Admin - 80219 - Financials I in Microsoft Dynamics AX 2012

COURSE: 80219

FINANCIALS I IN MICROSOFT DYNAMICS® AX 2012

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Last Revision: August 2011 This courseware is provided “as-is”. Information and views expressed in this courseware, including URL and other Internet Web site references, may change without notice. Unless otherwise noted, the examples depicted herein are provided for illustration only and are fictitious. No real association or connection is intended or should be inferred. This courseware does not provide you with any legal rights to any intellectual property in any Microsoft product. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this courseware may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means or for any purpose, without the express written permission of Microsoft Corporation. Copyright © 2011 Microsoft Corporation. All rights reserved. Microsoft®, Microsoft Dynamics®, Microsoft® PowerPoint®, Microsoft® SQL Server® data management software and Microsoft Dynamics® AX are trademarks of the Microsoft group of companies. All other trademarks are property of their respective owners. This course content is designed for Microsoft Dynamics® AX 2012.

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Table of Contents Introduction

0-1 

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

Chapter 1: General Ledger Setup

1-1 

Objectives ........................................................................................................... 1-1  Introduction ......................................................................................................... 1-1  Currency and Exchange Rate Setup .................................................................. 1-2  Lab 1.1 - Set up a Currency Exchange Rate .................................................... 1-12  Periods and Fiscal Year Setup ......................................................................... 1-14  Lab 1.2 - Create Periods in a New Fiscal Year ................................................ 1-18  Date Intervals ................................................................................................... 1-19  Reason Codes .................................................................................................. 1-23  Financial Dimensions ....................................................................................... 1-25  Lab 1.3 - Assign Ledger Account Dimension Values ....................................... 1-32  Financial Dimension Sets ................................................................................. 1-33  Period Allocations ............................................................................................. 1-34  Summary .......................................................................................................... 1-44  Test Your Knowledge ....................................................................................... 1-45  Quick Interaction: Lessons Learned ................................................................. 1-47  Solutions ........................................................................................................... 1-48 

Chapter 2: Chart of Accounts Setup

2-1 

Objectives ........................................................................................................... 2-1  Introduction ......................................................................................................... 2-1  Main Account Categories ................................................................................... 2-2  Chart of Accounts ............................................................................................... 2-4  Main Account Information ................................................................................... 2-7  Main Account Administration Information ........................................................... 2-9  Main Account Setup Information ...................................................................... 2-11  Configuring Account Structures ........................................................................ 2-12  Advanced Rules ............................................................................................... 2-14  Ledger Setup .................................................................................................... 2-17  Lab 2.1 - Enter a Main Account ........................................................................ 2-22  Lab 2.2 - Account Allocation Terms ................................................................. 2-23  Accounts for Automatic Transactions ............................................................... 2-24  Inquiries and Reports Related to the Chart of Accounts .................................. 2-26  Summary .......................................................................................................... 2-28  Quick Interaction: Lessons Learned ................................................................. 2-31  Solutions ........................................................................................................... 2-32 

Chapter 3: Journal Setup

3-1 

Objectives ........................................................................................................... 3-1  Introduction ......................................................................................................... 3-1  Journal Setup ..................................................................................................... 3-2  Journal Controls ................................................................................................. 3-9  Journal Descriptions ......................................................................................... 3-10 

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Financials I in Microsoft Dynamics® AX 2012 Balance Control Accounts ................................................................................ 3-11  General Ledger Parameters ............................................................................. 3-13  Lab 3.1 - Set Up Journals ................................................................................. 3-15  Summary .......................................................................................................... 3-17  Test Your Knowledge ....................................................................................... 3-18  Quick Interaction: Lessons Learned ................................................................. 3-20  Solutions ........................................................................................................... 3-21 

Chapter 4: General Ledger Daily Procedures

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Objectives ........................................................................................................... 4-1  Introduction ......................................................................................................... 4-1  General Ledger Journals .................................................................................... 4-2  Enter General Ledger Transactions ................................................................... 4-4  Lab 4.1 - Daily Transactions ............................................................................... 4-7  Lab 4.2 - Daily Transactions with Balance Control ............................................. 4-9  Posting Multiple Journals ................................................................................. 4-11  Approval Journals ............................................................................................. 4-13  Example: Gathering Data for an Approval Journal ........................................... 4-17  Voucher Templates .......................................................................................... 4-18  Periodic Journals .............................................................................................. 4-20  Lab 4.3 - Entering Periodic Transactions ......................................................... 4-24  General Ledger Transaction Reversal.............................................................. 4-27  Reversing Entries - General Journals .............................................................. 4-31  Inquire and View Reports on Daily Journal Transactions ................................. 4-32  Summary .......................................................................................................... 4-34  Test Your Knowledge ....................................................................................... 4-35  Quick Interaction: Lessons Learned ................................................................. 4-37  Solutions ........................................................................................................... 4-38 

Chapter 5: Sales Tax Setup

5-1 

Objectives ........................................................................................................... 5-1  Introduction ......................................................................................................... 5-1  Sales Tax Overview ........................................................................................... 5-2  Ledger Posting Groups ...................................................................................... 5-4  Lab 5.1 - Create a Ledger Posting Group ........................................................ 5-10  Sales Tax Authorities ....................................................................................... 5-12  Lab 5.2 - Create a Sales Tax Authority ............................................................ 5-15  Lab 5.3 - Create and Assign a Vendor to the Sales Tax Authority ................... 5-16  Sales Tax Settlement Periods .......................................................................... 5-18  Lab 5.4 - Setup of Sales Tax Settlement Periods............................................. 5-22  Sales Tax Codes .............................................................................................. 5-24  Sales Tax Codes Intervals................................................................................ 5-32  Lab 5.5 - Set Up Sales Tax Codes Intervals .................................................... 5-36  Sales Tax Groups ............................................................................................. 5-38  Item Sales Tax Groups ..................................................................................... 5-43  Sales Tax Jurisdictions ..................................................................................... 5-45  Lab 5.6 - Comprehensive Setup of Sales Tax .................................................. 5-47  Lab 5.7 - Including Sales Tax in Journal Amounts ........................................... 5-54  Sales Tax Transactions .................................................................................... 5-55  Sales Tax Exemption ....................................................................................... 5-61 

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Table of Contents Lab 5.8 - EU 115 Sales Tax Directive .............................................................. 5-63  Withholding Sales Tax ...................................................................................... 5-66  Summary .......................................................................................................... 5-69  Test Your Knowledge ....................................................................................... 5-70  Quick Interaction: Lessons Learned ................................................................. 5-73  Solutions ........................................................................................................... 5-74 

Chapter 6: Financial Features

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Objectives ........................................................................................................... 6-1  Introduction ......................................................................................................... 6-1  Financial Reason Codes .................................................................................... 6-2  Fill Utility ............................................................................................................. 6-7  Summary ............................................................................................................ 6-8  Test Your Knowledge ......................................................................................... 6-9  Quick Interaction: Lessons Learned ................................................................. 6-10  Solutions ........................................................................................................... 6-11 

Chapter 7: Cash and Bank Management Setup

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Objectives ........................................................................................................... 7-1  Introduction ......................................................................................................... 7-1  Bank Transaction Types ..................................................................................... 7-2  Bank Transaction Groups ................................................................................... 7-4  Lab 7.1 - Create Bank Transaction Types and Bank Transaction Groups ......... 7-5  Cash and Bank Management Parameters ......................................................... 7-7  Payment Purpose Codes ................................................................................... 7-9  Bank Groups .................................................................................................... 7-10  Bank Accounts ................................................................................................. 7-11  Lab 7.2 - Create a Bank Group and Bank Account .......................................... 7-16  Check Layout ................................................................................................... 7-18  Lab 7.3 - Define a Check Layout ...................................................................... 7-23  Summary .......................................................................................................... 7-25  Test Your Knowledge ....................................................................................... 7-26  Quick Interaction: Lessons Learned ................................................................. 7-27  Solutions ........................................................................................................... 7-28 

Chapter 8: Cash And Bank Management Daily Procedures

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Objectives ........................................................................................................... 8-1  Introduction ......................................................................................................... 8-1  Create Checks .................................................................................................... 8-2  Delete a Check ................................................................................................... 8-3  Lab 8.1 - Create and Delete a Check ................................................................. 8-4  Deposit Slips ...................................................................................................... 8-6  Lab 8.2 - Create a Deposit Slip .......................................................................... 8-9  Void Unposted Checks ..................................................................................... 8-11  Refund Checks ................................................................................................. 8-11  Lab 8.3 - Check Refund ................................................................................... 8-13  Bank Remittance .............................................................................................. 8-14  Payment Reversal ............................................................................................ 8-15  Reconcile a Bank Account ............................................................................... 8-17  Summary .......................................................................................................... 8-20 

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Financials I in Microsoft Dynamics® AX 2012 Test Your Knowledge ....................................................................................... 8-21  Quick Interaction: Lessons Learned ................................................................. 8-23  Solutions ........................................................................................................... 8-24 

Chapter 9: Accounts Payable Setup

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Objectives ........................................................................................................... 9-1  Introduction ......................................................................................................... 9-1  Payment Schedule ............................................................................................. 9-2  Terms of Payment .............................................................................................. 9-4  Payment Days .................................................................................................... 9-7  Lab 9.1 - Terms of Payment ............................................................................... 9-8  Cash Discounts .................................................................................................. 9-9  Payment Fee .................................................................................................... 9-14  Methods of Payment ........................................................................................ 9-18  Lab 9.2 - Method of Payment, Terms of Payment, and Cash Discount ........... 9-24  Vendor Groups ................................................................................................. 9-26  Lab 9.3 - Create a Vendor Group ..................................................................... 9-30  Accounts Payable Posting Profiles ................................................................... 9-31  Lab 9.4 - Vendor Posting Profile ...................................................................... 9-34  Accounts Payable Vendors .............................................................................. 9-36  Lab 9.5 - Vendors ............................................................................................. 9-42  Summary .......................................................................................................... 9-43  Test Your Knowledge ....................................................................................... 9-44  Quick Interaction: Lessons Learned ................................................................. 9-45  Solutions ........................................................................................................... 9-46 

Chapter 10: Accounts Payable Daily Procedures

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Objectives ......................................................................................................... 10-1  Introduction ....................................................................................................... 10-1  Invoice Journals in Accounts Payable .............................................................. 10-2  Invoice Register ................................................................................................ 10-2  Invoice Approval Journal ................................................................................ 10-13  Lab 10.1 - Register an Invoice ....................................................................... 10-16  Vendor Invoice Pool Excluding Posting Details .............................................. 10-19  Lab 10.2 - Invoice Pool Excluding Posting ..................................................... 10-21  Invoice Journal ............................................................................................... 10-23  Lab 10.3 - Invoice Journal .............................................................................. 10-25  Voucher Template .......................................................................................... 10-27  Payment Journals ........................................................................................... 10-29  Lab 10.4 - Payment Journals ......................................................................... 10-39  Prepayments .................................................................................................. 10-43  Lab 10.5 - Setup and Track a Prepayment..................................................... 10-47  Invoice Matching ............................................................................................ 10-50  Charges to Purchase Order Invoices ............................................................. 10-60  Edit Open Transactions .................................................................................. 10-64  Reverse a Closed Transaction ....................................................................... 10-66  Lab 10.6 - Reverse a Closed Transaction ...................................................... 10-68  Print Management .......................................................................................... 10-69  Summary ........................................................................................................ 10-76  Test Your Knowledge ..................................................................................... 10-77 

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Table of Contents Quick Interaction: Lessons Learned ............................................................... 10-79  Solutions ......................................................................................................... 10-80 

Chapter 11: Accounts Receivable Setup

11-1 

Objectives ......................................................................................................... 11-1  Introduction ....................................................................................................... 11-1  Payment Schedule ........................................................................................... 11-2  Terms of Payment ............................................................................................ 11-4  Payment Days .................................................................................................. 11-7  Lab 11.1 - Terms of Payment ........................................................................... 11-9  Cash Discount ................................................................................................ 11-10  Payment Fee .................................................................................................. 11-13  Methods of Payment ...................................................................................... 11-18  Lab 11.2 - Set up a Method of Payment ......................................................... 11-23  Customer Groups ........................................................................................... 11-24  Lab 11.3 - Create a Customer Group ............................................................. 11-28  Accounts Receivable Posting Profiles ............................................................ 11-29  Lab 11.4 - Set Up a Customer Posting Profile................................................ 11-32  Accounts Receivable Customers.................................................................... 11-34  Lab 11.5 - Create a Customer ........................................................................ 11-41  Summary ........................................................................................................ 11-43  Test Your Knowledge ..................................................................................... 11-44  Quick Interaction: Lessons Learned ............................................................... 11-46  Solutions ......................................................................................................... 11-47 

Chapter 12: Accounts Receivable Daily Procedures

12-1 

Objectives ......................................................................................................... 12-1  Introduction ....................................................................................................... 12-1  Free Text Invoice - Description and Usage ...................................................... 12-2  Lab 12.1 - Create Free Text Invoices ............................................................. 12-10  Payment Journals ........................................................................................... 12-12  Lab 12.2 - Settlements - Entering an Accounts Receivable Payment Journal (Cash Receipt) ............................................................................................... 12-23  Edit Open Transactions .................................................................................. 12-25  Lab 12.3 - Edit Open Transactions ................................................................. 12-29  Placing an Accounts Receivable Transaction on Hold ................................... 12-31  Reverse Settlements ...................................................................................... 12-32  Lab 12.4 - Reverse a Settlement .................................................................... 12-34  Reimburse a Customer .................................................................................. 12-35  Lab 12.5 - Reimburse a Customer ................................................................. 12-36  Reason Codes ................................................................................................ 12-39  Print Management .......................................................................................... 12-40  Summary ........................................................................................................ 12-47  Test Your Knowledge ..................................................................................... 12-48  Quick Interaction: Lessons Learned ............................................................... 12-50  Solutions ......................................................................................................... 12-51 

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Financials I in Microsoft Dynamics® AX 2012

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

Introduction

INTRODUCTION Welcome We know training is a vital component of retaining the value of your Microsoft Dynamics® AX 2012. 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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Financials I in Microsoft Dynamics® AX 2012

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.

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Introduction

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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Financials I in Microsoft Dynamics® AX 2012

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

2.

3.

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Chapter 1: General Ledger Setup

CHAPTER 1: GENERAL LEDGER SETUP Objectives The objectives are: •

Set up Currencies and Exchange Rates.

•

Create Periods in a new fiscal year.

•

Create Date intervals.

•

Create, modify, and delete reason codes.

•

Create a Financial dimension value.

•

Create a Dimension Set.

•

Set up allocation rules.

•

Contrast the various allocation methods.

