance: Accepts a slightly greater or smaller amount as full settlement of an outstanding invoice. In the system, payment amount tolerance is called Payment Tolerance.

In this lesson, Payment Tolerances are set up on the following windows:

• Customer Card • General Ledger Setup • Chart of Accounts • Customer Posting Groups



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Set Up Payment Tolerance on Customer Cards

As default, payment tolerance is allowed for all customers. This default can be changed on the Customer Card.

To disable payment tolerances, follow these steps:


2. Locate and select the customer to disable payment tolerance. 3. Click the Payments FastTab. 4. Place a check mark in the Block Payment Tolerance check box. 5. A message is displayed that asks if payment tolerance is to be

removed from all open entries. Click either: o Yes, to remove payment tolerance on open entries and restrict

from future invoices. o No, to maintain the payment tolerance on open entries but

restrict from future invoices.

To enable a disabled payment tolerance, follow these steps:

1. Remove the check mark from the Block Payment Tolerance check box.

2. A message is displayed that asks if payment tolerance is to be allowed for open entries. Click either: o Yes, to allow payment tolerance on open entries and all future

invoices. o No, to prevent payment tolerances from being available on open

entries but available on future invoices.

Set Up Payment Tolerance in General Ledger Setup

In the Customer Card, payment tolerance is enabled or disabled for individual customers. The companywide payment tolerance parameters are set up in the General Ledger Setup window. On the Application FastTab, specify:

• Payment Tolerance warnings • Payment Tolerance percentages and maximum amounts • Payment Tolerance grace periods • Payment Tolerance G/L posting types



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To access these setup parameters, on the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, select General Ledger Setup, and then open the Application FastTab.

FIGURE 5.6 APPLICATION FASTTAB

The following fields are related to payment tolerance:

• Payment Discount Tolerance Warning - if this field is selected, the system generates a warning message when an application is made between the payment discount date and the payment discount tolerance date. If payment discount tolerances are usually allowed, do not place a check mark in this check box.

• Payment Discount Tolerance Posting - identifies the type of G/L accounts to post payment discount tolerance. There are two choices for posting: o Payment tolerance accounts: The payment tolerance is posted to

a special G/L account set up for payment tolerance. o Payment discount accounts: The payment tolerance is posted as a

payment discount.

These G/L accounts are specified in Customer Posting Groups, or the General Posting Setup if VAT amounts are adjusted for payment discounts.

• Payment Discount Grace Period - determines the number of days that a payment or refund can pass the payment discount due date and still receive payment discount. Specified as a date formula. For example, to allow five days, enter 5D



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• Payment Tolerance Warning - if this field is selected, the system generates a warning message when an application is made and a balance is within the allowed payment tolerance amount

• Payment Tolerance Posting - identifies the G/L accounts to post payment tolerance. There are two choices for posting: o Payment tolerance accounts: The payment tolerance is posted to

a special G/L account set up for payment tolerance. o Payment discount accounts: The payment tolerance is posted as a

payment discount. These G/L accounts are specified in Customer Posting Groups, or the General Posting Setup if VAT amounts are adjusted for payment discounts.

• Payment Tolerance Percentage - determines the percentage that the payment or refund is allowed to differ from the amount on the invoice or credit memo. This field is non-editable, but you can change the value by running the Change Payment Tolerance batch job.

• Maximum Payment Tolerance Amount - specifies the maximum allowed amount that the payment or refund can differ from the amount on the invoice or credit memo. This field is non-editable, but you can change the value by running the Change Payment Tolerance batch job.

NOTE: Except the posting parameters, these fields can be used singly or in combination.

Set Up Payment Tolerance Percentages and Maximum Amounts

To change either or both the maximum payment tolerance and the payment tolerance percentage, and filter by currency, run the Change Payment Tolerance batch job, accessed from the General Ledger Setup window.

To run this batch job, follow these steps:

1. On the Navigation Pane, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.

2. Click Actions, point to Functions, and then select Change Payment Tolerance.

3. Place a check mark in the All Currencies check box to change the tolerance setup for both local and all foreign currencies.

4. If the tolerance setup is changed for a single currency, in the Currency Code, click the drop-down list and select the relevant currency.



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5. In the Payment Tolerance % field, enter the percent the payment or refund can differ from the invoice or credit memo amount.

6. In the Max. Pmt. Tolerance Amount field, enter the maximum amount that the payment or refund can differ from the invoice or credit memo amount.

7. Click OK. 8. In the message that asks to change all open entries for unblocked

customers or vendors, click Yes or No as necessary.

NOTE: Existing open entries do not have to be updated. To only grant payment discount tolerance or payment tolerance on new entries, click No when asked to update existing entries.

Set Up and Assign Payment Tolerance G/L Accounts

To post tolerance to a G/L account that differs from the usual payment discount account, the accounts must be created in the Chart of Accounts.

As soon as the accounts are set up, they must be assigned to the following fields on Customer Posting Groups that allow payment tolerance:

• Payment Tolerance Debit Acc. • Payment Tolerance Credit Acc.

NOTE: In CRONUS International Ltd., accounts 9260 and 9270 have already been set up and assigned to Customer Posting Groups.

Demonstration: Set Up Payment Tolerance

Scenario: Cassie, the accountant at CRONUS International Ltd., is asked to set up payment tolerance because of the many underpayments received based on payment discounts.

Your company has decided to give a 1 percent payment tolerance for payment amounts. However, the tolerance cannot exceed 50.00 (LCY).

There has also been a request for the company to:

• Receive notification if payment discount tolerance or payment tolerance is possible.

• Use special accounts for tolerance postings. • Give a payment discount grace period of five days.

In this demonstration, the new payment tolerance is set up.



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Steps: Set Up Payment Tolerance

To set up the tolerance parameters, follow these steps:


2. Click the Application FastTab. 3. Place a check mark in the Pmt. Disc. Tolerance Warning check

box. 4. Make sure that the Pmt. Disc. Tolerance Posting field is set to

Payment Tolerance Accounts. 5. In the Payment Discount Grace Period field, enter 5D. 6. Click Yes to update the change to existing customer and vendor

ledger entries. 7. Place a check mark in the Payment Tolerance Warning check box. 8. Make sure that the Payment Tolerance Posting field is set to

Payment Tolerance Accounts. 9. Click Actions, point to Functions, and then select Change Payment

Tolerance. 10. In the Payment Tolerance % field, enter 1. 11. In the Max. Pmt. Tolerance Amount field, enter 50. 12. Click OK to run the batch job. 13. Click Yes to update the change to existing customer and vendor

ledger entries. 14. Notice that the Payment Tolerance % and Max. Pmt. Tolerance

Amount fields in the General Ledger Setup window contain the values entered in the Change Payment Tolerance batch job.




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Lab 5.7 - Set Up a Payment Tolerance Scenario

The CFO at CRONUS International Ltd. has discovered that the existing tolerance is too strict and has created too many open balances for amounts not worth collecting.

As the accounting manager, you have been asked to change the existing tolerance to allow 3 percent overpayment/underpayment of invoices, with a maximum tolerance of 200.00 (LCY).

The other tolerance parameters do not have to change. But all open ledger entries must be updated to reflect the new tolerance.

Challenge Yourself!

1. Run the Change Payment Tolerance batch job as specified in the scenario.

2. Update the open ledger entries.

Need a Little Help?

1. Open the Change Payment Tolerance batch job. 2. Enter the tolerance percent and maximum amount as specified in the

scenario. 3. Run the batch job. 4. Update the open ledger entries.

Step by Step

1. On the Navigation Pane, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.


3. In the Payment Tolerance % field, enter 3. 4. In the Max. Pmt. Tolerance Amount field, enter 200. 5. Click OK to run the batch job. 6. Click Yes to update the change to existing customer and vendor

ledger entries. 7. Close the General Ledger Setup window.



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Process Payment Tolerance When payments do not match the invoiced amount, perhaps the customer has:

• Deducted the payment discount even though the payment discount date is exceeded.

• Calculated the payment discount inaccurately. • Combined the outstanding balance of two invoices and paid an

incorrect amount that is an underpayment.

NOTE: To complete the demonstrations in this lesson, the following labs and demonstrations must be performed:

Lab 5.1: Apply and Post a Cash Receipt Lab 5.4: Reverse a Posted Journal Entry Demonstration: Set up Payment Tolerance Lab 5.7: Set up a Payment Tolerance

Demonstration: Discount Taken Past the Discount Date

Scenario: On January 10, 2010, Arnie the Account Receivable assistent, receives a payment from The Cannon Group PLC in the amount of 49,762.93 for invoice 00-3. The invoiced amount, however, was 50,778.50.

The Cannon Group PLC has taken the payment discount two days past the discount date of January 8, 2010. Because CRONUS International Ltd. has set up a grace period of five days, this discount is acceptable.

Steps: Discount Taken Past the Discount Date

To post the payment by using the tolerance, follow these steps:




Customer. 6. In the Account No. field, enter 10000. 7. In the Amount field, enter -49,762.93. 8. Click Apply Entries. 9. Click the line for Document No. 00-3. 10. Click Set Applies-to ID. 11. Notice that the Balance field at the bottom of the window contains a

difference at -1,015.57.



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12. Click OK. The Payment Discount Tolerance Warning window appears, with the options of accepting or declining the late payment discount.

13. To accept the late payment discount, click the Post as Payment Discount Tolerance option button.

14. Click Yes. 15. Click Post. 16. Click Yes to post the journal lines. 17. Click OK. 18. Close the Cash Receipt Journal window.

Review Posted Payment Tolerance Entries

When users apply entries and post balances as payment tolerance or payment discount tolerance, the system posts a separate Detailed Customer Ledger Entry with the amount of the tolerance.

The Entry Types for the tolerance entries are as follows:

• Payment Discount Tolerance: Contains the amount of discount that was allowed even though the payment discount has passed.

• Payment Tolerance: Contains the amount of the underpayment or overpayment that was accepted to close the applied entries.

If Microsoft Dynamics NAV 2009 is set up to adjust VAT amounts for payment discounts, the VAT amounts are also adjusted for any tolerance allowed.

To review the posted entries from the "Discount Taken Past the Discount Date" demonstration, follow these steps:

1. On the Receivables page, click Customers. 2. Locate and select customer 10000. 3. Click Ledger Entries. 4. Notice that the Remaining Amount is zero for:

o Document No. 00-3 o Payment line dated 01/10/10

5. Click the payment line and then click Related Information, point to

Entry and then select Detailed Ledger Entries.



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6. Review the lines, making note of the values in the Entry Type field: o The first line is the initial entry of the payment and contains the

amount of the payment. o The second line is the Payment Discount Tolerance and

contains the accepted payment discount amount. o The third line is the Application and contains the net amount of

the two lines that match the invoice total.


If the difference was not posted as a discount tolerance, the 1,015.57 balance appears as a remaining amount on the invoice line. Accept the late payment discount to close the invoice and payment.

Demonstration: Discount Calculated Incorrectly

Scenario: On January 7, 2010, Arnie receives a payment from The Cannon Group PLC in the amount of 66,181.31 for invoice 00-6. The invoiced amount, however was 67,704.67.

Arnie reviews the possible discount amounts and notices that, although the payment was received within the discount period, the amount was calculated incorrectly.

The Cannon Group PLC has taken a 2.25 percent discount instead of 2 percent. Because CRONUS International Ltd. has set up a 3 percent payment tolerance, this discount is acceptable.

Steps: Discount Calculated Incorrectly





Customer. 6. In the Account No. field, enter 10000. 7. In the Amount field, enter -66,181.31. 8. Click Apply Entries. 9. Click the line for Document No. 00-6. 10. Click Set Applies-to ID. 11. Notice that the Balance field at the bottom of the window contains

the -1,523.36 difference.



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12. Click OK. The Payment Tolerance Warning window appears, with the options of posting the difference as a payment tolerance or leaving it as a remaining amount on the customer account. To accept the tolerance, click the Post the Balance as Payment Tolerance option button.

13. Click OK. 14. Click Post. 15. Click Yes to post the journal lines. 16. Click OK. 17. Close the Cash Receipt Journal window.

To review the posted entries, follow these steps:


o Document No. 00-6 o Payment line dated 01/07/10

5. Click the payment line and then click Detailed Ledger Entries. 6. Review the lines, making note of the values in the Entry Type field:

o The first line is the Initial Entry of the payment and contains the amount of the payment.

o The second line is the Payment Tolerance and contains the payment tolerance amount of the additional discount taken.

o The third line is the Payment Discount and contains the original payment discount amount.

o The fourth line is the Application and contains the net amount of the three lines that match the invoice total.


If the difference was not posted as a payment tolerance, the 1,523.36 is displayed as a remaining amount on the invoice line. Accept the tolerance to close the invoice and payment.

Demonstration: Incorrect Totaling of Two Invoices

Scenario: On January 30, 2010, Arnie receives a payment from John Haddock Insurance Co. in the amount of 116,564.07 for the following invoices:

• Document No. 00-13, 40,399.29 • Document No. 00-15, 76,167.75



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When posting the payment, Arnie realizes that the payment is 2.97 less than the total of the two invoices. Because this is within the payment tolerance range, he continues with posting to close the entries.

Steps: Incorrect Totaling of Two Invoices





Customer. 6. In the Account No. field, enter 30000. 7. In the Amount field, enter -116,564.07. 8. Click Apply Entries. 9. Click the line for Document No. 00-13. 10. Click Set Applies-to ID. 11. Click the line for Document No. 00-15. 12. Click Set Applies-to ID. 13. Notice that the Balance field at the bottom of the window contains

the 2.97 difference. 14. Click OK; the Payment Tolerance Warning window appears. 15. To accept the tolerance, click the Post the Balance as Payment

Tolerance option button. 16. Click OK. 17. Click Post. 18. Click Yes to post the journal lines. 19. Click OK and close the Cash Receipt Journal window.



o Document No. 00-13 o Document No. 00-15 o Payment line dated 01/30/10



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5. Click the payment line and then click Related Information, point to Entry and then select Detailed Ledger Entries.

6. Review the entry lines: o The first line is the Initial Entry of the payment and contains the

amount of the payment. o The second line is the Payment Tolerance and contains the

accepted payment tolerance amount. o The third line is the Application and contains the net amount of

the two lines that match the actual net amount of the two invoices.


If the difference was not posted as a payment tolerance, the 2.97 balance is displayed as a remaining amount on the line for invoice 00-15 because it was the last invoice applied. Accept the tolerance to close the invoices and payment.

Review Payment Tolerance History

To obtain an overview of the payment tolerance allowed over time for a specific customer, statistics provide periodic and cumulative totals relative to the payment amounts, in local currency (LCY).

To view a customer's statistics, follow these steps:


2. Locate and select the customer to review. 3. Click Statistics. 4. Click the Sales FastTab. The fields related to discounts and

tolerances are as follows: o Pmt. Discounts (LCY) - contains the LCY value of discounts

that have been taken on or before the Pmt. Discount Date. o Pmt. Disc. Tol. (LCY) - contains the LCY value of discounts

that have been taken after the Pmt. Discount Date but within the payment discount grace period.

o Pmt. Tolerances (LCY) - contains the LCY value of underpayments and overpayments that have been accepted in relation to the customer.

5. Close the Customer Statistics window.



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Lab 5.8 - Process a Payment Tolerance Scenario

At the end of December 2009, customer 20000, Selangorian Ltd., signed an agreement to receive a 2 percent discount on all payment received within eight days of the invoice's Document Date. Before the change can be made on the customer card, Document No. 00-8 was posted. Your first step is to add the following to this invoice:

• Discount date of January 8, 2010 • Discount amount of 1,015.57

On January 7, 2010, you receive the payment for the invoice in the amount of 49,635.98. Where this payment is within the discount range, the discount amount taken (1,142.52) is greater than the granted amount (1,015.57).

Although the underpayment falls within the acceptable tolerance range, the accounting manager decides that the customer is responsible for this difference because they took a 2.25 percent discount instead of the allowed 2 percent.

Therefore, you have to post the payment with a remaining amount. You will later contact the customer for an additional payment and remind them of the discount terms.

Challenge Yourself!

1. For customer 20000, update the payment discount date and amount as specified in the scenario.

2. Enter and apply the payment as specified in the scenario. 3. Decline the tolerance and post the journal line.

Need a Little Help?

1. Open the Customer Ledger Entries window for customer 20000. 2. Update the Pmt. Discount Date and Remaining Pmt. Disc.

Possible for Document No. 00-8 as specified in the scenario. 3. Open the Cash Receipt Journal window. 4. Enter the payment as specified in the scenario. 5. Open the Apply Customer Entries window. 6. Apply Document No. 00-8 to the payment. 7. Decline the tolerance. 8. Post the journal line.



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Step by Step


2. Locate and select customer 20000. 3. Click Ledger Entries. 4. On the line for Document No. 00-8, click the Pmt. Discount Date

field. 5. Enter 01/08/10. 6. In the Remaining Pmt. Disc. Possible field, enter 1015.57. 7. Close the Customer Ledger Entries and Customer Card windows. 8. In the Receivables folder, click Cash Receipt Journals. 9. Make sure that the Bank batch is selected. 10. In the Posting Date field, enter 01/07/10. 11. In the Document Type field, click the drop-down list and select


Customer. 13. In the Account No. field, enter 20000. 14. In the Amount field, enter -49,635.98. 15. Click Apply Entries. 16. Click the line for Document No. 00-8. 17. Click Set Applies-to ID. 18. Click OK; the Payment Tolerance Warning window appears 19. To decline the tolerance, make sure that the Leave the Balance as

Remaining Amount option button is selected. 20. Click OK. 21. Click Post. 22. Click Yes to post the journal lines. 23. Click OK. 24. Close the Cash Receipt Journal window.



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Reminders and Finance Charge Memos Management of receivables includes checking whether amounts due are paid on time. If customers have overdue payments, it is necessary to determine when and how to send reminders. In addition, it may be necessary to debit their accounts for interest and/or fees.

Microsoft Dynamics NAV 2009 provides the ability to generate reminders and finance charge memos. Reminders are used to prompt customers to pay overdue amounts and to inform them of possible interest payable on overdue amounts.

If customers refuse to pay overdue amounts after they have received the reminders, a finance charge memo can be issued that contains interest charges.

Set Up and Assign Reminder Terms Reminder Terms specify when and how reminders are created. For example, if three reminder levels are set up for a Reminder Term that only allows for five reminders:

• Microsoft Dynamics NAV 2009 allows a given invoice to appear on up to five reminders (the first one on level 1, the second on level 2, and the rest on level 3).

• As soon as an invoice appears on five reminders, all reminders to the customer are blocked until that particular invoice is paid.

• Even if the customer has other overdue invoices that have not yet reached the maximum, additional reminders cannot be created.

As soon as the reminder terms are created, the Reminder Term Code is entered on the relevant customer cards.



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Reminder Terms

To access Reminder Terms, on the Navigation Pane, click Administration, click Application Setup, click Financial Management, click Finance, and then select Reminder Terms.

FIGURE 5.7 REMINDER TERMS

The Reminder Terms page contains the following fields:

• Code and Description - unique identifier and short description of the reminder.

• Max. No. of Reminders - identifies the maximum number of reminders that can be created for an invoice.

• Post Interest - if this field is selected, any interest listed on the reminder must be posted to the G/L and customer accounts when the reminder is issued.

• Post Additional Fee - if this field is selected, any additional fee listed on the reminder must be posted to the G/L and customer accounts when the reminder is issued.

• Minimum Amount - identifies the minimum amount that must be owed before a reminder is created.

Reminder Levels

Reminder Levels are used to define when reminders can be created and what charges and texts they must include.



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To access Reminder Levels from the Reminder Terms window, click Levels.

FIGURE 5.8 REMINDER LEVELS

The Reminder Levels window contains the following fields:

• No. - identifies the level of the selected Reminder Term. The next consecutive number is automatically generated when a new level is added. Level 1 is the first reminder that is sent about an overdue amount. Level 2 is the second reminder, and so on. o When reminders are created, Microsoft Dynamics NAV 2009

keeps track of how many reminders have been created previously and uses the current level number to determine which conditions apply.

o When a reminder is issued on the last level, the terms of this level apply to any succeeding reminders that are created.

• Grace Period - specifies the time that must pass from the due date or from the date of the previous reminder before a reminder is created. This field is required on each level. o When Microsoft Dynamics NAV 2009 determines whether the

first reminder must be created, it compares the document date on the reminder header to a date that is calculated as the due date of the outstanding invoice plus the grace period for the first level.

o Any succeeding reminders are created if the document date is after the date of the last issued reminder plus the grace period.

• Due Date Calculation - indicates the date formula used to determine how the due date is calculated on the reminder. The due date is calculated from the document date.



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• Calculate Interest - if this field is selected, interest is calculated on the reminder lines and displayed on the reminder. Interest is calculated based on the Finance Charge Terms Code selected on the customer card.

• Additional Fee (LCY) - identifies the amount of the additional fee in LCY that will be displayed on the reminder.

The following table shows how Grace Periods and Due Date Calculations are used on an invoice due January 29 (01/29).

Rem. Level

Invoice Due Date / Prior Reminder Due Date

Grace Period in Rem. Terms

Due Date Calc. in Rem. Terms

Document Date of Reminder

Reminder Due Date

1 01/29 3D 5D 02/02 02/07

2 02/07 5D 1W 02/13 02/20

3 02/20 5D 2D 02/26 02/28

Reminders and Currency

Additional fees can also be created for each reminder level in foreign currencies.

To access the Currency for Reminder Level window, click Related Information, point to Level, and then select Currencies.

For each reminder level code and corresponding reminder level number, define foreign currency information that consists of a currency code and an additional fee.

Beginning and Ending Text

Beginning and ending text lines can:

• Be added for each reminder level for each reminder term. • Contain instructions on payment and consequences of non-payment. • Include several predefined text variables.

To access Beginning or Ending Texts from the Reminder Levels window, click Related Information, point to Level, and then click Beginning Text or Ending Text.



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In either the Beginning - Reminder Text or Ending - Reminder Text windows, the following text variables can be entered:

%1 = Document Date (from the reminder header)

%2 = Due Date (from the reminder header)

%3 = Interest Rate (from Finance Charge Terms)

%4 = Remaining Amount (from the reminder header)

%5 = Interest Amount (from the reminder header)

%6 = Additional Fee (from the reminder header)

%7 = Total (Remaining Amount + Interest Amount + Additional Fee + VAT)

%8 = Reminder Level (from the reminder header)

%9 = Currency Code (from the reminder header)

%10 = Posting Date (from the reminder header)

Demonstration: Create a Reminder Term

Scenario: Arnie is informed that a new reminder term must be set up for customers who consistently pay after the due date. The name of this reminder term is Late, with a description of Consistently Late Payers.

This reminder term contains three levels, including the criteria in the following table.

Level Grace Period

Due Date

Additional Fee

Beginning Text

Ending Text

1 3 days 5 days 10.00 Please remit payment immediately.

2 5 days 1 week

15.00 Payment was due (due date from the header). Remit payment immediately.



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Level Grace

Period Due Date

Additional Fee

Beginning Text

Ending Text

3 5 days 2 days 20.00 This is the (reminder level from the header) reminder we have sent. Your account is delinquent and is sent to a collection agency.

Additional fees are not posted to customer or G/L accounts and interest must be calculated for all levels but is also not posted.

When finished, Arnie assigns this Reminder Terms Code to customer 20000, Selangorian, Ltd.

Steps: Create a Reminder Term

To create the Reminder Term Code and two levels, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Reminder Terms.

2. Click New to insert a line. 3. In the Code field, enter Late. 4. In the Description field, enter Consistently Late Payers. 5. Click Levels. 6. For level 1, in the Grace Period field, enter 3D. 7. In the Due Date field, enter 5D. 8. Place a check mark in the Calculate Interest check box. 9. In the Additional Fee field, enter 10. 10. Click Related Information, point to Level, and then select

Beginning Text. 11. In the first line, enter "Please remit payment immediately". 12. Click OK. 13. Click the next line. 14. For level 2, in the Grace Period field, enter 5D. 15. In the Due Date field, enter 1W. 16. Place a check mark in the Calculate Interest check box. 17. In the Additional Fee field, enter 15.



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18. Click Related Information, point to Level and then click Ending Text.

19. In the first line, enter Payment was due %2. Remit payment immediately.

20. Click OK

To enter the third level of the Reminder Term, follow these steps:

1. In the Reminder Levels window, click the next line. 2. For level 3, in the Grace Period field, enter 5D. 3. In the Due Date field, enter 2D. 4. Place a check mark in the Calculate Interest check box. 5. In the Additional Fee field, enter 20. 6. Click Related Information, point to Level and then select Ending

Text. 7. In the first line, enter "This is the %8 reminder we have sent". 8. In the second line, enter "Your account is delinquent and is sent to a

collection agency". 9. Click OK 10. Click OK in the Reminder Levels and Reminder Terms windows.

To assign the Reminder Term to customer 20000, follow these steps:

1. On the Receivables page, click Customers. 2. Locate and select customer 20000. 3. Click the Payments FastTab. 4. In the Reminder Terms Code field, click the drop-down list and

select LATE. 5. Click OK.



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Lab 5.9 - Set Up a Reminder Term Scenario

CRONUS International Ltd. has three troublesome customers who are consistently late on paying invoices. As the accounts receivable administrator, you have been asked to set up a new reminder term named TOP3, with a description of Top 3 Late Payers.

You also have to send a reminder every 14 days, with a maximum of four reminders before the account is sent to collections. This reminder only includes one level with an ending text that informs the customer of the current reminder number and that after the fourth notice, the account will be sent to collections.

When the Reminder Term is set up, assign it to the following customers: 10000, 40000, and 50000.

NOTE: Use the appropriate text variable to designate the reminder number in the ending text.

Challenge Yourself!

1. Create the new reminder term as specified in the scenario. 2. Enter the level as specified in the scenario. 3. Assign the Reminder Terms Code to the three customers specified in

the scenario.

Need a Little Help?

1. Open the Reminder Terms window. 2. Create the new reminder term as specified in the scenario. 3. Open the Reminder Levels window. 4. Enter the level as specified in the scenario. 5. In the Ending - Reminder Text window, use the appropriate text

variable. 6. Open the Customer Card for customer 10000. 7. Enter the TOP3 Reminder Terms Code. 8. Assign the code to customer 40000 and 50000.



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Step by Step

1. On the Navigation Pane, click Administration, click Application Setup, click Financial Management, click Finance, and then select Reminder Terms.

2. Click New to insert a line. 3. In the Code field, enter TOP3. 4. In the Description field, enter Top 3 Late Payers. 5. In the Max. No. of Reminders field, enter 4. 6. Click Levels. 7. For level 1, in the Grace Period field, enter 1W. 8. Click Related Information, point to Level, and the select Ending

Text. 9. In the first line, enter "This is reminder number %8". 10. In the second line, enter "After the fourth reminder, your account

will be sent to collections". 11. Click OK 12. Click OK in the Reminder Levels and Reminder Terms windows. 13. In the Receivables folder, click Customers. 14. Locate and select customer 10000. 15. Click the Payments FastTab. 16. In the Reminder Terms Code field, click the drop-down list and

select TOP3. 17. Click OK. 18. Repeat steps 13-15 for customers 40000 and 50000.



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Create and Issue Reminders In Microsoft Dynamics NAV 2009, a reminder resembles an invoice. To create a reminder, a reminder header and one or more reminder lines must be filled in.

You can create reminders by using either of the following methods:

• Automatically create reminders by using the Create Reminders batch job.

• Manually fill in a header and use the Suggest Reminder Lines batch job to fill in the lines.

Use the Create Reminders batch job when you are generating reminders for all customers. Reminders are typically created manually when only one reminder is needed for a single customer.

Create Reminders Batch Job

The Create Reminders batch job uses information from the customer card to determine the relevant terms for the reminder. There are other extensive options, such as:

• Applying several predefined text options. • Flexible interest rates. • Other fees when you are creating reminders for customers. • Choosing whether interest and/or fees must be posted to the relevant

G/L and customer accounts.

To access the Create Reminders batch job, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Receivables, and then select Reminders.



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2. Click Create Reminders.

FIGURE 5.9 CREATE REMINDER

The Create Reminders batch job contains three FastTabs:

• Options • Customer • Cust. Ledger Entry

Use the Customer and Cust. Ledger Entry FastTabs to filter the information used to create the reminders. Notice that regardless of the selections made on these FastTabs, reminders are only created for customers who have outstanding balances.


• Posting Date - date that is listed as the posting date on the header of the reminder.

• Document Date - date that is listed as the Document Date on the header of the reminder. This date is used for any interest calculations and to determine the reminder's due date.

• Only Entries with Overdue Amounts - if this field is selected, the batch job only inserts open customer entries with a due date earlier than the Document Date. If it is not selected, the bottom of the reminder contains the amounts owed by the customer but are not yet due.



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• Use Header Level - if this field is selected, the Reminder Level in the reminder header is used to determine whether to calculate interest for a specific reminder line. If it is not selected, the Reminder Level on each reminder line is used to determine whether to calculate interest or not.

Use Header Level Option Example

A customer has two overdue amounts:

• The first amount already appeared in a reminder and is now at Level 2 when the next reminder is created.

• The second amount has not appeared in a reminder before and is therefore at Level 1 when the next reminder is created.

In this situation, the reminder header has a Reminder Level of 2 because it uses the highest level from the lines.

If Reminder terms are set up with Level 2 having interest calculated while Level 1 does not and the Use Header Level check box contains a check mark, the following occurs when the batch job is run:

• The Reminder Level from the header is used. • Interest is calculated for both lines in the reminder.

NOTE: The batch job only inserts customer ledger entries that are in the currency represented by the currency code on the reminder header. The batch job creates one reminder for each currency for which there is overdue customer ledger entries.

Create Reminders Manually

You can manually create reminders directly in the Reminders window. After creating the header, you can add invoice lines by using the Suggest Reminder Lines batch job.

The Suggest Reminder Lines batch job creates reminder lines by using options similar to those in the Create Reminders batch job:

• Filter customer ledger entry types. • Suggest only overdue amounts.

NOTE: To calculate interest based on the Reminder Level in the reminder header, place a check mark in the Use Header Level check box in the reminder header, rather than selecting the Reminder Level on each reminder line before running the Suggest Reminder Lines batch job.



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To create reminders manually, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Receivables, and the select Reminders.

2. Click New. 3. In the Customer No. field, click the drop-down list and select the

relevant customer. 4. In the Posting Date field, enter the date this reminder is to be issued. 5. In the Document Date field, enter the date the reminder is created.

Remember that this date is used to: o Determine whether a reminder is created. o Calculate interest. o Calculate the due date of the reminder.

6. Place a check mark in the Use Header Level check box to base the

interest calculations on the header level, rather than the line level. 7. Click Suggest Reminder Lines. 8. Click the Options FastTab. 9. Place a check mark in the Only Entries with Overdue Amounts to

include only overdue invoices in the reminder lines. 10. Click the Cust. Ledger Entry FastTab. 11. Filter as needed on the document types to include in the reminder

lines. 12. Click OK to generate the reminder lines. 13. Click OK in the Reminder window

Change Beginning and Ending Text

Change the beginning and ending text on reminders using the Update Reminder Text batch job. This batch job changes the text associated with the current Reminder Terms level to the text associated with a different level.

NOTE: The Reminder Level is linked to the Reminder Terms Code on the reminder header.

To change the reminder text, follow these steps:

1. In the Reminders window, with the header and lines created, click Actions, point to Functions, and then select Update Reminder Text.

2. Click the Options FastTab.



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3. In the Reminder Level field, enter the level number that contains the preferred text.

4. Click OK.

FIGURE 5.10 UPDATE REMINDER TEXT

The reminder lines are now updated with the new text.

Issue Reminders

After the reminder header and associated reminder lines have been created, the reminder must be issued. This is the process of posting the reminders.

When a reminder is issued, Microsoft Dynamics NAV 2009 posts entries according to the Reminder Terms specifications, such as whether interest and/or additional fees are posted to the customer's account and the general ledger.

Before issuing reminders, a Test Report can be run to review the pre-printed document. To run the test report, follow these steps:

1. On the Reminder window, locate and select the reminder to review. 2. Click Actions, point to Issuing, and then select Test Report. 3. Click Preview to view the document on the screen or click Print to

print the document for review.

To issue reminders, follow these steps:


2. Locate and select the reminder to issue. 3. Click Issue. 4. Click the Options FastTab.



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5. Place a check mark in the Print check box to print the issued reminder(s).

6. Place a check mark in the Replace Posting Date check box to change the existing posting date on the reminder header(s).

7. If you are replacing the posting date, enter the new date in the Posting Date field.

8. The Reminder FastTab contains the reminder number of the selected reminder. Issue a group of reminders by entering the number range in the No. field.

To issue all reminders from the Reminder List window, follow these steps:

1. In the Reminders window, highlight all lines. 2. Click Issue. 3. Click the Options FastTab and complete as needed. 4. Click OK. 5. Close the Reminders window.

View or Print Issued Reminders

View and print issued reminders from the Issued Reminder window. Information cannot be entered, changed, or deleted in this window.

To view an issued reminder, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Receivables, and then select Issued Reminders.

2. Locate the issued reminder.

To print an issued reminder, follow these steps:

1. In the Issued Reminder window, locate and select the reminder to print.

2. Click Print. 3. Click the Options FastTab. 4. Place a check mark in the Show Internal Information check box to

include internal information, such as dimensions, on the printed reminder.

5. Place a check mark in the Log Interaction check box to create a reminder interaction on the customer's Contact Card.

6. Click Print. 7. Close the Issued Reminder window.



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Lab 5.10 - Create and Issue Reminders Scenario

It is the beginning of March, 2010, and reminders must be created and issued for past due customer entries as of February 28, 2010, by using the conditions of the header level to all reminder lines.

Issue reminders for customers 43687129 and 47563218 only, without printing or changing the posting date. Review the issued reminders.

Challenge Yourself!

1. Run the Create Reminders batch job as specified in the scenario. 2. Issue the reminders as specified in the scenario. 3. Locate and review the issued reminders as specified in the scenario.

Need a Little Help?

1. Open the Reminder window. 2. Run the Create Reminders batch job for all past due entries as of

February 28, 2010. 3. Issue the reminder for customer 43687129. 4. Issue the reminder for customer 47563218. 5. Open the Issued Reminder window. 6. Locate and review the issued reminders for customers 43687129 and

47563218.

Step by Step


2. Click Create Reminders. 3. Click the Options FastTab. 4. In the Posting Date field, enter 02/28/10. 5. In the Document Date field, enter 02/28/10. 6. Make sure that the Only Entries with Overdue Amounts check box

contains a check mark. 7. Place a check mark in the Use Header Level check box. 8. Click OK. 9. Locate and select the reminder for customer 43687129. 10. Click Issue. 11. Click OK.



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12. Locate and select the reminder for customer 47563218. 13. Click Issue. 14. Click OK. 15. Close the Reminder window. 16. In the Periodic Activities folder, click Issued Reminders. 17. Locate and review the issued reminders for customers 43687129 and

47563218.



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Set Up and Assign Finance Charge Terms A Finance Charge Memo is:

• A document that contains information about calculated interest on outstanding balances.

• Used to inform a customer that the outstanding balance is increased by an interest amount.

Before creating finance charge memos, you must set up the conditions for finance charge calculations in the Finance Charge Terms window. After you set up Finance Charge Terms, they are assigned to Customer Cards for use when you calculate finance charges on open entries.

Finance Charge Terms

To access Reminder Charge Terms, on the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Finance Charge Terms.

FIGURE 5.11 FINANCE CHARGE TERMS



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The Finance Charge Terms window contains the following fields:

• Code and Description - unique code and short description of the finance charge term.

• Interest Calculation - determines which entries are used in the interest calculation on finance charge memos. The options are as follows: o Open Entries o Closed Entries o All Entries

• Interest Calculation Method - determines the interest calculation

method for this set of finance charge terms. The options are as follows: o Balance Due Method: the finance charge is a percentage of the

overdue amount. Finance Charge = Overdue Amount * (Interest Rate / 100)

o Average Daily Balance Method: this method considers how many days the payment is overdue. Finance Charge = Remaining Amount * (Days Overdue / Interest Period)*(Interest Rate/100)

• Interest Rate - identifies the finance charge percentage charged when this finance charge type is used.

• Interest Period (Days) - identifies the number of days related to the interest rate. For example, 12 percent for 360 days or 1 percent for 30 days.

• Minimum Amount (LCY) - specifies the minimum interest charge in local currency (LCY).

• Additional Fee - identifies a charge in addition to the finance charge.

• Grace Period - determines the number of days the customer's invoice may go unpaid before a finance charge is assessed.

• Due Date Calculation - indicates the date formula used to determine how the due date is calculated on the finance charge. This date is calculated from the document date.

• Line Description - identifies a description to be used in the Description field on the finance charge memo lines. Text variables can be used in this description. Post Interest - if this field is selected, interest listed on the finance charge memo must be posted to the G/L and customer accounts when the finance charge memo is issued.

• Post Additional Fee - if this field is selected, additional fees listed on the finance charge memo must be posted to the G/L and customer accounts when the finance charge memo is issued.



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Similar to Reminder Terms, Finance Charge Terms can also be set up with Beginning and Ending Text and Currency fees. These three options are accessed on the Terms button from the Finance Charge Terms window.