Introduction A general ledger is a formal ledger that contains a company’s accounting records. To make the General ledger functional, setup the chart of accounts, fiscal calendars, legal entities, and currencies. The chart of accounts is a list of main accounts and financial dimensions that are allowed by one or more account structures. Fiscal calendars specify what time period financial data is posted, while currency setup determines which currencies are available for business transactions. This course explains how to work with the chart of accounts and its multiple dimensions. These dimensions may be used to track profits, cost centers, and other important financial information. Allocation rules and methods are also defined in this course.

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Financials I in Microsoft Dynamics® AX 2012

Currency and Exchange Rate Setup Currency setup is a mandatory step in Microsoft Dynamics AX® and is used to record financial transactions. Multi-currency functionality may be used if your company does business in more than one currency. If your organization has multiple legal entities and transacts in multiple currencies, then maintaining currencies and their corresponding exchange rate is essential.

Currency Setup In Microsoft Dynamics AX, all currencies are provided by default. The currencies are loaded the first time a user opens the General ledger parameters form. To view currencies click General ledger, click Setup, click Currency, and then click Currencies.

FIGURE 1.1 CURRENCIES FORM

Only one currency can represent the Triangulation currency. By default, the EUR currency is selected as the Triangulation currency. To change the Triangulation currency, you must first clear the Reference currency for triangulation check box on the EUR record in the Currencies form. Then, you can select the Reference currency for triangulation on the desired currency.

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Chapter 1: General Ledger Setup Currency Names and Symbols Each currency may have specific attributes associated with it. The name, symbol and currency code are specific to each currency. The following illustrates currencies: •

$ - U. S. dollar

•

€ - Euro

Field

Description

Currency The unique identifier – a code of up to three characters – for the selected currency. Examples: • USD- U.S dollar

Name

•

EUR - Euro

•

CAD - Canadian dollar

A description of the currency. This is typically printed on checks and other documents. Examples: • U.S dollar •

Euro

•

Canadian dollar

Symbol

Typically used on reports Example: $

Currency Code

The standard code of the currency as defined by the International Organization for Standardization (ISO).

Accounting and Reporting Currencies Microsoft Dynamics AX uses the concept of Accounting currency and Reporting currency. •

Accounting Currency: The customary monetary unit of measure used to record the converted monetary value of economic transactions in ledger accounts. In previous releases of Microsoft Dynamics AX, this was called the company currency.

•

Reporting Currency: The monetary unit of measure used to record the converted monetary value of economic transactions in ledger accounts for financial and management reporting purposes.

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Financials I in Microsoft Dynamics® AX 2012 An example of this would be if you had a subsidiary company in Canada, your primary company is in the United States. When running reports you want to see the results of the business operations in Canadian dollars (CAD). To accomplish this, you must convert your U.S. dollars (USD) to CAD, the system uses the exchange rate defined on the Exchange rates form to convert the amounts for reporting purposes.

Procedure: Enable a Currency for Currency Conversion The Currency Converter setup allows numeric conversions for online transactions. If the Conversion box is selected, the system will automatically convert transaction amounts in grids using the exchange rates in the lower pane. This setup allows the display of financial information in a currency other than the default company currency in forms and reports. This conversion is completed by double-clicking the Currency converter in the Status bar in these forms. Perform the following steps to convert to another currency. 1. Click General ledger, click Setup, click Currency, and then click Currencies. 2. Select a currency. 3. Select the Conversion check box to enable a currency for conversion. 4. Specify the currency's symbol before or after an amount, in the Prefix or Suffix fields. HINT: Enter a space before the currency symbol to separate the currency amount and the symbol.

Changing the Display Currency After a currency is enabled for currency conversion, you can display financial information in a form or report using a currency other than the ledger accounting currency. Do this by performing the following steps: 1. On the status bar, click the Currency field to open the Currency converter form. 2. Select any of the currencies that have been set up for conversion in the Currency converter form. 3. Enter the date used for the conversion in the Date of rate field. 4. Click a currency to select the new currency.

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Chapter 1: General Ledger Setup The Currency converter form will automatically close, and the Currency field on the status bar displays the new currency. All the forms, inquiries, and reports that originally displayed amounts in the company's currency now display the currency selected. Perform the following steps to return to the default company currency: 1. Open the Currency converter form. 2. Click the Reset button to return to the ledger accounting currency.

Procedure: Set Rounding Options Perform the following steps to set the Rounding options for each currency. 1. From the Currencies form, select a currency. 2. Tab to the Rounding Rules section. 3. Round the sums according to a fixed unit for general transaction amounts For example, amounts on transactions are rounded to the nearest unit to 0.01. Specify the general unit for rounding in the General roundoff field. 4. Round sums for Sales orders, Purchase orders, and Prices. These have a Rounding option as well as a Rounding method. Rounding Option - Enter the unit for rounding amounts, such as 0.10 or 1.00. Rounding Method - Select the rounding convention that applies to the number to the right of the round-off unit that is entered in the Rounding rule text box: •

Normal – round up numbers 5 and higher and round down numbers 4 and lower.

•

Downward – round down all numbers.

•

Rounding-up – round up all numbers.

NOTE: The value in the General round-off field affects all values in all modules.

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Financials I in Microsoft Dynamics® AX 2012 Rounding Option Considerations All posting amounts are rounded off to the nearest factor of the specified unit, regardless of whether they are calculated and posted automatically or entered manually by the user. In the General ledger parameters form: •

Specify the maximum rounding amount for a voucher in the default currency, in the Maximum penny difference field.

•

Set up the rounding for secondary currencies in the Maximum penny-rounding in secondary currency field.

FIGURE 1.2 GENERAL LEDGER PARAMETERS

Currency Gender Currency Gender is used for Spanish speaking countries to define the gender printed on checks and reports. Select Feminine if the selected currency has a feminine gender and the gender is used on checks and reports. The default value for this field is Masculine, which, in effect, means no gender.

Procedure: Create Exchange Rate Types Exchange rates types are shared data across the entire system and only need to be setup once. Exchange rate types are a grouping that allows different exchange rates for two currencies. Examples include Buy, Sell, Spot, and Budget.

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Chapter 1: General Ledger Setup Perform the following steps to set up an exchange rate: 1. To access the Exchange rates types form, click General ledger, click Setup, click Currency, and then click Exchange rate types. 2. Click on the New button to create a new record. 3. Enter the identification of the exchange rate type in the Exchange rate type field and a description in the Name field. 4. Save the record and close the form.

FIGURE 1.3 EXCHANGE RATE TYPES

Procedure: Create Currency Exchange Rates If a company trades with multiple currencies, and uses multiple exchange rate conversions. Perform the following steps to set up the additional exchange rates: 1. To access the Currency Exchange rates form, click General ledger, click Setup, click Currency, and then click Currency exchange rates or navigate from the Exchange rate type form. 2. Select a Exchange rate type from the drop-down list. 3. Click the New button. 4. Define the necessary exchange rates between a currency pair by selecting a currency in the From currency and the To currency drop-down list.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: A currency pair can only exist once and entering a reciprocal pair is not supported in the the system. Therefore, if you already have USD to EUR set up, you cannot create a EUR to USD currency pair for the same exchange rate type. The system will calculate the reciprocal rate automatically if it cannot find the exact currency pair during the translation conversion. If you only have USD to EUR set up and you are entering a transaction amount in EUR in a legal entity where USD is the accounting currency, the system will first look for the exact currency pair in the rate type used by the ledger: EUR to USD. If not found, the system will then look for USD to EUR and calculate the reciprocal rate. 5. Define the Quotation unit. Typically the system is based on either one unit or one hundred units. If the field is set to one hundred units, the exchange rate should specify the equivalent of one hundred units of the foreign currency. For example, if the "From" currency is U.S. dollars and the "To" currency is Euro, the exchange rate should specify how many U.S. dollars equal one hundred Euros. 6. Select the date range in by entering the From date and a To Date in the appropriate fields. This date range is used to filter the display of the exchange rates in the grid. By default, this range is set to 30 days prior to and 30 days after the current date 7. It is possible to add multiple exchange rate dates for a single currency pair by clicking the Add button. 8. It is also possible to remove exchange rate dates for a single currency pair by clicking the Remove button. 9. Save the record and close the form

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Chapter 1: General Ledger Setup NOTE: Because the same currency can have several rates, the posting date determines the rate applied. For example: An exchange rate is entered on January 1, and another exchange rate is entered on February 1. If a sales order is invoiced on January 15, the exchange rate from January 1 is used to calculate the invoice amount. If an exchange adjustment is run on February 2, the rate from February is used as an adjustment.

FIGURE 1.4 CURRENCY EXCHANGE RATES

Procedure: Create Revaluation Accounts When running currency revaluation, exchange rate differences may occur due to the change in exchange rates. This is also used in the customer/vendor settlement of payments and invoices. Revaluation processes will generate unrealized gain/loss amounts where the settlement process will generate realized gain/loss amounts. For each ledger, define main accounts to account for changes in exchange rate loss or gain. Perform the following steps to set up ledger and currency specific exchange rate loss/gain accounts: 1. Open General ledger, select Setup, select Currency, and then select Currency revaluation accounts. 2. Select the ledger in the Ledger field. 3. Select a Currency and define the main accounts that will be posted to for any unrealized and realized gains/losses for the currency in that ledger. 4. Repeat the same steps for each ledger/currency. 5. Save the record and close the form.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: This setup can also be completed from the General ledger Setup > Ledger form if different gain/loss accounts are not required for each currency.

FIGURE 1.5 CURRENCY VALUATION ACCOUNTS FORM

Denomination Currencies Add the currencies that are denominated as the triangulation currency and should be triangulated through the triangulation currency during the currency conversion process.

FIGURE 1.6 DENOMINATION CURRENCIES FORM

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Chapter 1: General Ledger Setup Accounting and Reporting Currencies Microsoft Dynamics AX allows Accounting and Reporting currencies. Accounting Currency: This is the monetary unit of measure that is used to record the converted monetary value of economic transactions in ledger accounts. It may also be referred to as the "company" or ledger currency. Reporting Currency: This is the monetary unit of measure used to record the converted monetary value of economic transactions in ledger accounts for financial and management reporting purposes. For example: A primary company entity is located in the United States, and a subsidiary entity is located in Canada. To see financial reports in the Canadian (CAD ) currency, the system uses the exchange rates defined in the Exchange rates form to convert USD to CAD amounts.

Procedure: Change the Display Currency After a currency has been enabled for currency conversion, perform the following steps to display financial information in a currency other than the default company currency: 1. On the status bar, click the Currency field to open the Currency converter form. 2. Select any of the currencies that have been set up for conversion in the Currency converter form. 3. Enter the date used for the conversion in the Date of rate field. 4. Click a currency to select the new currency. The Currency converter form automatically closes, and the Currency field on the status bar displays the new currency. All the screens, inquiries, and reports that originally showed amounts in the company's currency display the new currency. Perform the following steps to return to the default company currency. 1. Open the Currency converter form. 2. Click the Reset button to return to the default company currency. NOTE: When you change the display currency, the default currency of a company does not change. Also, this is not a global change; it does not affect any other users in the company, nor does it change the original transaction. It is also meant to be an estimate of the amount in the selected currency.

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Financials I in Microsoft Dynamics® AX 2012

Lab 1.1 - Set up a Currency Exchange Rate Scenario Ken is the Controller for Contoso Entertainment USA (CEU). CEU uses US dollars as the company's default currency. CEU recently gained a new customer located in South Africa and uses the South African Rand (ZAR). Transactions for this currency should be tracked to two decimal places. As of April 1, 2011, 12.35 USD equals 100 ZAR. After some research, Ken has found that the following posting accounts should be set for the new currency. Field

Value

Realized Loss

801300

Realized Profit

801500

Unrealized Loss

801400

Unrealized Profit

801600

Challenge Yourself! 1. Set up the South African Rand (ZAR) posting accounts and rounding options. 2. Set up the exchange rate. 3. Convert the ZAR Quotation unit to 100.

Need a Little Help? 1. To set up the currency and specify the posting accounts and rounding options, follow these steps: o Open the Currencies form and enter a general rounding rule. o Open the Currency revaluation accounts form, and set appropriate main accounts. 2. Set up the exchange rate for the ZAR currency. 3. To set up ZAR for currency conversion, select 100 in the Quotation unit field

Step by Step Perform the following steps to set up the currency rounding options: 1. Click General ledger, click Setup, click Currency, and then click Currencies. 2. Highlight the Currency ZAR.

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Chapter 1: General Ledger Setup 3. Click the Rounding rules FastTab and in the General rounding rule field, enter .01. 4. Click Close to close the form. Perform the following steps to set up the currency posting accounts: 1. Click General ledger, click Setup, click Currency, and then click Currency revaluation accounts. 2. Select ceu as the Ledger. 3. Highlight the Currency ZAR. 4. In the Realized gain line, enter 801500 in the Main account field. 5. In the Realized loss line, enter 801300 in the Main account field. 6. In the Unrealized gain line, enter 801600 in the Main account field. 7. In the Unrealized loss line, enter 801400 in the Main account field. 8. Click Close to close the form. Perform the following steps to set up the exchange rate. Every currency requires one exchange rate entry with a blank date. 1. Click General ledger, click Setup, click Currency, and then click Currency exchange rates. 2. In the Exchange rate type field, select Default in the drop down list. 3. Click the Add button. 4. In the Start Date field, click the calendar icon. 5. Select 04/01/11. 6. In the Exchange rate field, enter 12.3500 Perform the following steps to set up ZAR for currency conversion. 1. Select 100 in the Quotation unit field. 2. Click Close to close the form.

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Financials I in Microsoft Dynamics® AX 2012

Periods and Fiscal Year Setup The fiscal year in Microsoft Dynamics AX can be: •

Set to any length

•

Divided into any number of periods

•

Shared across multiple legal entities

Both fiscal year and periods can be set up by the following measurements of time: •

Years

•

Months

•

Days

Each period (at the ledger level) can be: •

Closed completely or put On Hold to block transaction postings

•

Set to enable selected users to continue an update of one or more modules

The periods and fiscal year feature is very useful for the preparation and reconciliation of periodic and yearly accounts

Set Up Periods and Fiscal Year Fiscal calendars are shared across multiple legal entities. The benefits of sharing fiscal calendars include: •

Supporting multiple fiscal calendars for each legal entity.

For example: Fixed assets may require two calendars one for auditing purposes and one for tax purposes. Having multiple calendars allows you to run parallel depreciations. •

Reduces the amount of setup required for each legal entity as it is possible to use the same fiscal calendar for multiple legal entities.