Demonstration: Create a Finance Charge Term

Scenario: Two days ago, Arnie set up new reminder terms for customers who consistently pay late. He now has to set up a Finance Charge Term for these customers using the following criteria:

• Interest is calculated on open customer entries by using the Average Daily Balance method.

• Interest rate is 11 percent, with an interest period of 360 days. • Includes the following line description: (Interest rate)% finance

charge of (Remaining amount on the customer ledger entry). • Only calculated interest is posted. • Includes the following ending text: Please pay the total of (Total

(Remaining Amount + Interest Amount + Additional Fee + VAT).

In this demonstration, the 11 LATE Finance Charge Term is set up and then assigned to customer 20000.

Steps: Create a Finance Charge Term

To create the finance charge term, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Finance Charge Terms.

2. Click New. 3. In the Code field, enter 11 Late. 4. In the Description field, enter Consistently Late Payers. 5. In the Line Description field, enter %4% finance charge of %6 6. In the Interest Rate field, enter 11. 7. Make sure that the Interest Calculation is set to Open Entries. 8. Make sure that the Interest Calculation Method is set to Average

Daily Balance. 9. In the Interest Period (Days) field, enter 360. 10. Make sure that the Post Interest check box contains a check mark. 11. Click to remove the check mark in the Post Additional Fee check

box. 12. Click OK 13. Select the new Finance Charge Term in the Finance Charge Terms

window and then click Related Information, point to Terms, and then select Ending Text.



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14. In the first line, enter "Please pay the total of %7". 15. Click OK.

To assign the finance charge term to customer 20000, follow these steps:

1. On the Receivables page, click Customers. 2. Locate and select customer 20000. 3. Click the Payments FastTab. 4. In the Fin. Charge Terms Code field, click the drop-down list and

select 11 LATE. 5. Click OK.

Demonstration: Set Up a Finance Charge Term

In Lab 5.9, you set up the TOP3 Reminder Terms. Now, a Finance Charge Term is being assigned to these customers.

Set up a Finance Charge Term for these customers using the following criteria:

• Code: 10 TOP3, Description: Top 3 Late Payers. • Interest is calculated on all customer entries by using the Average

Daily Balance method. • Use a 10 percent interest rate with an interest period of 180 days. • Additional Fee of 20.00 • Includes the following line description: (Interest rate)% finance

charge of (Remaining amount on the customer ledger entry). • Calculated interest and Additional Fees are posted. • Includes the following ending text: Please pay the total of (all

amounts including interest and fees).

When the Finance Charge Term is set up, assign it to the following customers: 10000, 40000, and 50000.

Steps: Set Up a Finance Charge Term 1. On the Navigation Pane, click the Departments button, click

Administration, click Application Setup, click Financial Management, click Finance, and then select Finance Charge Terms.

2. Click New. 3. In the Code field, enter 10 TOP3. 4. In the Description field, enter TOP 3 Late Payers. 5. In the Line Description field, enter %4% finance charge of %6. 6. In the Additional Fee field, enter 20. 7. In the Interest Rate field, enter 10.



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8. In the Interest Calculation field, click the drop-down list and select All Entries.

9. Make sure that the Interest Calculation Method is set to Average Daily Balance.

10. In the Interest Period (Days) field, enter 180. 11. Make sure that the Post Interest and Post Additional Fee check

boxes contain check marks. 12. Click OK. 13. Select the 10 TOP3 in the Finance Charge Terms window and then

click Related Information, point to Terms, and then select Ending Text.

14. In the first line, enter "Please pay the total of %7". 15. Click OK. 16. In the Navigation Pane, click Financial Management, click

Receivables, and then select Customers. 17. Locate and select customer 10000. 18. Click the Payments FastTab. 19. In the Fin. Charge Terms Code field, click the drop-down list and

select 10 TOP3. 20. Click OK. 21. Repeat steps 18-20 for customers 40000 and 50000.

Create and Issue Finance Charge Memos Finance charge memos are composed of a header and lines and are created using processes similar to reminders.

Create finance charge memos by using either of the following methods:

• Automatically create reminders using the Create Finance Charge Memos batch job.

• Manually fill in a header and use the Suggest Fin. Charge Memo Lines batch job to fill in the lines.

Use the Create Finance Charge Memo batch job when you are generating reminders for all customers. Finance charge memos are typically created manually when only one is needed for a single customer.

Create Finance Charge Memos Batch Job Overview

The Create Finance Charge Memos batch job creates finance charge memos for customers who have overdue amounts, including:

• Open entries where payment is overdue. • Closed entries where payment was late.



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The batch job:

• Uses information from the customer card to determine the relevant terms for the finance charge memo.

• Calculates finance charges according to the following conditions defined on the customer's Finance Charge Terms.

• Checks customer ledger entries to determine whether any payments are overdue (or for closed entries, were overdue when paid by the customer).

• Inserts the overdue customer ledger entries into the Finance Charge Memo lines and calculates finance charges on each line.

NOTE: Make sure that all open credit memos are applied to existing open invoices before you calculate finance charges. Because credit memos have negative balances, the finance charge function generates an error when you try to calculate on that open record.

To access the Create Finance Charge Memos batch job, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Receivables, and then select Finance Charge Memos.

2. Click Create Finance Charge Memos.

The Create Finance Charge Memos batch job contains three FastTabs:

• Options • Customer • Cust. Ledger Entry

Use the Customer and Cust. Ledger Entry FastTabs to filter the information that is used to create the finance charge memos. Notice that regardless of the selections made on these FastTabs, reminders are only created for customers who have outstanding balances.


• Posting Date - date that is listed as the posting date on the header of the finance charge memo.

• Document Date - date that is listed as the Document Date on the header of the finance charge memo. This date is used to determine:

o The due date for the finance charge memo. o Which customer ledger entries to insert in the finance charge

memo lines. If you use the Average Daily Balance method for interest calculation, this date is used to calculate finance charges on each overdue customer ledger entry.



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NOTE: The batch job only inserts customer ledger entries that are in the currency represented by the currency code on the finance charge memo header. The batch job creates one finance charge memo for each currency for which there are entries on which interest is calculated.

Demonstration: Create Finance Charge Memos Automatically

Scenario: Beginning from 2010, Arnie is required to create finance charge memos for all open customer entries. It is February 1, 2010 and he needs to run the reminders for open entries as of January 31, 2010.

After running the Create Finance Charge Memos batch job, he reviews the memo for customer 20000.

Steps: Create Finance Charge Memos Automatically

To create a finance charge memo using the Create Finance Charge Memos batch job, follow these steps:


2. Click Create Finance Charge Memos. 3. Click the Options FastTab. 4. In the Posting Date field, enter 01/31/10. 5. In the Document Date field, enter 01/31/10. 6. Click OK.

To review a finance charge memo, follow these steps:

1. In the Finance Charge Memos window click New. 2. Click the drop-down list in the Customer No. field and locate the

memo for customer 30000, John Haddock Insurance Co. 3. Notice that all invoices are past due as of January 31, 2010. 4. Click the Posting FastTab. 5. Note that the Reminder Terms Code is 1.5 DOM. Click the drop-

down list in this field. 6. Notice that there is:

o A 1.5 percent interest calculated with an interest period of 30 days.

o An additional fee of 10.00. o A line text referencing the interest rate and the amount due.

7. Click Related Information, point to Terms, and then select

Beginning Text.



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8. Note that no beginning text has been specified for this Finance Charge Term.

9. Close the Beginning - Finance Charge Text window. 10. Click Related Information, point to Level, and then select Ending

Text. 11. Note that the text references paying the total amount of overdue

invoices, interest, and additional fees. 12. Close the Ending - Finance Charge Text and Finance Charge

Terms windows. 13. On the Finance Charge Memo window, notice the following lines

based on the Finance Charge Terms: o Line text of 1.5% finance charge of (overdue invoice amount). o Additional fee of 10.00 o Ending text of Please pay the total of (total amount).

Create Finance Charge Memos Manually

You can manually create finance charge memos directly in the Finance Charge Memos window. After creating the header, you can add invoice lines using the Suggest Fin. Charge Memo Lines batch job.

This batch job creates finance charge memo lines using similar filtering options as the Create Finance Charge Memos batch job.

NOTE: The batch job first deletes any existing lines in the finance charge memo before inserting the new lines created when you run the batch job.

To create finance charge memos manually, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Receivables, and then click Finance Charge Memos.

2. Click New to a new finance charge memo. 3. In the Customer No. field, click the drop-down list and select the

relevant customer. 4. Click OK. 5. Press TAB or ENTER to populate the header. 6. In the Posting Date field, enter the date this finance charge memo is

to be issued. 7. In the Document Date field, enter the date the finance charge memo

is created. Remember that this date is used to: o Calculate interest. o Calculate the due date of the finance charge memo.



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8. Click Actions, point to Functions, and then select Suggest Finance Charge Memos Lines.

9. Click the Cust. Ledger Entry FastTab. 10. Filter as needed on the document types to include in the memo lines. 11. Click OK to generate the finance charge memo lines.

Update Beginning and Ending Text

If existing beginning or ending text has been erroneously modified on a finance charge memo, use the Update Finance Charge Text batch job to revert the text to the original text set up on the Finance Charge Term.

To change finance charge memo text, follow these steps:

1. In the Finance Charge Memo window, with the header and lines created, click Actions, point to Functions, and then select Update Finance Charge Text.

2. Click OK.

The lines are updated with the new text.

NOTE: If text has been changed on the Finance Charge Term, it is recommended to run the Suggest Fin. Charge Memo Lines batch job to update the lines.

Issue Finance Charge Memos

After creating the finance charge memo header and associated lines, you must issue the finance charge memo, which is the process of posting the finance charge memo.

When a finance charge memo is issued, Microsoft Dynamics NAV 2009 posts entries according to the Finance Charge Terms specifications, such as whether interest and/or additional fees are posted to the customer's account and the general ledger.

Prior to issuing finance charge memos, you can run a Test Report to review the pre-printed document. To run the test report, follow these steps:

1. On the Finance Charge Memo window, locate and select the finance charge memo to review.

2. Click Actions, point to Issuing, and then select Test Report. 3. Click Preview to view the document on the screen or click Print to

print the document for review. 4. Close the open windows.



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To issue finance charge memos, follow these steps:


2. Locate and select the finance charge memo to issue. 3. Click Issue. 4. Click the Options FastTab. 5. Place a check mark in the Print check box to print the issued finance

charge memo(s). 6. Place a check mark in the Replace Posting Date check box to

change the existing posting date on the finance charge memo header(s).

7. If replacing the posting date, enter the new date in the Posting Date field.

8. The Finance Charge Memo FastTab contains the number of the selected finance charge memo. You can issue a group of finance charge memos by entering the number range in the No. field.

9. Click OK.

To issue multiple finance charge memos from the Finance Charge Memo List window, follow these steps:

1. In the Finance Charge Memo window, highlight all lines to be issued and click Issue.

2. Notice that the Finance Charge Memo FastTab references a filter of Marked entries.

3. Click the Options FastTab and complete as needed. 4. Click OK and close the Finance Charge Memo window.

View or Print Issued Finance Charge Memos

Issued finance charge memos can be viewed and printed from the Issued Finance Charge Memo window. Information cannot be entered, changed, or deleted in this window.

To view an issued finance charge memo, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Receivables, and then select Issued Finance Charge Memos.

2. Locate the issued finance charge memo.



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To print an issued finance charge memo, follow these steps:

1. In the Issued Finance Charge Memo window, locate and select the finance charge memo to print.

2. Click Print. 3. Click the Options FastTab. 4. Place a check mark in the Show Internal Information check box to

include information that is only for internal use on the printed report. 5. Place a check mark in the Log Interaction check box to create a

finance charge memo interaction on the customer's Contact Card. 6. Click Print. 7. Close the Issued Finance Charge Memo window.

Interest Calculation in Finance Charge Memos

The entries suggested in finance charge memos, and the amount of interest calculated in finance charge memos, depends on the selections made in Interest Calculation and Interest Calculation Method fields in the Finance Charge Terms window.

The interest calculation rules for finance charge terms are summarized in the following table.

Interest Calculation

Interest Calculation Method

Customer Ledger Entries Suggested in Finance Charge Memo

Base Used to Calculate Interest

Balance Due

Open Entries

Open entries at Document Date of Finance Charge Memo.

Remaining Amount of each finance charge memo line.

Balance Due

Closed Entries

No Finance Charge Memo created.

No Finance Charge Memo created.

Balance Due

All Entries Open entries at Document Date of Finance Charge Memo.




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Interest Calculation

Interest Calculation Method

Customer Ledger Entries Suggested in Finance Charge Memo

Base Used to Calculate Interest

Average Daily Balance

Open Entries

Open entries at Document Date of Finance Charge Memo.



Closed Entries

Closed entries at Document Date of Finance Charge Memo Open at their Due Date.

Remaining Amount at the Due Date of each closed entry suggested.


All Entries The combined entries for the Open and Closed Entries options.

Same base as the Open and Closed Entries options.

Interest Calculation in Reminders

In contrast to finance charge memos, customer ledger entries suggested in reminders are only open entries at the Document Date of the reminder.

If the reminder is assigned a finance charge term with an Interest Calculation Method of:

• Balance Due: o The Interest Calculation field has no effect. o The amount of interest calculated for each reminder line

suggested is based on the Remaining Amount of the reminder line.

• Average Daily Balance, the Interest Calculation field has the following effect: o If Open Entries or All Entries is selected in the Interest

Calculation field, the amount of interest calculated for each reminder line suggested is based on the Remaining Amount of the reminder line.

o If Closed Entries is selected in the Interest Calculation field, the amount of interest calculated for each reminder line suggested is based on the Remaining Amount of the related customer ledger entry on its Due Date. This allows interest to be calculated on the full invoice amount of partially applied entries if they were overdue at the time the partial payment was applied.



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Lab 5.11 - Create and Issue Finance Charge Memos Scenario

It is the beginning of March 2010 and finance charge memos must be created and issued for past due customer entries as of February 28, 2010.

Issue a finance charge memo for customer 42147258 only, without printing or changing the posting date. Review the issued finance charge memo.

Challenge Yourself!

1. Run the Create Finance Charge Memos batch job as specified in the scenario.

2. Issue the finance charge memo as specified in the scenario. 3. Locate and review the issued finance charge memo as specified in

the scenario.

Need a Little Help?

1. Open the Finance Charge Memo window. 2. Run the Create Finance Charge Memos batch job for all past due

entries as of February 28, 2010. 3. Issue the finance charge memo for customer 42147258. 4. Open the Issued Finance Charge Memo window. 5. Locate and review the finance charge memo issued for customer

42147258.

Step by Step

1. On the Navigation Pane, click the Department button, click Financial Management, click Periodic Activities, click Receivables, and then select Finance Charge Memos.

2. Click Create Finance Charge Memos. 3. Click the Options FastTab. 4. In the Posting Date field, enter 02/28/10. 5. In the Document Date field, enter 02/28/10. 6. Click OK. 7. Locate and select the finance charge memo for customer 42147258. 8. Click Issue. 9. Click OK. 10. Close the Finance Charge Memo window.



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11. In the Periodic Activities folder, click Issued Finance Charge Memos.

12. Locate and review the finance charge memo issued for customer 42147258.

13. Close the Issued Finance Charge Memo window.



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Analyzing Receivables Customer Ledger Entries are posted entries from sales orders, sales invoices, sales credit memos, journal lines, finance charge memos, reminders, and refunds. The amount on each customer entry is a flow field, which gathers information from a Detailed Customer Ledger Entry.

Detailed Customer Ledger Entries contain the actual amounts of the posted entries. Besides the original entry and the applied entry, Detailed Customer Ledger Entries include any adjustments made to the customer ledger entry, including:

• Payment discounts • Realized and unrealized losses and gains due to changes in the

currency exchange rate • Application rounding and corrections due to the rounding of different

currencies

Review Ledger Entries

Reviewing ledger entries gives the user a basic to analyze the receivables. The Customer Ledger Entries and Detailed Customer Ledger Entries are both used to analyze receivables.

1. The followring examble reviews the posted ledger entries posted to customer 10000. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then select Customers.

2. Locate and select customer 10000. 3. Click Ledger Entries. 4. Review the posted entries, noticing that there are:

o Multiple opening entries created using a journal. o Multiple payments, created from a general journal and the Cash

Receipt Journal. o Multiple invoices and a credit memo created from sales

documents. o Closed and open entries

5. Click the Amount field for any line. Notice that it accesses the

Detailed Customer Ledger Entries that calculate the value in the field.

6. Click Close. 7. On the line for Document No. 00-11, click Related Information,

point to Entry, and then select Detailed Ledger Entries to view all the entries posted to this entry.



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The Entry Type field is automatically populated when the detailed customer ledger entry is created and contains several options. Some of the most common are:

• Initial Entry: the entry is an invoice, payment, credit memo, finance charge memo, or reminder.

• Application: two or more customer ledger entries are applied to each other.

• Payment Discount: payment discount granted. • Payment Tolerance: payment tolerance granted. • Payment Discount Tolerance: payment discount tolerance granted.

Summary Receivables Management helps understand the processes and functionality available when you are managing receivables. It helps make sure that payments are applied and posted correctly.

I helps you in always keeping track of the open balances and all entries posted to a customer.

Using Receivables Management in Microsoft Dynamics NAV 2009 also lets you manage customer payments, payment discounts and tolerances and even address reminders and finance charge memos.



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Test Your Knowledge Multiple Choice Questions

1. Where are Application Methods specified?

( ) Cash Receipt Journal ( ) Apply Customer Entries window ( ) Customer Card ( ) Customer Ledger Entries

2. In what window are actual posted customer entries amounts located?

( ) Posted Customer Ledger Entries window ( ) Customer Ledger Entries window ( ) Detailed Ledger Entries window ( ) Detailed Cust. Ledg. Entries window

Fill in the Blanks


3. Payment _________ is used to manage customer over- and underpayments.

4. _________ are used to prompt customers to pay overdue amounts.

5. Payment _________ are an incentive for customers to quickly pay their outstanding amounts fully.

6. Finance charge memos contain information about calculated ________ on outstanding balances.



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1.

2.

3.



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Solutions Set Up Payment Discounts

Test Your Knowledge: Set Up Payment Discounts

1. On the General Ledger Setup window, what check box must contain a check mark so you may enter payment discount accounts in the Customer Posting Groups window?

( ) Adjust for Payment ( ) Pmt. Disc. Incl. VAT (•) Pmt. Disc. Excl. VAT ( ) Use Payment Disc.

2. On the General Ledger Setup window, what check box must contain a check mark so you may enter payment discount accounts in the General Posting Setup window?

(•) Adjust for Payment ( ) Pmt. Disc. Incl. VAT ( ) Pmt. Disc. Excl. VAT ( ) Use Payment Disc.

3. What do you select in the Payment Terms window, to grant a payment discount of 3 percent if payment is received within ten days of the document date?

( ) Enter D10 in the Discount Date Calculation field, and 3 in the Discount % Field.

(•) Enter 10D in the Discount Date Calculation field, and 3 in the Discount % Field.

( ) Enter 10D in the Discount Date Calculation field, and .03 in the Discount % Field.

( ) Enter D10 in the Discount Date Calculation field, and .03 in the Discount % Field.



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Test Your Knowledge

Multiple Choice Questions

1. Where are Application Methods specified?

( ) Cash Receipt Journal ( ) Apply Customer Entries window (•) Customer Card ( ) Customer Ledger Entries

2. 2. In what window are actual posted customer entries amounts located?

( ) Posted Customer Ledger Entries window ( ) Customer Ledger Entries window ( ) Detailed Ledger Entries window (•) Detailed Cust. Ledg. Entries window

Fill in the Blanks


3. Payment tolerance is used to manage customer over- and underpayments.

4. Reminders are used to prompt customers to pay overdue amounts.

5. Payment discounts are an incentive for customers to quickly pay their outstanding amounts fully.

6. Finance charge memos contain information about calculated interest on outstanding balances.


Chapter 6: Payables Management

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CHAPTER 6: PAYABLES MANAGEMENT Objectives

The objectives are:

• Describe the Payments FastTab on the Vendor Card window. • Explain the Payment Journal, which is used to process payments. • Explain the Apply Vendor Entries window, used to apply payments

to vendor ledger entries. • Explain the process of entering and posting manual checks. • Explain the Suggest Vendor Payments batch job, which is used to

generate open payables entries in the Payment Journal. • Create payments using the Suggest Vendor Payment batch job. • Explain the process of printing and posting payments. • Explain the process of voiding printed but unposted payments. • Demonstrate how to apply payments to vendor ledger entries after

posting. • Explain the process of unapplying vendor ledger entries. • Explain the process of reversing vendor ledger entries posted using

journals. • Set up Microsoft Dynamics NAV 2009 to use payment discounts. • Process transactions for various situations that benefit from using

payment discounts. • Set up Microsoft Dynamics NAV 2009 to use payment tolerance. • Process transactions for various situations that benefit from payment

tolerance. • Review Vendor Ledger Entries and Detailed Vendor Ledger Entries.

Introduction Payables Management is an integral component of Microsoft Dynamics® NAV Financial Management that helps companies manage vendor payments more effectively and build up a comprehensive vendor database.

Understanding Payables Management give a overviews of the relevant windows, explains the vendor setup, the structure of vendor ledger entries and detailed ledger entries and how to effectively use Payables Management in Microsoft Dynamics NAV 2009 .

NOTE: To successfully perform all demonstrations in Payables Management, a clean Microsoft Dynamics NAV 2009 database must be used.



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Vendor Card Managing vendors and payments is an important part of managing the total finances of the company. This is important to avoid penalty fees if there is a late payment, to keep a good relationship with the vendors or if possible get a discount if the company make early payment.

In Microsoft Dynamics NAV 2009, the Vendor Card contains six FastTabs:

• General • Communication • Invoicing • Payments • Receiving • Foreign Trade

Each FastTab contains a function to help companies manage vendors efficiently. The vendor card also has two FactBoxes with the Vendor Statistics and Vendor History to help users keep control of expenses and information on the vendor account.

Vendor Card and Payables

The Payments FastTab on the Vendor Card is used to define how payments to vendors are managed.

FIGURE 6.1 VENDOR CARD, PAYMENTS FASTTAB



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On this FastTab, the following payment requirements are specified:

• Payment application methods • Payment terms and methods • Vendor priorities • Whether payment tolerance is allowed

These areas are described as needed in the lessons that relate to their functionality. For more information about any of these fields, press F1 to access online help.

Payment Journal Overview In Microsoft Dynamics NAV 2009, payments to vendors are created and posted in the Payment Journal. When using the Payment Journal, you can:

• Record and post handwritten checks quickly • Enter printed computer checks for open invoices:

o Manually o Using the Suggest Vendor Payments batch job

Access the Payment Journal from the following two areas on the Financial Management menu:

• Cash Management • Payables

FIGURE 6.2 PAYMENT JOURNAL WINDOW



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Use the following field selections when posting payments:

• Document Type = Payment • Account Type = Vendor • Amount = Entered as a positive amount • Bal. Account Type = Bank Account • Bank Payment Type =

o Computer Check when printing checks o Manual Check when recording a handwritten check

The Document No. field represents the check number and is populated based on the selections in the Bank Payment Type field.

For manual checks:

• The Bank Payment Type is set to Manual Check. • The check number is entered in the Document No. field.

For computer checks, the Bank Payment Type is set to Computer Check and the Document No. field is specified as follows:

• To print one check for each vendor, the Document No. field is left empty. The Document

• No. field is populated with the check numbers that are specified during the check printing process.

• To print multiple checks for each vendor: o Create separate lines for each vendor payment. o In the Document No. field on each line, indicate separate check

numbers, for example, enter 1 on the first line, 2 in the next line, and so on.

o During the check printing process, Microsoft Dynamics NAV 2009 recognizes that the numbers are different and prints multiple checks.

Apply Vendor Entries Window Use the Apply Vendor Entries to apply open vendor ledger entries for the relevant vendor.



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This window can be accessed from various areas in Microsoft Dynamics NAV 2009. In this lesson, however, it is accessed from the following two windows, based on when payments are applied:

• Payment Journal, to apply payments to entries before posting. • Vendor Ledger Entries, after posting payments that have not been

applied.

To open the Apply Vendor Entries window from either of these windows, click in the Action Pane on Apply Entries

FIGURE 6.3 APPLY VENDOR ENTRIES

The Apply Vendor Entries window contains four areas:

• Action Pane • General Header • Lines • Balancing application fields

From the Action Pane on the Apply Vendor Entries window, you can access the following buttons:

• Set Applies-to ID - used to set the Applies-to ID field on the line for each line that is applied against the Applying Entry in the General FastTab



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• Navigate - click to accesses the Navigate window for the selected line.

• Post Application - click to post the application when you are applying previously posted entries

From the Related Information, the following options are available:

• Entry - provides access to additional information for the line selected.

• Application - provides access to Set Applies-to ID and Post Application. The Show Only Selected Entries to Be Applied check box, this determines whether only the entries selected for the applying entry are displayed.

The Lines area displays each open transaction and is used to determine the entries to be applied-to. The following fields can be edited:

• Applies-to ID - identifies who or what is making the application and is required to post the application.

• Amount to Apply - used for partial payments to specify the exact amount to apply to the applying entry.

• Due Date - indicates when an invoice is due to be paid. • Pmt. Discount Date - indicates the date on which the amount in the

entry must be paid for a payment discount to be obtained. • Pmt. Disc. Tolerance Date - indicates the latest date on which the

amount in the entry must be paid for payment discount tolerance to be granted.

• Remaining Pmt. Disc. Possible - identifies the remaining payment discount that can be received if the payment is made before the payment discount date.

• Max. Payment Tolerance - Identifies the maximum tolerated amount that the amount in the entry can differ from the amount on the invoice or credit memo.

The following balancing fields-which are used to track the application-are located underneath the lines:

• Appln. Currency • Amount to Apply • Pmt. Disc. Amount • Rounding • Applied Amount • Available Amount • Balance



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For more information about these fields, press F1 to access online help.

Post Manual Payables Checks Users can enter a payment as a manual check, when a payment is generated outside Microsoft Dynamics NAV 2009, to create a corresponding check ledger entry for the amount without printing the check.

Entering payments manually in the Payment Journal resembles entering lines in the Cash Receipts Journal.

NOTE: The instructions for posting manual checks do not reference specific vendor payments or invoices. To avoid conflicts with demonstrations in this lesson, do not use vendor numbers 10000-62000 when performing these procedures.

Post an Unapplied Manual Check

To post a manual check entry without applying the payment to an invoice(s), follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Payment Journals.

2. In the Batch Name field, click the drop-down list and select the appropriate batch.

3. In the Posting Date field, enter the date the check was written. 4. In the Document Type field, click the drop-down list and select

Payment. 5. In the Document No. field, enter the check number. 6. In the Account Type field, click the drop-down list and select

Vendor. 7. In the Account No. field, click the drop-down list and select the

relevant vendor. 8. In the Amount field, enter the amount of the payment as a positive

amount. 9. In the Bal. Account Type field, click the drop-down list and select

Bank Account. 10. In the Bal. Account No. field, click the drop-down list and select the

bank account. 11. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 12. Click Post. 13. Click Yes to post the journal lines. 14. Click OK. 15. Close the Payment Journal window.



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Application Methods

When users post payments without application to an entry, the option selected in the Application Method field on the Payments FastTab of the vendor's card determines how the open payment is managed in the vendor ledger entries.

The Application Method options are as follows:

• Manual • Apply to Oldest

When the Manual option is selected, a payment posted to a vendor's account is not applied to an invoice and remains an open payment in the vendor ledger entries.

When the Apply to Oldest option is selected, a payment posted to a vendor's account is automatically applied to the oldest of the vendor's open entries.

The option selected does not affect how applications are made when users post a payment; however, it is important to understand how the Application Method affects the unapplied entries.

Apply and Post a Manual Check

To enter a manual check entry applied to single or multiple invoices, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Payment Journal.

2. In the Batch Name field, verify that the correct batch is used. 3. In the Posting Date field, enter the date the payment was created. 4. In the Document Type field, click the drop-down list and select


Vendor. 7. In the Account No. field, enter the relevant vendor. 8. In the Amount field, enter the full payment as a positive amount. 9. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 10. Click Apply Entries. 11. Click the line with the invoice to apply the payment to. 12. Click Set Applies-to ID.



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13. Verify that the Balance field at the bottom of the window is zero. 14. Click OK. 15. Make sure that the Bal. Account Type and Bal. Account No. fields

contain the correct bank account.

Notice that if the Amount field was left blank, it will be populated with the amount of the applied invoice(s).

To post the manual check, follow these steps:

1. Click Post. 2. Click Yes to post the journal lines. 3. Click OK. 4. Close the Payment Journal window.

Apply and Post a Manual Partial Payment

To post a manual check with a partial payment of a single invoice, follow these steps:


2. In the Batch Name field, verify that the correct batch is used. 3. In the Posting Date field, enter the date the payment was created. 4. In the Document Type field, click the drop-down list and select


Vendor. 7. In the Account No. field, enter the relevant vendor. 8. In the Amount field, enter the partial payment as a positive amount. 9. Click Apply Entries. 10. Click Applies-to ID 11. On the line with the partial payment, click Applies-to ID 12. Click the Apply to Amount field. 13. Enter the amount of the partial payment as a negative amount in the

field. 14. Verify that the Balance field is zero. 15. Click OK. 16. Make sure that the Bal. Account Type and Bal. Account No. fields

contain the correct bank account. 17. In the Bank Payment Type field, click the drop-down list and select

Manual Check.



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Notice that if the Amount field was left blank, it will be populated with the amount of the applied invoice.

To post the manual check, follow these steps:




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Lab 6.1 - Enter a Manual Check Scenario

In January 2010, two manual checks were created:

• To vendor 10000, London Postmaster: o On 01/03/10, check number 1200 o In the amount of 8132.00 for Document No. 108018.

• To vendor 30000, CoolWood Technologies:

o On 01/23/10, check number 1201 o In the amount of 2850.00 for a purchase that required payment

on delivery.

The invoice for the payment to vendor 30000 still has not been received. But because it is nearing the end of the month, the payment has to be recorded.

As the accounts payable coordinator at CRONUS International Ltd., it is your responsibility to apply and post these manual checks to the World Wide Operating bank account using the Bank batch.

Challenge Yourself!

1. Enter both manual checks in the Payment Journal. 2. Apply the second check to the invoice as stated in the scenario. 3. Post the journal.

Need a Little Help?

1. Open the Payment Journal. 2. Enter the first check. 3. Enter the second check and do not apply to any invoice. 4. Open the Apply Vendor Entries window. 5. Apply the payment to the invoice stated in the scenario. 6. Post the journal.

Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then Payment Journals.

2. In the Batch Name field, make sure that the Bank batch is selected. 3. In the Posting Date field, enter 01/30/10.



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4. In the Document Type field, click the drop-down list and select Payment.

5. In the Document No. field, enter 1200. 6. In the Account Type field, click the drop-down list and select

Vendor. 7. In the Account No. field, enter 10000. 8. In the Amount field, enter 8132. 9. In the Bank Payment Type field, click the drop-down list and select

Manual Check. 10. Click Apply Entries. 11. Click the line for Document No. 108018. 12. Click Set Applies-to ID. 13. Click OK. 14. Click the next line. 15. In the Posting Date field, enter 01/23/10. 16. Make sure that the Document No. is set to 1201. 17. In the Account No. field, enter 30000. 18. In the Amount field, enter 2850.00. 19. In the Bank Payment Type field, click the drop-down list and select




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Suggest Vendor Payments Overview In the Payment Journal, the Suggest Vendor Payments function:

• Processes open vendor ledger entries. • Creates a payment suggestion as lines in the Payment Journal, based

on specified criteria, such as the following: o Specific vendors o Due Dates o Vendor Priority

The Suggest Vendor Payments function can also be run to:

• Include payments for which it is possible to obtain a discount. • Summarize suggested line for each vendor, by dimension.

Suggest Vendor Payments Batch Job Overview

The Suggest Vendor Payments batch job contains two FastTabs:

• Vendor • Options

On the Vendor FastTab, filter the suggestion lines by vendor information. Additional filters can be added in a blank line.



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To suggest vendor payments for all vendors, do not set filters on this FastTab.

FIGURE 6.4 SUGGEST VENDOR PAYMENTS

The Options FastTab is used to determine how the batch job is executed and contains the following fields:

• Last Payment Date - the latest payment date that can appear on the vendor ledger entries to be included in the batch job. o Only entries that have a due date or a payment discount date

either before or on this date are included. o If this date is earlier than the system date, the system displays a

warning message.

• Find Payment Discounts - if this field is selected, the batch job includes vendor ledger entries for which a payment discount can be received.

• Summarize per Vendor - if this field is selected, the batch job suggests one line for each vendor, for each currency in which the vendor has ledger entries. If not selected, the batch job suggests one line for each invoice.



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• By Dimension - if the Summarize per Vendor check box contains a check mark, select the dimensions to group the suggested payments. Based on the selected dimensions, Microsoft Dynamics NAV 2009: o Calculates a total amount for each dimension value that is

contained in the outstanding vendor ledger entries. o Transfers each amount and the dimension value to a new

payment line. • Use Vendor Priority - if this field is selected, the contents of the

Priority field on the Vendor Cards determine in which order vendor entries are suggested for payment by the batch job. Microsoft Dynamics NAV 2009 always prioritizes vendors for payment suggestions if an available amount is specified in the Available Amount (LCY) field.

• Available Amount (LCY) - indicates that there is a maximum amount available (in local currency) for payments. Therefore, the batch job: o Creates a payment suggestion from this amount and the vendor

priority. o Only includes vendor entries that can be paid fully.

• Posting Date - the posting date that appears on the lines that the

batch job inserts in the Payment Journal. • Starting Document No. - automatically populated with the next

available number in the number series for the journal batch that is linked to the payment journal. This field can also be filled in manually.

• New Doc. No. per Line - if this field is selected, the batch job fills in the payment journal lines with consecutive document numbers, starting with the document number specified in the Starting Document No. field. This check box must contain a check mark if: o The Bank Payment Type field is set to Manual Check. o The Summarize per Vendor field does not contain a check

mark.

• Bal. Account Type - the balance account type to be used in the batch job. The options are: o G/L Account o Bank Account

• Bal. Account No. - either the G/L Account or Bank Account

number.

NOTE: If Bank Account is selected and the bank account contained in the Bal. Account No. field has a currency code other than LCY, only those entries with the same currency as the bank account are included in the batch job.



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• Bank Payment Type - if the Bal. Account Type is set to Bank Account, the selection in this field determines whether the suggested lines are Manual Checks or Computer Checks.

In the following demonstrations, computer checks are not printed or posted. Printing and posting are discussed in the "Printing and Posting Payables Checks" lesson.

NOTE: Suggested payment entries in the Payment Journal can be modified and/or deleted. Until open ledger entries are closed or outside the filters, they are included every time that the batch job is run.

Test Your Knowledge: Suggest Vendor Payments

1. On the Suggest Vendor Payment batch job, the New Doc. No. per Line check box must contain a check mark if which of the following are true: (Select all that apply)

( ) Summarize per Vendor check box contains a check mark. ( ) Bank Payment Type is set to Manual Checks. ( ) Summarize per Vendor check box does not contain a check mark. ( ) Bank Payment Type is set to Computer Check.

2. On the Suggest Vendor Payments batch job, which fields are used to group the suggested payments by dimension? (Select all that apply)

( ) By Dimension ( ) Summarize by Dimension ( ) Group by Dimension ( ) Summarize per Vendor

Create Payments Using Suggest Vendor Payments When a company have to pay vendor invoices they can run the Suggest Vendor Payments batch job. The Suggest Vendor Payments batch job, suggest payment lines for single vendors or all vendors.

Demonstration: Suggest Vendor Payments for All Vendors

Scenario: On the twenty-fifth of each month, April, the accounts payable coordinator, pays vendor invoices. Today is January 25, 2010 and she has to run the Suggest Vendor Payments batch job for all open entries that are due on or before January 31, 2010.



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Steps: Suggest Vendor Payments for All Vendors

To run the Suggest Vendor Payments batch job for all vendors, follow these steps:


2. Make sure that the Bank batch is selected. 3. Click Suggest Vendor Payments. 4. In the Last Payment Date field, enter 01/31/10. 5. In the Posting Date field, enter 01/25/10. 6. In the Bal. Account Type field, click the drop-down list and select


WWB-OPERATING. 8. Click OK. 9. In the Bank Payment Type field, click the drop-down list and select

Computer Check. 10. Verify that no filters are set on the Vendor FastTab. 11. Click OK. 12. Click Yes to the message that asks if you want to view the entries. 13. Click OK to the message that suggested vendor payment lines for all

currencies have been created.

All the open invoices and credit memos for all vendors are listed as individual payment lines.

Steps 2: Suggest Vendor Payments for All Vendors

To verify that open entries continue to be included in the Suggest Vendor Payments batch job, follow these steps:

1. Delete all Payment Journal lines. 2. Run the same Suggest Vendor Payment process by clicking Suggest

Vendor Payments. 3. Click OK. 4. Click OK to the message that lines have been created. 5. Notice that the lines all appear again.

Until open entries are closed, they will appear in the Suggest Vendor Payment process if they are within the set filters and parameters.

To prepare for the "Suggest Payments for a Single Vendor" demonstration, delete all the Payment Journal lines again.



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Demonstration: Suggest Payments for a Single Vendor

Scenario: April, the accounts payable coordinator, pays vendor invoices on the twenty-fifth of each month. On January 24, 2010, the accountant asks her to run the Suggest Vendor Payments batch job for all open entries for vendor 30000 that are due on or before January 31, 2010.

Steps: Suggest Payments for a Single Vendor

To run the Suggest Vendor Payments batch job for a single vendor, follow these steps:


2. Make sure that the Bank batch is selected. 3. Click Suggest Vendor Payments. 4. In the Last Payment Date field, enter 01/31/10. 5. In the Posting Date field, enter 01/24/10. 6. In the Bal. Account Type field, click the drop-down list and select



Computer Check. 10. On the Vendor FastTab, in the Filter field for the No. line, enter

30000. 11. Click OK. 12. Click Yes to the message that asks if you want to view the entries. 13. Click OK to the message that suggested vendor payment lines for all


All the open invoices and credit memos for vendor 30000 are listed as individual payment lines. If a computer check is printed, the document numbers and amounts of the entries are individually displayed on the check stub.

To verify the total amount of the check, follow these steps:

1. Click Related Information, point to Payments, and then select Preview Check.

2. The Amount field displays 87,172.82 This amount is verified in the "Summarize Vendor Payments" demonstration.

3. Close the Check Preview window.



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Demonstration: Summarize Vendor Payments

Scenario: After running the Suggest Vendor Payments batch job for vendor 30000, April realizes that she had intended to run the batch job using the Summarize per Vendor option to post a single combined payment line for this vendor.

Steps: Summarize Vendor Payments

To rerun the Suggest Vendor Payments batch job for a single vendor, for one payment line, follow these steps:


2. Delete all the journal lines. 3. Click Suggest Vendor Payments. 4. In the Last Payment Date field, enter 01/31/10. 5. Click the Summarize per Vendor check box to insert a check mark. 6. In the Posting Date field, enter 01/24/10. 7. In the Starting Document No. field, enter CH001. 8. In the Bal. Account Type field, click the drop-down list and select



Computer Check. 12. Make sure that the batch job is filtered on vendor 30000. 13. Click OK. 14. Click OK to the message that suggested vendor payment lines for all

currencies have been created. 15. Click Yes to the message that asks if you want to view the entries. 16. Notice that the Amount field displays 87,172.82, the same total as

the previous demonstration.

Adding a check mark in the Summarize per Vendor check box results in all the open invoices and credit memos being combined in a single payment line. If the payment is made with a computer check, the document numbers and amounts of the entries combined to create the net payment amount are also displayed on the check stub.

To prepare for the "Use Vendor Priority and Available Amounts" demonstration, delete all the Payment Journal lines again.



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Suggest Payments Using Vendor Priority

Use vendor priority when there are limited funds available to pay vendors and it is necessary to prioritize the order in which vendors are paid. Vendor priority is set on the Payments FastTab of the Vendor Card.

To determine which specific payments to suggest, Microsoft Dynamics NAV 2009 applies the following rules:

• Only vendor entries that can be paid fully are suggested. • All priority 1 vendor entries that can be fully paid within the

Available Amount (LCY) are suggested first. Any vendor entries for lower priority vendors that can be fully paid within the remaining available amount are then suggested.

• For each vendor, the batch job suggests amounts based on the Due Date of the Vendor Ledger Entries for that vendor. Invoices with the earliest Due Date are suggested first.

When specifying an Available Amount (LCY) in the Suggest Vendor Payments batch job, Microsoft Dynamics NAV 2009 does not automatically calculate the following when suggesting the amounts to pay:

• Payment tolerance • Payment discount tolerance

This lesson contains a demonstration of using vendor priorities with specified available amounts. To provide a controlled demonstration environment, only two vendors are included. Typically when you are using vendor priority, specific vendors are not filtered.

Demonstration: Use Vendor Priority and Available Amounts

To achieve the results noted in this demonstration, Lab 6.1 must be completed.

Scenario: On the twenty-fifth of each month, April, the accounts payable coordinator, pays all open vendor invoices. This month, however, there is a limited fund issue because of previous holiday expenses. The accountant has informed April to use vendor priority to allocate the 92,000 available for payments.



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April learns that vendor 10000 has Priority 1 and vendor 20000 has Priority 2. The following table shows the ledger entries that are ready for payment this month.

Vendor Document No. Due Date Amount

10000 5578 01/18/10 -24,156.97

5672 01/19/10 -57,976.72

108019 01/31/10 -8,245.76

108023 01/31/10 -15,846.00

20000 108017 12/31/09 -1,535.63

108025 01/31/10 -1,368.90

Because of the limited funds, April also decides to search for available discounts when running the Suggest Vendor Payments batch job.

Steps: Use Vendor Priority and Available Amounts

To run the Suggest Vendor Payments batch job using vendor priority and available amounts, follow these steps:


2. Click Suggest Vendor Payments. 3. In the Last Payment Date field, enter 01/31/10. 4. Click the Find Payment Discounts check box to insert a check

mark. 5. Click to remove the check mark in the Summarize per Vendor

check box. 6. Click the Use Vendor Priority check box to insert a check mark. 7. In the Available Amount (LCY) field, enter 92000. 8. In the Posting Date field, enter 01/25/10. 9. In the Bal. Account Type field, click the drop-down list and select



Computer Check.



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13. On the Vendor FastTab, set a filter for the No. line, enter 10000..20000.

14. Click OK. 15. Click OK to the message that suggested vendor payment lines for all


The batch job suggests payments totaling less than 92,000 LCY. The following table shows how Microsoft Dynamics NAV 2009 applied the vendor priority rules to suggest the payments in the demonstration.

Vendor by Priority

Document Number

Amount Available Amount (LCY)

Remaining Available Amount (LCY)

Payment Line

10000 5578 -24,156.97

-92,000 -67,843.03 Yes

5672 -57,976.72

-67,843.03 -9,866.31 Yes

108019 -8,245.76 -1,620.55 Yes

108023 -15,846.00

-1,620.55 No

20000 108017 -1,535.63 -1,620.55 -84.92 Yes

108025 -1,368.90 -198.68 No

To demonstrate how priority affects the suggested payments, the following steps show what occurs if a change is made to the priority of the two vendors.

1. Delete all the Payment Journal lines. 2. In the Payables folder, click Vendors. 3. Locate and select vendor 10000. 4. Click the Payments FastTab. 5. In the Priority field, enter 2. 6. Click OK. 7. Locate and select vendor 20000. 8. In the Priority field, enter 1 9. Click OK to close the Vendor Card window. 10. In the Payment Journal, click Suggest Vendor Payments. 11. On the Options FastTab, use the same settings as in the previous

steps. 12. Verify that the same vendor filter is still set on the Vendor FastTab.



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The batch job again suggests payments totaling less than 92,000 LCY. The same rules still apply, but the vendor priority changes the invoices suggested for payment, as shown in the following table.

Vendor by Priority

Document Number

Amount Available Amount (LCY)

Remaining Available Amount (LCY)

Payment Line

20000 108017 -1,535.63 -92,000 -90,464.37 Yes

108025 -1,368.90 -90,464.37 -89,095.47 Yes

10000 5578 -24,156.97

-89,095.47 -64,938.50 Yes

5672 -57,976.72

-64,938.50 -6961.78 Yes

108019 -8,245.76 -6961.78 No

108023 -15,846.00

-6961.78 No

NOTE: The payments suggested by the batch job are listed by vendor order in the Payment Journal. They are not listed in order of vendor priority or the order they are suggested.

Do not delete the suggested vendor payment lines for vendors 10000 and 20000. These entries are used in the Print Computer Checks demonstration.



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1. What happens when the Summarize per Vendor check box is checked when you are running the Suggest Vendor Payments batch job?

2. If your company has a fixed amount available to pay vendor invoices, how do you pay these vendors in Microsoft Dynamics NAV 2009? Explain the setup for the vendors and the Suggest Vendor Payments batch job.

Print and Post Payables Checks The processes of printing and posting checks, for both suggested payments and manually entered payments.

Check printing is affected based on the settings in the Document No. and One Check per Vendor per Document fields on the Suggest Vendor Payment batch job.

Computer Check Printing

Computer checks are printed using the Check report, accessed from the Payment Journal by clicking Print Check.



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The Check report contains two FastTabs:

• Options • Gen. Journal Line

FIGURE 6.5 CHECK

The Options FastTab is used to determine how the batch job is executed and contains the following fields:

• Bank Account - the bank account that the printed checks are drawn from.

• Last Check No. - automatically updated with the last check number that is used for the selected bank account. Notice that this field is not updated if the Last Check No. field is not populated on the selected bank account's card.

• One Check per Vendor per Document No. - if this field is selected, only one check for each vendor, for each document number, is printed.

• Reprint Checks - if printed checks have to be reprinted before you post, click to insert a check mark to reprint the checks.

NOTE: If reprinting checks, you may need to update the Last Check No. field.

• Test Print - if this filed is selected, the checks are printed on blank paper.

• Preprinted Stub - if this field is selected, it will indicate that check forms with preprinted stubs are used.



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The Gen. Journal Line FastTab is populated with the journal name and batch. Additional filters can be added in a blank line.

Demonstration: Print Computer Checks

Scenario: In the "Use Vendor Priority and Available Amount" demonstration, April ran the Suggest Vendor Payments batch job for vendors 10000 and 20000. April now prints those checks using the World Wide operating bank account. For the purposes of this demonstration, the checks are printed to a file that is named Checks 012510.

Steps: Print Computer Checks

To print computer checks, follow these steps:

1. In the Payment Journal with the checks ready to print, click Print Check.

2. In the Bank Account field, click the drop-down list and select WWB-OPERATING.

3. Press TAB, the Last Check No. field is populated with the last check number that is used for the World Wide operating bank account.

4. Select the One Check per Vendor per Document No. check box. 5. Click Print. 6. In the Check - Print window, click the Print to file check box to

insert a check mark. 7. Click OK. 8. In the Output File Name field, enter Checks 012510. 9. Click OK.

The printed check lines have been updated, and depending on the printing setup, images of the printed checks may appear in the Microsoft Office Document Imaging window.

Review the printed checks (if applicable) and check lines:

• If the printed check images appear, notice that: o One check is printed for each vendor. o Document numbers and amounts of the entries are individually

displayed on the check stubs.

• On the check lines in Microsoft Dynamics NAV 2009, notice that:

o The Document No. field is updated with the next check numbers from the selected bank account.



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o A balancing bank account entry is inserted for each vendor payment for the full amount of the payment.

o The Bank Payment Type on the suggested lines is blank and the balancing bank account entry line is populated with Computer Check.

NOTE: To prevent conflicts with future processing in the CRONUS International Ltd. database, change the vendor Priority back to 1 for vendor 10000 and 2 for vendor 20000.

Demonstration: Manually Enter and Print a Computer Check

In this demonstration, a computer check is manually added to the Payments Journal and then printed.

Scenario: April has 6961.78 still available for payments. She reviews her Aged Accounts Payable report and notices that vendor 30000 has an outstanding invoice in the amount of 3638.00 that can be included in this check run. She decides to manually enter the payment line and then print the check.

The Payment Journal still contains the four suggested payment lines and two balancing bank account lines from the "Print Computer Checks" demonstration.

Steps: Manually Enter and Print a Computer Check

To manually enter the check, follow these steps:


2. Click the blank line under the balancing bank account entry line for vendor 20000.

3. In the Posting Date field enter 01/30/10 4. In the Account Type field, click the drop-down list and select

Vendor. 5. In the Account No. field, enter 30000. 6. Click Apply Entries. 7. Click the line for Document No. 108026. 8. Click Set Applies-to ID. 9. Click OK. In the Payment Journal, the Amount field is updated with

the invoice amount. 10. In the Bank Payment Type field, click the drop-down list and select

Computer Check.



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To print a manually-entered computer check, follow these steps:

1. With the new check line still selected, click Related Information, point to Payments, and then select Print Check.

2. Select the world wide operating bank account. 3. Click Print. 4. In the Check - Print window, click the Print to file check box to

insert a check mark. 5. Click OK. 6. In the Output File Name field, enter Checks 012508_1. 7. Click OK. 8. If the printed check appears in the Microsoft Office Document

Imaging window, review and then close the window.

A balancing entry is not required for this new line because the entry was applied separately.

Document Numbers and Computer Check Printing

In Microsoft Dynamics NAV 2009, the number of checks to print and the amount of each check is determined by the:

• Selection of the One Check per Vendor per Document field in the Check report.

• Contents of the Document No. field in the Payment Journal window.

These fields affect one another, based on how entries are created in the following ways: Document No. in the Payment Journal, with and without summarizing by vendor.

• One Check per Vendor per Document No. field in the Check report.



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When you are using the Suggest Vendor Payments batch job to populate the Payment Journal, the system specifies a Starting Document No. The following table displays the results when the batch job is run without selecting the Summarize per Vendor check box.

Number of Vendors

Starting Document No. field

Result in the Payment Journal Window

One Vendor

Empty One payment line for each open vendor ledger entry for the vendor. Each payment line: • Is applied to the related open vendor ledger

entry. • Has an empty Document No. field.

One Vendor

Contains a document number

One payment line for each open vendor ledger entry for the vendor. Each payment line: • Is applied to the related open vendor ledger

entry. • With the same currency has the same

Document No.

Multiple Vendors

Empty One payment line for each open vendor ledger entry for each vendor. Each payment line: • Is applied to the related open vendor ledger

entry • Has an empty Document No. field.

Multiple Vendors


One payment line for each open vendor ledger entry for each vendor. Each payment line: • Is applied to the related open vendor ledger

entry. • For the same vendor, with the same

currency, has the same Document No.



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If the Summarize per Vendor check box contains a check mark on the Suggest Vendor Payments batch job, the payment lines are populated as shown in the following table.

Number of Vendors

Starting Document No. field

Result in the Payment Journal Window

One Vendor only


One payment line for each currency, summarize the open vendor ledger entries with the same currency. Each payment line: • Is applied to the related open vendor ledger

entries. • Has a different currency and different

Document No.

Multiple Vendors


For each vendor, one payment line for each currency summarize the open vendor ledger entries with the same currency. • Each payment line is applied to the related open

vendor ledger entries. • For each vendor, each payment line has a

different currency and different Document No.

NOTE: If you add a check mark in the New Doc. No. per Line check box and enter a document number in the Starting Document No. field, each suggested payment line has a different Document No.

There are two options when printing checks, either:

• Print a check for each payment line. • Sum payment lines into a single check.



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The following table shows how the One Check per Vendor per Document No. field and Document No. field together affect how payment lines are created and therefore printed, based on the assumption that the payment lines are in the same currency as the bank account contained in the Bal. Account No. field.

One Check per Vendor per Document No. field

Document No. in Payment Journal window

Number and Amount of Checks Printed

Empty Blank A check is printed for each payment line. If any payment line contains a negative amount, an error occurs and the program does not print checks for the remaining payment lines after the negative amount.

Empty Contains a document number

A check is printed for each payment line. If any payment line contains a negative amount, an error occurs and the program does not print checks for the remaining payment lines after the negative amount.

Contains a check mark

Blank One check for each vendor is printed. For each vendor: • The amount of the check is the net amount of

all the payment lines for that vendor. • The balancing bank account on all payment

lines is cleared and a new payment line is created for the net amount.

• The Account No. for the new payment line is the balancing bank account.

Contains a check mark


One check for each vendor, for each document number is printed. For each vendor: • The amount of each check is the net amount of

the payment lines with the same Document No.

• The balancing bank account on payment lines with the same Document No. is cleared and a new payment line is created for the net amount.

• The Account No. for the new payment line is the balancing bank account.



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Post the Payment Journal

The Payment Journal is posted after:

• Manual checks are entered. • Computer checks are printed.

Remember to verify that all checks have printed correctly before posting the journal.

Demonstration: Post the Payment Journal

Scenario: Now that all checks have been successfully printed, April posts the Payment Journal.

The Payment Journal is still populated with the payment entries for vendors 10000, 20000, and 30000 from the previous demonstrations.

Steps: Post the Payment Journal

To post the payment journal with printed checks, follow these steps:

1. On the Navigation Pane, click the Department button, click Financial Management, click Payables, and then select Payment Journal.




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Lab 6.2 - Suggest, Print, and Post a Vendor Payment Scenario

Vendor 10000, London Postmaster, is paid on the twenty-fifth of each month for all open ledger entries through the end of the month. As the accounts payable coordinator, it is your responsibility to generate, print, and post the payment.

On January 25, 2010, run the Suggest Vendor Payments batch job for vendor 10000 for all payments due by January 31, 2010. Look for payment discounts and ensure that vendor priority is not included.

You notice that invoice 108023 in the amount of 15,846.00 was suggested. This invoice is in dispute. Therefore, you remove it from the lines and then print the remaining check(s) to a file that is named Lab 6.2. Post the payment journal after the check is printed.

Challenge Yourself!

1. Run the Suggest Vendor Payment batch using the criteria specified in the scenario.

2. Print checks using the criteria specified in the scenario. 3. Post the journal.

Need a Little Help?

1. Open the Payment Journal window. 2. Run the Suggest Vendor Payment batch using the criteria specified

in the scenario. 3. Open the Check report and print checks based on the criteria

specified in the scenario. 4. Post the journal.

Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then click Payment Journals.

2. Click Suggest Vendor Payments. 3. In the Last Payment Date field, enter 01/31/10. 4. Ensure that the vendor priority fields are empty. 5. In the Posting Date field, enter 01/25/10. 6. In the Bal. Account Type field, click the drop-down list and select

Bank Account.



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7. In the Bal. Account No. field, click the drop-down list and select WWB-OPERATING.

8. In the Bank Payment Type field, click the drop-down list and select Computer Check.

9. On the Vendor FastTab, make sure the filter in the No. line, is set to 10000.


currencies have been created. 12. Click the line for the Payment of Invoice 108023 and click Actions

and then click Delete. 13. Click Yes to delete the line. 14. Click Print Check. 15. In the Bank Account field, click the drop-down list and select

WWB-OPERATING. 16. Click TAB. 17. If there are multiple invoices for payment, add a check mark in the

One Check per Vendor per Document No. check box. Otherwise, this check box must be empty.

18. Click Print. 19. In the Check - Print window, click the Print to file check box to

insert a check mark. 20. Click OK. 21. In the Output File Name field, enter Lab 6.2. 22. Click OK. 23. Click Post. 24. Click Yes to post the journal lines. 25. Click OK. 26. Close the Payment Journal window.



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Void Unposted Checks Before posting, if a printed check must be deleted or reprinted, you can void it in the Payment Journal. After voiding, you can delete or reprint the payment line(s) from the journal. One reason a check might be reprinted is if a printing error occurs.

Void Printed Checks

To void a single printed but unposted check, follow these steps:



3. Click OK. 4. In the Payment Journal lines, click the line for the check to be

voided. 5. Click Void Check. 6. Click Yes to the message that asks to void the check.

The check is voided and you can delete or reprint it from the Payment Journal.

To void all printed but unposted checks in a batch, follow these steps:



3. Click OK. 4. Click Related Information, point to Payments, and then select

Void All Checks. 5. Click Yes to the message that asks to void all checks.

All checks are voided and you can then delete or reprint them from the

Reprint Voided Checks

When you print checks, the Last Check No. in the Check report is updated automatically with the last printed check number. When you reprint checks, ensure that the correct check number will be used. For example, if the check number has to be 206, then enter 205 is in this field.



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To reprint a single voided check, follow these steps:


2. Select the relevant batch. 3. Click the line with the voided check. 4. Click Print Check. 5. Update the Last Check No. 6. Click to insert a check mark in the Reprint Checks check box. 7. Click Print.



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Lab 6.3 - Void a Check Scenario

On February 1, invoice 108023 in the amount of 15,846.00 for vendor 10000 is approved for payment. After the Suggest Vendor Payments batch job for vendor 10000 is run, the check is printed to a file that is named Lab 6.3.

Before the check is posted, the inventory manager informs you that there is still a problem and this invoice cannot yet be paid. Void and delete the payment line.

Challenge Yourself!

1. Run the Suggest Vendor Payment batch using the criteria specified in the scenario.

2. Print the check based on the criteria specified in the scenario. 3. Void the check based on the criteria specified in the scenario.

Need a Little Help?

1. Open the Payment Journal window. 2. Run the Suggest Vendor Payment batch using the criteria specified

in the scenario. 3. Open the Check report and print the check based on the criteria

specified in the scenario. 4. Void the check based on the criteria specified in the scenario.

Step by Step


2. Click Suggest Vendor Payments. 3. In the Last Payment Date field, enter 01/31/10. 4. Make sure that the vendor priority fields are empty. 5. In the Posting Date field, enter 02/01/10. 6. In the Bal. Account Type field, click the drop-down list and select


WWB-OPERATING. 8. In the Bank Payment Type field, click the drop-down list and select

Computer Check. 9. Click OK. 10. Click OK to the message that suggested vendor payment lines for all




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11. Click Print Check. 12. In the Bank Account field, click the drop-down list and select

WWB-OPERATING. 13. Press TAB. 14. Make sure that the One Check per Vendor per Document No.

check box does not contain a check mark. 15. Click Print. 16. In the Check - Print window, click the Print to file check box to

insert a check mark. 17. Click OK. 18. In the Output File Name field, enter Lab 6.3. 19. Note the check number. 20. Click Void Check. 21. Click Yes to void the check. 22. Click Actions and then click Delete. 23. Click Yes to delete the line. 24. Close the Payment Journal window.



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Apply Payments after Posting When you post a payment or credit memo without applying it to an open vendor ledger entry, you can apply it later from the Vendor Ledger Entries window.

Demonstration: Apply a Payment after Posting

Scenario: On January 31, 2010, a manual check was sent to vendor 30000, CoolWood Technologies, in the amount of 70,860.66. April, the accounts payable coordinator, manually posts check number 1205 to the vendor account without applying it to a particular invoice.

Some days later, she finds out this payment has to be applied to Document No. 12345.

Steps: Apply a Payment after Posting

To manually post the check, follow these steps:




Vendor. 7. In the Account No. field, enter 30000. 8. In the Amount field, enter 70860.66. 9. Ensure that the WWB-OPERATING bank account is selected. 10. In the Bank Payment Type field, click the drop-down list and select


To apply the posted payment to the open invoice, follow these steps:

1. In the Payables folder, click Vendors. 2. Locate and select vendor account 30000. 3. Click Ledger Entries. 4. Click the payment line dated 01/31/10 in the amount of 70,860.66. 5. Click Actions, point to Function, and then select Apply Entries.



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6. Notice that: o The General FastTab in the header is populated with the

payment information. o The payment line is removed from the lines so that it cannot be

selected as an applied-to entry.

7. In the lines, click the line for Document No. 12388 in the amount of -105,952.82.

8. Click Set Applies-to ID. 9. Notice that the Balance field at the bottom of the window displays -

35,092.16. This is the remaining amount.

To post the application, follow these steps:

1. Click Post Application. 2. Click OK without changing the fields. 3. Click OK to the message that the application was posted. 4. Close the Apply Vendor Entries and Vendor Ledger Entries

windows.



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Lab 6.4 - Apply a Credit Memo after Posting Scenario

On January 10, 2010, credit memo 109001 was posted for vendor 30000, CoolWood Technologies. The order processor tells you that this credit memo has to be applied to Document No. 12388.

Challenge Yourself!

Apply the credit memo as specified in the scenario.

Need a Little Help?

1. Open the Apply Vendor Entries window for vendor 30000. 2. Set the credit memo as the applying entry. 3. Apply the invoice to the credit memo.

Step by Step

1. On the Navigation Pane, click the Department button, click Financial Management, click Payables, and then select Vendors.

2. Locate and select vendor 30000. 3. Click Ledger Entries. 4. Click the credit memo line dated 01/14/10 in the amount of

35,430.00. 5. Click Actions, point to Functions, and then Apply Entries. 6. In the lines, click the line for Document No. 12388, with the

remaining amount of -35,092.16. 7. Click Set Applies-to ID. 8. Click Post Application. 9. Click OK without changing the fields. 10. Click OK to the message that the application was posted. 11. Close the Vendor Ledger Entries window.



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Unapply Vendor Ledger Entries The Unapply Vendor Ledger Entries functionality allows you to reverse entries while ensuring that the correct application is processed. This functionality is available from two windows:

• Vendor Ledger Entries • Detailed Vendor Ledg. Entries

Unapplying posted applications allows you to reopen the closed vendor ledger entries. All G/L postings that may have derived from an incorrect application, such as payment discounts and currency gains/losses, are also corrected when an entry is unapplied.

It is only possible to unapply from the bottom up. Therefore, if an entry is applied by more than one application entry, the last application entry must be unapplied first.

Unapply a Ledger Entry

To unapply a ledger entry from the Vendor Ledger Entries window, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables and then select Vendors.

2. Locate and select the vendor to unapply entries. 3. Click Ledger Entries. 4. Click the line with the entry to unapply. 5. Click Actions, point to Functions and then select unapply Entries.

The Unapply Vendor Entries window shows the original detailed ledger entries that can be used to unapply the original entry.

6. Click the line with the corresponding entry to unapply. 7. Click Unapply. 8. Click Yes to unapply the entries. When the entry is unapplied, a new

entry is created that has an opposite sign in the Amount field. 9. Click OK to the message that the entries were unapplied. 10. In the Vendor Ledger Entries window, review the unapplied

entries: o The Remaining Amount field contains the relevant unapplied

amount. o The Open check box is checked to indicate that the unapplied

entries are open.

It is now possible to apply the open amount to the correct entry by using the Apply Vendor Entries functionality.



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Lab 6.5 - Unapply a Payment Scenario

In Lab 6.4, credit memo 109001 for vendor 30000 was applied to Document No. 12388. Later you are informed that this credit memo was applied in error and has to be unapplied because it must remain open.

Challenge Yourself!

Unapply the credit memo as specified in the scenario.

Need a Little Help?

1. Open the Unapply Vendor Entries window for vendor 30000. 2. Unapply the credit memo from the invoice.



2. Locate and select vendor 30000. 3. Click Ledger Entries. 4. Click the line for credit memo 109001. 5. Click Actions, point to Functions and then select Unapply Entries. 6. In the Unapply Vendor Entries window, with the credit memo line

selected, click Unapply. 7. Click Yes to unapply the entries. 8. Click OK to the message that the entries were unapplied. 9. In the Vendor Ledger Entries window, notice that both credit

memo 109001 and Document No. 12388 have remaining amounts. 10. Close the Vendor Ledger Entries and Vendor Card windows.



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Reversal of Journal Postings In Microsoft Dynamics NAV 2009, incorrect vendor ledger entries posted from a journal, such as the Purchase Journal or Payment Journal, can be reversed to correct the entries.

The following are conditions of using the reversal functionality:

• Entries must be generated from a general journal line or from a previous reversal.

• Vendor Ledger Entries cannot be applied. • Bank Ledger Entries must not be closed by reconciliation. • The total amount of G/L Entries must equal zero.

Before reversing an applied vendor ledger entry, the entry must be unapplied.

During the reversal process, correcting entries with the same document number and posting date as the original entry are created and posted for each line in the entry. After reversing an entry, the correct entries are entered and posted manually.

This lesson describes how to reverse posted vendor ledger entries.

Reverse a Posted Journal Entry

To reverse a journal posting, follow these steps:


2. Locate and select the relevant vendor. 3. Click Ledger Entries. 4. Unapply entries that have been applied to the entry to reverse. 5. Click the relevant entry to reverse. 6. Click Actions, point to Functions and then select Reverse

Transaction. The Reverse Transaction Entries window displays the posted entries connected by the same transaction number.

7. Click Reverse. 8. Click Yes to reverse the entries. 9. Click OK to the message that the entries were reversed. 10. In the Vendor Ledger Entries window, review the original and

reversed entries: o A new entry that reverses the selected posted entry appears. o The Remaining Amount field for both entries is a zero amount. o The Open field does not contain a check mark that indicates that

both entries are closed.



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Lab 6.6 - Reverse a Posted Journal Entry Scenario

When beginning balances were posted on 12/31/09 for vendor 01254796, an error was entered for Document No. 2344. The numbers were transposed, therefore the incorrect amount of 107,717.23 was posted instead of the correct amount of 107,177.23.

Cassie, the accountant, asks you to make the reversing entry and she will later post the correction.

NOTE: This vendor's currency is USD. To view the vendor ledger entry amounts in local currency, show the amount columns with LCY.

Challenge Yourself!

Reverse the posted journal entries as specified in the scenario.

Need a Little Help?

1. Open the Vendor Ledger Entries window for vendor 30000. 2. Open the Reverse Transaction Entries. 3. Reverse the entries.



2. Locate and select vendor 01254796. 3. Click Ledger Entries. 4. With Document No. 2344 selected, click Actions, point to

Functions and then select Reverse Transaction. 5. In the Reverse Transaction Entries window, click Related

Information, point to Reversing and then select Reverse. 6. Click Yes to reverse the entries. 7. Click OK to the message that the entries were reversed. 8. In the Vendor Ledger Entries window, review the original and

reversed entries. 9. Close the Vendor Ledger Entries and Vendor Card windows.



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Set up Payment Discounts Payment discounts are granted by vendors as an incentive for their customers to quickly pay their outstanding amounts fully.

A payment discount can be specified when the purchase order or invoice is posted, or added to a posted vendor ledger entry before posting payments

Determine Payment Discount Calculations on Amounts

The G/L Accounts for payment discounts must be set up differently, that depends on whether payment discounts are calculated on amounts:

• Including VAT • Excluding VAT

The set up is determined by the fields selected in the General Ledger Setup window:

• Pmt. Disc. Excl. VAT • Adjust for Payment Disc.

The set up of each payment discount method is explained in this lesson.

NOTE: In the General Ledger Setup window, the Pmt. Disc. Excl. and the VAT Adjust for Payment Disc. check boxes are mutually exclusive. This means that only one can contain a check mark. However, both can be empty at the same time.

Therefore, payment discount accounts cannot be entered in the Vendor Posting Groups window if the Adjust for Payment Disc. check box contains a check mark. Similarly, payment discount accounts cannot be entered in the General Posting Setup window if the Pmt. Disc. Excl. VAT check box contains a check mark.

Set up Payment Discounts Calculated on Amounts Excluding VAT

To set up payment discounts calculated on amounts excluding VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, click General Ledger Setup.



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2. Add a check mark in the Pmt. Disc. Excl. VAT check box to calculate payment discounts on: o The Amount field in Purchase documents. o The Sales/Purch. (LCY) field in General Journals.

3. Leave the Pmt. Disc. Excl. VAT check box unchecked to calculate

payment discounts on: o The Amount Including VAT field in Purchase documents. o The Amount field in General Journals.


NOTE: If journals are used to enter purchase transactions and the Pmt. Disc. Excl. VAT check box contains a check mark, an amount must be entered in the Sales/Purch. (LCY) field in the journal. If an amount is not entered, the payment discount is 0.

If the Pmt. Disc. Excl. VAT check box contains a check mark, the following two payment discount accounts must be set up in the Vendor Posting Group windows:

• Payment Disc. Debit Acc. - G/L account that is used to post reductions in payment discount amounts when posting purchase payments for the selected Vendor Posting Group.

• Payment Disc. Credit Acc. - G/L account that is used to post granted payment discount amounts when posting purchase payments for the selected Vendor Posting Group.

To set up the payment discount accounts for Vendor Posting Groups, follow these steps:

1. In the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Posting Groups and then select Vendor Posting Groups.

2. For each Vendor Posting Group using payment discounts: 3. In the Payment Disc. Debit Acc. field, click the field and select the

correct payment discount account. 4. In the Payment Disc. Credit Acc. field, click the field and select the

correct payment discount account. 5. Close the Vendor Posting Group window.

Set up Payment Discounts Calculated on Amounts Including VAT

If payment discounts are calculated on amounts including VAT. Then VAT recalculations may have to be made if the payment discount is taken.



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To set up the program to recalculate tax amounts when payment discounts are posted, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, click General Ledger Setup.

2. Add a check mark in the Adjust for Payment Disc. field to enable the feature.

3. Close the General Ledger Setup window. 4. On the Navigation Pane, click the Departments button, click

Administration, click Application Setup, click Financial Management, click VAT Posting Group and then select VAT Posting Setup.

5. For each relevant VAT Posting Group combination, add a check mark in the Adjust for Payment Discount field.

6. Close the VAT Posting Setup window.

If the Adjust for Payment check box contains a check mark, the following two payment discount accounts must be set up in the General Posting Setup window.

• Purch. Pmt. Disc. Debit Acc. - G/L account that is used to post reductions in payment discount amounts when posting payments for purchases with the selected combination of general business and product posting groups.

• Purch. Pmt. Disc. Credit Acc. - G/L account that is used to post payment discount amounts given by vendors when posting payments for purchases with the selected combination of general business and product posting groups.

To set up the payment discount accounts in the General Posting Setup window, follow these steps:

1. In the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Posting Groups and then select General Posting Setup.

2. Click New. 3. In the Purchases FastTab, for general posting group combination

using payment discounts: 4. In the Purch. Pmt. Disc. Debit Acc. field, click the drop-down list

and select the correct payment discount account. 5. In the Purch. Pmt. Disc. Credit Acc. field, click the drop-down list

and select the correct payment discount account. 6. Close the General Posting Setup card.



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Payment Terms with Discounts

Payment discounts granted to vendors are determined by the Payment Terms Code set up on the vendor card and/or entered in the purchase order or invoice header.

To access the Payment Terms window, on the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Payment Terms.

FIGURE 6.6 PAYMENT TERMS

The only Payment Term currently set up with discount capabilities is 1M(8D). This Payment Term is set up as follows:

• Payments are due within one month of the Document Date specified on the posted invoice.

• If Payments are generated within eight days of the Document Date specified on the posted invoice, a 2 percent discount is available.

• A payment discount cannot be calculated on credit memos with this payment term because the Calc. Pmt. Disc. on Cr. Memos check box does not contain a check mark.



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Set Up Payment Terms on Vendors and Documents

When payment discounts have been offered by specified vendors, Payment Terms are set up on the Vendor Card. Then, when a purchase order or invoice is created:

• Payment terms are transferred to the header. • Applicable discount terms are automatically applied to the order or

invoice during posting.

To set up Payment Terms on vendors, follow these steps:


2. Locate and select the vendor to assign a Payment Term. 3. Click the Payments FastTab. 4. In the Payment Terms Code field, click the drop-down list and

select the relevant Payment Term. 5. Close the Vendor Card.

Alternatively, you can assign Payment Terms on the purchase order or invoice header if:

• Payment Terms are not specified on the vendor. • A different term has to be assigned to a specific purchase order or

invoice.

Process Payment Discounts In the Suggest Vendor Payments batch job, if the Find Payment Discounts check box:

• Contains a check mark , Microsoft Dynamics NAV 2009 suggests payments for: o All open entries that have a Due Date on or before the Last

Payment Date. o Any open vendor ledger entry that has a Pmt. Discount Date

between the Posting Date and the Last Payment Date.

• Does not contain a check mark, only those entries that have a Due Date on or before the Last Payment Date are suggested.

Demonstration: Suggest Discounted Payment Lines

Scenario: On January 25, 2010, invoice number 55681 from vendor 40000, Lewis Home Furniture, is received in the amount of 298.13. The invoice is for nine wooden doors, item 70010.



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This vendor has granted a 2 percent payment discount if the payment is received within eight days of the invoice.

On February 1, 2010, April runs the Suggest Vendor Payments batch job for this vendor with a last payment date of 02/15/10. The first time she runs the batch job, she forgets to add a check mark in the Find Payment Discounts and the payment is not suggested. She runs the batch job again and inserts a check mark in the Find Payment Discounts check box. The discounted payment is suggested.

Steps: Suggest Discounted Payment Lines

To post the invoice, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Purchase Invoices.

2. Click New. 3. In the Buy-from Vendor No. field, enter 40000. 4. Press TAB. 5. In the Posting Date field, enter 01/25/10. 6. In the Vendor Invoice No. field, enter 55681. 7. Click the Invoicing FastTab. 8. In the Payment Terms Code field, click the drop-down list and

select 1M(8D). 9. On the Lines FastTab, In the Type field, click the drop-down list and

select Item. 10. In the No. field, enter 70010. 11. In the Quantity field, enter 6. 12. Click Post. 13. Click Yes to post the invoice.

To Suggest Vendor Payments without finding discounts, follow these steps:

1. In the Navigation Pane click Payables and then select Payment Journal.

2. Ensure that the Bank batch is selected. 3. Click Suggest Vendor Payments. 4. Click the Options FastTab, in the Last Payment Date field, enter

02/15/10. 5. Ensure that the Find Payment Discounts check box does not

contain a check mark. 6. In the Posting Date field, enter 02/01/10. 7. In the Bal. Account Type field, click the drop-down list and select

Bank Account.



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9. Click OK. 10. In the Bank Payment Type field, click the drop-down list and select


40000. 12. Click OK.

Notice that the payment is not suggested. Because the invoice is not technically due until 02/25/10, it is not suggested because the Find Payment Discount check box did not prompt Microsoft Dynamics NAV 2009 to search for possible discounts before the due date.