Before posting transactions, a new fiscal year must be divided into periods as transactions cannot post unless a period is created for the posting date. NOTE: Microsoft Dynamics AX posts transactions according to dates as opposed to periods. Accounting periods are used for reporting. Closing of accounting periods allows the user to close the sub-ledger to make sure that no additional transactions are recorded.

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Chapter 1: General Ledger Setup Scenario Phyllis, the Accounting Manager, wants to define calendars for different purposes and share them across different ledgers without having to create them in each legal entity.

Procedure: Create Shared Fiscal Calendar Perform the following steps to create a new fiscal calendar: 1. 2. 3. 4. 5. 6. 7. 8.

Click General ledger, click Setup, and then click Fiscal Calendar. Click the New fiscal calendar button. Enter the name of the calendar to be created in the Calendar field. Enter a description of the fiscal calendar in the Description field. This description may print on reports. Enter the Start and End dates of the initial fiscal year in the appropriate fields. Enter a Fiscal year name of the initial fiscal year to be associated with this fiscal calendar. Enter the Length of the period and the Unit of the periods. These fields work together to determine how many periods will be created. Click the Create button.

NOTE: There will always be an Open and Closing period created along with the number parameters specified in the Length of the Period and the Unit fields.

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Financials I in Microsoft Dynamics® AX 2012 Example: Length of period entered in setup

Unit entered in setup

Number of Periods Created

1

Days

367

1

Months

14

1

Year

3

FIGURE 1.7 FISCAL CALENDAR YEAR FORM

Review New Periods When you create a new fiscal year, the system creates the following:

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•

An opening period with the Type of Opening

•

A number of periods (or period) with the Type of Operating

•

A closing period with the Type of Closing

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Chapter 1: General Ledger Setup NOTE: There is no Period status control on the Fiscal Calendar form. This is because when you are sharing a calendar across multiple legal entities, all legal entities may not be ready to be closed at the same time. Therefore, you control the period status on a per-legal entity basis, in their ledger (General ledger > Setup > Ledger > Ledger calendar). The period types are defined as follows: •

Opening – the period can be used to record opening balances from the previous period.

•

Operating – the period can be used to record accounting transactions.

•

Closing – the period can be used to record general ledger transactions for closing a fiscal period.

Modifying Fiscal Calendar Once the Fiscal Calendar is created, it is possible to Divide, Delete, or Create closing period in the Fiscal calendar form by clicking the appropriate button. •

To divide an existing period into two periods, click the Divide period button. Enter the start date of the new period, and then click OK to create the new period and return to the Periods form.

•

To create a closing period for a fiscal period, click the Create Closing period button. The system automatically creates an opening and closing period for the fiscal year, but not for each individual period.

NOTE: It is also possible to create multiple closing periods. This provides the ability to track internal button external audit adjustments (for example) in separate periods. •

•

To delete period with an Operating status click the Delete button. The Delete button is not available if the selected fiscal period has a status of Opening. No warning or error message appears when an open period with transaction history is deleted. The transactions are not deleted, and the end date of the period prior to the deleted period changes to coincide with the beginning date of the next period. After making changes to periods, it is recommend to run the Recalculate ledger period functionality.

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Lab 1.2 - Create Periods in a New Fiscal Year Scenario Ken, the Controller for Contoso Entertainment USA (CEU), must create a new fiscal year. CEU has a fiscal year that begins on July 1, and is divided into onemonth periods.

Challenge Yourself! Create the fiscal year calendar for 2012, which begins on July 1, 2011.

Need a Little Help? 1. In the Fiscal calendars form, click the New fiscal calendar button to create the fiscal year for 2012. 2. Select the period length of one month.

Step by Step 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

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Click General ledger, click Setup, and then click Fiscal Calendar. Click the New fiscal calendar button. Enter FIS-2012 in the Calendar field. Enter Fiscal Year 2012 in the Description field. In the Start of fiscal year field, enter 7/1/2011. In the End of fiscal year field, enter 6/30/2012. Enter 2012 in the Fiscal year name field. In the Length of period field, enter 1. In the Unit field, click the arrow to select Months. Click the Create button to create the year. Click Close to close the form.

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Chapter 1: General Ledger Setup

Date Intervals Create and manage date intervals that can be used in financial statements and reports. Date intervals allow you to create dynamic dates. When you use date intervals, you can set up predefined periods when you run financial statements. Date intervals can also be used when setting up an allocation rule.

Scenario Ken, the Controller at Contoso Entertainment USA (CEU), runs a dimension statement every month. Instead of entering the dates every time he runs the report, he selects a date interval. The date interval automatically fills in the start date and the end date. Therefore, Ken does not have to specify the start date and the end date when he runs the dimension statement.

Procedure: Create Date Intervals Perform the following steps to create date intervals: 1. To access the Date intervals form, click General Ledger, click Setup, click Periods, and then click Date Intervals. 2. Click the New button to create a new record. 3. Enter a date interval code in the Date interval code field. Use a code that is easy to identify when you set up date intervals on statements and reports, such as CP for the Current period.

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Financials I in Microsoft Dynamics® AX 2012 4. Enter a short description of the date interval, in the Description field.

FIGURE 1.8 DATE INTERVALS FORM

Procedure: Create Date Intervals - Start/End Perform the following steps to further define the date interval start and end dates. 1. From the Date intervals form, click the General tab. 2. Select the time unit that is the basis of the calculation in the Before list. 3. Specify the starting point of the interval in the Start/End field. This data is used with the value in the Before list to set the starting point of the date interval. The following examples are for Before and Start/End fields:

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Field name

Value

Before

Fiscal year

Start/End

Start

Calculation date

3/13/2012

Starting point

1/1/2012

Field name

Value

Before

Quarter

Start/End

End

Calculation date

3/13/2012

Starting point

3/31/2012

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Chapter 1: General Ledger Setup NOTE: The Calculation date field is equal to the system date. Changing the system date, (File > Tools > Session Date), will change all the values in the Date calculation area of the form accordingly.

Procedure: Create Date Intervals - Future or Past Perform the following steps to set whether a date interval moves into the future or the past 1. From the Date intervals form, click the General tab. 2. Indicate whether the interval should move into the future or into the past, by selecting + for future or - for past in the +/- field. The +/field is based on the Before field. The number is multiplied by the time units in the Days, months, years or periods field. 3. Select the unit for change of start date in the interval in the Days, Months, Years or periods field. The number of units is displayed in the +/- field. The choices are reflected in the After adjustments field. The following examples are of the +/- field and the Days, months, years and period fields: Field

Value

Before

Year

Start/End

Start

+/-

1

Days, months, years and periods

Years

Calculation date

3/13/2012

Starting point

1/1/2012

After adjustment

1/1/2012

Field

Value

Before

Year

Start/End

Start

+/-

-1

Days, months, years and periods

Years

Calculation date

3/13/2012

Starting point

1/1/2012

After adjustment

1/1/2012

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Financials I in Microsoft Dynamics® AX 2012 NOTE: If the +/- field and Days, Months, Years or periods field is empty, the After adjustments field equals the starting point value.

Procedure: Create Date Intervals - After Follow these steps to select the basis for adjustment of the date in the After adjustments field. 1. From the Date intervals form, click the General tab. 2. Select a time unit to determine the start date or the end date of the From date field in the After field. The From date field is based on the value in the After adjustments field. The From date is used as the basis of calculation in financial statement columns, and can be the start or the end date of a time unit selected in the After field 3. Select whether the time unit in the After field should be set in the beginning or the end of the time unit in the Start/End field. The following examples are of the After field and the Start/End field. Field

Value

After adjustments

4/17/2012

After

Fiscal year

Start/End

Start

From date

1/1/2012

Field

Value

After adjustments

4/17/2012

After

Quarter

Start/End

End

From date

6/30/2012

Procedure: Create Date Intervals - Locked Start Perform the following steps to use a specific date. 1. From the Date intervals form, click the General tab. 2. Enter a fixed start date, in the Locked start field. All other values are overwritten, and the value is transferred to the From date field.

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Chapter 1: General Ledger Setup

Reason Codes Reason codes are standardized codes that can be used in various transaction types or changes to field values to provide background data about the transaction. For example, auditors or managers frequently want to see reasons recorded for various transactions such as reversals. When you use standard reason codes instead of transaction text, you have guidelines for which codes to select from. Standard reason codes also allow management and auditors to analyze transaction history by specific reason. Reason codes can be used with the following: •

General ledger

•

Accounts payable

•

Accounts receivable

•

Bank

Procedure: Create a Reason Code A reason code can be selected in the following General ledger entry processes: •

General journal entry

•

Process allocation requests

•

Elimination proposal

•

Consolidation, Online periodic

Perform the following steps to create a General ledger reason code: 1. To access the Reasons form, click General Ledger, click Setup, and then click Ledger reasons. 2. Click the New button to create a new reason. 3. Enter a unique Reason Code as identification.

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Financials I in Microsoft Dynamics® AX 2012 4. Enter a Default Comment for the reason code. The comment entered here is displayed as the default comment when you select this reason in transactions. You can change the default reason comment.

FIGURE 1.9 LEDGER REASONS FORM

Procedure: Modify a Reason Code Reason codes can be modified at any time. The Default comment and Account types can be changed. Perform the following steps to modify a reason code: 1. To access the Reasons form, click General Ledger, click Setup, and then click Ledger reasons. 2. Select the Reason Code to modify. 3. Modify the Default Comment for the reason code. 4. Clear the Ledger check box. As soon as the Ledger check box is cleared, the reason code is no longer displayed in the General ledger transaction entry forms, and is unable to be used.

Procedure: Delete a Reason Code Perform the following steps to delete a reason code. 1. To access the Reasons form, click General Ledger, click Setup, and then click Ledger reasons. 2. Select the Reason Code to be deleted.

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Chapter 1: General Ledger Setup 3. Clear the Ledger check box. You can delete a Reason code only if no account types are associated with it. If the Reason code has been selected for use from another module, clear the other Account type check boxes or view the Reasons form from Basic to clear all Account type check boxes. 4. Click the delete icon. 5. Click Yes in the Confirm deletion dialog box.

Financial Dimensions Financial dimensions have the following characteristics: •

Provide a more detailed description of a transaction.

•

Simplify the accounting process when you enable detailed analysis without the creation of a detailed Chart of Accounts.

•

Are defined to analyze and classify financial transactions as follows: o o

Financial transactions usually are organized according to voucher and account number. Additional grouping and classification options are available when you assign several dimensions to transactions.

•

Enable you to view the data file from different perspectives to improve the effectiveness in tracking figures across accounts.

•

Can be used throughout the system.

•

Add dimensions to base data such as: o o o

•

Ledger accounts Customers Vendors

Are copied to transactions automatically.

Scenario Ken, the Controller at Contoso Entertainment USA, must analyze company figures from a perspective other than only ledger accounts. Ken wants to make reports and sales statistics inquiries based on cost centers and departments. Therefore, he decides to set up dimensions as a supplement to voucher and account numbers.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Financial Dimension Perform the following steps to create a new financial dimension. 1. To access the Financial Dimensions form, click General ledger, click Setup, click Financial dimensions, and then click Financial dimensions. 2. Click the New button. 3. In the Use values from field, select a system-defined entity to base the financial dimension on. Financial dimension values will be created from this selection. For example, to create dimension values for projects, select Projects. A dimension value will be created for each project name. 4. Enter the name of the financial dimension in the Dimension name field. 5. In the Report column name field, enter the name of the financial dimension to be displayed as a column name on reports. 6. In the Dimension value mask field, enter a format mask to use for creating financial dimension values. A format mask limits the amount and type of information that you can enter for dimension values. For example, if the dimension value should be 3 characters, you could enter XXX. 7. This field is available only when you select < Custom dimension > in the Use values from field. 8. Click the Financial dimension values button to enter more details about the financial dimension.

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Chapter 1: General Ledger Setup 9. Click the Translations button to open the Text translation form, in which you can enter text to be displayed in different languages for the selected financial dimension. 10. Click Main account translation to open the Text translation form, in which you can enter text to be displayed in different languages for the main account.

FIGURE 1.10 FINANCIAL DIMENSIONS

Financial Dimension Value Details Use the Dimension Values Detail form to set up the details for financial dimension values. You can set options for dimension values that can be shared between a chart of accounts and a legal entity. You also can set specific options for dimension values based on the chart of accounts or legal entity specified. Click the Financial dimension values button in the Financial dimensions form to enter detailed values. NOTE: Depending on your selection in the Select the level of dimension value to display field, some fields will not be available

Field

Description

Dimension Value

Displays the financial dimension value for the dimension selected in the Dimension details form

Description

The description for the financial dimension value.

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Financials I in Microsoft Dynamics® AX 2012 Field

Description

Select the level of dimension value to display

Select the level of the financial dimension value to display. If you select Shared value, fields that can be shared between a chart of accounts and a company are displayed. You can the values for a specific chart of accounts or legal entity by selecting Chart of accounts or Companies. If you select Chart of accounts, some fields will not be available and you can override the shared information for the selected chart of accounts. If you select Companies, some fields will not be available, you can override the shared information for the selected company, and additional fields specific to the selected company will be displayed.

Financial Dimension Value Details General Expand the General tab to enter general parameters detail for the dimension.

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Field

Description

Active from

Enter or select the date that the financial dimension value is active from. If you leave it blank then it uses the beginning of time.

Active to

Enter or select the date that the financial dimension value is active to. If it is left blank, it uses the end of time.

Suspended

Select this check box to prevent all postings to the selected financial dimension value. You cannot suspend a financial dimension value that is assigned as a budget group account on another account.

Owner

Select the employee number for the employee who is responsible for this financial dimension value.

Group Dimension

Enter a group dimension name. This can be used to group specific financial dimension values into the same dimension value when you consolidate legal entities. This field is available only when Shared value is selected in the Select the level of dimension value to display field.

Calculate total from multiple dimension values

Select this check box to sum up amounts from one or more dimension values. This field is available only when Shared value is selected in the Select the level of dimension value to display field.

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Chapter 1: General Ledger Setup Field

Description

Do not allow manual entry

Select this check box to prevent a user from manually entering a value for this financial dimension in journals. This field is available only when Shared value is selected in the Select the level of dimension value to display field.

Companies If Companies is selected in the Select the level of dimension value to display field, Financial Statement Formatting and Cost accounting tabs become available. The following describes how to use each of the fields in the expanded Financial Statement Formatting tab: Field

Description

Invert sign

Select this check box to hide the minus sign on the financial statement report when this financial dimension is represented. Typically, revenue and expenses are displayed in both credit and debit balances so that credit balances have a minus sign and debit balances have no sign. When this check box is selected, the minus sign in front of revenue on the report is not displayed.

Column

Select the column number that the financial dimension is printed to when the financial statement is printed. You can define how many columns will be used to print a single column definition. For example, if you enter a 2 in the Number of columns field in the Financial statement form, for a definition that shows the current balance, the balance for this financial dimension will be printed in 2 columns.

Bold

Select to print the selected financial dimension in bold type on the financial statement.

Italics

Select to print the selected financial dimension in italic type on the financial statement.

Line above

Select to precede the selected financial dimension with a blank line on the printout of the financial statement.

Line below

Select to follow the selected financial dimension with a blank line on the printout of the financial statement.

Underline text

Select to underline the text when the selected financial dimension is printed on the financial statement.

Underline amount

Select to underline the amounts when the selected financial dimension is printed on the financial statement.

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Financials I in Microsoft Dynamics® AX 2012 The following table describes how to use each of the fields in the expanded Cost accounting tab: Field

Description

Blocked for cost transactions

Select this check box to prevent a user from entering a cost transaction in Cost accounting for this financial dimension.

Blocked for service transactions

Select this check box to prevent a user from entering a service transaction in Cost accounting for this financial dimension.

Blocked for distribution

Select this check box to prevent a user from entering a distribution in Cost accounting for this financial dimension.

Blocked for allocation

Select this check box to prevent a user from entering an allocation in Cost accounting for this financial dimension.

Financial Dimension Templates Dimension templates may be used for common patterns used to distribute source document amounts. Use the Financial dimension default templates form to create a template of percentage and financial dimension value combinations. The information in the template will be used to display default financial dimension values when you distribute source document amounts. Select General Ledger, click on Setup, then Financial dimensions, then Financial dimension default templates. Use the following table to enter the appropriate information:

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Field

Description

Template ID

Enter an identification for the template.

Template percentages and dimension values

Enter the percentage to apply to the distribution.

Financial dimensions

Select the dimension to use with the percentage to apply to the distribution.

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Chapter 1: General Ledger Setup Financial Dimension Entry After dimension values are set up, you can assign them to the following: •

Ledger accounts

•

General ledger transactions

•

Accounts Receivable transactions

•

Customers

•

Accounts Payable transactions

•

Vendors

For example, customer 4037 may be set up by department and cost center dimensions. When a sales order is created for customer 4037, the defined dimensions are populated on the sales order automatically, but the values can be changed. Throughout Microsoft Dynamic AX, you can separate data in different ways by using dimensions. For example, you can attach a department number to each transaction and then run a query that shows balances by department code.

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Lab 1.3 - Assign Ledger Account Dimension Values Scenario Phyllis, the Accounting Manager, at Contoso Entertainment USA (CEU) has been asked by Charlie, the President and CEO, for monthly financial reports by department, cost center, and purpose. Phyllis has determined that cleaning expenses for the building should always be recorded to the Building maintenance cost center.

Challenge Yourself! Help Phyllis enter the necessary dimension validation options for account 605110.

Need a Little Help? To guarantee the accuracy of the financial reports, make sure that transactions posted to the cleaning expense account (605110) always specify: 1. Cost center dimension - Building maintenance

Step by Step 1. Click General ledger, click Common, and then click Main accounts. 2. Select account 605110, Cleaning expense, and click the Edit button. 3. Select Companies in the Select the level of main account to display field. 4. Select CEU in the Companies field. You may have to click on the green cross icon to select the company. 5. Expand the Financial Dimensions FastTab. 6. In the Cost center field, click the arrow to select the Building maintenance account. 7. Close the form.

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Chapter 1: General Ledger Setup

Financial Dimension Sets Financial dimension sets have several purposes. Financial dimension sets are used to determine how reports and inquiries related to the general ledger are rendered. Financial dimension sets are used to calculate balances during the posting process. Balances can also be scheduled for calculation or manually updated. Balances are stored based on the financial dimension set and are calculated based on the option to calculate with posting or batch schedule. Financial dimension sets also drive the data displayed in the Trial balance list page. The order in which financial dimension sets are considered in reporting effect how transactions are sorted and fields are presented. For example, the set Department and Cost center indicates that the Department dimension type is first and Cost center second. Therefore, the considered financial set is the composite of Department and Cost center. Department amounts are presented first and Cost center amounts are presented second. The defined financial dimension set can be used alone or in pairs when inquiring or reporting on financial transactions. The selection of a primary and secondary financial dimension set is considered when presenting the results. The secondary financial dimension set details the figures of the primary dimension set. The selection of a secondary financial dimension set is limited to focuses that do not share a dimension type with a primary dimension set. Therefore, if the primary dimension set is the composite of Main account and Department, these cannot be select in the secondary financial set.

Scenario Sara, the Chief Financial Officer (CFO) at Contoso Entertainment USA (CEU), must: •

Analyze financial transactions based on dimensions and ledger accounts combined. For example, Sara views sales revenue for each department or country.

•

Determine how financial transactions should be organized when users run reports and make inquiries.

To view the sales revenue for all departments in CEU, Sara decides to create a dimension set that consists of ledger accounts and departments dimensions.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Financial Dimension Set Perform the following steps to create a dimension set: 1. To access the Financial dimension set form, click General Ledger, click Setup, click Financial dimensions, and then click Financial dimension sets. 2. Enter a unique identifier to name the new dimension set in the Financial dimension set field. 3. Enter a descriptive name in the Name field. 4. Expand the Financial dimension FastTab. 5. Select one or more dimensions in the Available dimensions pane that should be included in the financial dimension set. Click the arrows to add the dimensions to the Selected dimensions pane. At least one dimension must be selected for each financial dimension set. The financial dimension that is the primary row pattern (primary financial set) must be listed first, and the dimension shown within each primary row must be listed second (secondary financial set). For example, to print a report that displays sales revenue per department, the department dimension should be selected first and ledger accounts selected second.

FIGURE 1.11 DIMENSION SETS FORM

Period Allocations Allocation is the process of distributing monetary amounts to one or more accounts or account and dimension combinations. Microsoft Dynamics AX has the ability to use predefined allocation rules to perform generated allocations. Generated allocation is the distribution of posted or fixed amounts to combinations of destination accounts and dimensions at any time, which generate new journal entries.

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Chapter 1: General Ledger Setup Allocation rules have numerous calculation methods, including: •

Basis

•

Fixed percentage

•

Fixed weight

•

Spread even

Allocations also provide the ability to allocate across multiple companies, also known as Intercompany allocations.

Scenario Phyllis, the Accounting Manager at Contoso Entertainment USA (CEU), creates a new Intercompany allocation rule for Electric Utilities to distribute overhead utility expense to each department based on fixed percentages. The rule is for the new fiscal year that begins on January 1, 2012. Because Phyllis does not want the new rule to be used until then, she enters 01/01/2012 as the start date for the rule. Because CEU typically reviews its allocation rules every fiscal year, Phyllis enters 12/31/2012 as the end date for the rule. Phyllis enters detailed notes about the basis and reasons for the allocation rule. Phyllis then selects the Microsoft® Word template that was implemented when CEU experienced an audit review to document the allocation rule completely. When Phyllis has finished writing the document, she attaches a copy of it to the rule. Anyone who wants additional information about the rule can open the document or print an Allocation rules definition report.

Ledger Allocation Rules Ledger allocation rules allow you to define the results you want in the allocation business process. Each ledger allocation rule has the four primary components: •

The General settings dictate which fields are available in the rule tabs.

•

The Source data for the allocation is also known as the allocation pool.

•

The Destination defines how the results of the allocation calculation must be distributed to the destination distribution lines.

•

Offset entries balance the destination distribution lines.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Ledger Allocation Rule Perform the following steps to create an allocation rule: 1. Click General ledger, click Setup, click Posting, and then click Ledger allocation rule. 2. Click the New button to create a new rule. 3. Enter the Rule as identification. 4. Enter a Description of the rule. 5. Optionally select the Effective start date and Effective end date for the rule. 6. Select the Active check box, if the allocation rule is available to be processed.

FIGURE 1.12 LEDGER ALLOCATION RULE FORM

Procedure: Create a Ledger Allocation Rule - General Perform the following steps to complete the setup of allocation rule general settings. These dictate what fields are available in the rule tabs. 1. From the Ledger allocation rule form, select the General tab. 2. Review or change settings from the Overview tab in the Identification and Administration sections. 3. View the Date last run, which displays the date when a user last processed the allocation rule and created distributions.

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Chapter 1: General Ledger Setup 4. Select the Intercompany rule check box if the allocation rule involves being processed among multiple companies. 5. Select the Allocation method: o Basis: Defines how and in what proportion the source amounts are distributed to the various destination lines. For example, allocation based on revenue dollars, in which the cost of corporate advertising expense is shared across all departments, is based on each department's sales in proportion to total departmental sales. o Fixed percentage: Takes criteria defined in the allocation source and uses a fixed percentage amount that the user entered, to determine the allocation amount for the destination. o Fixed weight: Takes criteria defined in the allocation source and uses a fixed weight amount that the user entered, to determine the allocation amount for the destination. o Spread even: Takes criteria defined in the allocation source and disperses the amount evenly across the destination distribution lines.

FIGURE 1.13 LEDGER ALLOCATION RULE FORM, GENERAL TAB

6.

In the Data source field, select the source of the amount to allocate: o Ledger o Fixed value

7. If Fixed value is selected in the Data source field, enter a value in the Fixed value field. 8. If Ledger is selected in the Data source field, select an arithmetic operation to apply to the source value in the Mathematical operation field.

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Financials I in Microsoft Dynamics® AX 2012 9. If Ledger is selected in the Data source field and either Multiply or Divide is selected in the Mathematical operation field, enter the Amount by which to multiply or divide the source value. 10. If Ledger is selected in the Data source field, select a date interval to determine the account periods used for the allocation rule source. If a date interval is not selected, all balanced for the chosen account or account-dimension combination will be selected for source allocation. 11. Select an allocation Journal name. The Description displays the allocation journal description. 12. If the Spread even Allocation method is selected, select from the Keep account from list to use the source account. 13. If the Spread even Allocation method is selected, select from the Keep dimension form list to indicate if you want to use the source destination account and dimension or a user-specified destination account and dimension.

Procedure: Create a Ledger Allocation Rule - Source Perform the following steps to complete the setup of settings for the allocation rule source, also known as the allocation pool. 1. From the Ledger allocation rule form, select the Source button. 2. Click New to create a new record. 3. From the Field setting list select to allocate from an Account or account Dimension combination. 4. If Financial dimension is selected in the Field setting field, select a Financial dimension.

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Chapter 1: General Ledger Setup 5. In the Source criteria field enter the account or dimension information from which to allocate. You can use wildcard characters to specify accounts or dimension codes. For example, if the selected Financial dimension is Department and the source criteria = Admin,", the system displays information that includes the department dimension equal to Admin or a department dimension has not been specified.

FIGURE 1.14 LEDGER ALLOCATION RULE SOURCE FORM

Procedure: Create a Ledger Allocation Rule - Destination Perform the following steps to complete the setup of allocation rule destination settings, which define how the results of the allocation calculation must be distributed to the destination distribution lines. 1. From the Ledger allocation rule form, select the Destination button. 2. Click the New button to create a new record. 3. The Company field displays the company in which the allocation rule was created. If the allocation rule is an inter-company rule, users can change this field. 4. Select the account to allocate to in the To Account field. 5. Select the Dimension you want to allocate to.

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Financials I in Microsoft Dynamics® AX 2012 6. Select the Purpose dimension you want to allocate. 7. If the Allocation method is Basis, select the Basis ID with which to associate the destination line.

FIGURE 1.15 LEDGER ALLOCATION RULE DESTINATION FORM

Procedure: Create a Ledger Allocation Rule - Offset Perform the following steps to complete the setup of allocation rule Offset settings. These define the offset entries that balance the destination distribution lines. 1. From the Ledger allocation rule form, select the Offset tab. 2. In the Offset account from field, select where to find the offset account. o Source: The allocation process will use the respective account defined in source. o User specified: The allocation process will use the offset account value specified. 3. If the Offset account from is set to User specified, select the Offset account. 4. In the Offset dimension from field, select where to find the offset account. o Source: The allocation process will use the respective dimension value that was defined in source. o User specified: The allocation process will use the specified offset dimension value.

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Chapter 1: General Ledger Setup 5. If the Offset dimension from field is set to User specified, select the dimension to associate to the allocation rule.

FIGURE 1.16 LEDGER ALLOCATION RULE FORM, OFFSET TAB

Scenario Phyllis runs the Allocation rules definition report that details the allocation rules for the current year. The report contains details about each rule including the rule ID, description, From/To account number and dimension combinations, effective start and end dates, calculation method details, usage information, and other setup information.

Procedure: Print the Ledger Allocation Rules Definition Report Perform the following steps to print the Allocation Rules Definition report: 1. To access the Allocation Rules Definition report, click General Ledger, click Reports, click Base data, click Various, and then click Allocation rules definition. 2. Select criteria such as Ledger allocation rule.

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Financials I in Microsoft Dynamics® AX 2012 3. Click OK to print.

FIGURE 1.17 ALLOCATION RULES DEFINITION REPORT

Scenario Phyllis runs an allocation proposal without posting it to review the allocation results and the detailed distributions that will be created based on the allocation rule used. If the results are accurate, Phyllis posts the entry.

Procedure: Process a Ledger Allocation Request As soon as an allocation rule is created, you can process it and either preview or post an allocation journal. To set up an allocation journal, select General ledger, click Setup, click Journals, and then click Journal names. Perform the following steps to use the Process allocation request form to create an allocation journal. 1. Click General ledger, click Periodic, and then click Process allocation request. 2. Select an allocation rule. 3. Select the date to include ledger amounts for allocation in the As of date field. This date corresponds with the Date interval on the allocation rule. 4. Select the date to post the allocation journal to the general ledger in the GL posting date field. 5. Select the action to occur if the allocation process generates a zero source amount. o Select Process to create destination distributions, where applicable. o Select Stop to create an error that indicates when a zero source amount is selected and stops the allocation process.

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Chapter 1: General Ledger Setup 6. In the Proposal options field, select a posting preference. o Select Proposal only to review allocation results without posting. o Select Post only to post the allocation results directly to the general ledger. 7. Click OK. NOTE: The Date last run field displays the last date a user processed an allocation rule and created distribution lines.

FIGURE 1.18 PROCESS ALLOCATION REQUEST FORM

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Financials I in Microsoft Dynamics® AX 2012

Summary The General ledger setup course describes the initial setup to start working with Microsoft Dynamics AX financials. The course provides basic introductions to set up:

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•

Currencies and exchange rates

•

Fiscal calendars

•

Financial dimensions and financial dimension sets

•

Period allocations

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Chapter 1: General Ledger Setup

Test Your Knowledge Test your knowledge with the following questions. 1. What effect does the value in the General round-off field have on the values in Microsoft Dynamics AX 2012?