To Suggest Vendor Payments with discounts, follow these steps:

1. Click Suggest Vendor Payments. 2. Ensure that the vendor filter is still set. 3. Click to insert a check mark in the Find Payment Discounts check

box. 4. Click OK. 5. Click Yes to the message that suggested vendor payment lines for all


The payment amount suggested is 194.77. The original invoice amount was 198.75 The 2 percent discount of 3.98 was subtracted from the payment amount because the Posting Date is within the payment discount range.

To verify the discount, follow these steps:

1. On the payment line, click the Applies-to Doc. No. field. 2. Click the drop-down list to open the Apply Vendor Entries

window. 3. Review the amount fields at the bottom of the window. 4. Close the Apply Vendor Entries window.

For the purposes of the "Suggest Payment Lines without a Discount" demonstration, delete the payment line.

Demonstration: Suggest Payment Lines without a Discount

Scenario: On February 15, 2010, April runs the Suggest Vendor Payments batch job to find discounts for all payments due on or before February 29, 2008.

She reviews the payment for vendor 40000. Because the payment was not suggested within the payment discount date, the discount was not applied to the payment.



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Steps: Suggest Payment Lines without a Discount

To Suggest Vendor Payments without discounts, follow these steps:


2. Ensure that the Bank batch is selected. 3. Click Suggest Vendor Payments. 4. In the Last Payment Date field, enter 02/28/10. 5. Ensure that the Find Payment Discounts check box contains a

check mark. 6. In the Posting Date field, enter 02/15/10. 7. In the Bal. Account Type field, click the drop-down list and select



Computer Check. 11. Ensure that the vendor filter is still set to 40000. 12. Click OK. 13. Notice that the payment is for the full amount of the invoice: 198.75.

To verify the payment, follow these steps:

1. In the Applies-to Doc. No. field on the line, click the drop-down list. 2. Review the amount fields at the bottom of the window. 3. Close the Apply Vendor Entries window.

For the purposes of the "Adjust Payment Discounts" demonstration, delete the payment line.

Adjust Payment Discounts

The following discount fields can be adjusted in the Vendor Ledger Entries or Apply Vendor Entries windows:

• Pmt. Discount Date • Remaining Pmt. Disc. Possible



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Payment discount dates and amounts can be adjusted when:

• The invoice was posted without discount information. • The discount date has passed and the vendor approves of the date

change. • The discount amount was calculated incorrectly.

The "Adjust Payment Discounts" demonstration shows how invoices posted without discounts can be adjusted to allow discounts.

Demonstration: Adjust Payment Discounts

Scenario: On February 3, 2010, April remembers to suggest vendor payments for vendor 40000. She realizes that the payment discount date has passed and calls the vendor, asking whether she can still take the discount. The vendor approves the discount as long as April sends the payment using overnight mail.

She changes the payment discount date on the vendor ledger entry and then runs the suggest vendor payment batch job again.

Steps: Adjust Payment Discounts

To change the payment discount date on the vendor ledger entry, follow these steps:


2. Locate and select vendor 40000. 3. Click Ledger Entries. 4. On the invoice line, click the Pmt. Discount Date field. 5. Click the field and enter 02/03/10. 6. Press TAB or ENTER. 7. Close the Vendor Ledger Entries and Vendor Card windows.

To run the Suggest Vendor Payments batch job, follow these steps:

1. In the Navigation Pane, click Payables and then click Payment Journals.



Bank Account.



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9. In the Bank Payment Type field, click the drop-down list and select Computer Check.

10. Ensure that the vendor filter is still set to 40000. 11. Click OK. 12. Click OK. 13. Notice that the payment includes the 2 percent discount.

Set Up Payment Tolerance For payables, payment tolerances provide the ability to make payments to vendors that differ slightly from the invoiced amount. The features of using payment tolerance are the same for payables as they are for receivables.

In Microsoft Dynamics NAV 2009, there are two types of payment tolerance:

• Payment Discount Tolerance: allows for a payment discount even though the payment discount date has passed.

• Payment Amount Tolerance: accepts a slightly greater or smaller amount as full settlement of an outstanding invoice. In Microsoft Dynamics NAV 2009, payment amount tolerance is called Payment Tolerance.

Payment Tolerances are set up on the following windows:

• Vendor Card • General Ledger Setup • Chart of Accounts • Vendor Posting Groups

Set Up Payment Tolerance on Vendor Cards

As a default, payment tolerance is allowed for all vendors. This default can be changed on the Vendor Card.



2. Locate and select the vendor to disable payment tolerance. 3. Click the Payments FastTab. 4. Add a check mark in the Block Payment Tolerance check box.



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5. A message is displayed that asks whether payment tolerance is to be removed from all open entries. Click either: o Yes to remove payment tolerance on open entries and restrict

from future invoices. o No to maintain the payment tolerance on open entries but restrict

from future invoices.



2. A message is displayed that asks whether payment tolerance is to be allowed for open entries. Click either: o Yes to allow payment tolerance on open entries and all future

invoices. o No to prevent payment tolerances from being available on open


Set Up Payment Tolerance on Vendor Cards

As a default, payment tolerance is allowed for all vendors. This default can be changed on the Vendor Card.



2. Locate and select the vendor to disable payment tolerance. 3. Click the Payments FastTab. 4. Add a check mark in the Block Payment Tolerance check box. 5. A message is displayed that asks whether payment tolerance is to be

removed from all open entries. Click either: o Yes to remove payment tolerance on open entries and restrict

from future invoices. o No to maintain the payment tolerance on open entries but restrict

from future invoices.



2. A message is displayed that asks whether payment tolerance is to be allowed for open entries. Click either: o Yes to allow payment tolerance on open entries and all future

invoices. o No to prevent payment tolerances from being available on open




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Set Up Payment Tolerance in General Ledger Setup

In the Vendor Card, payment tolerance is enabled or disabled for individual vendors. The companywide payment tolerance parameters are set up in the General Ledger Setup window. On the Application FastTab, specify:

• Tolerance warnings • Tolerance percents and maximum amounts • Tolerance grace periods • Tolerance G/L posting types

To access these setup parameters, on the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, and then select General Ledger Setup. Open the Application FastTab.

FIGURE 6.7 GENERAL LEDGER SETUP - APPLICATION FASTTAB

For more information about the fields on the Application FastTab, refer to the "Set Up Payment Tolerance" lesson of the Receivables Management content or press F1 to access online help.



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Set Up Payment Tolerance Percents and Maximum Amounts

To change either or both the maximum payment tolerance and the payment tolerance percentage and filter by currency, run the Change Payment Tolerance batch job, accessed from the General Ledger Setup window.

To run this batch job, follow these steps:

1. On the Navigation Pane, click the Department button, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.


3. Add a check mark in the All Currencies check box to change the tolerance setup for both local and all foreign currencies.

4. If the tolerance setup is changed for a single currency, in the Currency Code, click the drop-down list and select the relevant currency.

5. In the Payment Tolerance % field, enter the percent the payment or refund can differ from the invoice or credit memo amount.

6. In the Max. Pmt. Tolerance Amount field, enter the maximum amount that the payment or refund can differ from the invoice or credit memo amount.

7. Click OK. 8. In the message that asks to change all open entries for unblocked

customers or vendors, click Yes or No as necessary.

NOTE: To only grant payment discount tolerance or payment tolerance on new entries, click No when asked to update existing entries.

Set Up and Assign Payment Tolerance G/L Accounts

To post tolerance to a G/L account that is different from the usual payment discount account, the accounts must be created in the Chart of Accounts.

As soon as the accounts are set up, they must be assigned to the following fields on Vendor Posting Groups that allow payment tolerance:

• Payment Tolerance Debit Acc. • Payment Tolerance Credit Acc.

NOTE: In CRONUS International Ltd., accounts 9170 and 9160 have already been set up and assigned to Vendor Posting Groups.



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Demonstration: Set Up Payment Tolerance

Scenario: Cassie, the accountant at CRONUS International Ltd., is asked to set up payment tolerances for receivables and payables to manage differences caused by the increased usage of payment discounts.

It is decided to allow a 3 percent payment tolerance for payment amounts. However, the tolerance cannot exceed 200 (LCY).

There has also been a request to:

• Receive notification if payment discount tolerance or payment tolerance is possible.

• Use special accounts for tolerance postings. • Allow a payment discount grace period of five days.

In this demonstration, the new payment tolerance is set up.

Steps: Set Up Payment Tolerance

To set up the tolerance parameters, follow these steps:

1. On the Navigation Pane, click the Department button, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.

2. Open the Application FastTab. 3. Add a check mark in the Pmt. Disc. Tolerance Warning check box. 4. Ensure that the Pmt. Disc. Tolerance Posting field is set to Payment

Tolerance Accounts. 5. In the Payment Discount Grace Period field, enter 5D. 6. Click Yes to change all open entries for unblocked customers or

vendors. 7. Add a check mark in the Payment Tolerance Warning check box. 8. Ensure that the Payment Tolerance Posting field is set to Payment

Tolerance Accounts. 9. Click Actions, point to Functions, and then select Change Payment

Tolerance. 10. In the Payment Tolerance % field, enter 3. 11. In the Max. Pmt. Tolerance Amount field, enter 200. 12. Click OK to run the batch job. 13. Click Yes to update the change to existing customer and vendor

ledger entries. 14. Notice that the Payment Tolerance % and Max. Pmt. Tolerance

Amount fields in the General Ledger Setup window contain the values entered in the Change Payment Tolerance batch job.




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Process Payment Tolerance The process of apply tolerances to a payment when a discount has not been applied to a invoice. Payment tolerances can be used in many other situations; these are demonstrated to show functionality.

NOTE: To complete the demonstrations in this lesson, the following demonstrations must be performed: Demonstration: Suggest Discounted Payment Lines and Demonstration: Set up Payment Tolerance.

Demonstration: Discount Taken Past the Discount Date

Scenario: As of February 5, 2010, the invoice for vendor 40000 still has not been paid. April contacts the vendor who assures her that it is fine to take the discount.

Instead of adjusting the discount fields, and because payment tolerance is set up, April suggests vendor payments and then changes the amount to the discounted amount of 194.77.

In this demonstration, the payment is not printed or posted.

Steps: Discount Taken Past the Discount Date








40000. 11. Click OK. 12. Click OK. 13. Notice that the payment is for the full amount of the invoice: 198.75.



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To change the amount and accept the payment tolerance, follow these steps:

1. In the Amount field, enter 194.77. 2. Press TAB or ENTER. The Payment Discount Tolerance

Warning window appears, with the options of accepting or declining the late payment discount.

3. To accept the late payment discount, click the Post as Payment Discount Tolerance option button.

4. Click Yes.

The amount is changed to 194.77. When the payment is posted, the invoice and the payment are closed without remaining amounts.

For the purposes of the "Adjust the Payment Amount to Reflect Discount" demonstration, delete the payment line.

Demonstration: Adjust the Payment Amount to Reflect Discount

Scenario: Invoice 108021 from vendor 30000, CoolWood Technologies, was posted 01/13/08 without discounts. As of 01/01/08 all invoices receive a 1 percent discount if the invoice is paid within 10 days.

On January 21, 2010, the Suggest Vendor Payments is run for this vendor. You check the amount to ensure that the discount was taken and find that it was not set up on the invoice. Because the discount amount is within the tolerance, you decide to change the amount on the Payment Journal and accept the tolerance.

Steps: Adjust the Payment Amount to Reflect Discount


1. On the Navigation Pane, click the Department button, click Financial Management, click Payables, and then click Payment Journals.





Computer Check.



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10. On the Vendor FastTab, set the filter for the No. line, enter 30000. 11. Click OK. 12. Notice that the payment is for the full amount of the invoice:

19,500.00. 13. Delete the other lines from the journal.

To change the amount and accept the payment tolerance, follow these steps:

1. In the Amount field, enter 19305.00. 2. Press TAB or ENTER; the Payment Tolerance Warning window

appears. 3. To accept the tolerance, click the Post the Balance as Payment

Tolerance option button. 4. Click OK.

The amount is changed to 19,305.00. When the payment is posted, the invoice and the payment are closed without remaining amounts.



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Lab 6.7 - Adjust the Payment Discount Amount Scenario

In Lab 6.7, the discount amount was added to invoice 108023 if it is paid by January 16, 2010. As vendor payments are suggested for vendor 10000, you are notified that the discount is actually 2.5 percent, not 2 percent.

Because the checks have already been generated, you adjust the payment amount from 15,529.08 to the correct amount of 15,449.85 and accept the payment tolerance warning.

Challenge Yourself!

1. Run the Suggest Vendor Payments batch job as specified in the scenario.

2. Change the amount as specified in the scenario.

Need a Little Help?

1. Open the Payment Journal window. 2. Run the Suggest Vendor Payments batch job as specified in the

scenario. 3. Change the amount as specified in the scenario. 4. Accept the payment tolerance.

Step by Step






Computer Check. 10. On the Vendor FastTab, set the filter for the No. line, enter 10000. 11. Click OK.



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12. Notice that the payment is for the incorrect discounted amount of 15,529.08.

13. In the Amount field, enter 15449.85. 14. Press TAB or ENTER; the Payment Tolerance Warning window

appears. 15. To accept the tolerance, click the Post the Balance as Payment

Tolerance option button. 16. Click OK.

The amount is changed to 15,449.85.



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Analyze Payables Vendor Ledger Entries are posted entries from purchase orders, purchase invoices, purchase credit memos, journal lines, and refunds. The amount on each vendor entry is a flow field that collects information from a Detailed Vendor Ledger Entry.

Detailed Vendor Ledger Entries contain the actual amounts of the posted entries. Other than the original entry and the applied entry, Detailed Vendor Ledger Entries include any adjustments made to the vendor ledger entry, including:

• Payment discounts. • Realized and unrealized losses and gains caused by changes in the

currency exchange rate. • Application rounding and corrections caused by the rounding of

different currencies.

To provide an understanding of how Vendor Ledger Entries and Detailed Vendor Ledger Entries are used to analyze payables, entries posted to vendor 30000 throughout this content are reviewed.

To review the ledger entries, follow these steps:


2. Locate and select vendor 30000. 3. Click Ledger Entries. 4. Review the posted entries, noticing that there are:

o Opening entries created using a journal. o Multiple payments, created from a general journal and the

Payment Journal. o Multiple invoices and a credit memo created from purchase

documents. o Closed and open entries.

5. Click the Amount field for any line to accesses the Detailed Vendor

Ledger Entries that calculate the value in the field.

The Entry Type field is automatically populated when the detailed vendor ledger entry is created, and it contains several options. Some of the most common are:

• Initial Entry: the entry is an invoice, payment, credit memo, finance charge memo, or reminder.

• Application: two or more vendor ledger entries are applied to each other.



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• Payment Discount: payment discount granted. • Payment Tolerance: payment tolerance granted. • Payment Discount Tolerance: payment discount tolerance granted.

The other Entry Types are related to multicurrency and VAT. For more information about these types, press F1 to access online help.

Summary Managing Payables covers multiple types of the process a company must have to manage vendors and vendor transactions quickly and efficiently.

In addition to overview of the windows used in Managing Payables, vendor payments were processed, unposted printed checks were voided, posted payments were unapplied and reversed, and then the use of payment discounts and tolerances were set up and demonstrated.

Understanding these processes and functionality when preparing to manage payables helps ensure that payments are recorded correctly, reducing the amount of outstanding balances owed and improve the company's control over the expenses.



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Test Your Knowledge Multiple Choice Questions

1. On the General Ledger Setup window, what check box must contain a check mark so you can enter payment discount accounts in the Vendor Posting Groups window?


2. In what window are actual posted vendor entries amounts located?

( ) Posted Vendor Ledger Entries window ( ) Vendor Ledger Entries window ( ) Detailed Ledger Entries window ( ) Detailed Vendor Ledg. Entries window

Fill in the Blanks


1. The Bank Payment Type of Computer Check is used to _____ check.

2. Checks that have been printed but not posted can be ______ without affecting the bank ledger entries.

3. The _______ Vendor Payments batch job processes open vendor ledger entries and creates payment lines.

4. Vendor ________ is used when there are limited funds available to pay vendors.



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1.

2.

3.



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Solutions Suggest Vendor Payments Overview


1. On the Suggest Vendor Payment batch job, the New Doc. No. per Line check box must contain a check mark if which of the following are true: (Select all that apply)

( ) Summarize per Vendor check box contains a check mark. (√) Bank Payment Type is set to Manual Checks. (√) Summarize per Vendor check box does not contain a check mark. ( ) Bank Payment Type is set to Computer Check.

2. On the Suggest Vendor Payments batch job, which fields are used to group the suggested payments by dimension? (Select all that apply)

(√) By Dimension ( ) Summarize by Dimension ( ) Group by Dimension (√) Summarize per Vendor

Create Payments Using Suggest Vendor Payments


1. What happens when the Summarize per Vendor check box is checked when you are running the Suggest Vendor Payments batch job?

MODEL ANSWER:

All open invoices and credit memos are combined in a single payment line. If the check is printed, the document numbers and amounts of the entries combined to create the net amount are individually displayed on the check stub.

2. If your company has a fixed amount available to pay vendor invoices, how do you pay these vendors in Microsoft Dynamics NAV 2009? Explain the setup for the vendors and the Suggest Vendor Payments batch job.

MODEL ANSWER:

1. Set up all vendors with a Priority on the Payments FastTab of the Vendor Card. 2. Run the Suggest Vendor Payments batch job, with the Use Vendor Priority check box selected and the fixed amount entered in the Available Amount (LCY) field.



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Test Your Knowledge

Multiple Choice Questions

1. On the General Ledger Setup window, what check box must contain a check mark so you can enter payment discount accounts in the Vendor Posting Groups window?

( ) Adjust for Payment ( ) Pmt. Disc. Incl. VAT (•) Pmt. Disc. Excl. VAT ( ) Use Payment Disc.

2. In what window are actual posted vendor entries amounts located?

( ) Posted Vendor Ledger Entries window ( ) Vendor Ledger Entries window ( ) Detailed Ledger Entries window (•) Detailed Vendor Ledg. Entries window

Fill in the Blanks


1. The Bank Payment Type of Computer Check is used to print check.

2. Checks that have been printed but not posted can be voided without affecting the bank ledger entries.

3. The Suggest Vendor Payments batch job processes open vendor ledger entries and creates payment lines.

4. Vendor priority is used when there are limited funds available to pay vendors.


Chapter 7: Prepayments

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CHAPTER 7: PREPAYMENTS Objectives

The objectives are:

• Explain the requirements for setting up prepayments. • Set up and assign prepayment General Ledger accounts. • Set up prepayment numbering for sales and purchases. • Set up default prepayment percentages on customers and vendors. • Set up default prepayment percentages for Customer-Item and

Vendor-Item combinations. • Set up prepayment posting verification for sales and purchases. • Explain the prepayment processing flows for sales and purchase

orders. • Describe the prepayment-specific fields on sales and purchase

orders. • Create sales and purchase orders with prepayment percents and

amounts. • Create prepayment invoices from sales and purchase orders. • Explain the processes available to correct posted prepayment

invoices.

Introduction Prepayments are payments that are invoiced and posted to a sales or purchase prepayment invoice before final invoicing.

In Microsoft Dynamics NAV 2009® users can define prepayment requirements on customers and vendors for all items or selected items.

After completing the required setup, a user can generate prepayment invoices from sales and purchase orders for the calculated prepayment amount, and correct prepayment invoices as needed.



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Prepayments Setup Overview Prepayments are available for both sales and purchases in Microsoft Dynamics NAV 2009.

• On the sales side, prepayments are used to require customers to pay a part of the total amount of their order-specified as an amount or a percentage-in advance of the final invoice.

• On the purchases side, prepayments are used to document and process prepayments that vendors require.

Microsoft Dynamics NAV 2009 can be set up to require:

• Selected customers to prepay a specific percentage for all items. • Specified prepayment percentages for particular combinations of

customers or customer price groups and items. • All customers to prepay a specific percentage for selected items. • Specified prepayment percentages to selected vendors for all items. • Specified prepayment percentages for selected combinations of

vendors and items. • Verification that the prepayment is made before shipping or

receiving items.

Setting Up Prepayments

To use prepayments, you must set up the following:

• General Ledger accounts and Posting Groups for prepayments • Number Series for prepayment documents • Prepayment percentages for selected vendors and customers • Prepayment percentages for combinations of:

o Customers, customer groups, or all customers and items o Vendors and items

• Check boxes to require before the posting of sales shipments or

purchase receipts: o The receipt of prepayment amounts from customers for sales o The issue of prepayment amounts from vendors for purchases



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Set Up Prepayment General Ledger Accounts Because the prepayment amount belongs to the buyer until he or she has received the goods or services, companies must set up General Ledger accounts to post the prepayment amounts until the final invoice is posted. To recognize ownership, companies must set up Microsoft Dynamics NAV 2009 to record:

• Customer prepayments in a liability account until the items are shipped.

• Vendor prepayments in an asset account until the items are received.

NOTE: A separate General Ledger account is required for each VAT identifier.

Set Up Prepayment General Ledger Accounts

To set up General Ledger accounts for prepayments, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then select Chart of Accounts.

2. Create the new accounts for sales prepayments and purchase prepayments by filling in the following fields: o No. o Name o Income/Balance o Account Type o Gen. Bus. Posting Group o Gen. Prod. Posting Group o VAT Bus. Posting Group o VAT Prod. Posting Group

3. Close the Chart of Accounts window.

Assign Prepayment General Ledger Accounts

After the prepayment accounts are created, they are assigned to the relevant posting setup combinations in the General Posting Setup window. To complete this setup, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Posting Groups, and then select General Posting Setup.

2. In the Choose Column feature, add Sales Prepayments Account and Purch. Prepayments Account.

3. Click OK to close the Choose Column window.



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4. For every line that contains a combination of business group and product group that requires sales or purchase prepayments, enter the following: o In the Sales Prepayments Account field, enter the number of

the General Ledger account to use for posting sales prepayment amounts.

o In the Purch. Prepayments Account field, enter the number of the General Ledger account to use for posting purchase prepayment amounts.

5. Close the General Posting Setup window.

Set Up Number Series for Prepayment Documents Companies must set up a number series for every type of prepayment document that is used. The prepayment documents are as follows:

• Sales prepayment invoices • Sales prepayment credit memos • Purchase prepayment invoice • Purchase prepayment credit memos

The same number series can be used for:

• Prepayment invoices and credit memos. • Regular invoices and credit memos.

Alternatively, you can use different number series. When you are using different number series, each number series must be unique so you can navigate effectively on posted transactions.

Set Up Prepayment Numbering for Sales

To set up prepayment number series for sales, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Sales & Receivables Setup.

2. Click the Numbering FastTab. 3. In the Posted Prepmt. Inv. Nos. field, click the drop-down list and

select the number series to use to assign numbers to sales prepayment invoices when they are posted.



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4. In the Posted Prepmt. Cr. Memo Nos. field, click the drop-down list and select the number series to use to assign numbers to sales prepayment credit memos when they are posted.

5. Click OK to close the Sales & Receivables Setup window.

FIGURE 7.1 SALES RECEIVABLES SETUP - NUMBERING FASTTAB

Set Up Prepayment Numbering for Purchases

To set up prepayment number series for purchases, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Purchases & Payables Setup.

2. Click the Numbering FastTab. 3. In the Posted Prepmt. Inv. Nos. field, click the drop-down list and

select the number series to use to assign numbers to purchase prepayment invoices when they are posted.



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4. In the Posted Prepmt. Cr. Memo Nos. field, click the drop-down list and select the number series to use to assign numbers to sales prepayment credit memos when they are posted.

5. Click OK to close the Purchases & Payables Setup window.

FIGURE 7.2 PURCHASES & PAYABLES SETUP - NUMBERING FASTTAB

Set Up Prepayment Percentages for Customers and Vendors Companies can specify a default percentage for prepayments to use for all items for customers and vendors. As soon as the percentage is specified, it is automatically populated on the Prepayment FastTab of sales or purchase orders.

To set up a default prepayment percentage for all items, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Receivables, select Customers or, click Financial Management, click Payables, and then select Vendors.

2. Locate and select the customer or vendor that requires a default prepayment percentage.

3. Click the Invoicing FastTab. 4. In the Prepayment % field, enter the default percentage. 5. Close the Customer Card or Vendor Card window.

NOTE: Prepayment percentages specified on customers and vendors apply to all lines entered on sales and purchase orders, not only items.



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Set Up Prepayment Percentages for Customer-Item and Vendor-Item Combinations

Companies can set up a default prepayment percentage for an item being sold to all customers, a specific customer, or a customer price group.

Various combinations of items and customers can be set up from the Customer Card or the Item Card. The same Sales Prepayment Percentages window is used from both locations. However, the preset filters differ, depending on whether the window is opened from the Customer Card or the Item Card.

Companies can also set up a default prepayment percentage for an item being purchased for a specific vendor.

The various combinations of items and vendors can be set up from the Vendor Card or from the Item Card. The same Purchase Prepmt. Percentages window is used from both locations. However, the preset filters differ, depending on whether the window is opened from the Vendor Card or from the Item Card.

Set Up Prepayment Defaults for an Item-Customer Combination

To set up prepayment defaults for an item-customer combination, follow these steps:

1. On the Navigation Pane, click the Departments button, click Warehouse, click Planning & Execution, and then click Items.



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2. Locate and select the item that requires a prepayment. 3. Click Related Information, point to Sales, and then select

Prepayment Percentages.

FIGURE 7.3 SALES PREPAYMENT PERCENTAGES - ITEM

4. In the Sales Type field, click the drop-down list and select either Customer, Customer Price Group, or All Customers.

5. In the Sales Code field, click the drop-down list and select the particular Customer or Customer Price Group for whom this prepayment percentage applies or All Customers.

6. In the Item No. field, click the drop-down list and select the item for which the prepayment percentage applies.

7. In the Starting Date field, enter the date to start charging the prepayment percentage. o Set the Starting Date to the current date by leaving the field

blank. o If a future date is entered, the rule starts automatically on that

date.

8. In the Ending Date field, enter the date to stop charging the prepayment percentage. o If the Ending Date field is left blank, the rule does not expire

until it is edited or removed. o If a future date is entered, the rule expires automatically on that

date. 9. In the Prepayment % field, enter the percentage of the item cost to

charge as a prepayment. For example, if a prepayment of 10 percent is charged on this item, enter 10 in this field.

10. Close the Sales Prepayment Percentages and Item Card windows.



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NOTE: The rules for Starting Dates, Ending Dates, and Prepayment % are the same for each combination.

Set Up Prepayment Defaults for a Customer-Item Combination

To set up prepayment defaults for a customer-item combination, follow these steps:


2. Locate and select the customer from whom a prepayment is required. 3. Click Related Information, point to Sales, and then select


FIGURE 7.4 SALES PREPAYMENT PERCENTAGES - CUSTOMER

4. In the Sales Type field, click the drop-down list and select either Customer, Customer Price Group, or All Customers.

5. In the Sales Code field, click the drop-down list and select the particular Customer or Customer Price Group for whom this prepayment percentage applies. If the Sales Type is set to All Customers, leave the Sales Code field blank.


7. In the Starting Date field, enter the date to start charging the prepayment percentage.

8. In the Ending Date field, enter the date to stop charging the prepayment percentage.



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9. In the Prepayment % field, enter the percentage of the item cost to charge as a prepayment.

10. Close the Sales Prepayment Percentages and Customer Card windows.

Set Up Prepayment Defaults for a Vendor-Item Combination

To set up prepayment defaults for vendor-item combinations, follow these steps:


2. Locate and select the vendor that requires a prepayment. 3. Click Related Information, point to Purchases, and then select


FIGURE 7.5 PURCHASE PREPMT. PERCENTAGES - VENDOR

4. In the Vendor No. field, click the drop-down list and select the particular vendor for whom this prepayment percentage applies.


6. In the Starting Date field, enter the date to start charging the prepayment percentage.

7. In the Ending Date field, enter the date to stop charging the prepayment percentage.

8. In the Prepayment % field, enter the percentage of the item cost to charge as a prepayment.

9. Close the Purchase Prepmt. Percentages and Vendor Card windows.



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Set Up Prepayment Defaults for an Item-Vendor Combination

To set up prepayment defaults for an item-vendor combination, follow these steps:

1. On the Navigation Pane, click the Departments button, click Warehouse, click Planning & Execution, and then select Items.

2. Locate and select the item that requires a prepayment. 3. Click Related Information, point to Purchases, and then select

Prepayment Percentages. 4. In the Vendor No. field, click the drop-down list and select the

particular vendor for whom this prepayment percentage applies. 5. In the Item No. field, click the drop-down list and select the item for

which the prepayment percentage applies. 6. In the Starting Date field, enter the date to start charging the

prepayment percentage. 7. In the Ending Date field, enter the date to stop charging the

prepayment percentage. 8. In the Prepayment % field, enter the percentage of the item cost to

charge as a prepayment. 9. Close the Purchase Prepmt. Percentages and Item Card windows

Set Up Check Prepayment When Posting When posting a prepayment invoice to a customer or vendor, users can set up Microsoft Dynamics NAV 2009 to verify that:

• Prepayments due from a customer have been received. • Prepayments due to a vendor have been issued.

This feature ensures that inventory is not shipped to a customer before the receipt of the prepayment amount.

Set Up Prepayments Verification for Sales

To set up the prepayments verification when posting sales, follow these steps:


2. On the General FastTab, place a check mark in the Check Prepmt. When Posting check box to prevent posting invoices before receipt of the prepayment amount.

3. Close the Sales & Receivables Setup window.



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Set Up Prepayments Verification for Purchases

To set up the prepayments verification when posting purchases, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Purchases & Payables Setup.

2. On the General FastTab, place a check mark in the Check Prepmt. When Posting check box to prevent posting invoices before you issue the prepayment amount.

3. Close the Purchases & Payables Setup window.



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Lab 7.1 - Set Up Prepayments for Sales Scenario

As the accounts receivable administrator for CRONUS International Ltd., you are responsible for setting up prepayments for particular items and customers. You have to charge a prepayment of 10 percent on all orders for Item 1896-S. You also have to charge Customer 10000 a prepayment of 20 percent on all orders.

Challenge Yourself!

1. Enter the prepayment requirement for the item as specified in the scenario.

2. Enter the prepayment requirement for the customer as specified in the scenario.

Need a Little Help?

1. Open the Prepayment Percentages window from the Item card window.

2. Enter the prepayment requirement for the item as specified in the scenario.

3. Open the Customer Card window for customer 10000. 4. Enter the Prepayment % for the customer as specified in the

scenario.

Step by Step

1. On the Navigation Pane, click the Departments button, click Warehouse, click Planning & Execution, and then select Items.

2. Locate and select item 1896-S. 3. Click Related Information, point to Sales, and then select

Prepayment Percentages. 4. In the Sales Type field, click the drop-down list and select All

Customers. 5. In the Prepayment % field, enter 10. 6. Close the Sales Prepayment Percentages window. 7. Close the Item Card window. 8. On the Navigation Pane, click Sales & Marketing, click Order

Processing, and then click Customers. 9. Locate and select customer 10000. 10. Click the Invoicing FastTab. 11. In the Prepayment % field, enter 20. 12. Close the Customer Card window.



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Prepayments Processing Flows Users can create prepayment invoices from a sales or purchase order with the prepayment invoice option.

The prepayment amount on the order is calculated based on the prepayment percentage specified on items, customers, or vendors. Users can edit this prepayment percentage or amount on the individual sales or purchase order.

Prepayment Sales Order Process

The following steps list the typical process flow for prepayment sales orders:

1. Create a sales order with a prepayment requirement. 2. Send a prepayment invoice for the prepayment amount to the

customer. 3. The customer pays the prepayment amount. 4. Apply the prepayment amount to the sales order. 5. Ship the order to the customer. 6. Create a sales invoice for the total amount of the sales order minus

the prepayment amount. 7. Receive payment from the customer and post the payment to the

sales order.

Prepayment Purchase Order Process

The following steps list the typical process flow for prepayment purchase orders:

1. Create a purchase order with a prepayment requirement. 2. Post a prepayment invoice for the prepayment amount. 3. Send the prepayment amount to the vendor. 4. Apply the prepayment amount to the purchase order. 5. After the vendor ships the order, create a purchase invoice for the

total amount of the purchase order minus the prepayment amount. 6. Send the payment to the vendor and post the payment to the purchase

order.

Prepayment Sales and Purchase Orders Overview The Sales and Purchase Order with the Prepayment FastTab is accessed from the Customer Card or the Vendor Card.

In this lesson, the fields specific to prepayments on the sales and purchase order header and lines are defined. In addition, the prepayment percentage priority is explained.



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Sales and Purchase Order Header Overview

The sales and purchase order header contain the following fields on the Prepayment FastTab, related to prepayments:

FIGURE 7.6 PURCHASE ORDER - PREPAYMENT FASTTAB

• Prepayment % - the percentage to be applied to all lines on the order. If there is a default prepayment percentage specified on the customer or vendor, this field is automatically populated with that amount. However, the prepayment percentage specified on the customer or vendor only applies to lines that do not have a default prepayment percentage set up for the customer-item or vendor-item combination.

• Compress Prepayment - if this field is selected, prepayment lines on the invoice are combined when: o They have the same General Ledger account for prepayments (as

defined in the General Posting Setup window). o They have the same dimensions.

If not selected, you can create an invoice by using a separate line for each prepayment amount.

• Prepmt. Payment Terms Code - the payment terms for prepayment invoices. As a default, this code is retrieved from the Payment Terms Code field on the Invoicing FastTab of the order. The prepayment payment terms are used to calculate the due date, payment discount date, and payment discount percentages for prepayment amounts.

• Prepayment Due Date - the date the prepayment invoice for the order is due. The date is calculated with the date formula in the Due Date Calculation field related to the payment term and the Document Date on the order.



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• Prepmt. Payment Discount % - the payment discount percentage that is given on the prepayment if the order is paid on or before the date entered in the Prepmt. Pmt. Discount Date field. Prepmt. Pmt.

• Discount Date - the last date the prepayment invoice can be paid and still receive a payment discount on the prepayment amount. The Prepmt. Payment Terms Code and Document Date fields are used to calculate the date.

Prepayment Status

The Status field on the General FastTab on the order an option of Pending Prepayment. This status is used when the order has one or more lines with a prepayment amount, but the prepayment invoice has not yet been posted.

The Status field is set to:

• Open when an order is created. • Pending Prepayment when:

o The order is released by clicking Related Information, pointing to Functions, and then selecting Release.

o The order is approved, if document approvals are used.



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• Released when the Prepayment invoice is posted.

FIGURE 7.7 PURCHASE ORDER - GENERAL FASTTAB

Sales and Purchase Order Lines Overview

The sales and purchase order lines contain the following fields, related to prepayments. Notice that you must show these fields with the Choose Column function.

• Prepayment % - the contents of this field are determined as follows: o If a default prepayment percentage is set up for the item on the

line, it is automatically copied into the Prepayment % field. o If no default prepayment percentage is set up for the item, the

prepayment percentage from the customer or vendor card is copied from the order header.

o The Prepayment % field can be entered or changed manually on a line-by-line basis.

• Prepmt. Line Amount Excl. VAT - the prepayment amount of the line, if a Prepayment percent is specified for the sales line.

• Prepmt. Amt. Inv. Excl. VAT - the prepayment amount that has already been invoiced to the customer for this sales line. The contents of this field cannot be changed. To void the prepayment, you must post a Prepayment Credit Memo for the sales line.



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• Prepmt. Amt to Deduct Excl. VAT - the prepayment amount that will be deducted from the next ordinary invoice for this line. When you create an invoice for the order, the system suggests an amount proportional to the amount of the order that is being invoiced. You can change the amount to deduct before posting the invoice.

• Prepmt Amt Deducted Excl. VAT - the prepayment amount that has already been deducted from ordinary invoices posted for this order line. The contents of this field cannot be changed.

Prepayment Percentage Priority for Order Lines

A sales or purchase order can have a prepayment percent on the header and a different percentage for the items on the lines. For each sales or purchase order line, Microsoft Dynamics NAV 2009 searches for the prepayment percentage and applies the first default that it finds in the following order:

1. A prepayment percentage for the item on the line and the customer or vendor on the order header.

2. A prepayment percentage for the item on the line and the customer price group for the customer.

3. A prepayment percentage for the item on the line for all customers. 4. The prepayment percentage on the sales or purchase header. 5. A prepayment percentage for the customer or vendor on the order

header.

NOTE: The priority order followed by Microsoft Dynamics NAV 2009 means that the prepayment percentage specified on the customer or vendor only applies if there is no prepayment percentage set up for the selected item.

Test Your Knowledge: Payment Percentage Priority

Microsoft Dynamics NAV 2009 searches items, customers, vendors, and price groups for default prepayment percentages when an order is created. What default prepayment percentage is searched for first?



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Process Prepayment Sales and Purchase Orders When an order is created for an item, customer, or vendor that has a prepayment rule defined, Microsoft Dynamics NAV 2009 retrieves the prepayment requirement from the item, customer, or vendor card and enters it into the order.

Create Prepayment Orders Using Percentages

Creating prepayment orders resembles creating other sales and purchase orders. To create a prepayment sales order, follow these steps:

1. On the Navigation Pane, click the Departments button, click Sales & Marketing, click Order Processing, and then select Sales Orders.

2. Click New to create a new sales order. 3. In the Sell-to Customer No. field, click the drop-down list and select

the relevant customer. 4. Click the Prepayment FastTab. Review the settings and update the

fields as needed. 5. In the Lines FastTab, in the Type field, click the drop-down list. 6. Select the relevant line type to add to the order. 7. In the No. field, click the drop-down list and select the relevant

number of the type selected in the Type field. 8. In the Quantity field, enter the number of items to be sold. 9. Review the prepayment fields to verify the settings. 10. Press the ARROW DOWN to insert another line. 11. Repeat steps 7-11 for the new line.

The same steps are used to create a purchase order, except:

• The purchase order is accessed by clicking the Departments button, clicking Purchase, clicking Order Processing, and then selecting Purchase Orders.

• The Buy-from Vendor No. is selected from the Vendor List

Assign Prepayment Percentage to All Order Lines

Although there can be different prepayment percentages for each of the order lines, a single prepayment percentage can be applied to the whole order. Perform this after all the order lines are completed.



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To enter a single prepayment percentage that applies to all the order lines, follow these steps:

1. Complete the sales or purchase order header and lines. 2. Click the Prepayment FastTab. 3. In the Prepayment % field, enter the prepayment percentage to be

applied to all the lines of the order.

Click Yes to the message on updating the lines; the Prepayment % is updated on all the lines to match the header.

NOTE: As soon as a number is entered into the Prepayment % field on the header and the lines are updated, you cannot revert to the individual prepayment percentages that existed for each line.

To return to the individual prepayment percentages, either delete and reenter the lines, or manually enter the Prepayment % on each line.

Specify Prepayment Amounts

Instead of using prepayment percentages, you can define a prepayment amount for the whole sales or purchase order. Prepayment amounts are set in the Sales Order Statistics and the Purchase Order Statistics windows.

To apply a total prepayment amount to the order, follow these steps:

1. On the completed order, click Related Information, point to Order, and then select Statistics.

2. Click the Prepayment FastTab. 3. In the Prepmt. Amount Excl. VAT field, enter the prepayment

amount to be charged for the whole order.

The amount in the Prepayment Amount Excl. VAT field is distributed proportionately between all lines in the order, except those that have zero in the Prepayment % field.

NOTE: If the Prices Including VAT check box does not contain a check mark, the Prepayment Amount Excl. VAT field is editable.

If the Prices Including VAT check box on the sales header contains a check mark, the Prepayment Amount Incl. VAT field is editable.



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Process Prepayment Sales and Purchase Invoices After entering a sales or purchase order, you can create a prepayment invoice. The default percentages for each sales or purchase line can be used, or the amounts can be adjusted as necessary.

When the final invoice is posted, Microsoft Dynamics NAV 2009:

• Verifies receipt or issue of the Prepayment amount based on setup. • Deducts the prepayment amount from the amount due. • Reverses prepayment amounts previously posted to the balance sheet

as assets or liabilities.

Create Prepayment Invoices

To create a prepayment invoice, follow these steps:

1. Click Actions, point to Posting, and then select Prepayment. 2. Select from the following prepayment options:

o To print a test report before posting the prepayment invoice, click Prepayment Test Report.

o To post the prepayment invoice, click Post Prepayment Invoice.

o To post and print the prepayment invoice, click Post and Print Prepmt. Invoice.

3. Complete the process as indicated by the selected prepayment option.

Create Additional Prepayment Invoices

To create additional prepayment invoices for an order, follow these steps:

1. Increase the prepayment amount on one or more lines. 2. Adjust the document date, if required. 3. Click Actions, point to Posting, click Prepayment, and then select

Post Prepayment Invoice.

A new invoice is created for the difference between the invoiced prepayment amount and the new prepayment amount.

Correct Prepayments After posting a prepayment invoice, you can process corrections or updates by adding new lines to the order and posting another prepayment invoice. Lines cannot be deleted from an order when a prepayment is invoiced for the line.



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You can correct a prepayment using any of following options:

• Refund all invoiced prepayments for an order. • Reduce the quantity on sales or purchase lines. • Add new lines to an order after issuing a prepayment. • Increase the prepayment amount.

Refund all Invoiced Prepayments for an Order

To refund all invoiced prepayments for an order, follow these steps:

1. On the order, click Actions, point to Posting, click Prepayment, and then select Post Prepayment Credit Memo.

2. If it is required, re-create the correct entries.

Reduce the Quantity on Sales or Purchase Lines

To reduce the quantity on a sales or purchase line, follow these steps:

1. Increase the Prepayment % on the line so that the Prepmt. Line Amount is not decreased lower than the amount in the Prepmt. Amt. Inv. field.

2. Reduce the amount in the Line Amount field.

Add New Lines to an Order after Issuing a Prepayment

To add new lines to an order after issuing a prepayment, follow these steps:

1. Add the additional lines to the order. 2. Click Actions, point to Posting, click Prepayment, and then select


A prepayment invoice is created for the new line.

Increase the Prepayment Amount

To increase the prepayment amount, follow these steps:

1. Increase the Prepayment % on one or more lines. 2. Click Actions, point to Posting, click Prepayment, and then select


A new invoice is created for the difference between the prepayment amount invoiced to this point and the new prepayment amount.



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Summary Prepayments are used in sales or purchases and provide the ability to charge either a percentage of the total order or a specific amount before shipping items to customers. Companies can also use prepayments to record prepayments to vendors.

The Prepayments functionality in Microsoft Dynamics NAV 2009 assists in:

• Invoicing and collecting deposits required from customers or remitting deposits to vendors.

• Posting and tracking prepayment amounts to specific accounts. • Accurately creating invoices that reflect the total order amount minus

any prepayments.



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Test Your Knowledge 1. What status do you use when an order has one or more lines with a

prepayment amount, but a prepayment invoice has not yet been posted?

( ) Prepayment Issued ( ) Pending Prepayment ( ) Prepayment awaiting ( ) Issued Prepayment

2. Which of the following methods can you use to correct prepayment invoices? (Select all that apply)

( ) Delete invoiced prepayment lines from the order. ( ) Increase the prepayment amount. ( ) Reduce the quantity on sales and purchase lines. ( ) Add new lines to an order after issuing a prepayment.

3. To recognize prepayment ownership, Microsoft Dynamics NAV 2009 must be set up to perform which if the following? (Select all that apply.) (Select all that apply)

( ) Record purchase prepayments in a liability account until the items are received.

( ) Record purchase prepayments in an asset account until the items are received.

( ) Record sales prepayments in an asset account until the items are shipped.

( ) Record sales prepayments in a liability account until the items are shipped.

4. How do you enter a default prepayment percentage on an Item Card?



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5. Explain how to apply a single prepayment percentage to a whole order.

Fill in the Blanks


6. On a sales or purchase order, you can enter a prepayment percent on the __________ FastTab.

7. To charge a prepayment amount instead of a prepayment percent to an order, open the __________ window.



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1.

2.

3.



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Solutions Prepayment Sales and Purchase Orders Overview

Test Your Knowledge: Payment Percentage Priority

Microsoft Dynamics NAV 2009 searches items, customers, vendors, and price groups for default prepayment percentages when an order is created. What default prepayment percentage is searched for first?

MODEL ANSWER:

A prepayment percentage for the item on the line and the customer or vendor on the order header.

Test Your Knowledge

1. What status do you use when an order has one or more lines with a prepayment amount, but a prepayment invoice has not yet been posted?

( ) Prepayment Issued (•) Pending Prepayment ( ) Prepayment awaiting ( ) Issued Prepayment

2. Which of the following methods can you use to correct prepayment invoices? (Select all that apply)

( ) Delete invoiced prepayment lines from the order. (√) Increase the prepayment amount. (√) Reduce the quantity on sales and purchase lines. (√) Add new lines to an order after issuing a prepayment.

3. To recognize prepayment ownership, Microsoft Dynamics NAV 2009 must be set up to perform which if the following? (Select all that apply.) (Select all that apply)

( ) Record purchase prepayments in a liability account until the items are received.

(√) Record purchase prepayments in an asset account until the items are received.

( ) Record sales prepayments in an asset account until the items are shipped.

(√) Record sales prepayments in a liability account until the items are shipped.



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4. How do you enter a default prepayment percentage on an Item Card?

MODEL ANSWER:

Click Related Information, point to Sales and then click Prepayment Percentages and enter the default prepayment percentage in the Prepayment Percentages window.

5. Explain how to apply a single prepayment percentage to a whole order.

MODEL ANSWER:

After the order lines are complete, click the Prepayment FastTab. In the Prepayment % field, type the prepayment percentage for the whole order. When you exit the Prepayment % field, the order lines are updated with the prepayment percentage in the header.

Fill in the Blanks


6. On a sales or purchase order, you can enter a prepayment percent on the Prepayment FastTab.

7. To charge a prepayment amount instead of a prepayment percent to an order, open the Statistics window.


Chapter 8: VAT and Intrastat

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CHAPTER 8: VAT AND INTRASTAT Objectives

The objectives are:

• Explain the affects of the Prices Including VAT settings on sales and purchase documents.

• Explain the process of adjusting calculated VAT amounts in sales and purchase documents and journals.

• Demonstrate the process of recording Import VAT. • Describe and demonstrate the process of correcting a posted VAT

entry. • Explain, create, and print a VAT Statement. • Explain and run the Calc. and Post VAT Settlement batch job. • Explain the requirements of reporting Intrastat. • Set up Intrastat for use in Microsoft Dynamics NAV 2009. • Explain the process of running and submitting Intrastat reports.

Introduction Value Added Tax (VAT) is a transaction tax that is paid by the end consumer and businesses.

It is required for all companies to report and calculate VAT, therefore companies need to become familiar with the setup process, in addition to how to calculate, display, and adjust VAT amounts in sales and purchase documents.

Additional functions that make the required VAT reporting more efficient include:

• Import VAT • VAT Corrections • VAT Reporting • VAT Settlement • Unrealized VAT • Payment Discount VAT Adjustments

Intrastat is a required reporting process for all European Union (EU) companies that trade with other EU countries/regions.

The system can be set up to run all the necessary reports related to Intrastat and make the reporting more efficient for the company.



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Display VAT Amounts in Sales and Purchase Documents Companies can display and calculate VAT amounts in sales and purchase documents differently, depending on the Prices Including VAT settings on the customer or vendor card.

Display VAT Amounts in Sales and Purchase Documents

The selection made in the Prices Including VAT check box determines whether Unit Prices on sales documents and Direct Unit Costs on purchase documents include VAT. Set up the Prices Including VAT check box in the following areas:

• Customer Card • Vendor Card • Item Card • Sales document header • Purchase document header

On the customer and vendor cards, if the Prices Including VAT check box:

• Does not contain a check mark, sales and purchase documents are automatically set up to exclude VAT from unit prices and direct unit costs. Therefore, the price and cost fields on the respective document dynamically display Unit Price Excl. VAT and Direct Unit Cost Excl. VAT.

• Contains a check mark, sales and purchase documents are automatically set up to include VAT in unit prices and direct unit costs. Therefore, the price and cost fields on the respective document dynamically display Unit Price Incl. VAT and Direct Unit Cost Incl. VAT.

On the item card, if the Prices Including VAT check box:

• Does not contain a check mark: o VAT is not included in the unit price. o The unit price is copied directly from the item card to the Unit

Price field on the sales line.

• Does contain a check mark: o VAT is subtracted from the price on the item card before it is

entered on the sales line. o The VAT Bus. Posting Gr. (Price) field must be filled in.

Except for retail sales, the Prices Including VAT check box typically does not contain a check mark.



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NOTE: To include VAT in the unit price on items, you must display the Prices Including VAT and VAT Bus. Posting Gr. (Price) fields on the Item Card window using the Form Designer.

The following table provides an overview of how unit price amounts are calculated for a sales document when prices are not set up in the Sales Prices window.

Price Includes VAT field on Item Card

Prices Including VAT field in Sales Header

Action Performed

No check mark

No check mark

The Unit Price on the Item Card is copied to the Unit Price Excl. VAT field on the sales lines.

No check mark

Check mark The VAT amount for each unit is calculated and added to the Unit Price on the Item Card. This total Unit Price is then entered in the Unit Price Incl. VAT field on the sales lines.

Check mark

No check mark

The VAT amount included in the Unit Price on the Item Card is calculated by using the VAT% related to the VAT Bus. Posting Gr. (Price) and the VAT Prod. Posting Group combination. The Unit Price on the Item Card, reduced by the VAT amount, is then entered in the Unit Price Excl. VAT field in the sales lines.

Check mark

Check mark The Unit Price on the Item Card is copied to Unit Price Incl. VAT field on the sales lines.

If the Prices Including VAT functions is set up on customers and vendors, it is not necessary to change the settings on the sales or purchase document headers. However, if amounts on individual documents have to include or exclude VAT, the Prices Including VAT check box in the header can be changed.

Changing the Prices Including VAT setting in a sales or purchase document header generates a message that asks you to update the unit price or direct unit cost on the lines. If the Prices Including VAT setting is changed, any manual changes that are made to the unit prices or direct unit costs are overwritten.



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Test Your Knowledge: Prices Including VAT Setup

1. Where can you set up Prices Including VAT? (Select all that apply)

( ) G/L Accounts ( ) Customer and Vendor Cards ( ) Sales and Purchase Documents ( ) Item Cards

2. Regarding the Prices Including VAT check box, which of the following causes the Unit Price on the Item Card to be copied to the Unit Price Incl. VAT field on the sales lines?

( ) Prices Including VAT check box does not contain a check mark in either the Item Card or Sales Header.

( ) Prices Including VAT check box contains a check mark on both the Item Card and Sales Header.

( ) Prices Including VAT check box contains a check mark on the Item Card, but does not contain a check mark in the Sales Header.

( ) Prices Including VAT check box does not contain a check mark on the Item Card, but does contain a check mark in the Sales Header.

3. What field must also be filled in if the Prices Including VAT check box contains a check mark on the Item Card?

( ) VAT Amount ( ) VAT Prod. Posting Gr. (Price) ( ) VAT Bus. Posting Gr. (Price) ( ) Unit Price Incl. VAT

Adjust VAT Amounts in Sales and Purchase Documents and Journals

When VAT amounts calculated by Microsoft Dynamics NAV 2009 are slightly different from VAT amounts calculated by the customer or vendor, the amount can be manually adjusted:

• On the sales or purchase documents • On general, sales, or purchase journals

Adjust VAT Amounts in Sales and Purchase Documents

On sales and purchase documents, VAT is automatically calculated using the:

• Customer or vendor's VAT Bus. Posting Group. • Item's VAT Prod. Posting Group.



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Users can manually enter or adjust VAT amounts if the calculated amount is slightly different from the amount calculated by the customer or vendor, for example, caused by rounding.

The following must be set up before you enter or adjust VAT in sales and purchase documents:

• Specify a maximum VAT correction amount allowed. • Allow the VAT difference for sales and purchases.

To set up the maximum VAT correction amount, follow these steps:


2. In the Max. VAT Difference Allowed field, enter the maximum VAT correction amount for the local currency. For example, if 5 is entered and LCY is British Pounds, VAT amounts can be corrected by up to five pounds.


To allow VAT correction for sales and purchases, follow these steps:


2. Add a check mark in the Allow Vat Difference field to allow the manual adjustment of VAT amounts in sales documents.

3. Close the Sales & Receivables Setup window. 4. Select Purchases & Payables Setup. 5. Add a check mark in the Allow Vat Difference field to allow the

manual adjustment of VAT amounts in sales documents. 6. Close the Purchases & Payables Setup window.

After setup is complete, VAT adjustments can be made in the Sales Order Statistics or Purchase Order Statistics windows.

To open either window, follow these steps:

1. From either the sales or purchase order, select the customer or vendor and click Statistics.

2. Click the Invoicing FastTab. Adjustments can only be made while on this FastTab.



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In either window, the total VAT amount for the invoice, grouped by VAT identifier, is displayed in the lines. To make an adjustment, change the amount in the VAT Amount field on the lines for each VAT identifier.

When the VAT Amount field is changed, Microsoft Dynamics NAV 2009 verifies that the VAT amount was not changed by more than the amount specified as the maximum difference allowed. One of the following actions then occurs:

• If the amount is outside the range of the Max. VAT Difference Allowed, the system displays a warning stating that the maximum allowed difference and the adjustment is prevented. Click OK and enter another VAT Amount that is within the allowed range.

• If the VAT difference is equal to or lower than the maximum allowed, the VAT is divided proportionally among the document lines that have the same VAT identifier.

Confirm the original VAT amount and the adjusted difference on the Sales Order Statistics or Purchase Order Statistics windows by using the Show Column function to display the Calculated VAT Amount and VAT Difference fields.

Demonstration: Adjust a VAT Amount in a Purchase Document

Scenario: April, the accounts payable coordinator at CRONUS International Ltd., receives an invoice from vendor 10000, for purchase order 106009. The VAT amount on the invoice is 230.00, not 225.90 as calculated.

April discusses the difference with Phyllis, the accounting manager, who tells her to set up a 5.00 maximum VAT correction amount and allow corrections for purchases.

April accidentally enters 4.00 as the maximum and then tries to adjust the VAT amount on the purchase invoice. Because the change is not within the allowed range, she is prevented from making the change. She checks her setup, and after correcting the maximum VAT correction amount, she adjusts the VAT amount accordingly.

The Calculated VAT Amount and VAT Difference fields are also added to the Purchase Order Statistics window to review the original VAT amount and the difference between the amounts.



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Steps: Adjust a VAT Amount in a Purchase Document

To set up Microsoft Dynamics NAV 2009 to make VAT corrections, follow these steps:


2. In the Max. VAT Difference Allowed field, enter 4. 3. Click OK to close the General Ledger Setup window. 4. Click Purchases & Payables Setup. 5. Add a check mark in the Allow Vat Difference check box. 6. Click OK to close the Purchases & Payables Setup window.

To make the adjustment on the purchase order, follow these steps:

1. On the Navigation Pane, click Purchase, click Order Processing, and then select Purchase Orders.

2. Locate and select order 106009. 3. Click Statistics. 4. Click the Invoicing FastTab. 5. To open the VAT Amount Lines, click the number 1 field No. of

VAT Lines 6. In the VAT Amount field in the lines, enter 230.00. 7. Press TAB or ENTER. 8. An error message appears, stating that the VAT difference must not

exceed Max. VAT Difference Allowed = 4 appears 9. Click OK, and then click Yes to discard changes 10. Click OK to close the Purchase Order Statistics window.

To correct the maximum VAT difference allowed and complete the VAT amount adjustment on the purchase order, follow these steps:


2. Update the Max. VAT Difference Allowed field to 5. 3. Click OK to close the General Ledger Setup window. 4. On the Navigation Pane, click Purchase, click Order Processing,

and then select Purchase Orders. 5. Locate and select order 106009. 6. On purchase order 106009, click Statistics. 7. Click the Invoicing FastTab. 8. Click the No. of VAT Lines field.



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9. In the VAT Amount field in the lines, enter 230.00. 10. Click OK. 11. Notice that a message does not appear in the header, and the 25%

VAT field in the General FastTab still contains the original amount of 225.90.

12. Open the VAT Amount Lines window. Notice that the 25% VAT field now contains the adjusted amount of 230.00.

13. In the Choose Column feature, add the Calculated VAT Amount and VAT Difference.

14. Review the amounts and then close the VAT Amount Lines, Purchase Order Statistics, and Purchase Order windows.

Adjust VAT Amounts in Journals

Calculated VAT amounts can be adjusted in general, sales, and purchase journals. This may be necessary when an invoice received from a vendor is entered in the general journal and the VAT amount on the invoice differs from the calculated VAT amount.

Before adjusting VAT amounts on a general journal:

• Specify a maximum VAT correction amount allowed. • Allow the VAT difference in the relevant journal.

If VAT amounts are to be adjusted on sales and purchase journals, the VAT difference must be allowed for sales and purchases, in addition to the setup for general journals.

For information about the setting up the maximum VAT correction amount allowed and the VAT difference allowed for sales and purchases, refer to the lesson" Adjust VAT Amounts in Sales and Purchase Documents".

To set up the VAT difference allowance in the relevant journal, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click General, and then select Journal Templates.

2. To edit the General Journal Templates, double-click the journal name.

3. To use each journal to adjust VAT amounts, add a check mark in the Allow VAT Difference check box.

4. A message appears: o To update all related batches, click Yes. o If only particular batches are used to adjust VAT amounts, click

No. To set up individual batches:



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5. Click Related Information, point to Template, and then select Batches.

6. For each batch, add a check mark in the Allow VAT Difference check box.

7. Close the General Journal Batches. 8. Close the General Journal Templates.

After setup is complete, adjustments to VAT amounts to equal invoiced VAT amounts can be made in the:

• VAT Amount field in the general journal. • Bal. VAT Amount field in the sales or purchase journal.

Similar to changing VAT amounts in sales and purchase documents, Microsoft Dynamics NAV 2009 verifies that the difference is not greater than the specified maximum. One of the following actions then occurs:

• If the difference is greater than the maximum allowed, the system displays a warning stating that the maximum allowed difference and adjustment is prevented. Click OK and enter another amount that is within the allowed range.

• If the VAT difference is equal to or lower than the maximum allowed, the difference is displayed in the VAT Difference field.

Demonstration: Adjust a VAT Amount in a General Journal

Scenario: Phyllis, the accounting manager at CRONUS International Ltd., is in the process of entering expenses in the general journal and has noticed that there are some minor VAT differences.

To enable the journal to accept changes to the VAT amounts, Phyllis sets a 2.00 maximum VAT difference and allows VAT difference in the General journal and all related batches.

One of the expenses, for Electricity and Heating in the amount of 800, calculates VAT at 160. However, the VAT amount she is posting is 162. She accidentally enters 163 and receives an error. After entering the correct VAT amount, she reviews the amount in the VAT Difference field.



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Steps: Adjust a VAT Amount in a General Journal

To set up Microsoft Dynamics NAV 2009 to make VAT corrections, follow these steps:


2. In the Max. VAT Difference Allowed field, enter 2. 3. Close the General Ledger Setup window. 4. On the Navigation Pane, click General, and then select Journal

Template. 5. Locate and select the GENERAL template. 6. Add a check mark in the Allow VAT Difference check box. 7. Click Yes to update all related general journal batches. 8. Close the General Journal Templates window.

To enter a line in the general journal and adjust the VAT amount, follow these steps:

1. On the Navigation Pane, click General Ledger and then select General Journals.

2. In the Batch Name field, click the drop-down list and select Default. 3. Click OK. 4. Delete existing lines, if any. 5. Open the Choose Column feature and add the VAT Amount and

VAT Difference fields. 6. In the Posting Date field, enter 01/25/10. 7. Ensure that the Account Type is set to G/L Account. 8. In the Account No. field, enter 8120. 9. In the Amount field, enter 800. 10. Notice that the VAT Amount field contains 160.00. Change this

amount to 163. 11. Press TAB or ENTER; a message appears, stating that the VAT

Difference must not be more than 2. 12. In the VAT Amount field, enter 162. 13. Press TAB or ENTER. 14. Review the amount in the VAT Difference field and close the

General Journal window.



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Lab 8.1 - Adjust a VAT Amount in a Sales Document Scenario

A purchase order from customer 20000, Selangorian Ltd., was received for sales order 101017. The customer has agreed to pay the full amount of the sales order, however, the customer has calculated VAT slightly higher than the calculation on the sales order. The calculated VAT amount is 277.27; the customer has calculated the VAT amount as 280.21.

To speed up the sales order process, you set up a maximum VAT correction amount of 3.00 and enable VAT differences on sales documents. After setup is complete, you change the VAT amount on the sales order.

Challenge Yourself!

1. Set up Microsoft Dynamics NAV 2009 to adjust VAT amounts for sales documents, as specified in the scenario.

2. Adjust the VAT amount on sales order 101017 as specified in the scenario.

Need a Little Help?

1. Open the General Ledger Setup window. 2. Set the maximum VAT difference as specified in the scenario. 3. Open the Sales & Receivables Setup window. 4. Allow the VAT difference for sales documents. 5. Open the Sales Order window and locate order 101017. 6. Open the Sales Order Statistics window. 7. Click the Invoicing FastTab and enter the adjusted VAT amount as

specified in the scenario.

Step by Step

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance and then General Ledger Setup.

2. In the Max. VAT Difference Allowed field, enter 3. 3. Close the General Ledger Setup window. 4. Click Sales & Receivables Setup. 5. Place a check mark in the Allow Vat Difference check box. 6. Close the Sales & Receivables Setup window. 7. On the Navigation Pane, click Sales & Marketing, click Order

Processing and then select Sales Orders. 8. Locate and select order 101017.



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9. Click Statistics. 10. Click the Invoicing FastTab. 11. Click the No. of VAT Lines 1 field. 12. In the VAT Amount field in the lines, enter 280.21. 13. Click OK. 14. Close the Sales Order Statistics window.



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Lab 8.2 - Adjust a VAT Amount in a Purchase Journal Scenario

An expense for vehicle maintenance is received. As the accounts payable coordinator at CRONUS International Ltd., you typically post these expenses using the Purchase Journal instead of creating an invoice.

In the past, these invoices have contained large differences in VAT calculations. Therefore, before you enter the expense, you set a 10.00 maximum VAT difference allowance and then verify that both the purchase journal and Purchase area are set up to adjust VAT amounts.

The journal line includes the following information:

• Batch: Default • Posting Date: 01/28/10 • G/L account: 8530 • Amount: 210.17 • Adjusted VAT amount: 51.49

You do not have to enter a balancing account or post the journal.

HINT: It may be necessary to show the VAT Amount and VAT Difference fields on the Purchase Journal.

Challenge Yourself!

1. Set up Microsoft Dynamics NAV 2009 to adjust VAT amounts for purchase journals and purchases, as specified in the scenario.

2. Create the expense and adjust the VAT amount as specified in the scenario.

Need a Little Help?

1. Open the General Ledger Setup window. 2. Set the maximum VAT difference as specified in the scenario. 3. Open the Journal Templates window. 4. Allow VAT differences for the purchases journal template. 5. Open the Purchases & Payables Setup window. 6. Allow VAT differences for purchases. 7. Open the Purchase Journal window. 8. Show the VAT Amount and VAT Difference fields, if necessary. 9. Enter the expense line as specified in the scenario.



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Step by Step


2. In the Max. VAT Difference Allowed field, enter 10. 3. Close the General Ledger Setup window. 4. On the Navigation Pane, click General and then select Journal

Templates. 5. Select the Purchases journal template and add a check mark in the

Allow VAT Difference check box. 6. Click Yes to update all related general journal batches. 7. Close the Journal Templates window. 8. On the Navigation Pane, click Finance, and then select Purchases &

Payables Setup. 9. Add a check mark in the Allow Vat Difference check box. 10. Close the Purchases & Payables Setup window. 11. On the Navigation Pane, click Purchase, click Order Processing,

and then select Purchase Journals. 12. Ensure that the Default batch is selected. 13. Open the Choose Column feature and add the VAT Amount and

VAT Difference fields. 14. In the Posting Date field, enter 01/28/10. 15. Ensure that the Account Type is set to G/L Account. 16. In the No. field, enter 8530. 17. In the Amount field, enter 210.17. 18. In the VAT Amount field, enter 51.49. 19. Press TAB or ENTER. 20. Review the amount in the VAT Difference field.



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Import VAT The process of recording Import VAT involves posting a document where the whole amount is treated as VAT. Import VAT is recorded when a VAT invoice is received from tax authorities for imported goods.

Demonstration: Set Up and Post Import VAT

Scenario: April, the accounts payable coordinator at CRONUS International Ltd., posts a purchase invoice in the amount of 100,000.00 LCY for imported goods. This invoice is posted with a VAT % of zero.

When the VAT invoice from the tax authorities arrives, it shows a calculated import VAT amount of 25 percent of the invoice amount (25,000.00 LCY). Therefore, when the VAT invoice is paid, a VAT ledger entry must be created by using the VAT base of zero (0) and the VAT amount of LCY 25,000.00.

The first step is to set up a general ledger account and the VAT Posting Setup to accommodate the Import VAT. Import VAT is then posted using either a journal or purchase invoice. In this demonstration, both posting options are explored.

Steps: Set Up and Post Import VAT

Set up the following to record Import VAT using a general journal:

• G/L Account • VAT Product Posting Group • VAT Posting Setup combination for Import VAT

To set up the VAT Product Posting Group for Import VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration click Application Setup, click Finance, click Financial Management, click VAT Posting Group, and then select VAT Product Posting Groups.

2. Click New. 3. In the Code field, enter IMPVAT. 4. In the Description field, enter Import VAT. 5. Close the VAT Product Posting Group window.

To set up the G/L account for Import VAT, follow these steps:

1. On the Navigation Pane, click Financial Management, click General Ledger and then select Chart of Accounts.

2. Click New. 3. In the No. field, enter 5650. 4. In the Name field, enter Import VAT 25%.



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5. In the Income/Balance field, click the drop-down list and select Balance Sheet.

6. On the Posting FastTab, in the General Posting Type field, click the drop-down list and select Purchase.

7. In the VAT Bus. Posting Group field, click the drop-down list and select National.

8. In the VAT Prod. Posting Group field, click the drop-down list and select IMPVAT.

9. Click OK. 10. Click Indent Chart of Accounts. 11. Click Yes to continue with the indent function.

To set up the VAT Posting Setup for Import VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management menu, click VAT Posting Group, and then select VAT Posting Setup.

2. Click New. 3. In the VAT Bus. Posting Group field, click the drop-down list and

select National. 4. In the VAT Prod. Posting Group field, click the drop-down list and

select IMPVAT. 5. Leave the VAT % field set to zero (0). 6. In the VAT Calculation Type field, click the drop-down list and

select Full VAT. 7. In the Purchase VAT Account field, enter 5650.

No other fields have to be populated in this card.

To record Import VAT with using a general journal, follow these steps:


2. In the Batch Name field, click the drop-down list and select Cash. 3. Click OK. 4. In the Posting Date field, enter 01/24/10. 5. In the Account Type field, click the drop-down list and select G/L

Account. 6. In the Account No. field, enter 5650. 7. In the Amount field, enter 25000. 8. Click Post. 9. Click Yes to post the journal lines. 10. Click OK.



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NOTE: When you are posting full VAT amounts using journals, only fill in the G/L account number, Gen. Posting Type, VAT Bus. Posting Group and VAT Prod. Posting Group, and the balancing account.

When you set up the default Gen. Posting Type, VAT Bus. Posting Group, and VAT Prod. Posting Group on the G/L account, all the information that is needed for posting the full VAT amount is automatically filled in when the G/L account is entered in the journal.

To review the posted journal entries, follow these steps:

1. On the Navigation Pane, click Financial Management, click General Ledger and then select Chart of Accounts.

2. Locate and select G/L account 5650. 3. Click Ledger Entries. 4. Open the Choose Column feature and add the VAT Amount field. 5. Click OK.

Microsoft Dynamics NAV 2009 created two balancing entries for account 5650:

• The first line displays: o 0.00 in the Amount field o 25,000.00 in the VAT Amount field

• The second line displays:

o 25,000.00 in the Amount field o 0.00 in the VAT Amount field

To review the VAT entries, follow these steps:

1. On the General Ledger Entries window, click Navigate. 2. Click the VAT Entry line and then click Show.

In the VAT Entries window, the Base field is 0.00 and the Amount field is 25,000.00. This VAT entry is equal to the first G/L entry. Notice that entries with the Base field set to 0.00 are only created from entries posted with a VAT Calculation Type of Full VAT.

When using a purchase invoice to record Import VAT, you are required to perform additional setup, including:

• Import authority vendor • General Product Posting Group • General Posting Setup combination for Import VAT

For this part of the demonstration, the G/L account that was created for Import VAT (5650) and the VAT Product Posting Group (IMPVAT) are used.



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To set up the vendor for use with Import VAT, follow these steps:


2. Click New. 3. In the No. field, enter Import VAT. 4. In the Name field, enter Import VAT Authority for Demo. 5. Click the Invoicing FastTab. 6. In the Gen. Bus. Posting Group field, click the drop-down list and

select National. 7. Click OK and ENTER. Notice that the VAT Bus. Posting Group is

automatically populated with National. 8. In the Vendor Posting Group field, click the drop-down list and

select Domestic. 9. Click OK and ENTER. 10. Close the Vendor Card window.

To set up the General Product Posting Group and G/L account for Import VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Posting Groups, and then select Gen. Product Posting Groups.

2. Click New. 3. In the Code field, enter IMPORTVAT. 4. In the Description field, enter Import VAT. 5. In the Def. VAT. Prod. Posting Group field, click the drop-down

list and select IMPVAT. 6. Click OK 7. Click Yes to all messages. 8. Close the Gen. Product Posting Groups window. 9. On the Navigation Pane, click Financial Management, click

General Ledger and then select Chart of Accounts. 10. Locate and select account 5650. 11. On the Posting FastTab, in the Gen. Prod. Posting Group field,

click the drop-down list and select IMPORTVAT. 12. Close the G/L Account window.



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To set up the General Posting Setup for Import VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Posting Groups, and then select General Posting Setup.

2. In the Gen. Bus. Posting Group field, click the drop-down list and select National.

3. In the Gen. Prod. Posting Group field, click the drop-down list and select IMPORTVAT.

4. In the Purchase Account field, enter 5650. 5. Close the General Posting Setup window.

To post the purchase invoice to record Import VAT, follow these steps:

1. On the Navigation Pane, click the Departments button, click Purchase, click Order Processing, and then select Purchase Invoices.

2. Click New. 3. In the Buy-from Vendor No. field, click the drop-down list. 4. Locate and select the Import VAT vendor. 5. In the Posting Date field, enter 01/30/10. 6. In the Vendor Invoice No. field, enter Demo. 7. In the lines, in the Type field, click the drop-down list and select G/L

Account. 8. In the No. field, enter 5650. 9. In the Quantity field, enter 1. 10. In the Direct Unit Cost Excl. VAT field, enter 25000. 11. Click Post. 12. Click Yes to post the invoice. 13. Close the Purchase Invoice window.


1. On the Financial Management menu, click General Ledger and then select Chart of Accounts.

2. Locate and select G/L account 5650. 3. Click Ledger Entries. 4. Open the Choose Column feature and add the VAT Amount field. 5. Click OK.

There are now four entries in the General Ledger Entries window. The two entries posted on 01/30/10 for the new posted purchase invoice resemble the two entries posted on 01/24/10 from the journal.



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To review the VAT entries for the posted purchase invoice, follow these steps:

1. On the General Ledger Entries window, click one of the entries dated 01/30/10 and then click Navigate.

2. Click the VAT Entry line and then click Show.

In the VAT Entries window, the Base field is 0.00 and the Amount field is 25,000.00. This VAT entry is equal to the first G/L entry for the posted invoice.

NOTE: When posting purchases documents, you must enter a Gen. Business Posting Group and a Gen. Prod. Posting Group; otherwise, the document cannot be posted. In addition, you must specify the import VAT G/L account number, Gen. Posting Type, VAT Bus. Posting Group, and VAT Prod. Posting Group for Microsoft Dynamics NAV 2009 to post a full VAT amount.

Test Your Knowledge: Import VAT


1. Import VAT is posted by using either a journal or a ________ invoice.

2. Import VAT is recorded when a VAT invoice is received from tax authorities for ________ goods.

3. Recording Import VAT is the process of posting a document where the ______ amount is treated as VAT.

VAT Correction In Microsoft Dynamics NAV 2009, corrections can be made to posted VAT entries using a process that changes the total sales or purchase VAT amounts without changing the VAT base. This process is used, for example, when an invoice is received from a vendor who has calculated VAT incorrectly.

The correction process includes a:

• Purchase VAT and Payables G/L accounts setup for Direct Posting • Correction VAT Posting Setup with a VAT Calculation Type of

Full VAT • General Journal

NOTE: Minimal VAT Posting Group combinations are set up in the "Set Up and Post a VAT Correction" demonstration.



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Demonstration: Set Up and Post a VAT Correction

Scenario: April, the accounts payable coordinator at CRONUS International Ltd., posts a purchase invoice with an amount excluding VAT of 1,000.00, using 25 percent VAT. With the VAT25 posting combination, the following entries are made:

• 1,250.00 credit to both the relevant vendor account and the payables account.

• 250.00 debit to the purchase VAT account.

April later receives the vendor invoice, stating that the amount including VAT amount is 1240.00. Therefore, a 10.00 correction must be posted. April contacts Cassie, the accountant, to make the correction.

Because this is the first VAT correction needed at CRONUS International Ltd., Cassie sets up the following to prepare for the correction process:

• Purchase VAT 25% account and the Vendor, Domestic payables account are set up for Direct Posting.

• Correction VAT Product Posting Group is created. • VAT Posting Setup combination for National (domestic) vendors

and the Correction VAT Product Posting Group is created, for Full VAT, with a zero VAT %.

As soon as the setup is complete, she posts the correction using a general journal and then reviews the posting. As soon as the posting and review are complete, she removes the Direct Posting capabilities on the G/L accounts.

Steps: Set Up and Post a VAT Correction

To set up the G/L account and VAT posting groups for this demonstration, follow these steps:


2. Locate and select G/L account 5410. 3. Click the Direct Posting check box to insert a check mark. 4. Locate G/L account 5630. 5. Click the Direct Posting check box to insert a check mark. 6. In the Navigation Pane, click Administration, click Application

Setup, click Financial Management, click VAT Posting Group, and then select VAT Product Posting Groups.