2. When you change the display currency, it affects all users. ( ) True ( ) False 3. Is it possible to post activity that uses a date for which a period has not been created? ( ) Yes ( ) No 4. What are reason codes?

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Financials I in Microsoft Dynamics® AX 2012 5. What are the parts of an allocation rule? ( ) General ( ) Source ( ) Destination ( ) Offset 6. Which allocation method defines how and in what proportion the source amounts are distributed to the various destination lines, by referring to balances in other account-dimensions? ( ) Basis ( ) Fixed percentage ( ) Fixed weight ( ) Spread even

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Chapter 1: General Ledger Setup

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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Financials I in Microsoft Dynamics® AX 2012

Solutions 1. What effect does the value in the General round-off field have on the values in Microsoft Dynamics AX 2012? MODEL ANSWER: The value are used to round all amounts in all modules. 2. When you change the display currency, it affects all users. ( ) True (•) False 3. Is it possible to post activity that uses a date for which a period has not been created? ( ) Yes (•) No 4. What are reason codes? MODEL ANSWER: Reason codes are standardized codes that can be used in various transaction types or changes to field values to provide background data about the transaction. 5. What are the parts of an allocation rule? (√) General (√) Source (√) Destination (√) Offset 6. Which allocation method defines how and in what proportion the source amounts are distributed to the various destination lines, by referring to balances in other account-dimensions? (•) Basis ( ) Fixed percentage ( ) Fixed weight ( ) Spread even

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Chapter 2: Chart of Accounts Setup

CHAPTER 2: CHART OF ACCOUNTS SETUP Objectives The objectives are: •

Create, edit, close, or delete Main account categories.

•

Create a new account in the Chart of Accounts (COA).

•

Define main account information.

•

Define administration information for the main chart of accounts.

•

Define setup information for the main chart of accounts.

•

Set up account structures.

•

Set up advanced rules.

•

Create a ledger.

•

Set up accounts for automatic transactions.

•

View inquiries and reports related to the Chart of Accounts.

Introduction A Chart of Accounts is a set of main accounts tracked by Microsoft Dynamics AX®. It captures financial information to make good financial decisions. Each account is assigned an account number as a unique identifier. Each main account contains the account structures used by the chart of accounts to define the valid combinations of main accounts and financial dimension values. The chart of accounts is shared and is a list of main accounts and account structures that define a chart of accounts in use by one or more ledgers. Additionally, different allocation terms can be set up for an account to distribute the amount to several accounts and account-dimension combinations, and system accounts help users handle automatic postings. The Chart of Accounts Setup course also shows all the reports and inquiries related to the Chart of Accounts.

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Financials I in Microsoft Dynamics® AX 2012

Main Account Categories Main account categories can be used to better classify a general ledger account. Use main account categories primarily for grouping or selection of ledger accounts for Cubes and Key Performance Indicators (KPI's). By default, over fifty ledger account categories are provided.

Scenario Phyllis, the Accounting Manager, wants to include the Current Ratio on the Short-term solvency KPI report. Current Ratio is calculated by dividing a company’s current assets by current liabilities. Current assets typically consist of cash, cash equivalents, accounts receivable, inventory, and marketable securities. Current Liabilities consist of any liabilities that are payable within one year. The following table shows the types of accounts defined in Contoso Entertainment USA: Ledger account

Account name

110100

Cash

130000

Accounts receivable

140000

Inventory

170000

Fixed Assets

To derive the Current Asset value, Phyllis must sum the values of the Cash, Accounts receivable, and Inventory accounts. Fixed Assets are not considered current assets. To perform this calculation, Phyllis uses the Main account category field. Main accounts later added to the chart of accounts will also use the Main account category to automatically be included in existing calculations.

Procedure: Create Main Account Categories Perform the following steps to create a General Ledger Main Account category: 1. To access the Main account categories form, click General Ledger, click Setup, click Main accounts, and then click Main account categories. 2. Click the New button to create a new record. 3. Enter a unique name for the Main account category and a Description.

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Chapter 2: Chart of Accounts Setup 4. Select a Main account type to associate with the account category. The purpose of selecting a Main account type is to reduce the lookup of available Main account categories when you create a new Main account within the Chart of accounts form. 5. To link an account category to a main account, click the Link main accounts button. Or, link a Main account category to an account from the Main account details form. For more information, refer to "Create a New Account - Main Account Category."

FIGURE 2.1 MAIN ACCOUNT CATEGORIES FORM

Edit Main Account Categories The Main account category, Description, and Main account Type assignment values can be changed at any time for user-defined and default Main Account Categories.

Close Main Account Categories To inactivate a main account category, including any of the default main account categories, select the Closed check box in the Main account categories form. If you try to close a Main account category that is already linked to a main account, a warning message listing the linked main accounts is displayed. Select to continue or cancel. After a Main account category is closed, it cannot be linked to main accounts.

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Financials I in Microsoft Dynamics® AX 2012 Delete Main Account Categories A user-defined Main account category can be deleted, as long as it is not assigned for use with Purchase Requisitions in the Accounts Payable Parameters form. None of the default Ledger account categories can be deleted.

Chart of Accounts The Chart of Accounts (COA) is the structured list of an organization's general ledger accounts. The COA will provide the main accounts for the COA plus the account structures in use for the COA. These structures determine the valid main account and financial dimension value combinations for the chart. Use the COA to do the following: •

Create and maintain main accounts

•

Set standard parameters

•

Define the terms of allocation

Plan the Chart of Accounts To create the COA, users should list accounts that group well together and group kinds of revenues, costs, and balance accounts. Before you create a company's Chart of Accounts, consider the following: •

What degree of specification is needed

•

How the Chart of Accounts must be structured

•

If external accountants offered any suggestions about the structure of the Chart of Accounts

Make sure that there is sufficient space so that in the future, additional main accounts can be created between the existing main accounts. Decide whether operating accounts must come before balance accounts or the other way around.

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Chapter 2: Chart of Accounts Setup Multiple Chart of Accounts It is common for large organizations to have the same chart of accounts used across multiple companies. It is possible to define company specific data, such as the default sales tax code on the main account. Also, the ability to inactivate financial dimension values for a specific company. The following entities/objects will have company specific data: •

Main account

•

Dimension values

The following elements make up the shared chart of accounts: •

Chart of accounts

•

Main accounts

•

Account structures

•

Advanced rules

•

Financial dimensions

•

Financial dimension values

Chart of Accounts Form The Chart of Accounts form is where where the list of main accounts can be viewed as well as the account structures in use by the chart of accounts.

FIGURE 2.2 CHART OF ACCOUNTS FORM

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Chart of Accounts Use the Chart of accounts form to create, manage, and view the organization’s chart of accounts. The chart of accounts also provides the main account and financial dimension value combination rules. The main accounts contain the financial data about the activity of the legal entity. 1. Click General ledger, then click Setup, then click Chart of accounts, and then click Chart of accounts. 2. Click the New button. 3. Enter the name and description in the Chart of Accounts and Description fields, respectively. 4. In the Main account mask field, enter the structure that main accounts must adhere to when they are created. This field is optional.

Procedure: Create Main Accounts To create main accounts associated with a specific chart of accounts, click on the Main accounts FastTab and perform the following steps: 1. Click New to create a new line, click the New from template to use a template set up in the Main account templates form. 2. Enter an account number in the Main account field and enter an account Name. 3. Select either Chart of accounts or Companies in the Select the level of main account to display field. Chart of accounts: Selecting this provides setup for the main account for the chart. It will be the shared setup. Companies: Selecting this provides the means to override specific data at the company level, such as active from/active to dates. Also to set up company specific data such as default sales tax codes, default dimensions and financial statement formatting. It does NOT select which company can use the main account.

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Chapter 2: Chart of Accounts Setup NOTE: Depending on the selection of the Select the level of the main account to display, specific fields in the Main accounts form are available.

FIGURE 2.3 MAIN ACCOUNTS

Main Account Information Select information specific to the main account, such as the main account category, debit and credit controls, and related accounts.

Procedure: Select Main Account Type After the Main accounts header information has been established, click the General FastTab to enter detail information. The first level of detail consists of selecting a Main account type. The following main account types determine how the account is used in the chart of accounts. You must select a main account type when creating the main account in the Main accounts form. Select one of the following options to enter as the Main account type: •

Profit and loss, Revenue, and Expense – used as posting accounts. The profit and loss account is used for recording revenue and expenses. The sum of all operating accounts determines the year-end results. The revenue and the expense accounts have the same function as the profit and loss account. The balances for these main accounts are rolled into the year end result account during the Opening transactions process. Expense accounts are used by budgetary control.

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Financials I in Microsoft Dynamics® AX 2012 •

Balance sheet, Asset, Liability, and Equity – used as transaction accounts that record the amounts that a company owns or owes. If you use asset, liability, and equity accounts, the accounts can have a higher degree of specification and you can more precisely structure reports about the company balance. The balances for these main accounts roll forward to the new year during the Opening transactions process.

•

Total – use this to add account intervals. For example, frequently it is useful to make a total of a range of revenue accounts to obtain a quick overview of the total sales for the current period when you run a financial statement.

•

Reporting – used for financial statement reporting. If you selected Reporting in the Type field, select how the account is used for reporting. You can select Header, Empty header, or Page header.

Procedure: Main Account Category The Main account category field can be used to better classify a general ledger account, if the account type is Profit and loss, Revenue, Cost, Balance, Asset, or Liability. Ledger account categories are used primarily for grouping or selection of ledger accounts for business intelligence reporting, such as Key Performance Indicators (KPIs) or Microsoft SQL Reporting Services (SRS). To set the Main account category field value, from the Chart of Accounts form, select a main account category from the drop-down list.

Procedure: Debit and Credit Considerations Perform the following steps to enter additional information on the General FastTab. 1. Select if transactions in this account are usually debits or credits, in the DB/CR proposal list. This selection determines the result when you leave the Transaction text field in a transaction entry process. The pointer in the general journal is automatically positioned according to the choice. If the field is left blank, the debit is automatically proposed. 2. Select if an account is used only for debiting or for crediting in the DB/CR requirement list. If an account is limited to only debiting or crediting, the system checks this when it validates and posts the general journal. However, when the amount is a credit, a negative credit can still be entered. 3. In the Balance control list, select the balance control criterion for the transactions on the current account. For example, when transactions are entered in a journal for the account, if Debit control is selected, the system makes sure that total amount of the journal transactions do not make the balance for the account go into a credit.

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Chapter 2: Chart of Accounts Setup Procedure: Selecting Related Accounts Perform the following steps below to associate related accounts with the main account: 1. In the Offset account field, select the default offset account for an account in the general journal. By creating a default offset account, you can settle certain costs from the same payment account without manually specifying the account every time. 2. In the Opening Account field, enter the account number to which the opening balance should be transferred. When you insert an account and then run the Opening transactions periodic job for a new fiscal year, the balance on the current account is transferred to the account that is specified in this field. NOTE: Only select asset or liability accounts in this field because profit and loss, revenue, and cost accounts are set to zero when you create opening transactions. 3. The SRU code is used specifically for Sweden and is only available when the legal entity's address is in Sweden. If the entity is based in Sweden, enter the SRU code in this field.

Main Account Administration Information Select administration information specific to the main account.

Procedure: Allow Manual Entry In order to have control when a main account may be used in a journal entry there have been administrative parameters added to the setup of a main account. 1. Select the Do not allow entry check box if a user should not be manually entering this account in a journal entry. By selecting this check box, users are prevented from entering a value for this account. 2. Select an Active from date and an Active to date to set up a time frame when the main account is available for transaction and journal entry. 3. Select the Suspended check box to prevent all postings to the selected main account. It is not possible to suspend an account that is assigned as a budget group account on another account.

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Financials I in Microsoft Dynamics® AX 2012 Closing Options It is important to define closing processes for the main account and how balances are distributed at the time of closing. In the Closing drop-down field, select how balances should be transferred to the closing sheet forms during the closing process. •

Blank – leave the field blank to transfer the balance to the Difference field.

•

Result – select this option to update operating accounts.

•

Balance – select this option for balance accounts.

•

Capital – select this option for accounts related to cash flow forecasts and revaluation.

Allocation Terms Allocated transactions redistribute account balances from one account to one or more destination accounts or account-dimension combinations. The allocation feature is valuable when centrally administrated expenses must be distributed to, for example, individual cost centers. Use allocation for realized and budget transactions. During allocation to the given accounts, the net amount is totaled. After allocation, any remainder relative to the journal line is posted to the original account with the original dimensions.

Scenario - Using Allocation Terms for a Main Account When Susan, the order processor in the Contoso Entertainment USA (CEU) Company, posts a sales order, 10 percent of the revenue posted must be allocated as a royalty payment. To achieve this, Cassie, the Accountant, creates an allocation term so that every time there is a posting to the revenue account in question, 10 percent is allocated to the royalty account.

Procedure: Set Up Allocation Terms for a Main Account Use the Allocation check box to automatically distribute a transaction amount to different accounts. This functionality is only available for the Companies view (Select the level of main account to display field ) in the Main accounts form. If you have a shared view of the chart of accounts, this option is not available. Perform the following steps to set up allocation terms for an account. 1. To access the Allocation form, click the Allocation check box in the Main accounts form and then click the Allocation Terms button. 2. In the Allocation percentage field, enter the percentage of the amount allocated to the specified account. The Percentage in total field checks that the allocation does not exceed 100 percent.

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Chapter 2: Chart of Accounts Setup Procedure: Select Allocation Criteria Perform the following steps to select allocation criteria: 1. Expand the Source financial dimension criteria FastTab to select the financial dimension values to allocate from. 2. Expand the Destination ledger account FastTab to select the financial dimension values to allocate to. 3. Limit the allocation from the selected dimensions by using the drop down list for the Cost center, Department, and the Expense purposes. The system uses all lines where the dimension is empty or where it matches the given line. For example, in a journal entry where a given expense is shared evenly between two departments, set up an allocation term where any entry on the account allocates 50 percent between the two dimensions set up for expenses. To copy an existing allocation profile from another account to the selected account click the Copy button.

Main Account Setup Information Set up currency, user, posting, and tax code validation information for each main account.

Create a New Main Account - Validation Options There are four posting validation settings that can be defined for each account. Posting validation can be set for the following: •

Currency

•

User ID

•

Posting types

•

Sales tax (available if Companies is selected in the Select the level of main account to display field)

Validation settings can be based on the following: •

Optional - the field is not validated at the time of posting. This is the default setting.

•

To be filled in - the system verifies that the field is completed for posting. The value is not checked.

•

Table - the system verifies that the field is completed for posting and that the value corresponds with the value specified in the account.

•

List - the system verifies that the field is completed with one of the values that are defined on the Validation list button.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a New Main Account - Validate Currency Perform the following steps to define currency information for a main account: 1. Click General Ledger, Common, Main accounts, click Main account on the Action Pane, then click the Setup FastTab. 2. In the Currency field, select the default currency that is displayed when a line in the general journal is assigned the selected main account. Depending on your selection in the Validate currency code field, a user can change the default currency on the journal line, if appropriate. 3. In the Validate currency code field, determine how the currency must be validated for posting. For more information, refer to "Create a New Main Account - Validation Options."

Procedure: Create a New Account - Validate User Perform the following steps to specify authorized users for posting: 1. In the User ID list, specify the user who is authorized to post to this account. The Validate user field determines how User ID must be validated for posting. 2. In the Validate user field, determine how User ID must be validated for posting. For more information, refer to "Create a New Main Account - Validation Options."

Procedure: Create a New Account - Validate Posting Perform the following steps to set posting validation for a main account: 1. In the Posting type field, determine the posting types allowed for the current account to make sure that only the defined posting types are accepted. 2. In the Validate posting field, determine how posting must be validated. For more information, refer to "Create a New Main Account - Validation Options."

Configuring Account Structures Account structures consist of main accounts and can include financial dimension segments. The account structures are used to define the valid combinations, which together with the main accounts, form a chart of accounts. The account structures allow you to define the sequence for the entry of the main account and financial dimension.

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Chapter 2: Chart of Accounts Setup NOTE: It is not required that the main account be the first segment in the account structure. However, it is required to be a segment in the account structure. Multiple account structures allow a company to track information for specific accounts while not affecting other accounts. For example, balance sheet accounts may not require as many financial dimensions as profit and loss type accounts. For balance sheet accounts, you might only be interested in Department. For profit and loss accounts, you might also want to track Cost Center, Purpose, and Region.

Procedure: Configure Account Structures Perform the following steps to configure account structures: 1. Open General ledger, click Chart of accounts, and then Configure account structures. 2. Click the New button to create a new record. 3. Click Add segment to add financial dimension to the structure from the list. 4. Click Validate to check if you created a valid combination of financial dimensions. 5. Click Activate once the validation is complete. 6. Save the record and close the form.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: This form can also be accessed from the Chart of accounts form.

FIGURE 2.4 CONFIGURE MAIN ACCOUNTS

Advanced Rules Advanced rules link a financial dimension or multiple financial dimensions to an account number or range of account numbers so additional information can be gathered for reporting and analysis. Advance rule structures provide the financial dimension combinations that are valid for the advanced rule. For example, you want to track the travel expense account by the airlines. You could set up "Travel Expense" as the main account and create another financial dimension called "Airlines" and set criteria for that financial dimension such as "Airline 1", "Airline 2", and "Airline 3". Now, you can easily track travel expense by each airline defined.

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Chapter 2: Chart of Accounts Setup Scenario: Create Advanced Rules Phyllis, the Accounting Manager, is setting up the charts of accounts for Contoso Enterprise. For some of the accounts, the organization wants to track additional information that is not captured in the account structures. She needs to ensure that for the customer group (one of the financial dimensions)"80: Other customers" that only certain departments can be used.

Procedure: Create Advanced Rule Structures Perform the following steps to create an advanced rule: 1. Open General ledger, click Setup, click Chart of accounts, and select Advanced rule structures. 2. Click New to create a new record. 3. Enter a unique identifier for the Advanced rule structure, enter a brief description, and then click OK. 4. Click Add segment to add financial dimension to the structure from. 5. Select the desired Financial dimension from the list and then click Add segment. 6. Click the Filter icon under the selected segment to define which values for the financial dimension are applicable for the selected rule. 7. Select the Specify which values are allowed option. 8. Click in the Enter a value field and then enter the desired value. 9. Optionally, select the Allow blanks check box to allow blank values for the segment in the advanced rule you are defining. 10. Click OK to save and close the form. 11. Click Add segment to add another financial dimension to the structure. 12. Select the next desired financial dimension from the list and then click Add segment. 13. Click the Filter icon under the new segment to define which values for the financial dimension are applicable for the selected rule. 14. Select the Specify which values are allowed option. 15. Click in the Enter a value field and then enter the desired value.

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Financials I in Microsoft Dynamics® AX 2012 16. Optionally, select the Allow blanks check box to allow blank values for the segment in the advanced rule you are defining. 17. Click OK to save and close the form. 18. Click Activate to save the changes and make them effective in the ledger.

FIGURE 2.5 ADVANCE RULES

Procedure: Create Advance Rules Perform the following steps to create advanced rules: 1. Click General ledger > Setup > Chart of accounts > Configure account structures. 2. Select the account structure to apply the advanced rule. 3. On the Action Pane, in the Setup group, click Advanced rule. 4. Click New. NOTE: To add or edit advanced rules for an account structure, the account structure must be in a draft status. If the account structure is active, and you select to create a new advanced rule or edit an existing advanced rule, you will receive a message and can change the status of the account structure from active to draft. 5. Enter an Advanced rule ID and Name, and click OK. 6. Click the Add filter button to add criteria, and then select the appropriate options to create the criteria. You might have to scroll down to view all of the criteria. 7. On the Advanced rule structures FastTab, click Add. Select the advanced rule structure to use when the advanced rule is in use. 8. Only active advanced rule structures are displayed. 9. To activate the advanced rule, you must activate the account structure by clicking Activate on the Action Pane in the Configure account structures form.

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Chapter 2: Chart of Accounts Setup

Ledger Setup The term ledger is used as a system for classifying transactions for the general ledger using a chart of accounts, a fiscal calendar, and one or more currencies. Creating multiple ledgers will provide a ledger for each legal entity which provides the chart of accounts, accounting currency, reporting currency and fiscal calendar for the legal entity. The ledger also provides the means for sharing the chart of accounts, currencies and fiscal calendar by multiple legal entities. Each legal entity will have a separate ledger and it is possible to have multiple ledgers for each legal entity.

Procedure: Create a Ledger Account Alias Use the Ledger account alias form to create or update ledger account aliases. Go to General ledger, click Setup, click Chart of accounts, and then click Ledger account alias. 1. In the Leger account alias field, enter unique name. 2. In the Type field, select the type of ledger account alias. If you select Shared, the ledger account alias will be available for all users. If you select User group or User, the ledger account alias will be available only for the user or user group selected in the User group or User field. 3. Select the account structure for the ledger account alias. 4. Select the Company for the alias to be used in.

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Financials I in Microsoft Dynamics® AX 2012 5. Select the values that will be displayed when the ledger account alias is entered in a ledger account definition field. 6. Select the dimension that will be selected when you enter this ledger account alias for a ledger account in the Initial focus field.

FIGURE 2.6 LEDGER ACCOUNT ALIAS FORM

Scenario - Create Ledgers CEU has recently acquired a waste management company in Canada called Waste Management Group (WMG) for the purpose of proper disposal of all wastes as a result of plant manufacturing processes. WMG uses the same chart of accounts and calendar as CEU. WMG and CEU use different local currencies as CEU uses the USD currency and WMG uses the CAD currency. As such, a secondary currency (of USD) is added because WMG’s ledger currency does not match the functional currency of CEU parent entity, and this secondary currency is required for consolidated reporting purposes. Because payments to suppliers and other trade partners is restricted to this ledger (Example - payment transactions will not be allowed from other ledgers WMG may establish), Phyllis must indicate this when creating the ledger.

Scenario - Add Business Entity To add the newly acquired business into the CES (Contoso Entertainment Systems) organization structure follow these steps: 1. Phyllis logs into WMG. 2. Phyllis navigates to the Ledger form (General ledger > Setup > Ledger). 3. She creates a new Ledger by clicking File > New. 4. She enters/selects the following ledger attributes: o Name: enters Waste Management Group Canada o Description: enters Corporate ledger

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Chapter 2: Chart of Accounts Setup o o o

Financial Calendar: selects Fiscal Year Accounting Currency: selects CAD Reporting Currency: selects USD

5. She enters the main accounts for posting. 6. She closes the form.

Procedure: Create a Ledger Group To group multiple ledgers into a ledger group for ease of use in process management and reporting follow these steps: Click General ledger > Setup > Sales Tax > Posting Groups. Use this form to set up the ledger posting groups for sales taxes. The ledger posting groups are attached to individual sales tax codes, and the ledger posting groups determine the ledger accounts that the calculated sales taxes are posted to.

Procedure: Ledger Calendars The ledger calendar uses the details set up in fiscal calendars. To view details for the fiscal calendar that was selected in the Ledger form, and view details for fiscal years that are part of that fiscal calendar follow these steps: 1. Click General ledger > Setup > Ledger. 2. Click the Ledger calendar button.

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Financials I in Microsoft Dynamics® AX 2012 3. Select a fiscal year in the left pane. The details for the selected year are displayed in the right pane. 4. Use the fields on this form to view period information and change the status of the periods, and to select which users can post accounting transactions to specific periods.

FIGURE 2.7 LEDGER CALENDAR

Procedure: Setting Period Statuses To view and control the period status, follow these steps: 1. Click General ledger, click Setup, and then click Ledger. 2. Select the calendar from the drop down menu in the Fiscal Calendar field 3. Click Ledger calendar on the top left corner of the form and it will open the desired calendar 4. Expand the calendar tree in the navigation pane and click on the desired period 5. Use the drop down menu under the Period status field to set the period status. Status - The three available statuses include: •

Open - Accounting transactions can be recorded in this period

•

On hold - Accounting transactions cannot be recorded in the period. This status may be changed to Open or Closed.

•

Closed - Accounting transactions cannot be recorded in the period. If a period has a status of Open, you cannot select Closed unless the previous period also has a status of closed.

NOTE: A closed period cannot be re opened or put it on hold.

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Chapter 2: Chart of Accounts Setup NOTE: When a fiscal year is being closed, you can select the Set fiscal year status to closed check box in the General ledger parameters form. This sets all periods in a fiscal year to a Closed status. You can also select the Check journalizing check box in the General ledger parameters form if you want to verify whether periods are journalized before they are put on hold or closed

Procedure: Select Authorized Users Follow these steps to select the users who are authorized to post transactions in a specific AX module. 1. Click General ledger, click Setup, and then click Ledger. 2. Select the calendar from the drop down menu in the Fiscal Calendar field 3. Click Ledger calendar on the top left corner of the form and it will open the desired calendar 4. Expand the calendar tree in the navigation pane and click on the desired period 5. Click on the Module access level tab to expand the access level detail. 6. Highlight the line item of the Module Name you wish to grant access. 7. In the Access field select All, None, or User Group All - All users are authorized to update in the module in the selected period. None - No users are authorized to update in this module in the selected period. For example, if a company wants to make some adjustments to a period, the modules that will not be adjusted are set to None. User group - Specific user groups are authorized to updates in the selected period. In the Module user group area, specify the user group that can make changes, when the module status is set to User group.

Recalculate Calendars Use the Recalculate ledger periods form to validate the ledger period in the general journal. If the ledger period has been modified for the ledger, the reference to the ledger period will be updated in the general journal. A message will be displayed and you will need to update the closing transactions using the Close form. To recalculate ledger periods follow these steps: 1. Click General ledger > Setup > Ledger. 2. Click the Recalculate ledger periods button.

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Lab 2.1 - Enter a Main Account Scenario Ken is the Controller at Contoso Entertainment USA (CEU). CEU pays rent for a leased building two times a year. The prepaid rent is an asset for CEU. The following table provides additional information. Option

Value

Main account

131150

Name

Prepaid Rent

Main account category

Prepaid Expenses

Currency

USD

Challenge Yourself! Use the table information to create a new Main account.

Need a Little Help? 1. In the Main accounts form, create the new account 131150, Prepaid rent. 2. In the Main account type field, use the arrow to select Balance sheet. 3. In the Main account category field, use the arrow to select PREPAIDEXP for Prepaid Expenses. 4. On the Setup FastTab in the Currency field, click the arrow to select USD.

Step by Step 1. Click General Ledger, click Common, and then click Main accounts. 2. In the New group on the Action Pane, click Main account. 3. In the Main account field, enter 131150. 4. In the Name field, enter Prepaid rent. 5. In the Main Account type field, use the arrow to select Balance sheet. 6. In the Main account category field, use the arrow to select PREPAIDEXP for Prepaid Expenses. 7. Expand the Setup FastTab. 8. In the Currency field, click the arrow to select USD. 9. Click Close to close the form.

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Chapter 2: Chart of Accounts Setup

Lab 2.2 - Account Allocation Terms Scenario At Contoso Entertainment USA (CEU), entries posted to account 600200, Repairs and Maintenance Expense, must be allocated between departments based on dimensions, Allocate 50 percent from the Administration department to the Professional Services department.

Challenge Yourself! Use the information in the scenario to enter the allocation terms for account 600200.

Need a Little Help? 1. Open the Main accounts form. 2. After locating account 600200, Repair and Maintenance Expense, open the Allocation rules form by clicking the Allocation terms button. 3. Set the Allocation rules terms according to the information in the scenario.

Step by Step 1. On the Navigation Pane, click General Ledger, click Common, and then click Main accounts. 2. Double-click on the Main account 600200 in the Main accounts list page. 3. Click the Edit button. 4. In the Select level of main accounts to display field, select Companies. 5. Click the Legal entity icon and select CEU. 6. Expand the General FastTab and select the Allocation check box. 7. Click the Allocation terms button. 8. In the Percentage field enter 50.00 9. On the Source Dimension FastTab, In the Department field, select Specific, and then use the arrow to select OU_4569 (Administration). 10. In the To account field select 600200. 11. On the Destination ledger account FastTab, In the Department drop down list, use the arrow to select OU_2562 (Professional Services). 12. Close the Allocation form.

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Accounts for Automatic Transactions The modules in Microsoft DynamicsAX are highly integrated and many postings are handled automatically. For example, when an invoice is posted where a discount is given, this amount is posted automatically to an account for discounts. The appropriate account for that kind of posting must be set up, through system accounts. In the Accounts for automatic transactions form consider the following: •

Specify the main accounts for automatic transactions that cannot be set up elsewhere in Microsoft DynamicsAX.

•

There are other automatic accounts set up in each module, for example, posting profiles in the Accounts Receivable and Accounts Payable modules.

•

The posting set up is discussed when each module is introduced.