7. Click New. 8. In the Code field, enter Correct. 9. In the Description field, enter VAT corrections.



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10. With the new line selected, click Setup. 11. In the VAT Bus. Posting Group field, click the drop-down list and

select National. 12. In the VAT Calculation Type field, click the drop-down list and

select Full VAT. 13. In the Purchase VAT Account field, enter 5630. 14. Click OK. 15. Click OK.

To post a VAT correction for this demonstration, follow these steps:

1. On the Navigation Pane, click Financial Management, click General Ledger, and then select General Journals.

2. In the Batch Name field, click the drop-down list and select Default. 3. Click OK. 4. Delete any existing journal lines. 5. Open the Choose Column feature and add VAT Bus. Posting

Group and VAT Prod. Posting Group. 6. In the Posting Date field, enter 01/01/10. 7. In the Account No. field, enter 5650. 8. In the Amount field, enter -10.00. 9. In the Bal. Account No. field, enter 5410. 10. In the General Posting Type field, click the drop-down list and

select Purchase. 11. In the VAT Bus. Posting Group field, click the drop-down list and


select Correct. 13. Click Post. 14. Click Yes to post the journal. 15. Click OK. 16. Close the General Journals window.

To view the VAT correction entries, follow these steps:

1. In the General Ledger folder, under History, select G/L Registers. 2. Press CTRL+END to move to the last entry. 3. Click General Ledger. 4. Open the Choose Column feature and add the VAT Amount field. 5. Click OK.



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When the general journal was posted, the following entries were created:

• 10.00 credit to the VAT Amount (VAT Entry credit) • 10.00 credit to the Purchase VAT Account • 10.00 debit to the Payables Account

To review the VAT Entry credit, follow these steps:

1. With any line in the General Ledger Entries window, click Navigate.

2. Click the VAT Entry line and then click Show. The 10.00 VAT Entry credit appears.

3. Close the VAT Entries, Navigate and General Ledger Entries windows.

To remove the direct posting capabilities on the G/L accounts, follow these steps:


2. Locate and select G/L account 5410. 3. Click the Direct Posting check box to remove the check mark. 4. Locate G/L account 5630. 5. Click the Direct Posting check box to remove the check mark. 6. Close the G/L Account Card window.

Test Your Knowledge: VAT Correction

Which of the following are included in the VAT Correction process? (Select all that apply)

( ) Correction VAT Posting Setup with a VAT Calculation Type of Normal VAT.

( ) Purchase VAT and Payables G/L accounts set up for Direct Posting. ( ) General Journal ( ) Correction VAT Posting Setup with a VAT Calculation Type of Full

VAT.



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What must be done after correcting posted VAT entries?

VAT Statements The VAT statement is used to specify the basis for calculating the VAT payable to the tax authorities. Created in the VAT Statement window, the VAT statement is defined based on:

• Accounts in the Chart of Accounts window. • Entries in the VAT Entries window.

The advantage of using the VAT entries is that you can close these entries by posting the VAT settlement. When working with VAT entries, you can locate VAT correction entries in previous accounting periods, where the VAT statement is done.

In Microsoft Dynamics NAV 2009, the VAT statement:

• Is typically only defined during the initial company setup. • Is set up with the format required by the tax authorities. • Can be previewed and printed after it is defined.

VAT Statement Templates and Names

When multiple VAT Statements are needed:

• Different kinds of VAT Statements are created in the VAT Statement Templates window.

• If different VAT Statements are created based on the same template, different names are created in the VAT Statement Names window.



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To create a VAT Statement Template, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click General, and then select VAT Statement Templates.

2. In the Name field, enter a unique name for the template. 3. In the Description field, enter a short description of the template.

To assign statements to a template, follow these steps:

1. On the VAT Statement Templates window, select the relevant template.

2. Click Related Information, point to Template, and then select Statement Names.

3. In the Name field, enter a unique name for the statement. 4. In the Description field, enter a short description of the statement. 5. Close the VAT Statement Names and VAT Statement Templates

windows.

The VAT Statement is now defined in the VAT Statement window.

VAT Statement

The VAT Statement window is used to calculate the VAT settlement amount for a specific period. The purpose of defining the VAT Statement window is to determine how the statement is calculated and appears when it is printed.

On the lines in the VAT Statement window, specify the information to be printed and how financial figures are totaled. You can set up several VAT statements for different purposes.

FIGURE 8.1 VAT STATEMENT



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The fields on the VAT Statement window are:

• Name - accesses the VAT Statement Names window. New statement names can be set up or existing statements can be selected.

• Description - a description of the VAT statement line. It is recommended to use the description from the customs and tax authorities' VAT statement form.

• Type - determines what the VAT statement line includes. The options are as follows: o Account Totaling: Used when VAT is totaled using G/L

Account entries. If selected, the Account Totaling field must be filled in with the G/L account range to total.

o VAT Entry Totaling: Used when VAT is totaled using VAT entries. If selected, the following fields must be filled in: - Gen. Posting Type - VAT Bus. Posting Group - VAT Prod. Posting Group - Amount Type

o Row Totaling: Used to define the totaling of other rows in the VAT statement. If selected, the Row Totaling field must be filled in with the row range to total.

o Description: Used when the row is to contain only text or symbols, for example, a dotted line.

• Account Totaling - if Account Totaling is selected in the Type field, specify the G/L account interval or a series of G/L account numbers to be included in the row total.

• General Posting Type, VAT Bus. Posting Group, and VAT Prod. Posting Group - if VAT Entry Totaling is selected in the Type field, in each field, specify the appropriate value for the row. These fields determine which VAT entries from the VAT Entry table are totaled.

• Amount Type -if VAT Entry Totaling is selected in the Type field, specify whether the totaling of VAT entries will consist of VAT amounts or the amounts on which the VAT is based. The options are as follows: o Blank: No amount is totaled. o Amount: The VAT Amount in the selected VAT entries is

totaled in the row. o Base: The Base Amount used to calculate the VAT in the

selected VAT entries is totaled in the row. o Unrealized Amount: The Unrealized VAT Amount in the

selected VAT entries is totaled in the row. o Unrealized Base: The Unrealized Base Amount used to

calculate the Unrealized VAT in the selected VAT entries is totaled in the row.



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• Row Totaling - if Row Totaling is selected in the Type field, specify the row-number interval or a series of row numbers to be included in the row total.

• Calculate With - Determines whether Microsoft Dynamics NAV 2009 reverses the sign of VAT entries when it performs calculations. The options are as follows: o Sign: Uses the sign of the VAT entry. o Opposite Sign: Uses the opposite sign of the VAT entry.

• Print - if selected, the row is printed on the VAT Statement. • Print With - determines whether amounts on the VAT statement are

printed with their original sign or with the sign reversed. The options are the same as in the Calculate With field.

• New Page - if selected, a new page begins immediately after this row when the VAT statement is printed.

NOTE: Regardless of whether Microsoft Dynamics NAV 2009 treats individual amounts as debit or credit amounts, by selecting Opposite Sign in this field, you can print all amounts on the VAT statement with a positive sign.

Demonstration: Define, Preview, and Print a VAT Statement

Scenario: Phyllis, the accounting manager at CRONUS International Ltd., has to set up a new VAT statement for European tax authorities. Based on the tax authorities' requirement, this statement includes the following:

• One description row heading • One blank row • Three statement rows:

o Two for calculating VAT entries on 10 percent and 25 percent VAT

o One for totaling the VAT entry rows

After setting up the VAT statement, Phyllis runs a preview to confirm the setup and then prints the statement.

Steps: Define, Preview, and Print a VAT Statement

To create a VAT Statement using VAT entries, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click VAT, and then select VAT Statements.

2. In the Name field, click the drop-down list to create a VAT statement.



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3. Click New. 4. In the Name field, enter VAT Europe. 5. In the Description field, enter VAT Statement for Europe. 6. Click OK . 7. On the first line, in the Description field, enter Monthly VAT

Settlement. 8. In the Type field, click the drop-down list and select Description. 9. Skip the next line to create a blank line. 10. In the third line, in the Row No. field, enter REV1. 11. In the Description field, enter VAT Revenue Domestic 25%. 12. In the Type field, click the drop-down list and select VAT Entry

Totaling. 13. In the General Posting Type field, click the drop-down list and

select Sale. 14. In the VAT Bus. Posting Group field, click the drop-down list and


select VAT25. 16. In the Amount Type field, click the drop-down list and select

Amount. 17. Do not change the defaults in the remaining fields.

To enter the fourth and fifth line, follow these steps:

1. Click the next line. 2. In the Row No. field, enter REV2. 3. In the Description field, enter VAT Revenue Domestic 10%. 4. In the Type field, click the drop-down list and select VAT Entry

Totaling. 5. In the General Posting Type field, click the drop-down list and

select Sale. 6. In the VAT Bus. Posting Group field, click the drop-down list and


select VAT10. 8. In the Amount Type field, click the drop-down list and select

Amount. 9. Do not change the defaults in the remaining fields. 10. Click the next line. 11. In the Row No. field, enter REV3. 12. In the Description field, enter VAT Revenue Domestic. 13. In the Type field, click the drop-down list and select Row Totaling. 14. In the Row Totaling field, enter REV1..REV2. 15. Do not change the defaults in the remaining fields.



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To view a calculated VAT Statement before printing it, in the VAT Statement window, click Related Information, point to VAT Statement, and then select Preview.

FIGURE 8.2 VAT STATEMENT PREVIEW

On the General FastTab of the VAT Statement Preview window, specify which:

• VAT statement to preview • VAT entries must be included in the calculations

These selections determine the lines that are contained in the actual statement and the lines that appear in the preview.

On lines where the Type field contains VAT Entry Totaling, you can access the individual entries that make up the sum in the Column Amount field by clicking the drop-down list.

Periodically, a printed statement detailing the VAT transactions must be provided to the tax authorities. To print the VAT Statement, follow these steps:

1. In the VAT Statement window, with the relevant batch to print selected, click Actions, point to Functions, and then select Print.

2. Click the Options FastTab: o Specify the statement period in the Starting Date and Ending

Date fields. o Filter by VAT Entry type to print: o Totals based on any combination of Open and/or Closed VAT

Entries.



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o Entries inside or outside the period. o Round the report to whole numbers. o Print in additional currency.

3. Click the VAT Statement Line FastTab. 4. Filter the printed row numbers as needed. 5. Click Preview to review the statement, or Print to print the

statement. 6. Close the open windows.

FIGURE 8.3 VAT STATEMENT



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VAT Settlement Periodically, the net VAT must be remitted to the tax authorities. To calculate this amount, run the Calc. and Post VAT Settlement batch job. This batch job:

• Calculates VAT settlement of open VAT entries in previous accounting periods.

• Finds all the VAT entries in the VAT Entry window-for every VAT Posting Group combination-that are included in the filters in the batch job.

• Can be used to start the posting process or to print a test report. • Can be run as frequently as needed.

Running the Calc. and Post VAT Settlement Batch Job

To run the Calc. and Post VAT Settlement batch job, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click VAT, and then select Calc. and Post VAT Settlement.

2. In the Starting Date and Ending Date fields, define the date range for the VAT entries to be settled.

3. In the Posting Date field, define the posting date for the settlement. 4. In the Document No. field, enter a unique number. This field is

required to run the batch job. 5. In the Settlement Account field, click the drop-down list and select

the G/L account that the net of the Purchase and Sales VAT entries are transferred to.

6. In the Show VAT Entries check box: o Click to insert a check mark to display all VAT entries used to

calculate each VAT Posting Group settlement amount. o Leave unchecked to display only the total settlement for each

VAT Posting Group.

7. In the Post check box, when printing or previewing the batch job: o Click to insert a check mark to post the transfer to the VAT

settlement account automatically. o Leave unchecked to print a test report.



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8. Click to insert a check mark in the Show Amounts in Add. Reporting Currency check box for report amounts to be shown in the additional reporting currency.

9. On the VAT Posting Setup FastTab, filter on VAT Business or Product Posting Groups to be included in the batch job, as needed.

FIGURE 8.4 CALC. AND POST VAT SETTLEMENT

To preview or print the report, follow these steps:

1. Click Preview to review the report, or click Print to print the VAT Settlement.

2. If the Post check box was checked, a message is displayed that asks whether VAT Settlement has to be calculated and posted. o Click Yes to continue posting. o Click No to prevent posting.

3. Close the Print Preview window.

VAT Settlement Posting Results

Posting the Calc. and Post VAT Settlement batch job:

• Closes open VAT entries. • Transfers purchase and sales VAT amounts to the VAT settlement

account.



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When VAT entries are closed:

• The Closed field on the VAT Entry is selected. • The entry number of the settlement entry that closed the VAT entry

is inserted automatically in the Closed by Entry No. field. This occurs only when the amount must be transferred between G/L accounts.

When a VAT amount is transferred to a VAT settlement account:

• The account for purchase VAT is credited and the account for sales VAT is debited with the amount from the VAT statement period.

• The account for VAT settlement is credited with the net amount (or, if the purchase VAT amount is larger, it is debited).

NOTE: As soon as VAT entries are posted and their status is closed, they cannot be reopened. However, VAT reports can be created from these closed entries.

Test Your Knowledge: VAT Settlement

1. Which of the following are true of the Calc. and Post VAT Settlement batch job? (Select all that apply)

( ) Can be used to start the posting process or to print a test report. ( ) Calculates VAT settlement of open VAT entries in previous

accounting periods. ( ) Is run one time each month. ( ) Finds all the VAT entries in the VAT Entry window—for every VAT

Posting Group combination—that are included in the filters in the batch job.

2. What occurs when the Calc. and Post VAT Settlement batch job is posted? (Select all that apply)

( ) Purchase and sales VAT amounts are transferred to the VAT settlement account.

( ) A Posted VAT Settlement report is printed. ( ) VAT entries are closed. ( ) The entry number of the settlement entry that closed the VAT entry is

inserted in the Closed by Entry No. field for amounts that are transferred between G/L accounts.



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Intrastat Reporting All EU businesses must report their trade with other EU countries. Each company within the EU is responsible for:

• Reporting the movement of goods to their statistics authorities every month.

• Delivering the report to their tax authorities.

In Microsoft Dynamics NAV 2009, this EU trade reporting is known as Intrastat Reporting. The Intrastat Journal is used to complete periodic Intrastat reports.

Set Up Intrastat For posted item entries to contain the necessary information when imported into the Intrastat Journal line, the following must be set up:

• Tariff Numbers • Transactions Types • Transport Methods

After each of these are set up:

• Tariff Numbers must be assigned on the Foreign Trade FastTab of each item.

• Transaction Types and Transport Methods must be assigned on the Foreign Trade FastTab of sales and purchase documents before posting.

Intrastat Journal Templates and Batches must also be set up before Intrastat can be reported.

Set Up Tariff Numbers

Customs and tax authorities have established eight-digit item codes for various items. These codes are specified as Tariff Numbers.

To set up Tariff Numbers, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat and then select Tariff Numbers.

2. Press New to insert a new line. 3. In the No. field, enter the established eight-digit item code. 4. In the Description field, enter the established description.



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5. Add a check mark in the Supplementary Units field if the customs and tax authorities require information about quantity and unit of measure for this item.

6. Repeat steps 2-5 for all items bought and sold.

FIGURE 8.5 TARIFF NUMBERS

Set Up Transaction Types

Each country/region has a set of codes for transaction types that are defined for Intrastat, such as:

• Ordinary purchase/sale • Exchange of returned goods • Exchange of non-returned goods

To set up Transaction Types, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat, and then select Transaction Types.

2. Click New to insert a new line. 3. In the Code field, enter the established transaction type code.



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4. In the Description field, enter the standard description established by the authorities in the relevant country/region.

5. Repeat steps 2-4 for all transaction types.

FIGURE 8.6 TRANSACTION TYPES

Set Up Transport Methods

There are seven one-digit codes for the transport methods that are defined for INTRASTAT:

• 1 for sea • 2 for rail • 3 for road • 4 for air • 5 for post • 7 for fixed installations • 9 for own propulsion (for example, transporting a car by driving it)



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When you are entering these methods in Microsoft Dynamics NAV 2009, these descriptions are not required. However, the descriptions must provide a similar meaning.

To set up Transport Methods, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat, and then select Transport Methods.

2. Click New to insert a new line. 3. In the Code field, enter the established one-digit transport methods

code. 4. In the Description field, enter a description of the transport method. 5. Repeat steps 2-4 for all transport methods.

FIGURE 8.7 TRANSPORT METHODS



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Additional Setup

In addition to Tariff Numbers, Transaction Types, and Transport Methods, the following can be set up for Intrastat reporting:

• Transaction Specifications are used to supplement the transaction type information and are also pre-established.

• Areas are used to supplement country/region information. • Entry/Exit Points are the locations where items from abroad are

shipped or received, for example, Heathrow Airport.

This information is also copied from the posted item entries when the Intrastat Journal is created.

To set up Transaction Specifications, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat, and then select Transaction Specifications.

2. Click New to insert a new line. 3. In the Code field, enter the established transaction specification

code. 4. In the Text field, enter the established description of the transaction

specification. 5. Repeat steps 2-4 for all transaction specifications. 6. Close the Transaction Specifications window.

To set up Entry/Exit Points, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat, and then select Entry/Exit Points.

2. Click New to insert a new line. 3. In the Code field, enter a code representing a location used as

shipping points. 4. In the Description field, enter a description that specifies the

location. 5. Repeat steps 2-4 for all entry/exit points. 6. Close the Entry/Exit Points window.

To set up Areas, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat, and then select Areas.

2. Click New to insert a new line.



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3. In the Code field, enter the established code for the area. 4. In the Text field, enter the description of the area. 5. Repeat steps 2-4 for all transaction specifications. 6. Close the Areas window.

As soon as Areas are set up, the system enters Transaction Specifications, Exit/Entry Points, and Areas on the Foreign Trade FastTab of sales and purchase documents before you post.

Set Up Country Codes

If you perform business with EU countries/regions, you must fill in the EU Country/Region Code and the Intrastat Code on the Countries/Regions window. Both codes use the ISO standard code for describing the countries/regions, such as:

• BE for Belgium • NL for Netherlands • DE for Germany

In addition, you must fill in the Intrastat Code because the Get Item Ledger Entries batch job in the Intrastat Journal retrieves only the entries that contain a country code with an Intrastat Code. Therefore, ensure that Intrastat codes are set up for the country codes used in the batch job.

To set up EU Country/Region and Intrastat codes on countries/regions, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click General, and then select Countries/Regions.

2. For each EU country where business is performed: 3. In the EU Country/Region Code field, enter the ISO standard code

for the country. 4. In the Intrastat Code field, enter the ISO standard code for the

country. 5. Close the Countries/Regions window.

Intrastat Journal Templates and Batches

The setup of the Intrastat Journal Batches is important because it determines the date filter for the entries to be reported. Intrastat Journal Batches are not similar in structure to other journal batches in Microsoft Dynamics NAV 2009.



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To set up an Intrastat Journal Template, follow these steps:

1. On the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Intrastat, and then select Intrastat Journal Templates.

2. In the Name field, enter a unique identifier for the template. 3. In the Description field, enter a short description.

To create an Intrastat Journal Batch, follow these steps

1. With the relevant template selected, click Related Information, point to Template, and then click Batches.

2. In the Name field, enter a unique identifier for the batch. 3. In the Description field, enter a short description. 4. In the Statistics Period field, enter the year and month period as a

four-digit code: YYMM. For example, 1001 represents January 2010.

5. In the Currency Identifier field, enter the currency of the Intrastat report. If this field is left blank, local currency is used.

6. If additional reporting currency is used: 7. Use the Show Column function to display the Amounts in Add.

Currency field. 8. Add a check mark in the Amounts in Add. Currency check box to

display the Intrastat report in additional reporting currency. 9. The Reported check box indicates whether the entries have been

reported to the tax authorities. A check mark is automatically inserted when the Intrastat - Make Disk Tax Auth. batch job is run, but can be removed to rerun the report.

10. Close the Intrastat Jnl. Batches and Intrastat Journal Templates windows.

NOTE: Because Intrastat is typically reported monthly, it is recommended that you set up 12 batches based on the same template, with a different Intrastat Journal Batch for each month.

Test Your Knowledge: Intrastat Setup

1. Which of the following must be set up to accurately report Intrastat? (Select all that apply)

( ) Tariff Numbers ( ) Transport Methods ( ) Transaction Types ( ) Transaction Specifications



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2. If business is performed with EU countries/regions, what must be set up on the related Country Codes? (Select all that apply)

( ) EU Country/Region Code ( ) EU Intrastat Code ( ) Country/Region Code ( ) Intrastat Code

3. In the Intrastat Journal Batches, how are Statistics Periods entered?

( ) MMYY ( ) YYMM ( ) YYDDMM ( ) DDMMYY

Report Intrastat The process of reporting Intrastat begins with filling in the Intrastat Journal and then selecting how to submit the reports to the required reporting authorities.

NOTE: Intrastat Journals are not posted; they are generated for reporting only.

Intrastat Journals

Intrastat Journals are populated using either of the following methods:

• Manually • Automatically with the Get Item Ledger Entries batch job

NOTE: The manual option is typically used to record G/L entries in addition to item ledger entries, such as service charges, freight costs, and landed costs.

To populate the Intrastat Journals with using the batch job, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click General Ledger, and then select Intrastat Journals.


3. Click OK. 4. Click Get Entries. The Get Item Ledger Entries batch job appears

with the Starting Date and Ending Dates populated based on the statistic period on the journal batch.

5. In the Cost Regulation % field, enter a percentage increase to the statistical value of each entry for freight and insurance costs.

6. Click OK.



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The Intrastat Journal is populated with the entries for the specified period

Submit Intrastat

As soon as the Intrastat Journal is populated, the following report options are available:

• Checklist Report - the Intrastat - Checklist report is a printed checklist to ensure that all information in the journal is correct.

• Form - the Intrastat - Form report contains all the information that is needed to complete the official Intrastat form provided by the tax authority in your country/region. A separate report must be printed for receipts and shipments.

• Make Diskette - in addition to completing the form, computer files that contains the transactions for the period must be provided to the tax authorities. The Intrastat - Make Disk Tax Auth. batch job is used to create the necessary files. A separate report must be printed for receipts and shipments. As soon as the batch job is run, the Reported field contains a check mark for the related batch in the Intrastat Journal Batch window and the Internal Reference Number field on every journal line in the batch is filled in.

It is recommended that you use each function in the order it appears.

Print Checklist Reports Option

To print the Checklist Report option, follow these steps:


2. With the journal filled in, click Checklist Report. 3. Click the Options FastTab. 4. Add a check mark in the Show Intrastat Journal Lines field to list

the Intrastat journal lines. 5. Click Print to print the report.

The Checklist Report contains:

• The same information as in the diskette file. • Totals for each combination of Tariff Number, Country/Region

Code, Transaction Type, and Transport Method.



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Print to Form Option

To print the form option, follow these steps:


2. With the journal filled in, click Form. 3. Click the Intrastat Jnl. Line FastTab. 4. In the Filter field for the Type line, click the drop-down list to select

either Receipt or Shipment. If left blank, the default type is Receipt. 5. Click Print to print the report.

If both sales and purchase transactions are reported, a separate form must be completed for each type so that the report must be printed twice.

Make Diskette Option

To make the diskette, follow these steps:


2. With the journal filled in, click Make Diskette. 3. Click the Options FastTab. 4. In the File Name field, enter the disk drive, path, and file name. If

the field is left blank, Microsoft Dynamics NAV 2009 prints to drive A: and names the file intrastat.

5. Click OK to make the disk.

Test Your Knowledge: Reporting Intrastat

Put the following steps in order: Process of reporting Intrastat in Microsoft Dynamics NAV 2009.

Step:

_____: Make the Diskette.

_____: Print the Intrastat - Form.

_____: Print the Checklist Report.

_____: Open the Intrastat Journal.

_____: Manually add G/L entries.

_____: Run the Get Item Ledger Entries batch job.



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Summary When doing business with EU countries, VAT and Intrastat must be reported.

The system can automatically calculate VAT amounts for sales, purchases and import.

Microsoft Dynamics NAV 2009 can run all the necessary reports related to VAT and Intrastat.

To accurately report VAT and Intrastat to the appropriate authorities, it is important to understand the reporting capabilities that are available in Microsoft Dynamics NAV 2009.



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Test Your Knowledge 1. Which setup requirement for Intrastat includes seven predefined one-digit

codes?

( ) Tariff Numbers ( ) Transaction Types ( ) Transport Methods ( ) Transaction Specifications

2. Where are Tariff Numbers specified after setup?

( ) On the Foreign Trade FastTab of each item. ( ) On the Foreign Trade FastTab of each customer. ( ) On the Foreign Trade FastTab of each vendor. ( ) On the Foreign Trade FastTab of each sales or purchase document.

3. What is required to adjust VAT amounts in sales and purchase documents? (Select all that apply)

( ) The VAT difference must be allowed for sales and purchases. ( ) A maximum VAT correction amount allowed must be specified. ( ) The Invoicing FastTab must be selected on the Sales Order Statistics

or Purchase Order Statistics window. ( ) A minimum VAT correction amount allowed must be specified.

4. Which of the following are true about VAT Statements? (Select all that apply)

( ) They are set up with the format required by the tax authorities ( ) They are used to specify the basis for calculating the VAT payable to

the tax authorities. ( ) They are defined based on entries in the VAT Entries window and

accounts in the Chart of Accounts window. ( ) They are set up and defined monthly.



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1.

2.

3.



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Solutions Display VAT Amounts in Sales and Purchase Documents

Test Your Knowledge: Prices Including VAT Setup

1. Where can you set up Prices Including VAT? (Select all that apply)

( ) G/L Accounts (√) Customer and Vendor Cards (√) Sales and Purchase Documents (√) Item Cards

2. Regarding the Prices Including VAT check box, which of the following causes the Unit Price on the Item Card to be copied to the Unit Price Incl. VAT field on the sales lines?

( ) Prices Including VAT check box does not contain a check mark in either the Item Card or Sales Header.

(•) Prices Including VAT check box contains a check mark on both the Item Card and Sales Header.

( ) Prices Including VAT check box contains a check mark on the Item Card, but does not contain a check mark in the Sales Header.

( ) Prices Including VAT check box does not contain a check mark on the Item Card, but does contain a check mark in the Sales Header.

3. What field must also be filled in if the Prices Including VAT check box contains a check mark on the Item Card?

( ) VAT Amount ( ) VAT Prod. Posting Gr. (Price) (•) VAT Bus. Posting Gr. (Price) ( ) Unit Price Incl. VAT

Import VAT

Test Your Knowledge: Import VAT


1. Import VAT is posted by using either a journal or a purchase invoice.



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2. Import VAT is recorded when a VAT invoice is received from tax authorities for imported goods.

3. Recording Import VAT is the process of posting a document where the all amount is treated as VAT.

VAT Correction


Which of the following are included in the VAT Correction process? (Select all that apply)

( ) Correction VAT Posting Setup with a VAT Calculation Type of Normal VAT.

(√) Purchase VAT and Payables G/L accounts set up for Direct Posting. (√) General Journal (√) Correction VAT Posting Setup with a VAT Calculation Type of Full

VAT.


What must be done after correcting posted VAT entries?

MODEL ANSWER:

The Direct Posting capabilities must be removed from the Purchase VAT and Payables G/L accounts.

VAT Settlement

Test Your Knowledge: VAT Settlement

1. Which of the following are true of the Calc. and Post VAT Settlement batch job? (Select all that apply)

(√) Can be used to start the posting process or to print a test report. (√) Calculates VAT settlement of open VAT entries in previous

accounting periods. ( ) Is run one time each month. (√) Finds all the VAT entries in the VAT Entry window—for every VAT

Posting Group combination—that are included in the filters in the batch job.



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2. What occurs when the Calc. and Post VAT Settlement batch job is posted? (Select all that apply)

(√) Purchase and sales VAT amounts are transferred to the VAT settlement account.

( ) A Posted VAT Settlement report is printed. (√) VAT entries are closed. (√) The entry number of the settlement entry that closed the VAT entry is

inserted in the Closed by Entry No. field for amounts that are transferred between G/L accounts.

Set Up Intrastat

Test Your Knowledge: Intrastat Setup

1. Which of the following must be set up to accurately report Intrastat? (Select all that apply)

(√) Tariff Numbers (√) Transport Methods (√) Transaction Types ( ) Transaction Specifications

2. If business is performed with EU countries/regions, what must be set up on the related Country Codes? (Select all that apply)

(√) EU Country/Region Code ( ) EU Intrastat Code ( ) Country/Region Code (√) Intrastat Code

3. In the Intrastat Journal Batches, how are Statistics Periods entered?

( ) MMYY (•) YYMM ( ) YYDDMM ( ) DDMMYY



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Report Intrastat

Test Your Knowledge: Reporting Intrastat

Put the following steps in order: Process of reporting Intrastat in Microsoft Dynamics NAV 2009.

Step:

6 : Make the Diskette.

5 : Print the Intrastat - Form.

4 : Print the Checklist Report.

1 : Open the Intrastat Journal.

3 : Manually add G/L entries.

2 : Run the Get Item Ledger Entries batch job.

Test Your Knowledge

1. Which setup requirement for Intrastat includes seven predefined one-digit codes?

( ) Tariff Numbers ( ) Transaction Types (•) Transport Methods ( ) Transaction Specifications

2. Where are Tariff Numbers specified after setup?

(•) On the Foreign Trade FastTab of each item. ( ) On the Foreign Trade FastTab of each customer. ( ) On the Foreign Trade FastTab of each vendor. ( ) On the Foreign Trade FastTab of each sales or purchase document.

3. What is required to adjust VAT amounts in sales and purchase documents? (Select all that apply)

(√) The VAT difference must be allowed for sales and purchases. (√) A maximum VAT correction amount allowed must be specified. (√) The Invoicing FastTab must be selected on the Sales Order Statistics

or Purchase Order Statistics window. ( ) A minimum VAT correction amount allowed must be specified.



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4. Which of the following are true about VAT Statements? (Select all that apply)

(√) They are set up with the format required by the tax authorities (√) They are used to specify the basis for calculating the VAT payable to

the tax authorities. (√) They are defined based on entries in the VAT Entries window and

accounts in the Chart of Accounts window. ( ) They are set up and defined monthly.



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Chapter 9: Multicurrency

9-1

CHAPTER 9: MULTICURRENCY Objectives

The objectives are:

• Explain setup requirements for currencies and exchange rates when using multiple currencies.

• Explain setup requirements using multiple currencies with Customers, Vendors, and Bank Accounts.

• Review steps and additional functionality for processing Purchase and Sales documents that have foreign currency.

• Review steps and additional functionality when recording and posting multicurrency transactions in the Cash Receipts Journal.

• Review the steps for processing multicurrency payments using the Payments Journal.

• Review the process of running the Adjust Exchange Rates batch job for Customers, Vendors, and Bank Accounts.

• Explain set up, viewing amounts, daily processing, and periodic processes when using an Additional Reporting Currency.

• Explain the process of consolidations with companies using different currencies.

Introduction In today's global economy, many companies have to report results and process activity using multiple currencies. Microsoft Dynamics® NAV 2009 provides functionality to help companies with posting and correct valuating of transactions in multiple currencies, displaying general ledger results in multiple currencies, and consolidating companies that use different currencies.

Companies that are processing multiple currencies will benefit from knowing how to set up, process various transactions, implement additional reporting currency, and consolidate multiple currencies with Microsoft Dynamics NAV 2009.

Becoming familiar with these features allows businesses to streamline their ability to work with multiple currencies in a global market.



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Currency Card and Currency Exchange Rates Companies complete the initial setup for multicurrency functionality in Microsoft Dynamics NAV 2009 using the Currency Card and Currency Exchange Rates windows.

The Currency Card is where the basic parameters for the various currencies used by a company are established. The Currency Exchange Rate window is used to set up the exchange rates for a selected currency on specific dates.

Currency Card

Each currencies have a Currency Card. All currency cards are listed on the Currencies page.

The Currencies page can be accessed from the Navigation Pane in two ways:

• Click the Departments button, click Financial Management, click Periodic Activities, click Currency, and the select Currencies.

• Click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Currencies.



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To open the Currency Card, click New, locate and select an already existing Currency Card.

FIGURE 9.1 CURRENCY CARD

The information on the Currency Card is organized on a series of FastTabs. The setup involves:

• Providing basic information about the currency, including accounts that are used for posting gains and losses.

• Indicating rules for rounding amounts, invoices, and unit-amounts for multicurrency transactions.

• Selecting accounts for posting realized gains and losses when an Additional Reporting Currency is implemented.



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General FastTab

The General FastTab contains the following fields:

• Code - unique identifier for the currency. • Description - short description of the currency. • Unrealized Gains Acc. - identifies the G/L account number that is

used to post unrealized exchange rate gains when the Adjust Exchange Rates batch job is run.

• Realized Gains Acc. - identifies the G/L account that is used to post realized exchange rate gains. If an unrealized gain or loss was previously posted, the entry is reversed when the realized gain or loss is posted.

• Unrealized Losses Acc. - identifies the G/L account number that is used to post unrealized exchange rate losses when the Adjust Exchange Rates batch job is run.

• Realized Losses Acc. - identifies the G/L account that is used to post realized exchange rate losses. If an unrealized gain or loss was previously posted, the entry is reversed when the realized gain or loss is posted.

• EMU Currency - if this field is selected, the currency is an Economic and Monetary Union currency.

• Last Date Modified - automatically populated when changes are made to the fields for the currency.

• Last Date Adjusted - automatically populated when the Adjust Exchange Rates batch job is run.

• Payment Tolerance % - indicates the percentage a payment or refund can vary from the amount on a credit memo or invoice. Update the field by selecting Change Payment Tolerance.

• Max. Payment Tolerance Amount - indicates the maximum amount that a payment or refund can vary from the amount on a credit memo or invoice. Update the field by selecting Change Payment Tolerance.

Rounding FastTab

The Rounding FastTab contains the following fields:

• Invoice Rounding Precision - specifies the rounding precision used for this currency on invoices; for example, invoices may be rounded to the nearest whole number.

• Invoice Rounding Type - determines the rounding method that is used for invoices. The options are Nearest, Up, or Down. This field works with the Invoice Rounding Precision field.



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• Amount Rounding Precision - specifies the rounding precision used for the currency.

• Amount Decimal Places - specifies the number of decimal places displayed for the currency. The minimum and maximum number of decimal places are separated by a colon.

• Unit-Amount Rounding Precision - specifies the rounding precision used for unit prices for items on sales and purchase invoices.

• Unit-Amount Decimal Places - identifies the minimum and maximum number of decimal places used for the sales and purchase price of items and sales price of resources. The minimum and maximum number of decimal places are separated by a colon, for example 2:5.

• Appln. Rounding Precision - specifies the amount allowed for rounding differences when a payment entry in one currency is applied to entries in a different currency.

• Conv. LCY Rndg. Debit Acc. - identifies the debit account to use for rounding differences when the Insert Conv. LCY Rndg. Lines function is used in a general journal.

• Conv. LCY Rndg. Credit Acc. - identifies the credit account to use for rounding differences when the Insert Conv. LCY Rndg. Lines function is used in a general journal.

• Max. VAT Difference Allowed - identifies the maximum VAT correction amount allowed for the currency.

• VAT Rounding Type - determines how VAT is rounded for the currency. The options are Nearest, Up, or Down.

Reporting FastTab

The Reporting FastTab contains the following fields:

• Realized G/L Gains Account - specifies the G/L account that is used to post exchange rate gains for currency adjustments between the local currency (LCY) and the additional reporting currency. The exchange rate gains are calculated when the Adjust Exchange Rates batch job is run.

• Realized G/L Losses Account - specifies the G/L account that is used to post exchange rate losses for currency adjustments between LCY and the additional reporting currency. The exchange rate losses are calculated when the Adjust Exchange Rates batch job is run.

• Residual Gains Account - indicates the G/L account that is used to post residual gain amounts (rounding differences) when an additional reporting currency is used in the general ledger application area.

• Residual Losses Account - indicates the G/L account that is used to post residual loss amounts (rounding differences) when an additional reporting currency is used in the general ledger application area.



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Payment Tolerance

A function is available from Currencies or the Currency Card to modify the Payment Tolerance for the selected currency.

FIGURE 9.2 CHANGE PAYMENT TOLERANCE

The Change Payment Tolerance window contains the following fields:

• All Currencies - if this field is selected, the payment tolerance setup is changed for all currencies.

• Currency Code - identifies the currency for which the tolerance setup is changed.

• Payment Tolerance % - identifies the percentage a payment or refund can vary from the expected amount on an invoice or credit memo.

• Max. Pmt. Tolerance Amount - identifies the maximum amount a payment or refund can vary from the amount on an invoice or credit memo. Used this field to limit the amount calculated by using the Payment Tolerance % setting, for example, 2 percent with a maximum of 100 Canadian dollars (CAD).

Companies can also set up Payment Tolerance for currencies using the Change Payment Tolerance batch job from the General Ledger Setup window.

When users are setting Payment Tolerance from the General Ledger Setup window, the Currency Code field is not automatically populated in the Change Payment Tolerance window. To set tolerance for a specific currency, click the drop-down list in the Currency Code field and select the currency. The other fields are completed as discussed in this lesson.