Create Accounts for Automatic Transactions Perform the following steps to set up automatic transaction accounts: 1. Click General ledger, click Setup, click Posting, and then click Accounts for automatic transactions. 2. Click Create and the system automatically creates the most common system account types when you set up the system accounts for the first time. The following is a list of examples of Accounts for automatic transaction Microsoft Dynamics AX creates when you click the Create button: o Penny difference in reporting currency o Error account o Penny difference in accounting currency o Year-end result o Cash discount o Balance account for consolidation differences o Customer cash discount o Customer invoice discount

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Chapter 2: Chart of Accounts Setup o o o

Vendor cash discount Vendor invoice discount Order, freight Order fee

FIGURE 2.8 ACCOUNTS FOR AUTOMATIC TRANSACTIONS FORM

o o o

Order invoice rounding Purchase invoice rounding-off Purchase, fixed receipt price profit

NOTE: The Error Account, Penny Difference, and Year-end Result accounts for automatic transactions are mandatory. The other accounts for automatic transaction are set up depending on whether that functionality is used. If a service pack is installed, new accounts for automatic transactions may be introduced. Click the Create button after you install a service pack to make sure you have all the latest default account types. 3. Click New to create a new account for automatic transactions, if accounts are already created. 4. Attach the relevant main account for each account for automatic transactions in the Main account field. The name of the main account is automatically inserted in the Name field. NOTE: To interrupt updates with an error message when the error account is used in the posting process, select the Interrupt in case of error account check box in the General ledger parameters form.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: To register or manually change a cash discount in the settlement process, a cash discount system account must be set up. To offer a discount on the total invoice amount, a customer invoice discount, vendor invoice discount, or both must be set up.

Inquiries and Reports Related to the Chart of Accounts This lesson describes standard inquiries and reports and the relationship to the Chart of Accounts.

Print the Chart of Accounts The Chart of Account report displays a list of all accounts in the Chart of Accounts. To print the Chart of Accounts report, click General Ledger, click Reports, click Base Data, and then click Chart of Accounts.

Audit Trail Inquiry Consider the following when using audit trail inquiry:

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•

Each ledger transaction is part of a voucher.

•

When a voucher or group of vouchers is posted, the program creates an audit trail entry with a unique numeric identifier. The entry includes an automatically generated transaction text that identifies the origin of the entry.

•

Click the Voucher button to view the vouchers that are contained in the audit trail entry. The entry also includes references to the user who created the entry and to the entry date and time.

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Chapter 2: Chart of Accounts Setup To access the Audit Trail form, click General Ledger, click Inquiries, and then click Audit Trail. If a journal that consists of several vouchers is posted, only one line is created in the audit trail. Check the specific vouchers by clicking the transactions button.

FIGURE 2.9 VOUCHER INQUIRY

View Account Transactions When you view account transactions, consider the following: •

You can use the Ledger transaction list to view a list of all posted transactions on the current account.

•

The entries result from posting transactions in: o o o

Journals Sales and purchase orders Any other modules that post to ledger

•

The information in the fields in the ledger transactions cannot be modified.

•

To correct an entry, make a transfer which then appears in the form.

To open the Account Transactions form, click General Ledger, click Reports, click Transactions, and then click Ledger transaction List.

View Account Balances To view a quick inquiry of ledger account balances in the system use the Balance list. To open the Balance list, click General Ledger, click Reports, click and then click Balance list. It is also possible to view balances from the Main account list page and the Trial balance list page.

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Financials I in Microsoft Dynamics® AX 2012

Summary This course, Chart of Accounts Setup, covers the basic information about the Chart of Accounts, Advanced Rules, Account Allocation Terms, Accounts for Automatic Transactions, and inquiries and reports related to these topics. The Chart of Accounts, the central collection location for daily financial transactions, is the base of the General Ledger module. It provides information about a company's financial state. Allocated transactions redistribute main account balances from one main account to another destination main account. This is practical and can be used to set up automatic posting of, for example, percentage allocation of main account postings.

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Chapter 2: Chart of Accounts Setup

Test Your Knowledge Test your knowledge with the following questions. 1. Is it possible to have the same chart of accounts used across multiple companies? ( ) Yes ( ) No 2. Before creating a company's Chart of Accounts, what considerations should be discussed?

3. Is the purpose of account allocation to use for realized transactions and budget transactions? ( ) Yes ( ) No 4. Can using posting types reduce the risk of selecting a wrong account when you set up posting profiles? ( ) Yes ( ) No

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Financials I in Microsoft Dynamics® AX 2012 5. Which of the following system accounts are required to be set up? (Select all that apply) ( ) Error account ( ) Cash difference ( ) Year-end result ( ) Penny difference 6. Which tasks are completed from the Chart of Accounts in Microsoft Dynamics AX? (Select all that apply) ( ) Create accounts ( ) Set standard parameters ( ) Access transactions ( ) View a company's financial state

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Chapter 2: Chart of Accounts Setup

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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Financials I in Microsoft Dynamics® AX 2012

Solutions Test Your Knowledge 1. Is it possible to have the same chart of accounts used across multiple companies? (•) Yes ( ) No 2. Before creating a company's Chart of Accounts, what considerations should be discussed? MODEL ANSWER: -What degree of specification is needed -How the Chart of Accounts must be structured -If external accountants offered any suggestions about the structure of the Chart of Accounts 3. Is the purpose of account allocation to use for realized transactions and budget transactions? (•) Yes ( ) No 4. Can using posting types reduce the risk of selecting a wrong account when you set up posting profiles? (•) Yes ( ) No 5. Which of the following system accounts are required to be set up? (Select all that apply) (√) Error account ( ) Cash difference (√) Year-end result (√) Penny difference 6. Which tasks are completed from the Chart of Accounts in Microsoft Dynamics AX? (Select all that apply) (√) Create accounts (√) Set standard parameters (√) Access transactions (√) View a company's financial state

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Chapter 3: Journal Setup

CHAPTER 3: JOURNAL SETUP Objectives The objectives are: •

Set up journal names.

•

Set up journal controls.

•

Create journal texts.

•

Set up balance control accounts.

•

Set up General Ledger parameters.

Introduction A journal is a worksheet that you can use before you enter postings into the system manually. Before you use financials in Microsoft Dynamics AX®, review the setup procedures for journals in this course. The procedures explain the basic setup of journals such as journal names, controls, and texts. You can use journals quickly and efficiently when you set them up correctly.

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Journal Setup There are manually generated journals and system generated journals in Microsoft Dynamics AX. Examples of system generated journals are allocation journals and elimination journals. These journals are created automatically and are never created manually. Manual journals entries are generated by postings entered into the system such as a general journal entry. When you use a manual journal entry the transactions are not posted immediately. Before you can post a manual entry, they can be the following states: •

Changed

•

Reviewed

•

Approved

•

Deleted

In Microsoft Dynamics AX, you can use journals to do the following: •

Control different kinds of entries. You can apply an approval system so that special journals are posted only after they are approved.

•

Review data imported from external ledger systems. You can ensure that all valid fields contain a value and that all restrictions for the transaction are fulfilled.

•

Make sure that the necessary voucher series is set up before you create journals. You can set up number sequences and attach them to the appropriate references.

Working with Journals Working with journals is divided into the following three steps: 1. Set up journal names. Use the journal setup for all new journals by using the name listed in Journal names. This means all the journals use the voucher series, offset account, and other information that you set up. 2. Create a new journal. Many of the modules in Microsoft Dynamics AX use journals for entering transactions. In General Ledger, use journals for ledger posting. In Accounts Receivable, use journals for postings. When you open a journal dialog box, create new journals by using the template that is associated with the journal type. 3. Create journal lines and post transactions. When a new journal is created, enter posting transactions in the journal and post it or transfer the journal for someone else to review and approve.

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Chapter 3: Journal Setup Journal Types The following are examples of journals: •

Daily

•

Periodic

•

Invoice register

•

Approval

•

Customer payment

EXAMPLE: Select a Daily journal type to create a journal for daily transactions. When you create new daily journals in General ledger > Journals > Journal Names, the journal names with the journal type of Daily appear in the Name list.

Procedure: Create Journal Names - Overview Perform the following steps to set up journal names: 1. To access the Journal names form, click General Ledger, click Setup, click Journals, and then click Journal names. 2. Enter a recognizable journal name in the Name field. 3. Enter a description of the journal that clearly describes the purpose of the journal in the Description field.

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Financials I in Microsoft Dynamics® AX 2012 4. Select the type of journal in the Journal type list. The journal type determines what the journal is used for and in which module it is available. For example, the customer payment Journal type is used only for customer payment journals.

FIGURE 3.1 JOURNAL NAMES FORM

Procedure: Create Journal Names - Approval The user responsible for journal routines sets up the approval system for each journal where approvals will be used. Manual journal approval is available for all journals in Microsoft Dynamics AX Perform the following steps to define approval options for a journal: 1. Select a journal from the Journal names form, and then click the General tab. 2. In the Approval area, select the Active check box if the journal must be approved before it is invoiced. The approval system enables journal transactions to be reported as one of the following: o Ready o Approved o Rejected. 3. Specify the users who can approve the journal in the Approve list. NOTE: You can define approval options in the Journal names form on the Overview tab.

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Chapter 3: Journal Setup Procedure: Create Journal Names - Workflow Approval Perform the following steps to define workflow approval options for a journal: 1. From the Journal names form, General FastTab, select the Approval workflow check box to start the workflow journal approval for the journal name. 2. From the Workflow field, enter the workflow configuration to use for the workflow approval for this journal name. NOTE: You cannot use both the manual approval system and the workflow approval system for the same journal name.

Procedure: Create Journal Names - Blocking Perform the following steps to restrict the use of a journal: 1. From the Journal names form, click the General FastTab. 2. In the Blocking area, specify if the journal should be available for only a limited group of people. In the Private for user group list, select a user group to restrict the usage of the journal.

Procedure: Create Journal Names - Voucher Number Perform the following steps to define voucher number options: 1. From the Journal names form, click the General FastTab. 2. In the Voucher number area, select when a new voucher number is assigned. 3. In the New voucher list, select from the following: o In connection with balance: if an offset account is not entered, keep entering transactions with the same voucher number as long as the lines on the voucher number do not balance. However, if an offset account is entered, either as a default account or as a manually entered account number, a new voucher is assigned for every line, because every line balances. o Manual: new voucher numbers are assigned manually. o One voucher number only: only one voucher number is employed for all journal lines. When you create a new journal a new voucher number is allocated automatically.

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Financials I in Microsoft Dynamics® AX 2012 4. Select the Number allocation at posting check box to start voucher number allocation in journals at posting. 5. Specify the number of the external document in the Document field. For example, a vendor invoice number that generated the voucher will appear on the journal lines, where it can be associated with a document date. NOTE: In the Organization Administration Module, click Common, and then click Number Sequences. If the Continuous check box is selected in the Number sequences form on the General tab, the voucher number is generated automatically from the previous voucher number without gaps in the voucher numbers. For example, the order is 1,2,3,4 and not 1,3,8.

Procedure: Create Journal Names - Offset Account Proposal Perform the following steps to define the offset account for the journal: 1. In the Journal names form, click the General FastTab. 2. In the Offset account proposal area, specify the default offset account type for the journal name in the Account type list. For example, when recording a vendor payment and specifying Vendor in Account type, offset posting occurs in the vendor account. At the same time, posting occurs automatically in the vendor summary account in General Ledger. 3. Select a default offset account for the journal in the Offset account list. 4. Select the Fixed offset account check box to prevent the default offset account from being changed. For example, select that a daily journal always must have a bank account as the default offset account.

Procedure: Create Journal Names - Posting Perform the following steps to set up information about posting: 1. In the Journal names form, click the General FastTab. 2. Set up information about journal posting details in the Posting area. 3. In the Posting layer, specify if the transactions in this journal name are Current, Operations, or Tax. The default value is Current. NOTE: The following posting layers can be used: Current, Operations, and Tax Current is the default layer that is used the same as Operations for entry of transactions. These are part of the periodic financial reporting. The Tax layer is where you record transactions that impact tax reporting.

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Chapter 3: Journal Setup NOTE: Posting operations or tax transactions can be done in the closing period from the Closing sheet form. 4. Select the Delete lines after posting check box to delete journal lines when posting is finished. This saves database space. However, the ability to inquire on posted journal lines is not saved. 5. In the Detail level list, specify how journal lines should be summarized: o Details - every instance of an account number in the journal lines is posted as a separate account transaction. o Summary - a summation of journal lines into one transaction is performed automatically during posting if voucher with date, account number, dimension, and currency code contain the same values. NOTE: Summation is not performed on transactions with sales tax. 6. Select how to handle the posting of fees in the Fees posting list, for example, for remittance. Select from the following options: o Keep fees in journal - keep fees in the actual journal for future posting. o Transfer fees, keep voucher no. - during posting of remittance journal, the fees are transferred into the journal set up in the Fee journal field on the bank account for the remittance. The journal keeps the original voucher number. o Transfer fees, new voucher no. - during posting of remittance journal, the fees are transferred into the journal set up on the bank account, and a new voucher number is allocated automatically. 7.

Specify how many journal lines are allowed in the Lines limit field. If the number of journal lines exceeds the number specified in the Lines limit field, the journal lines are distributed into several smaller journals.

Procedure: Create Journal Names - Currency Perform the following steps to define journal currency options: 1. In the Journal names form, click the General FastTab. 2. In the Currency area, select the default currency for the journal name in the Currency field. 3. Select the fixed rate check box if a fixed exchange rate should be used. The fixed exchange rate is specified in the individual Journal forms on the Setup tab. If the Currency or fixed rate fields are blank, the company currency setup is used for the journal name automatically.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create Journal Names - Sales Tax Perform the following steps to define journal sales tax options: 1. In the Journal names form, click the General FastTab. 2. In the Sales tax area, select the Amount includes sales tax check box to include sales tax in the journal transactions when a sales tax group is set up. The total includes sales tax.

Procedure: Create Journal Names - Financial Dimensions Perform the following steps to define journal dimension options: 1. In the Journal names form, click the Financial dimensions FastTab. 2. Set up default financial dimensions for the journal names. The dimensions are inserted automatically when you create new journals. However, the dimensions are overwritten if, for example, another dimension is set up on vendors or customers.

Procedure: Create Journal Names - Define Posting Restrictions Click the Posting restrictions button on the Journal names form. The posting restrictions feature enables an organization to specify, on a journal name basis, if specific users or user groups can only post the journals that the user or user group members entered or created. Posting restrictions can be defined by user group or user. Perform the following steps to define posting restrictions for a journal: 1. Select a journal from the Journal names form, and then click the Posting restrictions button.

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Chapter 3: Journal Setup 2. In the How do you want to set up posting restrictions? field, select the restrictions for users. Restrict journal posting to the user who created the journal for those who are assigned the control. If the user is not assigned to a posting restriction, he or she can post all journals for the journal name. Select from the following: o By user group o By user o No posting restrictions For example, Arnie, the Accounts Receivable (AR) Manager at Contoso, is a member of the AR user group. The AR user group has been assigned to a posting restriction for AR journals. Because of this posting restriction assignment, members of the AR user group can post AR journals that only they created. Phyllis, the Accounting Manager, decides to allow Arnie to post all AR journals, not only those that he created. Phyllis must clear the posting control for Arnie so that he can post to all AR journals.