Demonstration: Setting Payment Tolerance

Scenario: Phyllis, the accounting manager at CRONUS International Ltd., has determined that it may be helpful to set payment tolerances for the Icelandic krona (ISK). Phyllis plans to set a 3 percent tolerance with a limit of 1,250 krona and to update all open ledger entries for this change.



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Steps: Setting Payment Tolerance

To set up the payment tolerance, follow these steps:

1. From the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Currency, and then select Currencies.

2. Locate and select the ISK, Icelandic krona, currency. 3. Click Change Payment Tolerance. 4. In the Payment Tolerance % field, enter 3, the percentage allowed. 5. In the Max. Pmt. Tolerance Amount field, enter 1250, the amount

of the variance allowed. 6. Click OK. 7. Click Yes to update open entries for customers and vendors.

Currency Exchange Rates

Currency exchange rates are constantly fluctuating. The Currency Exchange Rates window is used to:

• Record exchange rates. • View prior entries for exchange rates.

To open the Currency Exchange Rates window from the Currencies or Currency Card window, click Exch. Rates.

FIGURE 9.3 CURRENCY EXCHANGE RATES



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When posting transactions, you can obtain the current exchange rates for the various currencies from the Currency Exchange Rates window. In addition, use data in the table to calculate unrealized gains or losses caused by exchange rate fluctuations when:

• Running the Adjust Exchange Rates batch job to revalue previously posted transactions.

• Performing consolidations of foreign subsidiaries using currencies other than the parent's currency.

This table is frequently updated, possibly daily, to reflect current exchange rates for transactions.

NOTE: You can use different exchange rates in the Relational Exch. Rate Amount and the Relational Adjmt Exch. Rate Amt. fields. This allows flexibility in the exchange rate setup. For example, you can update the Relational Exch. Rate Amount field daily, while updating the Relational Adjmt Exch. Rate Amt. field at the end of each month.

Another possibility is to use exchange rates from one source for adjustments and from another source for the default transaction exchange rate. For example, use the exchange rates according to the local rates for the Relational Exch. Rate Amount and use a government approved bank's exchange rates for the Relational Adjmt Exch. Rate Amt.

The Currency Exchange Rates window includes the following fields:

• Starting Date - identifies the effective date to use for the exchange rate. Enter a new line with a new Starting Date for each effective date.

• Currency Code - identifies the code for the selected currency. • Relational Currency Code - to specify local currency, leave the

field blank. • Exchange Rate Amount - identifies the rate to use for the currency

selected on the line. Use the Exchange Rate Amount and Relational Exch. Rate Amount fields when recording transactions. The entries in the fields tell the system how to calculate amounts for the selected currency.

• Relational Exch. Rate Amount - indicates the rate to use for the currency selected in the Relational Currency Code field; if the field is blank, it is the local currency. Use the Exchange Rate Amount and Relational Exch. Rate Amount fields when recording transactions. The entries in the fields tell the system how to calculate amounts for the selected currency.



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• Adjustment Exch. Rate Amount - indicates the rate to use for the currency selected on the line. Use the Adjustment Exch. Rate Amount and Relational Adjmt. Exch. Rate Amount fields when running the Adjust Exchange Rates batch job.

• Relational Adjmt. Exch. Rate Amount - indicates the rate to use for the currency selected in the Relational Currency Code field; if the field is blank, it is the local currency. Use the Adjustment Exch. Rate Amount and Relational Adjmt. Exch. Rate Amount fields when running the Adjust Exchange Rates batch job.

• Fix Exchange Rate Amount - determines whether the currency or relational currency exchange rates suggested on invoices, journal lines, and batch jobs are fixed or editable. When a selection is made in this field, that selection is fixed (not editable). The options are Currency, Relational Currency, or Both.

Set Up Multicurrency for Customers, Vendors, and Bank Accounts

Multiple steps are necessary to complete the setup in Microsoft Dynamics NAV 2009 to appropriately handle multicurrency transactions involving customers, vendors, and bank accounts.

Before processing transactions for customers, vendors, and bank accounts that use default currencies other than the local currency, you must perform the required setup, which includes establishing:

• Parameters for rounding. • Rules governing when applications can be applied between

currencies. • Default currencies for customers, vendors, and bank accounts.

Currency Card and Currency Exchange Rates

Working with Multicurrency in a company the first step is to setup the Currency Card and the Currency Exchange Rates for all customers, vendors, and bank accounts.

In the Currency Exchange Rates window:

• Use the values in the Exchange Rate Amount and Relational Exch. Rate Amount fields for recording the initial amounts for multicurrency transactions.

• The Adjust Exchange Rates batch job uses the values in the Adjustment Exch. Rate Amount and Relational Adjmt. Exch. Rate Amount fields. The batch job is run periodically to calculate gains or losses on open entries caused by currency fluctuations.



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General Ledger Setup

The General Ledger Setup window contains fields related to how rounding differences are managed by Microsoft Dynamics NAV 2009.

Access the General Ledger Setup window on the Navigation Pane by clicking the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.

FIGURE 9.4 GENERAL LEDGER SETUP

The General FastTab contains the following invoice rounding fields:

• Inv. Rounding Precision (LCY) - identifies the rounding precision used for the local currency on invoices; for example, invoices may be rounded to the nearest whole number.

• Inv. Rounding Type (LCY) - determines the rounding method that is used for invoices for the local currency. The options are Nearest, Up, or Down. This field works with the Invoice Rounding Precision field.

NOTE: The LCY Code field in the General Ledger Setup window specifies the local currency.



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On the Application FastTab of the General Ledger Setup window, use the Appln. Rounding Precision field to determine the rounding precision when entries that are using different currencies apply to one another.

FIGURE 9.5 GENERAL LEDGER SETUP - APPLICATION FASTTAB

NOTE: The currency of the entry that is applied to one or more other entries determines the interval for rounding differences. The rounding difference is only calculated and posted when the entry applied is a payment entry.

Receivables and Payables

As soon as the General Ledger Setup window is completed, you can set up the Invoice Rounding and Appln. Between Currencies fields in both the Sales & Receivables Setup and Purchases & Payables Setup windows.

On the Navigation Pane:

• Click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Sales & Receivables Setup. Click the General FastTab to view the fields in Receivables.



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• Click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select Purchases & Payables Setup. Click the General FastTab to view the fields in Payables.

FIGURE 9.6 SALES RECEIVABLES SETUP

In both windows, click to insert a check mark in the Invoice Rounding check box to use rounding for Sales and Purchase invoices for LCY.

The rounding process for LCY uses the settings in the Inv. Rounding Precision (LCY) and Inv. Rounding Type (LCY) fields on the General FastTab of the General Ledger Setup window.

Use the selection in the Appln. Between Currencies field in the Sales & Receivables and Purchases & Payables Setup windows to allow application between currencies if:

• Any customer or vendor uses more than one currency. • Any cash receipts or payments are recorded in a currency other than

the original invoice currency.



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The options in these windows are:

• None: when all entries used in an application must be in the same currency.

• EMU: to apply entries in the Euro and an old national currency to one another.

• All: to apply entries in any currency to one another.

When EMU or All is selected in the Appln. Between Currencies field, the rounding precision is determined from the entry in the Appln. Rounding Precision field in the:

• General Ledger Setup window for the local currency. • Currency Card window for other currencies.

For information about the Appln. Between Currencies field in the Currency Card window and General Ledger Setup window, refer to the relative lessons in this content.

NOTE: The currency of the entry that is applied to one or more other entries determines the interval for rounding differences. The rounding difference is only calculated and posted when the applied entry is a payment entry.

Rounding differences are posted to the Debit Curr. Appln. Rndg. Acc. or Credit Curr. Appln. Rndg. Acc. fields specified in the Vendor Posting Group or Customer Posting Group windows.

Customer, Vendor, and Bank Account Cards

The next step in the set up of multicurrency for customers, vendors, and bank accounts is to select the default currency in the Currency Code field on the account card.

For customers, on the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then select Customers.

Click the Foreign Trade FastTab, to assign a default currency to a customer:

1. In the Currency Code field, click and locate the correct currency for the customer.

2. Click OK to close the Customer Card.



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The process is the same for Vendors and Bank Accounts, the only difference being the path:

• Vendors: From the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Vendor. Click the Foreign Trade FastTab.

• Bank Accounts: From the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then select Bank Accounts. Click the Posting FastTab.

Process Sales and Purchase Documents As soon as multicurrency setup is complete, creating and posting sales or purchase documents by using multiple currencies is basically the same as creating and posting documents that use the local currency.

During the process, however, Microsoft Dynamics NAV 2009 has additional functionality to support multicurrency, including the ability to:

• Update the Currency Code when entering documents. • Edit the Currency Exchange Rate, depending on setup. • Display amounts in both currencies in statistics windows. • View posted amounts in both currencies.

Demonstration: Process a Purchase Invoice

Scenario: April, the accounts payable coordinator, recently added the Mundersand Corporation to the vendor listing for CRONUS International, Ltd. Mundersand uses the Canadian dollar (CAD) as their currency. April is processing the first purchase invoice for Mundersand for a single Side Panel, Item 70000.

April plans to verify the accuracy of the exchange rate used for the invoice and to review the vendor ledger entries that results from posting the purchase invoice. April must record and post the invoice, and then review the posted activity.

Steps: Process a Purchase Invoice

To record and post the purchase invoice, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Purchase Invoices.

2. Click New. 3. In the Buy-from Vendor No. field, click the drop-down list and

select 01905283, Mundersand Corporation.



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4. Press TAB or ENTER. 5. Click the Foreign Trade FastTab. 6. Notice that the currency from the Vendor Card populates the

Currency Code field.

To review the exchange rates, follow these steps:

1. In the Currency Code field, click the AssistButton to display the Change Exchange Rate window. For CAD, notice that the current exchange rate is 46.0862.

2. Close the Change Exchange Rate window.

NOTE: The fields that are editable in the Change Exchange Rate window are controlled by the selection made in the Fix Exchange Rate Amount field in the Currency Exchange Rates window. For more information, refer to the "Currency and Currency Exchange Rates" lesson in this content.

To enter a line in the purchase invoice, follow these steps:

1. In the lines, in the Type field, click the drop-down list and select Item.

2. In the No. field, enter 70000. 3. In the Quantity field, enter 1. 4. Press TAB or ENTER.

In the Direct Unit Cost Excl. VAT field, the cost is listed as 34.067. This is the cost of the item in CAD, the vendor's currency.

• The direct unit cost is calculated using the Last Direct Cost from the Item Card of 15.70008 and dividing it by the Relational Exchange Rate of .460862.

• The calculated amount of 34.06677 is rounded according to the entry in the Unit Amount Rounding Precision field in the Currencies window for CAD. This results in a Direct Unit Cost Excluding VAT of 34.067.

To review the statistics and post the invoice, follow these steps:

1. Click Statistics to display the Purchase Invoice Statistics window. The cost is displayed in both the foreign currency and the local currency.

2. Close the Purchase Invoice Statistics window. 3. Click the General FastTab. 4. In the Vendor Invoice No. field, enter CUR1. 5. Click Post. 6. Click Yes to post the invoice.



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To review the posted ledger entries, follow these steps:

On the Navigation Pane, click the Departments button, click Financial Management, click Payables, and then select Vendors.

1. Locate and select vendor 01905283, Mundersand Corporation. 2. Notice that the amount in the Balance (LCY) field is 15.70. 3. Click Ledger Entries to display the Vendor Ledger Entries window. 4. Notice that the amounts in the Original Amount, Amount, and

Remaining Amount fields are displayed in CAD, the vendor's currency.

5. Right click on the header to open the Choose Columns feature. 6. Select the Original Amt. (LCY), Amount (LCY), and Remaining

Amount (LCY) fields and then click OK. 7. In the Original Amount field, click the field to open the Detailed

Vendor Ledg. Entries window. Notice that amounts are displayed in both the vendor and the local currencies.

8. Close the Detailed Vendor Ledg. Entries, and Vendor Ledger Entries windows.



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Lab 9.1 - Process a Sales Invoice Scenario

You must create a sales invoice for Spotsmeyer's Furnishings, Customer 01121212. Spotsmeyer is set up with a Bill-to Customer; however, this invoice will be sent to Spotsmeyer directly. The order consists of five Base Panels, Item 70001.

Spotsmeyer's Furnishing uses U.S. dollar (USD) as their currency. The exchange rate as of 01/01/10 for 100 USD is 51.61 Great Britain Pounds (GBP). Because this is the first transaction posted to Spotsmeyer's, you plan to verify the multicurrency amount posted.

You create a table calculating the expected posting as shown here.

Currency Last Direct Cost, per Item Card

Exchange Rate

Mathematical Operation

Amount (LCY)

LCY (GBP)

40.30 40.30 * 5 201.50

USD 40.30 .5161 (40.30 / .5161) * 5

390.43

Challenge Yourself!

1. Update the Currency Exchange Rate. 2. Create a sales invoice. 3. Review the posted activity.

Need a Little Help?

1. Open the Currency Exchange Rates window. 2. Update the Bill-to Customer No. on the Invoicing FastTab of the

sales invoice. 3. Open the Customer Ledger Entries window. 4. Review the posted entries.

Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Currency, and then select Currencies.

2. Locate and select the entry for USD.



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3. Click Exch. Rates. 4. On a new line, in the Starting Date field, enter 01/01/10. 5. In the Relational Exch. Rate Amount field, enter 51.61. 6. In the Relational Adjmt. Exch. Rate Amt. field, enter 51.61. 7. Close the Currency Exchange Rates and Currencies windows. 8. In Financial Management menu, click Receivables and Sales

Invoices. 9. Click New. 10. In the Sell-to Customer No. field, enter 01121212. 11. Ensure that the Posting Date is 01/24/10. 12. Click the Invoicing FastTab. 13. In the Bill-to Customer field, enter 01121212. 14. Click the Foreign Trade FastTab, confirm the Currency Code field

is set to USD. 15. Click the Lines FastTab. 16. In the Type field on the first line, select Item. 17. In the No. field, enter 70001. 18. In the Location Code field, select Blue. 19. In the Quantity field, enter 5. 20. Note the amount in the Line Amount Excl. VAT field. 21. Click Statistics. 22. Note the amounts for Total Incl. VAT and Sales (LCY). 23. Close the Sales Invoice Statistics window. 24. Click Post. 25. Click Yes to post the invoice. 26. In the Navigation Pane, click Receivables, click Customers. 27. Locate and select customer 01121212. 28. Note the amount in the Balance (LCY) field. 29. Click Ledger Entries. 30. In the Customer Ledger Entries window, add the Original Amt.

(LCY), Amount (LCY), and Remaining Amt. (LCY) fields. 31. Note the amounts in the fields on the line. 32. Close all windows.



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Process Cash Receipts Using the Cash Receipts Journal with multiple currencies is basically the same as processing cash receipts that uses the local currency.

The primary difference is posting restrictions based on currency. The ability to post a journal is determined by the relationship between the Currency Code assigned to the selected bank account and the Currency Code on the receipt lines.

The rules for posting cash receipt activity by using multiple currencies are summarized in the following table.


Printing and Posting Rules

Blank (LCY) Post receipt lines with any currency code including LCY.

Currency Code Post only those receipt lines with the same currency code as the Bank Account.

In addition to the ability to use multiple currencies in the same Cash Receipt Journal when the Bank Account Currency Code is LCY:

• Payments made in one currency can close invoice entries in a different currency. For example, payment received in Euros can be applied to an invoice in Danish Krone.

• Payments in one currency can be applied to multiple invoice entries with more than one currency. For example, a payment in Euros can be applied to two invoices, one in Danish Krone and one in Euro.

Another difference when using multiple currencies is the entries created from posting. When multiple currencies are involved, three Detailed Customer Ledger Entries are created when a payment is applied and posted against an invoice Customer Ledger Entry:

• An entry with an Entry Type of Initial Entry that contains the amount and currency of the payment. This matches the single entry for the payment in the Customer Ledger Entries window with Payment as the Document Type.

• An entry with an Entry Type of Application Entry that is the application for the Invoice Customer Ledger Entry. This entry has the due date and is in the currency of the invoice to which it applies. Additionally, it is posted to reduce the Remaining Amount on the Invoice Customer Ledger Entry.

• An entry with an Entry Type of Application Entry that is the application for the Payment Customer Ledger Entry. This entry has the same currency and due date as the Initial Entry; however, the



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Amount has the opposite sign. This entry is posted to reduce the Remaining Amount on the Payment Customer Ledger Entry.

Demonstration: Process a Cash Receipt Journal

Scenario: Arnie, the accounts receivable administrator, has received the customer payments shown in the following table.

Customer Name Customer Number

Currency Invoice Paid

Receipt Amount

Progressive Home Furnishings

01445544 USD 103013 2688.58

New Concepts Furniture

01454545 GBP (LCY)

00-17 222241.32

Klubben 47563218 NOK 103015 134935.03

New Concepts Furniture typically uses USD as their currency. However, they remitted this payment in GBP, the local currency of CRONUS International Ltd.

Arnie must record the payments in the Cash Receipts Journal by using the World Wide Bank-Operating Account and a posting date of 01/24/10.

Because Arnie has never processed a receipt in a different currency from the original invoice, he plans to review the ledger entries for customer 01454545 after the journal is posted.

Steps: Process a Cash Receipt Journal

To enter the first line in the Cash Receipt Journal, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Cash Management, and then select Cash Receipt Journal.

2. Ensure that the Bank batch is selected. 3. In the Choose Column feature, add the Currency Code field. 4. Ensure that the Posting Date is set to 01/26/10. 5. In the Document Type field, click the drop-down list and select


Customer. 7. In the Account No. field, enter 01445544. 8. Click Apply Entries. 9. Click the line for Document No. 103013. 10. Click Set Applies-to ID. 11. Click OK.

To enter the remaining payment lines, follow these steps:



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1. Click the next line. 2. In the Account No. field, enter 01454545. 3. In the Amount field, enter -222241.32. 4. Delete the entry in the Currency Code field, so that the field is

blank. 5. Click Apply Entries. 6. With the line for Document No. 00-17 selected, click Set Applies-to

ID. 7. Click OK. 8. Click the next line. 9. In the Account No. field, enter 47563218. 10. Click Apply Entries. 11. With the line for Document No. 103015 selected, click Set Applies-

to ID. 12. Click OK

To post the journal, follow these steps:

13. Click Post. 14. Click Yes to post the journal lines. 15. Click OK. 16. Close the Cash Receipt Journal window.

To review the ledger entries for New Concepts Furniture, follow these steps:


2. Locate and select customer 01454545. 3. Click Ledger Entries. 4. Notice that the original invoice entry used a currency of USD and

that the payment entry that closed it used LCY. 5. Click the payment line. 6. Click Navigate. 7. Click the line for Detailed Cust. Ledg. entry and click Show.



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8. Note that there are three lines displayed for each of the three entries applied and posted.

9. Review the three entries for Customer 01454545. 10. Close the Detailed Cust. Ledg. Entries, Navigate, and Customer

Ledger Entries windows.

Process Payments Processing activity in the Payments Journal for transactions with multiple currencies is basically the same as using the Payments Journal for transactions with a single, local currency.

Similar to the Cash Receipts Journal, there are posting restrictions based on currency. These restrictions also affect the ability to print checks in the Payments Journal.

The ability to print checks and post a journal is determined by the Currency Code assigned to the selected bank account and the contents of the Bank Payment Type field. The rules for printing checks and posting payments with multiple currencies are summarized in the following table.


Bank Payment Type Field Contents

Printing and Posting Rules

Blank (LCY) Computer Check or Manual Check

Print only those checks for LCY payment lines; post only LCY payment lines.

Blank (LCY) Blank Post payment lines with any currency code including LCY.

Currency Code

Computer Check or Manual Check

Print only those checks with payment lines where the currency code is the same as the Bank Account; post only those payment lines with the same currency code as the Bank Account.

Currency Code

Blank Post only those Payment lines with the same currency code as the Bank Account.

Demonstration: Print and Post Checks

Scenario: April, the accounts payable coordinator, is asked to issue checks from the WWB-USD bank account for vendors using USD as their currency. Invoices due on or before 01/31/10 are to be paid.

The WWB-USD bank account is a newly opened account for CRONUS International Ltd. The starting check number for the bank account is 10001. April must update the Bank Account Card for the last check issued, check 10000.



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Because activity has not been processed previously for payments in USD, the accounting manager has asked April to check the currency code to ensure that account 9150 is specified in the Conv. LCY Rndg. Debit and Conv. LCY Rndg. Credit accounts.

After the activity is posted, April reviews the posting for vendor 01254796, Progressive Home Furnishings.

Steps: Print and Post Checks

To update the Currency Code and the Bank Account Card, follow these steps:


2. Locate and select the USD currency. 3. Click the Rounding FastTab. 4. In the Conv. LCY Rndg. Debit field, enter 9150. 5. In the Conv. LCY Rndg. Credit field, enter 9150. 6. Close the Currency Card and Currencies windows. 7. In the Navigation Pane, click Cash Management and then select

Bank Accounts. 8. Locate and select the WWB-USD bank account. 9. Click the Posting FastTab. 10. In the Last Check No. field, enter 10000. 11. Close the Currency Card window.

To suggest vendor payments in the Payment Journal, follow these steps:

1. In the Cash Management folder, click Payment Journals. 2. In the Batch Name field, click the drop-down list and select the

General batch. 3. Click Suggest Vendor Payments. 4. Click the Options FastTab. 5. In the Last Payment Date field, enter 01/31/10. 6. In the Bal. Account Type field, click the drop-down list and select

Bank Account. 7. In the Bal. Account No. field, click the drop-down list and select the

WWB-USD bank account. 8. Click OK. 9. In the Bank Payment Type field, click the drop-down list and select

Computer Check. 10. In the Vendor FastTab add a filter.



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11. Click the drop-down list and point to Additional Colums, locate and select Currency Code.

12. In the Enter a value field enter USD. 13. Click OK to the message advising that lines have been created for

payments only for USD amounts.

The Payments Journal is populated with the invoices to be paid.

To print the checks and post the journal, follow these steps:

1. Click Print Check. 2. Click the Options FastTab. 3. In the Bank Account No. field, click the drop-down list and select

WWB-USD. 4. Add a check mark in the One Check per Vendor per Document

No. check box. 5. Click Print. 6. Add a check mark in the Print to File check box. 7. Click OK. 8. In the Output File Name field, enter ck.prn. 9. Click OK; the Payments Journal is updated for the printed checks. 10. Click Post. 11. Click Yes to post the journal lines. 12. Click OK. 13. Close the Payment Journal window.

To review the posted activity for Progressive Home Furnishings, follow these steps:

1. Click on the Financial Management, click Payables and then select Vendors.

2. Locate and select vendor 01254796. 3. Click Ledger Entries. 4. Ensure that the Original Amount (LCY), Amount (LCY), and

Remaining Amount (LCY) fields appear. 5. Click the payment line. 6. Click Navigate. 7. Click Detailed Vendor Ledg. Entry line and then click Show. 8. Review the three Detailed Vendor Ledger Entries. 9. Close the Detailed Vendor Ledg. Entries, Navigate, Vendor

Ledger Entries, and Vendor Card windows.



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Lab 9.2 - Post Expenses in Foreign Currency Scenario

As the accounts receivable administrator for CRONUS International Ltd., you have received the January 2010 vehicle expense. It is your responsibility to post these expenses, in Euros (EUR), including VAT:

• Gasoline and Motor Oil: EUR 178.53 • Registration Fees: EUR 342.32 • Repairs and Maintenance: EUR 107.34

Ensure that you set up the following:

• G/L Account 9150 is set up with Direct Posting. • The Conv. LCY Rndg. Debit Acc. and Conv. LCY Rndg. Credit

Acc. fields on the Euro currency are set to 9150.

On January 1, 2010, use the DEFAULT journal to post these expenses to the cash account. If there is a rounding difference, enter the adjustment for the amount in local currency. It is not necessary to review the entries for this lab.

Challenge Yourself!

1. Verify the setup is correct. 2. Enter and post the journal.

Need a Little Help?

1. Verify the setup is correct for the Euro in the Currencies window. 2. Verify Direct Posting is set up for account 9150 in the G/L Account

Card window. 3. Use the Insert Conv. Rndg. Lines function to adjust any rounding

differences.

Step by Step

1. On the Navigation Pane, click the Departments button, click Financial Management, click General Ledger and then select Chart of Accounts.

2. Locate and select account 9150. 3. Verify that the Direct Posting check box contains a check mark. 4. Close the G/L Account Card. 5. In the Navigation Pane, click Periodic Activities, click Currency,

and then Currencies.



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6. Locate and select the EURO currency. 7. Verify that the Conv. LCY Rndg. Debit Acc. and Conv. LCY

Rndg. Credit Acc. fields are set to 9150. 8. Close the open window. 9. In the Navigation Pane, click General Ledger and then select

General Journals. 10. In the Batch Name field, ensure that the DEFAULT batch is

selected. 11. In the Posting Date field, enter 01/01/10. 12. In the Account No. field, enter 8510. 13. In the Amount field, enter 178.53. 14. In the Currency Code field, enter EUR. 15. Click the next line. 16. In the Account No. field, enter 8520. 17. In the Amount field, enter 342.32. 18. In the Currency Code field, enter EUR. 19. Click the next line. 20. In the Account No. field, enter 8530. 21. In the Amount field, enter 107.34. 22. In the Currency Code field, enter EUR. 23. Click the next line. 24. In the Account No. field, enter 2910. 25. In the Amount field, enter -628.19. 26. In the Currency Code field, enter EUR. 27. Click Actions, point to Functions and the select Insert Conv. LCY

Rndg. Lines. 28. Click Post. 29. Click Yes to post the journal lines. 30. Click OK. 31. Close the General Journal window.



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Use the Adjust Exchange Rates Batch Job Run the Adjust Exchange Rates batch job to update LCY amounts for posted entries in Microsoft Dynamics NAV 2009. The batch job adjusts customer, vendor, and bank account entries to reflect updated amounts when the exchange rate changes after entries are posted.

Adjusting exchange rates are typically completed in the following order:

1. Enter the adjustment exchange rate on the currency. 2. Set filters on the Adjust Exchange Rates batch job. 3. Run the Adjust Exchange Rates batch job.

NOTE: The Adjust Exchange Rates batch job is also used to update additional reporting currency amounts on general ledger entries.

Step 1: Enter the Adjustment Exchange Rate

To enter the exchange rate that the posted entries will be adjusted to, follow these steps:

1. On the Financial Management menu, click Periodic Activities, click Currency, and then select Currencies.

2. In the Currencies window, select the currency that will be adjusted and then click Exchange Rates to enter the adjustment.

3. In the Adjustment Exch Rate Amount and Relational Adjmt Exch Rate Amt fields on the new line, enter the exchange rate amounts with which to adjust the posted entries.

You can rerun the Adjust Exchange Rates batch job when it is necessary, for example when the batch job is run after an exchange rate is entered incorrectly. Before running the batch job again, overwrite the amounts in the Adjustment Exch Rate Amount and Relational Adjmt. Exch. Rate Amt. fields. Microsoft Dynamics NAV 2009 posts a new adjustment based on the adjustments already made.

Step 2: Set Filters on the Adjust Exchange Rates Batch Job

To run the Adjust Exchange Rates batch job, open the Adjust Exchange Rates window:



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On the Financial Management menu, click Periodic Activities, click Currency, and then select Adjust Exchange Rates.

FIGURE 9.7 ADJUST EXCHANGE RATES

The Options FastTab has the following fields:

• Starting Date - identifies the first date to use for locating and adjusting transactions. Generally, this field is left blank so that all transactions are adjusted.

• Ending Date - identifies the last date to use for locating and adjusting transactions. This date is usually the same as the Posting Date. Use the Ending Date field to retrieve the adjustment exchange rate for the batch job in the Currency Exchange Rates window

• Posting Description - describes the general ledger entries created by the batch job. The default text is: Exchange Rate Adjmt. of %1 %2. When you post the entries, the %1 is replaced by the currency code and %2 is replaced by the currency amount that is adjusted. This results in, for example, Exchange Rate Adjmt. of EUR 38,000.

• Posting Date - specifies the date on which the adjustment entries are posted.

• Document No. - identifies the document number that appears on the general ledger entries created by the batch job.



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• Adjust Customer, Vendor and Bank Accounts - if this field is selected, Customer, Vendor, and Bank account entries for currency fluctuations are adjusted.

• Adjust G/L Accounts for Add.-Reporting Currency - if this field is selected, G/L accounts are adjusted for currency fluctuations between LCY and the additional reporting currency. This field is only relevant if you are using a variable additional reporting currency and not a fixed one, as EUR.

On the Currency FastTab, select the currency codes that will be adjusted by the batch job.

Step 3: Run the Adjust Exchange Rates Batch Job

To run the Adjust Exchange Rates batch job, follow these steps:

1. Verify that filters are set appropriately. 2. Click OK to run the batch job.

NOTE: When exchange rates are adjusted regularly, it is recommended that you add new currency exchange rate lines in the Currency Exchange Rates window. By doing this, documents and journals are created using current exchange rates.

Additionally, it is recommended that existing entries are not overwritten or deleted from the Currency Exchange Rates window. Keeping history in this window allows traceability of exchange rate adjustments for a particular currency over time.

If there is a currency that is used as an additional reporting currency, the entries for that currency in the Currency Exchange Rates window must not be overwritten.

Exchange Rate Adjustment Process for Customers and Vendors

For customer and vendor accounts, the Adjust Exchange Rates batch job:

• Adjusts the currency using the exchange rate that is valid on the posting date specified in the batch job.

• Calculates the differences for the individual currency balances. • Posts the amounts to the G/L account specified in the Unrealized

Gains Acc. field or the Unrealized Losses Acc. field in the Currency window.

• Posts balancing entries to the Receivables or Payables account in the general ledger automatically.



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The batch job processes all open customer ledger entries and vendor ledger entries. If there is an exchange rate difference for an entry, the batch job creates a new detailed customer or vendor ledger entry that reflects the adjusted amount on the customer or vendor ledger entry.

Exchange Rate Adjustment Process for Bank Accounts

For bank accounts, the Adjust Exchange Rates batch job:

• Adjusts the currency by using the exchange rate that is valid on the posting date specified in the batch job.

• Calculates the differences for each bank account that has a currency code and posts the amounts to the G/L account specified in the Realized Gains Acc. field or the Realized Losses Acc. field in the Currencies window.

• Posts balancing entries to the G/L accounts that are specified in the Bank Account Posting Groups automatically.

• Calculates one entry for each currency, for each posting group.

Exchange Rate Adjustment Process for G/L Accounts

If posting in an additional reporting currency, add a check mark in the Adjust G/L Accounts for Add.-Reporting Currency check box to create new general ledger entries for currency adjustments between LCY and the additional reporting currency.

The Adjust Exchange Rates batch job:

• Calculates the differences for each general ledger entry. • Adjusts the general ledger entry, depending on the contents of the

Exchange Rate Adjustment field for each G/L account.

Exchange Rate Adjustment Register

The Exchange Rate Adjmt. Register provides an overview of all the exchange rate adjustments made by the Adjust Exchange Rates batch job.

On the Navigation Pane, click Financial Management, click Periodic Activities, click Currency, and then select Exch. Rate Adjmt. Registers.

In the Exchange Rate Adjmt. Register window, you can create each line using fields that display the:

• Type of entries adjusted • Currency and base amount adjusted • Adjustment amount



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Demonstration: Adjust Currency Exchange Rate

Scenario: Phyllis, the accounting manager of CRONUS International Ltd., is working with the accounting department to close the month for January 2010.

Phyllis wants to capture gains and losses caused by fluctuations in the exchange rate between the local currency, GBP, and the Euro. The exchange rate as of 01/31/10 is 1.00 EUR = .65 GBP, the local currency for CRONUS International Ltd.

Phyllis plans to run the Adjust Exchange Rates batch job for Customers, Vendors, and the Bank Accounts.

Phyllis has selected invoice 10310, posted to customer Antarticopy, to trace through the system. Phyllis calculated the current valuation and the expected valuation as shown in the following table.

Amount - EUR (Customer Ledger Entries window)

Relational Exchange Rate Amount (Currency Exchange Rates window)

Relational Adjmt. Exch. Rate Amount (Currency Exchange Rates window)

Operation Amount (LCY) - GBP (Customer Ledger Entries window)

3744.29 .6898 3744.29*.6898

2582.81

3744.29 .6500 3744.29*.6500

2433.79

Based on her calculations, Phyllis expects the Adjust Exchange Rates batch job to post an unrealized loss of 149.02 (2582.81 - 2433.79). Phyllis plans to review the posting result and compare it to her calculations.

Steps: Adjust Currency Exchange Rate

To update the Currency Exchange Rates window for the Euro, follow these steps:


2. Locate and select the line for the Euro. 3. Click Exch. Rates. 4. Click New. 5. In the Starting Date field, enter 01/31/10. 6. In the Exchange Rate Amount field, enter 1.



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7. In the Relational Exch. Rate Amount field, enter .65. 8. In the Adjustment Exch. Rate Amt field, enter 1. 9. In the Relational Adjmt Exch Rate Amt field, enter .65. 10. Close the Currency Exchange Rates.

NOTE: The Adjust Exchange Rate batch job uses the Adjustment Exchange Rate Amount and Relational Adjmt. Exch. Rate Amt. fields for calculating exchange rate gains and losses. Updating the Relational Exchange Rate Amount field is not necessary for processing the batch. However, the two fields are typically updated at the same time.

To run the Adjust Exchange Rates batch job, follow these steps:

1. From the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Currency, and then select Adjust Exchange Rates.

2. Leave the Starting Date field blank so that all transactions are included.

3. In the Ending Date field, enter 01/31/10. 4. Accept the defaults in the Posting Description and Posting Date

fields. 5. In the Document Number field, enter ADJACY-0110. 6. Make sure that the Adjust Customer, Vendor, and Bank Accounts

check box contains a check mark. 7. On the Currency FastTab, in the filter column for the Code field,

enter EUR. 8. Click OK.

A status box displays while the batch job is processed and closes when the process is completed.

To review the customer ledger and detailed customer ledger entries for Antarcticopy, follow these steps:


2. Locate and select customer 32656565, Antarcticopy. 3. Click Ledger Entries. 4. Right/click on the column header to open the Choose Columns

feature. 5. Select the Original Amount (LCY), Amount (LCY), and

Remaining Amount (LCY) fields and then click OK. 6. Verify that the amounts in the Original Amount (LCY) and

Amount (LCY) fields agree with the calculations in the table in the scenario.



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7. In the Amount (LCY) field, click the field. 8. Notice that there are two entries in the Detailed Customer Ledger

Entries window: o One for the initial entry. o One for the unrealized loss.

9. Click the second entry. 10. Click Navigate. 11. Click the G/L Entry line. 12. Click Show. 13. Review the entries for 149.02:

o A debit to account 9320, Unrealized FX Losses. o A credit to account 2320, Customers, Foreign.

14. Close the General Ledger Entries, Navigate, Detailed Cust. Ledg.

Entries, and Customer Ledger Entries windows.

To review the Exchange Rate Adjmt. Register, follow these steps:

1. On the Navigation Pane, click Financial Management, click Periodic Activities, click Currency, and then select Exchange Rate Adjmt. Register.

2. Notice that there are entries for Bank, Customer, and Vendor. Locate the line for the 149.02 adjustment.

Summary of Currency Exchange Rates

The following table provides a summary of how Microsoft Dynamics NAV 2009 uses the amounts in the Currency Exchange Rates window.

Task Fields used from Currency Exchange Rates window

How fields are used

Entering a default exchange rate for journals and documents

(1) Exchange Rate Amount(2) Relational Exch Rate Amount(3) Starting Date

Starting Date compared to Posting Date on journal or document. The latest entry with Starting Date <= Posting Date is determined and fields (1) and (2) are used to calculate the default exchange rate.



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Task Fields used from

Currency Exchange Rates window

How fields are used

Adjusting the exchange rate of posted customer/vendor, bank account and G/L entries.

(a) Adjustment Exch Rate Amount(b) Relational Adjmt Exch Rate Amt(c) Starting Date

Starting Date compared to Ending Date in Adjust Exchange Rates batch job. The latest entry with Starting Date <= Ending Date is determined and fields (a) and (b) are used to calculate the adjustment exchange rate.



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Lab 9.3 - Update the USD:GBP Exchange Rate Scenario

At the end of January 2010, the relational exchange rate amount between USD and LCY is 100 USD = 50 GBP. Because there are customers and vendors that use USD as their default currency, you must run the Adjust Exchange Rates batch job.

Because you posted activity to their account this month, you want to trace any adjustment to the customer ledger entry for Spotsmeyer.

Challenge Yourself!

1. Update the exchange rate and run Adjust Exchange Rates batch job. 2. Review the customer ledger entry for Spotsmeyer.

Need a Little Help?

1. Review the customer ledger entry for Spotsmeyer. 2. Update the exchange rate using the Exchange Rates button from the

Currencies window. 3. Locate the Adjust Exchange Rates batch job in Periodic Activities

under Currency, run the batch job. 4. Review the updated customer ledger entry for Spotsmeyer.

Step by Step

1. From the Navigation Pane, click the Departments button, click Financial Management, click Receivables, and then select Customers.

2. Locate and select customer 01121212, Spotsmeyer, . 3. Click Ledger Entries to open the Customer Ledger Entries

window. 4. Note the amount in the Amount (LCY) field is 153.50 5. Close all open windows. 6. In the Navigation Pane, click Periodic Activities, click Currency

and then select Currencies. 7. Locate and select USD. 8. Click Exch. Rates. 9. Click New, to insert a new line. 10. In the Starting Date field, enter 01/31/10. 11. In the Exchange Rate Amount field, enter 100. 12. In the Relational Exchange Rate Amount field, enter 50.



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13. In the Adjustment Exch. Rate Amount field, enter 100. 14. In the Relational Adjmt. Exch. Rate Amt. field, enter 50. 15. Close all forms. 16. In the Navigation Pane, click Currency and then select Adjust

Exchange Rates. 17. In the Starting Date field, leave the field blank. 18. In the Ending Date field, enter 01/31/10. 19. In the Document Number field, enter ADJUSD-0110. 20. Ensure that the Adjust Customer, Vendor, and Bank Accounts

check box contains a check mark. 21. Ensure that the Adjust G/L Accounts for Add.-Reporting

Currency check box does not contain a check mark. 22. On the Currency FastTab, set a filter for USD. 23. Click OK. 24. In the Navigation Pane, click Receivables and then select

Customers. 25. Locate and select customer 01121212, Spotsmeyer. 26. Click Ledger Entries to open the Customer Ledger Entries

window. 27. Note the amount in the Amount (LCY) field. 28. Click the field to open the Detailed Customer Ledger Entries

window. 29. Notice that there is a separate entry for the adjustment to the original

posted amount. 30. Click the new ledger entry. 31. Click Navigate to open the Navigate window, and on the G/L Entry

line, click Show. 32. Note the two lines created for the adjustment to Spotsmeyer. 33. Close all windows.



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Additional Reporting Currency Microsoft Dynamics NAV 2009 enables companies to record general ledger transactions in both the local currency (LCY) and an Additional Reporting Currency (ACY). The main purpose for using an Additional Reporting Currency is to generate reports that are more meaningful to users of financial statements and other reports.

After an Additional Reporting Currency is set up, Microsoft Dynamics NAV 2009 automatically:

• Records amounts in both LCY and the Additional Reporting Currency on each general ledger entry and on other entries, such as VAT entries.

• Uses information from the Currency Exchange Rates window to find the exchange rate for recording transactions in the Additional Reporting Currency.

When using an additional reporting currency, run the Adjust Exchange Rates batch job to record any exchange rate differences for previously posted transactions. Typically, the batch job is run at the end of the month. This batch job:

• Finds the appropriate adjustment exchange rate in the Currency Exchange Rates window.

• Compares the amounts in the Amount and Additional-Currency Amount fields on the general ledger entries to determine an exchange rate gain or loss.

• Uses the option selected in the Exchange Rate Adjustment field on each general ledger posting account to determine whether to calculate and post exchange rate gains or losses.

NOTE: The Additional Reporting Currency functionality is not to be used as a basis for financial statement translation. It is not a tool that can perform translation of foreign subsidiary financial statements as part of a company consolidation. The additional reporting currency functionality only provides the option of preparing reports in another currency, as if that was the company's local currency.

Set Up an Additional Reporting Currency

The setup required to use an Additional Reporting Currency is:

• Select general ledger accounts for posting exchange rate adjustments. • Specify the exchange rate adjustment method for General ledger

accounts.



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• Specify the exchange rate adjustment method for VAT entries. • Enable the additional reporting currency.

Select General Ledger Accounts for Posting Exchange Rate Adjustments

The G/L accounts for posting exchange rate adjustments are set up on the General and Reporting FastTabs of the Currency Card.

To open the Currency Card window, from the Navigation Pane, click Departments, click Financial Management, click Periodic Activities, click Currency and then select Currencies.

For the currency used for the Additional Reporting Currency, selections must be made in the following fields:

• Realized Gains Account • Realized Losses Account • Unrealized Gains Account • Unrealized Losses Account • Realized G/L Gains Account • Realized G/L Losses Account • Residual Gains Account • Residual Losses Account

Click the drop-down list in each field to specify the G/L accounts to use when posting. The fields are discussed in the "Currency Card and Currency Exchange Rates" lesson of this content.

Specify Exchange Rate Adjustment Method for G/L Accounts

When using an Additional Reporting Currency, you must make a selection for every G/L posting account in the Exchange Rate Adjustment field. This selection determines how amounts for an account will be adjusted for exchange rate fluctuations between LCY and the additional reporting currency when the Adjust Exchange Rate batch job is run.

To make selections for the G/L posting accounts, follow these steps:


2. Locate and select the account. 3. Click the Reporting FastTab. 4. In the Exchange Rate Adjustment field, click the drop-down list

and select the correct method.



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The options are as follows:

• No Adjustment: No exchange rate adjustment is made to the account. This is the default selection.

• Adjust Amount: The LCY amount field is adjusted for any exchange rate gains or losses.

• Adjust Additional-Currency Amount: The Additional Currency Amount field is adjusted for any exchange rate gains or losses.

NOTE: The No Adjustment selection is made if the exchange rate between the LCY and additional reporting currency is always fixed. This situation is common for companies preparing to change to Euro that have an EMU currency as the local currency and Euro as an additional reporting currency.

Specify Exchange Rate Adjustment Method for VAT Entries

When using an Additional Reporting Currency, you can use the VAT Exchange Rate Adjustment field in the General Ledger Setup window to determine how the accounts set up for VAT posting in the VAT Posting Setup window are adjusted for exchange rate fluctuations. Adjustments between LCY and the Additional Reporting Currency are calculated when the Adjust Exchange Rates batch job is run.

To select the VAT Exchange Rate Adjustment, follow these steps:

1. From the Navigation Pane, click the Departments button, click Administration, click Application Setup, click Financial Management, click Finance, and then select General Ledger Setup.

2. Click the Reporting FastTab. 3. In the VAT Exchange Rate Adjustment field, click the drop-down

list to make a selection.

The options are the same as those for general ledger entries, but in this case the selection is applied to VAT entries. The options are as follows:

• No Adjustment - no exchange rate adjustment is made to the VAT account. This is the default selection.

• Adjust Amount - the LCY amount field is adjusted on the VAT account for any exchange rate gains or losses.

• Adjust Additional-Currency Amount - the Additional Currency Amount field on the VAT account is adjusted for any exchange rate gains or losses.



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Enable the Additional Reporting Currency

When the Additional Reporting Currency is enabled, Microsoft Dynamics NAV 2009 runs a batch job to update previously posted entries. The Adjust Add. Reporting Currency batch job:

• Uses the exchange rate from the Currency Exchange Rates window that is valid on the work date.

• Calculates the Additional Reporting Currency amounts based on the LCY amounts on existing entries.

• Posts residual (rounding) amounts that occur on conversion of LCY to Additional Reporting Currency: o To the Residual Gains Account or Residual Losses Account

specified in the Currencies window. o Using the posting date and document number from the original

general ledger entry.

• Posts a rounding entry on the closing date of each closed year to the Retained Earning account. This ensures that the ending balance of the income accounts in closed years is zero (0) for both LCY and the Additional Reporting Currency.

NOTE: To enable an Additional Reporting Currency, the Residual Gains Account and Residual Losses Account must be set up for the currency.

To select an Additional Reporting Currency, follow these steps:


2. Click the Reporting FastTab. 3. In the Additional Reporting Currency field, click the drop-down

list and select the additional currency to report in from the Currencies window.

4. Click OK. 5. Click Yes to change the additional reporting currency.



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The Adjust Add. Reporting Currency batch job opens.

FIGURE 9.8 ADJUST ADD. REPORTING CURRENCY

The Adjust Add. Reporting Currency batch job contains the following fields:

• Additional Reporting Currency - contains the additional reporting currency selected in the General Ledger Setup window. Click the drop-down list to update the exchange rate to use to convert the LCY amounts to the Additional Reporting Currency.

• Document No. - identifies Document number to use for the entry created by the batch job that is posted to the retained earnings account. For the residual amount entries, the original transaction document number applies.

• Retained Earnings Acc. - specifies the retained earnings account for the batch job to use in posting. This account must be the same as the account that was used by the Close Income Statement batch job.

To process the Adjust Add. Reporting Currency batch job, follow these steps:

1. In the Document No. field, enter a document number. 2. In the Retained Earnings Account field, click the drop-down list

and select an account. 3. Click OK to run the batch job.

After running the Adjust Add. Reporting Currency batch job, the following existing entries have amounts in both LCY and in the Additional-Currency (ACY) fields:

• General ledger entries • VAT entries • Value entries • Job Ledger entries • Production Order Line entries

In addition, the local currency and additional reporting currency amounts are recorded for all new entries of these types.



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NOTE: The additional reporting currency will only be enabled after you click the OK button in the Adjust Add. Reporting Currency batch job window.

View ACY Amounts in Windows

The fields related to Additional Reporting Currency can be displayed in various windows, including the:

• Chart of Accounts • Acc. Schedule Overview • Analysis By Dimensions • G/L Balance By Dimension

For example, in the Chart of Accounts window, open the Choose Column feature to select the Additional-Currency Net Change, Add.-Currency Balance at Date, and Additional-Currency Balance fields.

FIGURE 9.9 CHOOSE COLUMNS

In the Analysis by Dimensions and Account Schedule Overview windows, select the Show Amounts in Add. Reporting Currency field on the Options FastTab to view the data in the Additional Reporting Currency.

When the data is displayed in the Additional Reporting Currency, it can be exported to Microsoft® Excel® from both the Acc. Schedule Overview and Analysis by Dimensions windows.



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NOTE: The Adjust Add. Reporting Currency batch job deletes Analysis View entries unless the Blocked field in the Analysis View window is selected before you activate the Additional Reporting Currency. The Analysis Views must be updated for entries to be available.

View ACY Amounts in Reports

Several reports in the General Ledger application area are based on general ledger entries. Many of these reports can be printed in the Additional Reporting Currency that includes Account Schedules and the Closing Trial Balance report.

To display the financial data in these reports in the additional reporting currency, select the Show Amounts in Add. Reporting Currency field on the Options FastTab for the report.

Similarly, all the reporting for VAT, including VAT Statements, VIES Declaration disks, and VAT settlements, can be done in the additional reporting currency. Select the Show Amounts in Add. Reporting Currency field on the Options FastTab for the relevant VAT report.

Daily Processing

There are no special steps required when processing daily activity using an Additional Reporting Currency. When using an Additional Reporting Currency:

• Enter exchange rates in the Currency Exchange Rates window. • Process transactions as usual.

Transactions can be entered using LCY. The system converts the LCY amount to the Additional Reporting Currency using the entry in the Currency Exchange Rates table that is valid for the Work Date.

Adjust Exchange Rates Batch Job

Periodically, typically at the end of the month, the Adjust Exchange Rates batch job is run to record exchange rate fluctuations between the LCY and the Additional Reporting Currency. The batch job:

• Calculates the differences for each general ledger entry by using the contents of the Currency Exchange Rates window.

• Adjusts the general ledger entry based on the contents of the Exchange Rate Adjustment field on the G/L account.

NOTE: The values in the Adjustment Exch. Rate Amount and Relational Adjmt. Exch. Rate Amount fields in the Currency Exchange Rates window are used by the Adjust Exchange Rates batch job to calculate gains or losses on open entries caused by currency fluctuations.



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Lab 9.4 - Adjust the ACY Exchange Rate Scenario

You must update the additional reporting currency for the Danish krone, DKK, for the exchange rate on 01/31/10. The exchange rate at the end of the month is 100 DKK = 10 GBP.

Challenge Yourself!

1. Update the exchange rate for the additional reporting currency. 2. Run the Adjust Exchange Rates batch job to update the ACY.

Need a Little Help?

1. Open the Currencies window. 2. Select the Danish krone. 3. Open the Currency Exchange Rates window. 4. Update the rates as specified in the scenario. 5. Run the Adjust Exchange Rates batch job to update the ACY.



2. Locate and select DKK. 3. Click Exch. Rates. 4. In the Starting Date field, enter 01/31/10. 5. In the Exchange Rate Amount field, enter 100. 6. In the Relational Exchange Rate Amount field, enter 10. 7. In the Adjustment Exch. Rate Amount field, enter 100. 8. In the Relational Adjmt. Exch. Rate Amt. field, enter 10. 9. Close all windows. 10. In the Navigation Pane, click Currency and then select Adjust

Exchange Rates. 11. Leave the Starting Date field blank. 12. In the Ending Date field, enter 01/31/10. 13. In the Document Number field, enter ADJACY-0110. 14. Click to remove the check mark in the Adjust Customer, Vendor,

and Bank Accounts check box.



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15. Add a check mark in the Adjust G/L Accounts for Add.-Reporting Currency check box.

16. On the Currency FastTab, set a filter for DKK. 17. Click OK.



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Consolidations with Multiple Currencies Microsoft Dynamics NAV 2009 supports consolidations of companies that use different base currencies into a single company. During the consolidation process, appropriate exchange rates can be specified.

NOTE: Before performing the consolidation, run the Adjust Exchange Rates batch process in each company.

Set Up General Ledger Accounts

In the G/L Account Card window of the subsidiary companies, the Consol. Translation Method field is used to specify the translation method applied to an account.

To view the field, on the Navigation Pane, click the Departments button, click Financial Management, click General Ledger, and then select Chart of Accounts

Click New to open a new G/L Account Card, and then click the Consolidation FastTab.

The following options are available:

• Average Rate (Manual): The average rate for the period to be consolidated. The average is calculated either as an arithmetic average or as a best estimate and is entered for each business unit. This option is the default assigned.

• Closing Rate: The rate which prevails in the foreign exchange market at the date for which the balance sheet or income statement is being prepared. The rate is entered for each business unit.

• Historical Rate: The rate of exchange for the foreign currency which prevailed when the transaction occurred.

• Composite Rate: The current period amounts are translated at the average rate and added to the previously recorded balance in the consolidated company. This method is typically used for retained earnings accounts because they include amounts from different periods and are therefore a composite of amounts translated with different exchange rates.

• Equity Rate: Similar to Composite. The posting of the differences are to separate G/L Accounts.



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The various options in the Consol. Translation Method field support how to use either of two methods for translation. These methods are the:

• Temporal Method, used when the foreign entity is considered an integral part of the parent company's business.

• Current Rate Method, used when the foreign entity is considered independent.

To implement the methods, translation methods are assigned to the general ledger accounts for each method as outlined here:

• Temporal Method: All current assets and liabilities are accounted for at the current rate. All non-current assets and liabilities are accounted for at historical value at the historical rate.

• Current Rate Method: All assets and liabilities are translated at the current rate and all income statement balances are translated at the average rate for the period.

The following table provides additional detail on specifying the Consol. Translation Method for G/L accounts under the Temporal and Current Rate Method.

Account Type Temporal Method Current Rate Method

Cash and Receivables Closing Closing

Marketable Securities Closing Closing

Inventory, Market Value Closing Closing

Inventory, Cost Historical Closing

Prepaid Expenses Historical Closing

Property, Plant & Equipment Historical Closing

Intangible Assets Historical Closing

Current Liabilities Closing Closing

Deferred Income Historical Closing

Long-term Debt Closing Closing

Capital Stock Historical Historical

Paid-in Capital Historical Historical

Retained Earnings Composite Composite

Revenue Average Average



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Account Type Temporal Method Current Rate Method

Expenses Average Average

Cost of Goods Sold Historical Average

Depreciation Historical Average

Amortization Historical Average

NOTE: From the Business Unit Card window, click Actions, point to Functions, and then select Import File options to import a file for a subsidiary; the G/L accounts for the parent (consolidated company) must be set up with a Consol. Translation Method.

Process Multicurrency Consolidations

The consolidation process is performed from the Business Unit Card window in the parent company. Access the window from the Navigation Pane by click the Departments button, select Financial Management, click Periodic Activities, click Consolidation, and then select Business Units.

FIGURE 9.10 BUSINESS UNIT CARD

The field descriptions that follow are specific for multiple currency consolidations.



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The Currency Code field identifies the business unit's local currency (LCY). This code specifies how the consolidation feature reads the consolidation file.

• If a code is not specified, the amounts in the consolidation file are regarded as being LCY amounts.

• If a code is specified, the consolidated amounts are regarded as being denominated in that currency.

If the foreign subsidiary is providing the translated financial statement, the Currency Code must be blank. The consolidation process regards the consolidated amounts as being denominated in LCY, and does not perform a translation.

The Currency Exchange Rate Table field is used to select the currency exchange rate table Microsoft Dynamics NAV 2009 uses while importing consolidation data. The options are:

• Local: The currency exchange rate table in the current company is used.

• Business Unit: The currency exchange rate table in the business unit's company is used.

The G/L Accounts FastTab contains several fields for selecting G/L accounts for posting:

• The Exchange Rate Gains Acc. and Exchange Rate Losses Acc. determine the G/L accounts Microsoft Dynamics NAV 2009 uses to post any exchange rate gains or losses.

• The Comp. Exch. Rate Gains Acc. and Comp. Exch. Rate Losses Acc. determine the G/L accounts that Microsoft Dynamics NAV 2009 uses to post any exchange rate gains or losses that result from consolidation of accounts that have a setting of Composite in the Consol. Translation Method field.

• The Equity Exch. Rate Gains Acc. and Equity Exch. Rate Losses Acc. determine the G/L accounts that Microsoft Dynamics NAV 2009 uses to post any exchange rate gains or losses that result from consolidation of accounts that have a setting of Equity in the Consol. Translation Method field.

NOTE: If the Comp. Exch. Rate Gains Acc. and Comp. Exch. Rate Losses Acc. or Equity Exch. Rate Gains Acc. and Equity Exch. Rate Losses Acc. fields are left blank, the accounts specified in the Exch. Rate Gains Acc. and Exch. Rate Loss Acc. fields are used.



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Before performing the Import function, view and update the exchange rate information. On the Business Unit Card window, click the Exch. Rates button to select:

• Average Rate (Manual) • Closing Rate • Last Closing Rate

Each of these options displays the Change Exchange Rate window.

NOTE: The field(s) that are editable in the Change Exchange Rate window depend on the selection made in the Fix Exchange Rate Amount field in the Currency Exchange Rates window.

The exchange rate amounts are completed as follows for these options:

• Average Rate (Manual): Enter the exchange rate to use to calculate the value for G/L accounts assigned a Consol. Translation Method of Average Rate (Manual); the exchange rate is typically an arithmetic average of the exchange rates for the period or can be a best estimate.

• Closing Rate: Enter the exchange rate to use to calculate the value for G/L accounts assigned a Consol. Translation Method of Closing; the exchange rate is typically the exchange rate in effect at the last date of a period

• Last Closing Rate: Enter the exchange rate used for the prior period to calculate the value for G/L accounts assigned a Consol. Translation Method of Closing; the exchange rate is typically the exchange rate in effect at the last date of the prior period.

NOTE: The exchange rate field for the Last Closing Rate is populated based on the closing rate used for the last consolidation. Therefore, it is not generally necessary to edit the rate. However, when it is necessary to reprocess consolidations, the entry must be updated manually.

After entering the exchange rates, the consolidation is processed using the same steps as for a single currency consolidation.



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Upon completion of the consolidation, any translation difference is posted as follows:

• Temporal Method: All translation adjustments are posted to the Unrealized FX Gains or Unrealized FX Losses account on the income statement.

• Current Rate Method: Translation differences are posted to the equity lesson of the balance sheet as cumulative translation adjustments. This can require a separate general journal entry to reclassify the amount.

Consolidations can be rerun if it is necessary. Remember to review and update the exchange rate field for the Last Closing Rate.

Summary Multicurrency helps companies:

• Process transactions for vendors, customers, and bank accounts using a currency other than the local currency.

• Designate an additional reporting currency to use for general ledger activity, including reporting capabilities.

• Consolidate subsidiaries that operate in different currencies than the parent company.

Microsoft Dynamics NAV 2009 provides flexibility by providing separate fields for setting exchange rates for:

• Current transactions • Adjusting open transactions for exchange rate fluctuations

Companies that operate globally can benefit from the multicurrency functionality offered by Microsoft Dynamics NAV 2009 because:

• Entries can be entered an posted in all currencies • Realized and unrealized foreign exchanges gains and losses are

adjusted and calculated automatically • Reporting can be done in different currencies.



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2.

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Chapter 10: Year End Closing Processes

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CHAPTER 10: YEAR END CLOSING PROCESSES Objectives

The objectives are:

• Close the accounting periods for the fiscal year. • Explain and run the Close Income Statement batch job process. • Complete the closing process by posting the General Journal.

Introduction Completing the year end closing process in Microsoft Dynamics NAV 2009® involves three steps:

1. Closing the fiscal year using the Close Year function on the Accounting Periods window.

2. Generating a year-end closing entry using the Close Income Statement batch job.

3. Posting the year-end closing entry together with the offsetting equity account entries.

Closing a year is not required by Microsoft Dynamics NAV 2009. However, completing the closing process ensures that balances are displayed only for open year(s); for example, in the Chart of Accounts window.



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Closing a Fiscal Year The first step in the year end closing process is to close the fiscal year. This process manages the periods and dates for fiscal years.

NOTE: A fiscal year cannot be closed before a new one is created.

Close the Fiscal Year

To close the accounting periods, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Fiscal Year, and then select Accounting Periods.

FIGURE 10.1 ACCOUNTING PERIODS



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2. Click Close Year. A message appears about the year to be closed. This year is suggested based on the earliest open year, and the corresponding check marks in the New Fiscal Year field.

3. Click Yes to close the year.

NOTE: To close a non-standard year, add a check mark in the New Fiscal Year check box of the last period to be included in the year to be closed.

After running the fiscal year closing process:

• The Closed and Date Locked fields of all periods in that fiscal year are updated with a check mark that cannot be removed.

• The period lengths of the closed periods cannot be changed.

After a fiscal year is closed, G/L entries can still be posted to the closed year. When you post in a closed year, entries are marked as prior-year entries.

When subsequent entries are posted to a closed fiscal year:

1. Run the Close Income Statement batch job to transfer the balances to the retained earnings (equity) account.

2. Post the transferred entries.

NOTE: To prevent users from posting entries in a specific period, set a date range in the Allow Posting From and Allow Posting To fields in the General Ledger Setup window.

Demonstration: Prior-Year Entry Confirmation

Scenario: After closing the 2009 fiscal year, Phyllis, the accounting manager at CRONUS International Ltd., realizes that she has to post a December 2009 cleaning expense for 80.00.

After posting the expense, she reviews the entry to verify that the Prior-Year Entry check box contains a check mark to indicate that it is a closing entry.

NOTE: To complete this demonstration, ensure that the 2009 fiscal is closed. If a different year is closed, post into that year in step 5 of this demonstration.

Steps: Prior-Year Entry Confirmation

To post the 2009 cleaning expense and review the posted entry, follow these steps:




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3. Click OK. 4. Delete any existing journal lines in the batch. 5. In the Posting Date field, enter 12/31/09. 6. Ensure that the Account Type field is set to G/L Account. 7. In the Account No. field, enter 8110. 8. In the Amount field, enter 80.00. 9. Ensure that the Bal. Account Type field is set to G/L Account. 10. In the Bal. Account No. field, enter 2910. 11. Click Post. 12. Click Yes to post the journal lines. 13. Click OK and close the General Journal window. 14. In the General Ledger folder, under History, click G/L Registers. 15. Press CTRL+END to move to the last entry. 16. Click General Ledger to review the posted entries. 17. Click Actions and point to Zoom to zoom in on the line. 18. Locate the Prior-Year Entry field and verify that the value is set to

Yes. This means that this entry is considered a closing entry and will be included when the Close Income Statement batch job is run.


Test Your Knowledge: Close Year Process

What occurs after the Close Year process is run? (Select all that apply)

( ) Subsequent entries posted in the closed year are marked as prior-year entries.

( ) The Closed and Date Locked check boxes in the Accounting Periods window contain check marks that cannot be changed.

( ) A new fiscal year is created. ( ) Period lengths of closed periods cannot be changed.



10-5

Test Your Knowledge: Posting in a Closed Year

What steps must be performed after an entry is posted into a closed fiscal year?

Transferring Income Statement Account Balances The Close Income Statement batch job:

• Transfers the income statement account balances to an account in the balance sheet and closes the income statement accounts.

• Creates lines in a journal that are posted manually.

Use the Close Income Statement batch job multiple times to transfer the income statement account balances. This may be necessary, for example, when subsequent entries are posted into a closed year.



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Close Income Statement Batch Job

Access the Close Income Statement batch job on the Navigation Pane by click the Departments button, click Financial Management, click Periodic Activities, click Fiscal Year, and then select Close Income Statement.

FIGURE 10.2 CLOSE INCOME STATEMENT

The following fields appear on the batch job:

• Fiscal Year Ending Date - automatically populated with the last date in the latest closed fiscal year. This date is used to determine the Posting Date for the journal.

NOTE: The closing entries are posted with a fictitious (Cmm/dd/yy) date. Do not change this date in the journal batch.

• Gen. Journal Template - identifies the name of the general journal template that the entries are added in.

• Gen. Journal Batch - identifies the name of the general journal batch that the entries will be added in.

• Document No. - automatically populated with the next available number from the number series for the selected Gen. Journal Batch.

• Retained Earnings Acc. - identifies the account that the retained earnings entries are added in.

• Posting Description - specifies the text to accompany the entries. The default text is Close Income Statement.



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• Close by - determines how many entries are created by the batch job. The options are: o Business Unit Code: If this field is selected, and the company is

a consolidated company, separate entries are created for each business unit.

o Dimensions: For any dimensions selected, one entry is posted for each dimension value combination used in a G/L account. If neither option is used, a single entry is created for each account.

• Inventory Period Close - indicates that the inventory period(s) with ending dates equal to or greater than the last date of the accounting period is closed.

CAUTION: Do not use the fictitious date format (Cmm/dd/yy) when entering posting dates in Microsoft Dynamics NAV 2009. This format is used by the program to distinguish system-generated closing entries from user entries.

Demonstration: Run the Close Income Statement Batch Job

Scenario: After closing the 2009 fiscal year, Phyllis the Account Manager has to run the Close Income Statement batch job to transfer the income statement accounts to account 3120, the retained earnings account, as part of the fiscal year processing.

The default general journal is used and the posting description includes the fiscal year number.

It is necessary to retain Area, Business Group, and Customer Group dimension information posted on the income account entries.

Steps: Run the Close Income Statement Batch Job

To run the Close Income Statement batch job, follow these steps:

1. On the Navigation Pane, click the Departments button, click Financial Management, click Periodic Activities, click Fiscal Year, and then select Close Income Statement.

2. Ensure that the Fiscal Year Ending Date is 12/31/09. 3. In the Gen. Journal Template field, click the drop-down list and

select GENERAL. 4. Click OK. 5. In the Gen. Journal Batch field, click the drop-down list and select

DEFAULT. 6. Click OK. 7. In the Retained Earnings Acc. field, enter 3120.



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8. In the Posting Description field, add 2009 to the end of the text. 9. In the Dimensions field, click the AssistButton. 10. Click the Selected field for Area to insert a check mark. 11. Click the Selected field for Business Group to insert a check mark. 12. Click the Selected field for Customer Group to insert a check mark. 13. Click OK to close the Dimension Selection window. 14. Click OK to run the batch job. 15. Click OK to the message that the journal lines have been created.

Test Your Knowledge: Close Income Statement Process

1. Which of the following statements are true of the Close Income Statement batch job? (Select all that apply)

( ) Reconciles all G/L entries. ( ) Transfers the income statement account balances to an account in the

balance sheet. ( ) Creates lines in a journal. ( ) Closes the income statement accounts.

2. What type of account are closing entries transferred to?

( ) Accrued Earnings ( ) Retained Earnings ( ) Accrual Entries ( ) Retained Accruals

Posting the Journal The Close Income Statement batch job transfers the closing entries to the specified journal batch. The batch job does not post the entries automatically.

If an account was not specified in the Retained Earnings Acc. field in the Close Income Statement batch job, one or more lines must be inserted into the journal with:

• The retained earnings account. • The amount to be posted to the account.

When the journal is posted:

• An entry is posted to each income statement account so that its balance becomes zero.

• The retained earnings accounts are updated for the gain or loss.



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NOTE: When an additional reporting currency is set up in the General Ledger Setup window, Microsoft Dynamics NAV 2009 posts the journal automatically. This guarantees the correct posting of rounding differences.

Demonstration: Review Entries and Post the General Journal

In this demonstration, a G/L account that has 2009 entries is reviewed before and after posting the journal for comparison. The steps of reviewing these entries are not part of the closing process.

Scenario: To complete the year-end closing process, Phyllis posts the entries transferred to the Default General Journal.

Because a retained earnings account was specified in the Close Income Statement batch job, a separate balancing line is not required.

Steps: Review Entries and Post the General Journal

To review a G/L account that has 2009 entries, follow these steps:


2. Locate and select account 9110. 3. Notice the amount in the Net Change field and then click the drop-

down list. 4. Review the posted entries. 5. Close the General Ledger Entries and Chart of Accounts

windows.

To post the general journal, follow these steps:

1. Click General Ledger, click General Journals. 2. Ensure that the DEFAULT batch is selected. 3. Do not change the Posting Date. 4. Scroll down to the last entry for account 3120, the Retained Earnings

account. Notice the amount. 5. Notice that the Total Balance field at the bottom of the window

contains a zero balance. Therefore, the journal can be posted. 6. Click Post. 7. Click Yes to post the journal. 8. Click OK. 9. Close the General Journal.



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As soon as they are posted, an entry is posted to each income statement account so that its balance becomes zero and the year's result is transferred to the Retained Earnings account in the balance sheet.

To review the posted G/L accounts, follow these steps:

1. On the Navigation Pane, click General Ledger, and then click Chart of Accounts.

2. Locate and select account 9110. 3. Notice that the Net Change field contains a zero balance. 4. Click the field . 5. Notice that an offsetting line appears for the amount noted when you

reviewed the account before posting the journal. 6. Close the General Ledger Entries window. 7. Locate and select account 3120. 8. In the Net Change field, click the field. 9. Notice that the amount for the Close Income Statement 2009 line

matches the amount for this account from the general journal. 10. Close the General Ledger Entries window.

Test Your Knowledge: Posting the Journal

1. What occurs when you post a journal that contains the closing entries? (Select all that apply)

( ) An entry is posted to each balance sheet account so that its balance becomes zero.

( ) An entry is posted to each income statement account so that its balance becomes zero.

( ) The income statement accounts are updated for the gain or loss. ( ) The retained earnings accounts are updated for the gain or loss.

2. In the closing process, what occurs when an additional reporting currency is set up in the General Ledger Setup window?

( ) This setup does not affect the closing process. ( ) Additional currencies are added to the journal. ( ) Two journals are created when the Close Income Statement batch job

is run. ( ) The journal is automatically posted when the Close Income Statement

batch job is run.



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Lab 10.1 - Post an Entry into a Closed Fiscal Year Scenario

In this lesson, the 2009 fiscal year was closed using the three step process. It is now audit time and the auditors have found an additional vacation compensation expense in the amount of 7,844.74 that must be posted in 2009.

As the accounting manager, it is your responsibility to post the accrual. The debit is to the Vacation Compensation expense (account 8740), and the credit is to the Vacation Compensation Payable account (5840). Use 12/31/09 as the posting date for the entry.

After the entry is made, transfer and post the expense to include it in the closing process. Use the following criteria to complete the closing process:

• Use the Default General Journal as the transfer to journal. • Post to the retained earnings account, 3120. • Add 2009 Audit to the end of the posting description. • Do not close by dimensions because none were used to post this

expense.

You do not have to review any entries.

Challenge Yourself 1. Post the accrual as specified in the scenario. 2. Run the Close Income Statement batch job as specified in the

scenario. 3. Post the general journal.

Need a Little Help? 1. Open the Close Income Statement batch job. 2. Complete the fields based on the criteria in the scenario. 3. Run the batch job. 4. Open the General Journal. 5. Review the journal but do not post.

Step by Step 1. On the Navigation Pane, click the Departments button, click

Financial Management, click General Ledger, and then select General Journals.


3. Click OK. 4. Delete any existing journal lines in the batch.



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5. In the Posting Date field, enter 12/31/09. 6. Ensure that the Account Type field is set to G/L Account. 7. In the Account No. field, enter 8740. 8. In the Amount field, enter 7844.74. 9. Ensure that the Bal. Account Type field is set to G/L Account. 10. In the Bal. Account No. field, enter 5840. 11. Click Post. 12. Click Yes to post the journal lines. 13. Click OK and close the General Journal window. 14. In the Financial Management folder, click Periodic Activities,

click Fiscal Year, and then select Close Income Statement. 15. Ensure that the Fiscal Year Ending Date is 12/31/09. 16. In the Gen. Journal Template field, click the drop-down list and

select GENERAL. 17. Click OK. 18. In the Gen. Journal Batch field, click the drop-down list and select

DEFAULT. 19. Click OK. 20. In the Retained Earnings Acc. field, enter 3120. 21. In the Posting Description field, add 2009 Audit to the end of the

text. 22. In the Dimensions field, if dimensions are indicated:

o Click the AssistButton. o Click the Selected field for Area to remove the check mark. o Click the Selected field for Business Group to remove the check

mark. o Click the Selected field for Customer Group to remove the check

mark. o Click OK to close the Dimension Selection window.

23. Click OK to run the batch job. 24. Click OK the message that the journal lines have been created. 25. In the General Ledger folder, click General Journals. 26. Ensure that the DEFAULT batch is selected. 27. Click Post. 28. Click Yes to post the journal. 29. Click OK. 30. Close the General Journal.



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Summary The yearend closing processes in Microsoft Dynamics NAV 2009 is the final step in the fiscal year. A company must close all the income and expense accounts to get and final statement and balance for the year.

The Year End Closing Processes close all entries in Microsoft Dynamics NAV 2009 and the Close Income Statement batch job transfer all G&L accounts to the balance so the company is ready for the next period.

Completing the year end closing processes facilitates data segregation and analysis, and simplifies review of posted entries in the Chart of Accounts because the balances only reflect current year activity.



10-14

Test Your Knowledge 1. What is used to transfer the income statement account balances to a balance

sheet account?

( ) Transfer Fiscal Year Balance batch job ( ) Close Income Statement batch job ( ) Transfer Income Balance batch job ( ) Close Fiscal Year batch job

2. What are the three main steps of completing the year end closing process? (Select all that apply)

( ) Post the general journal. ( ) Open the new fiscal year. ( ) Transfer the Income Statement account balances. ( ) Close the fiscal year.

3. What must occur to prevent users from posting in a closed period?

( ) Open a new fiscal year. ( ) Run the Close Year process. ( ) Set a date range in the General Ledger Setup window. ( ) Close the Income Statement.



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2.

3.



10-16

Solutions Closing a Fiscal Year

Test Your Knowledge: Close Year Process

What occurs after the Close Year process is run? (Select all that apply)

(√) Subsequent entries posted in the closed year are marked as prior-year entries.

(√) The Closed and Date Locked check boxes in the Accounting Periods window contain check marks that cannot be changed.

( ) A new fiscal year is created. (√) Period lengths of closed periods cannot be changed.

Test Your Knowledge: Posting in a Closed Year

What steps must be performed after an entry is posted into a closed fiscal year?

MODEL ANSWER:

The Close Income Statement batch job must be run and then the transferred entries must be posted.

Transferring Income Statement Account Balances

Test Your Knowledge: Close Income Statement Process

1. Which of the following statements are true of the Close Income Statement batch job? (Select all that apply)

( ) Reconciles all G/L entries. (√) Transfers the income statement account balances to an account in the

balance sheet. (√) Creates lines in a journal. (√) Closes the income statement accounts.

2. What type of account are closing entries transferred to?

( ) Accrued Earnings (•) Retained Earnings ( ) Accrual Entries ( ) Retained Accruals



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Posting the Journal

Test Your Knowledge: Posting the Journal

1. What occurs when you post a journal that contains the closing entries? (Select all that apply)

( ) An entry is posted to each balance sheet account so that its balance becomes zero.

(√) An entry is posted to each income statement account so that its balance becomes zero.

( ) The income statement accounts are updated for the gain or loss. (√) The retained earnings accounts are updated for the gain or loss.

2. In the closing process, what occurs when an additional reporting currency is set up in the General Ledger Setup window?

( ) This setup does not affect the closing process. ( ) Additional currencies are added to the journal. ( ) Two journals are created when the Close Income Statement batch job

is run. (•) The journal is automatically posted when the Close Income Statement

batch job is run.

Test Your Knowledge

1. What is used to transfer the income statement account balances to a balance sheet account?

( ) Transfer Fiscal Year Balance batch job (•) Close Income Statement batch job ( ) Transfer Income Balance batch job ( ) Close Fiscal Year batch job

2. What are the three main steps of completing the year end closing process? (Select all that apply)

(√) Post the general journal. ( ) Open the new fiscal year. (√) Transfer the Income Statement account balances. (√) Close the fiscal year.



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3. What must occur to prevent users from posting in a closed period?

( ) Open a new fiscal year. ( ) Run the Close Year process. (•) Set a date range in the General Ledger Setup window. ( ) Close the Income Statement.


Na2009 enus fin

Technology

microsoft dynamics nav

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general ledger budgets

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general ledger2

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