Journal Controls Set up journal control options to set up posting rules for the journal name.

Scenario Contoso uses journal control to set up limitations to certain journals. For example, the bank journal name is set up so that it is only possible for users to make bank account postings, and the customer payment journal allows only customer type postings.

Procedure: Set Up Journal Controls Perform the following steps to set up controls and posting rules for a journal: Which account types can be posted? section: 1. To access the Journal control form, click General ledger, click Setup, click Journals, click Journal names, and then click the Journal control button. 2. Use the Add button to add detail information. 3. Select the company accounts that allow posting for the current journal in the Company accounts list. 4. In the Accounts type list, specify what type of account the journal may be posted to. If is displayed, there are no posting restrictions by account type for the journal.

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Financials I in Microsoft Dynamics® AX 2012 Which segment values are valid for this journal? section: 1. Use the Add button to add detail information. These fields are available only when Ledger is selected from the Company accounts list in the Which account types can be posted? section. 2. Select a Company account to determine which segment accounts are available for this journal. 3. Select the Segment that is valid for the selected journal. 4. Select the Ledger type that is valid for the selected journal. If is displayed, all ledger types are valid for the selected journal. 5. Select the From and To value to determine the starting main account and the ending main account values that are valid for the selected journal.

Journal Descriptions Use journal texts to enter and reuse transaction texts when you record in journals. Users frequently enter the same transaction text every time they post a certain transaction. For example, users transfer from petty cash to bank or payment of invoice number. You can save the transaction texts in a table with a search name so that you can reuse the transaction text.

Procedure: Create Journal Descriptions Perform the following steps to set up standard journal texts: 1. To access the Ledger journal descriptions form, click General ledger, click Setup, click Journals, and then click Journal descriptions. 2. Click the New button to create a new record. 3. Enter an ID for the transaction text, in the Identification field. You can use the identification as a hotkey together with the search name when you enter the transaction texts.

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Chapter 3: Journal Setup 4. Enter a short, memorable name in the Search name field. The search name frequently resembles the value in the Identification field. For example, enter: o 1 in the Identification field o Daily in the Search name field o Daily transactions in the Transaction description field Microsoft Dynamics AX automatically finds the text Daily transactions if 1 or Daily is entered in the Transaction description field in any Journal lines form.

FIGURE 3.2 LEDGER JOURNAL DESCRIPTIONS FORM

Balance Control Accounts Use the Balance control accounts form to monitor the current and expected balance on an account as transactions are entered in a journal. You are not required to set up balance control accounts to work with Microsoft Dynamics AX.

Scenario Phyllis, the Accounting Manager at Contoso, wants to track the current and expected balance of liquidity accounts better. These include bank accounts and petty cash accounts. After Phyllis has set up the balance control accounts, April, the Accounts Payable Coordinator, verifies the expected balance of the bank account to make sure the balance is sufficient to pay invoices. The expected balance includes posted and unposted journals.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Set Up Balance Control Accounts Perform the following steps to set up balance control accounts: 1. To access the Balance control accounts form, click General ledger, click Setup, click Posting, and then click Balance control accounts. 2. Click the New button to create a new record. By default, bank accounts are included in the balance control. 3. In the Main account field, select the main account for balance control. The account is typically a liquidity account. The Name field is populated with the Account name of the main account.

FIGURE 3.3 BALANCE CONTROL ACCOUNTS FORM

Procedure: View a Balance Control When you add a main account to the Balance control accounts form, you can verify the effect of the postings on the main account in question. The Balance control form displays the following:

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•

The balance before journal

•

The posting transaction

•

The balance after journal

•

The effect on the account from other journals

•

The balance after posting this and other journals

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Chapter 3: Journal Setup Perform the following steps to view the current and expected balance of a balance control account: 1. From the Journal form, select a journal. 2. Click the Lines button. 3. From the Journal voucher form, click the Inquiries button, and then click Balance control.

General Ledger Parameters The last part of the journal setup is performed in the General Ledger parameters form.

Procedure: Set Up General Ledger Parameters Perform the following steps to set up the general ledger parameters for journals: 1. Click General ledger, click Setup, and then click General Ledger Parameters. 2. In the navigation pane select Ledger, then select one of the following methods to check the use of vouchers from the Check for Voucher used list: o Reject duplicate - prevents the use of different transaction dates for the same voucher number. o Reject duplicates within fiscal year - allows for different transaction dates for the same voucher number in different fiscal years. o Accept duplicates - uses different transaction dates for the same voucher number in the Transaction Date field in journal lines. o Warn in case of duplicates - sets up the system to notify you if journal lines with different transactions dates have the same voucher number. 3. Select the Check continuous numbers check box for the system to check for continuous numbers in the number sequences that generate vouchers in ledger. If this option is selected, no missing numbers can be in the voucher number sequence.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Set Up General Ledger Parameters - Number Sequence Perform the following steps to set up the number sequence options for journals: 1. Click General ledger, click Setup, and then click General ledger parameters. 2. Select Number sequence in the navigation pane and then select a Number sequence code. The Reference is a unique key for the journals in the General Ledger module and acts as a batch number that links journal transactions together. When you specify the number sequence for the journal number reference, you can create general journal transactions. In the Number sequence code list, set up a number sequence for journal number transactions. The number sequence is created in the Number sequences form. Number sequences in the Journal names form are used for voucher numbers (journal lines). You can number the journal by using the number sequences in the General ledger parameters form on the Number sequences tab.

FIGURE 3.4 GENERAL LEDGER PARAMETERS NUMBER SEQUENCE

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Chapter 3: Journal Setup

Lab 3.1 - Set Up Journals Scenario Ken, the Controller at Contoso, must set up two journals in Microsoft Dynamics AX. One journal records vendor invoices daily and a second journal records where periodic rent entries will be recorded. The table provides additional information about the journals. Journal

Option

Value

Vendor Journal

Name of Journal

Day3

Description

Vendor Invoice

Journal Type

Daily

Voucher Series

Acco_18

Account Type

Ledger

Name of Journal

PerRent

Description

Rent Journal

Journal Type

Periodic

Voucher Series

Acco_23

Account Type

Ledger

Company Account

ceu

Rent Journal

Challenge Yourself! Use the information in the table to set up the journals.

Need a Little Help? 1. Set up the Vendor Invoice journal. 2. Set up the Rent Journal. Define a journal control for Company ceu. 3. Set up journal description for the Rent Journal.

Step by Step Perform the following steps to set up the Vendor Invoice journal. 1. Click General ledger, click Setup, click Journals, and then click Journal names. 2. Click the New button to add a line. 3. In the Name field, enter Day3. 4. In the Description field, enter Vendor Invoice. 5. In Journal type, use the arrow to select Daily.

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Financials I in Microsoft Dynamics® AX 2012 6. In the Voucher series field, use the arrow to select the first Acco_18. 7. In the Account type field, verify Ledger is populated automatically. 8. Click the General FastTab. 9. In the New voucher field, verify that In connection with balance is selected. Perform the following steps to set up the Rent Journal. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

From the Journal names form, click the New button to add a line. In the Name field, enter PerRent. In the Description field, enter Rent Journal. In the Journal type field, use the arrow to select Periodic. In the Voucher series field, use the arrow to select the first Acco_23. In the Account type field, verify Ledger is populated automatically. Click the Journal control button. Click the Add button in the Which account types can be posted? In the Company accounts field, click the arrow to select CEU. Close the Journal control form. Close the Journal names form.

Perform the following steps to set up journal text for the Rent Journal. 1. Click General ledger, click Setup, click Journals, and then click Journal description. 2. Press the New button to add a line. 3. In the Identification field, enter rent. Notice the Search name defaults with the same value. 4. In the description field, enter rent. 5. Close the form.

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Chapter 3: Journal Setup

Summary Journal setup completion allows users to create journal and journal lines and record vendor and customer transactions. It is also possible to set up journal validation and journal approvals for every financial journal. With journal validation, you can lace restrictions on users, accounts, and modules. For each journal type, approval procedures for verification may be set up before any update. User rights are also an important consideration. The level of detail stored in individual records and fields may be modified. Defining access permissions (read, edit, add, or delete) also allows for increased security for sensitive information.

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Test Your Knowledge Test your knowledge with the following questions. 1. What is the purpose of the Blocking function when setting up Journals?

2. Which of the following types of journals may be set up in Microsoft Dynamics AX? (Select all that apply) ( ) Daily ( ) Periodic ( ) Approval ( ) Annual 3. What is the purpose of using Balance Control Accounts?

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Chapter 3: Journal Setup 4. Sequentially order the following steps for working with journals. Step: _____: Post transactions. _____: Create journal lines. _____: Create new journal. _____: Set up journal names. 5. Which of the following would be used to monitor the current and expected balance on an account as transactions are entered in a journal. ( ) Journal names ( ) Journal controls ( ) Balance control accounts ( ) General ledger parameters

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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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Chapter 3: Journal Setup

Solutions Test Your Knowledge 1. What is the purpose of the Blocking function when setting up Journals? MODEL ANSWER: To restrict the usage of a journal 2. Which of the following types of journals may be set up in Microsoft Dynamics AX? (Select all that apply) (√) Daily (√) Periodic (√) Approval ( ) Annual 3. What is the purpose of using Balance Control Accounts? MODEL ANSWER: -To monitor the current and expected balance on an account as transactions are entered in a journal. 4. Sequentially order the following steps for working with journals. Step: 4

: Post transactions.

3

: Create journal lines.

2

: Create new journal.

1

: Set up journal names.

5. Which of the following would be used to monitor the current and expected balance on an account as transactions are entered in a journal. ( ) Journal names ( ) Journal controls (•) Balance control accounts ( ) General ledger parameters

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Chapter 4: General Ledger Daily Procedures

CHAPTER 4: GENERAL LEDGER DAILY PROCEDURES Objectives The objectives are: •

Create General Ledger Journals.

•

Enter General Ledger Transactions.

•

Post multiple journals.

•

Create Approval Journals.

•

Demonstrate data needed to create an Approval Journal.

•

Create a Voucher Template.

•

Create and Retrieve Periodic Journals.

•

General Ledger Transaction Reversal.

•

Create General Ledger Reversing Entries.

•

Inquire and Report on Daily Journal Transactions.

Introduction Every manual posting entered into Microsoft Dynamics® AX is entered through a journal. A journal is a type of worksheet where entries do not post immediately. You can review, change, and verify completed journals until they are ready for posting. There are many ways to set up the journals to control different kinds of entries and to apply an approval system so that special journals post only after they have been approved. You also can choose whether to keep the used journals for historical purposes. This course explains journal management and journal transactions in the General ledger module.

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General Ledger Journals Users can post transactions to the following accounts by using a general journal: •

General ledger

•

Bank

•

Customer

•

Vendor

•

Projects

•

Fixed assets

In a general journal, users enter the following relevant information for the transaction: •

Posting date

•

Amount

•

Accounts to post to

The information that users enter in a general journal is temporary and can be changed as long as it remains unposted within the journal.

Procedure: Create a General Ledger Journal Use the General journal form to create and view journals within the General Ledger module in Microsoft Dynamics AX. The Show list determines whether only open, posted, or all transactions display in the form. Perform the following steps to create a general journal entry. 1. Click General ledger, select Journals, and then click General Journal. 2. Click the New button to create a new journal in the General journal form. 3. Enter the name of the journal in the Name list, or select the name from the journal name list for the general journal type. The journal number is inserted automatically from the voucher series set up in the Journal names form. The description from the Journal names form is inserted automatically, but you can overwrite it. The Journal batch number is created automatically from the number sequence set up in the General ledger parameters form, and the description comes from the Journal names form.

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Chapter 4: General Ledger Daily Procedures NOTE: The Posted check box is selected automatically after the journal has been posted. The General journal form filters journals by the Show field. You can select to display only open, all, or posted journals.

FIGURE 4.1 THE JOURNAL FORM

Procedure: Create a General Ledger Journal - Lines Perform the following steps to create the General Journal Lines: 1. Use the tabs, for example the General or Financial Dimension tab, to change or add to any of the field information that is entered automatically from the Journal names form. 2. Click Lines on the menu bar to create a transaction. 3. To inquire about transactions within a journal at any time, highlight the journal and click the Lines button. 4. To print the journal and other reports, click the Print button. 5. To save the lines, click File, then click Save at the end of each line or use the down arrow to enter a new transaction line. 6. Click Post in the General journal form or in the General journal lines form to post transactions to the General Ledger immediately after you create transactions. When you post the journal lines in either form, the results are the same. A transaction does not affect account balances until you post it.

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Enter General Ledger Transactions Journal entries in Microsoft Dynamics AX are the same as any other type of accounting entry. A ledger account is debited or credited, and then an offset account is designated. You must have the following information to create a journal entry: •

Accounting date

•

Ledger account

•

Debit or credit amount

•

Offset account (can be entered on the same line or multiple lines)

Use the Journal lines form to enter transactions within a journal. Click the Lines button on the General Journal to open the Journal lines form.

Enter General Ledger Transactions - Overview Tab The Overview tab is used to create entries. It contains the basic information needed to make a journal entry. Use this tab to enter transactions in the General Ledger. Create a journal and view open, posted, or all journals according to the selection in the Show list at the top of the form. NOTE: Set up default number sequences using the General ledger parameters form. To do this, click General Ledger, click Setup, then select General ledger parameters. If you set the number sequence to Continuous and you allow no user changes, the voucher field is skipped automatically. Refer to the Microsoft Dynamics AX Introduction manual for more information about number sequences.

Procedure: Enter General Ledger Transactions - Account Types Click the Overview or Setup tab to determine which type of transaction to create by using the Account type field. Follow these suggestions to select the account type. 1. Select one of the following account types to use for the general journal transaction in the Account type field: a. Ledger - use Ledger for transactions in a ledger account. b. Customer - use Customer for transactions to customers. c. Vendor - use Vendor for posting to a vendor account. For example, when you record a vendor payment and specify Vendor as the Account type, posting occurs in the specified vendor account. At the same time, posting occurs automatically in the vendor summary account in the General Ledger. 4-4

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Chapter 4: General Ledger Daily Procedures d. Project - use Project to post to a specific project number. e. Fixed assets - use Fixed assets to post to a specific asset number. f. Bank - Use Bank if a bank account transaction is involved. 2. Use the Offset account drop-down list to select an offset account to use with the transaction. It is also possible to enter multiple lines to get a balanced voucher.

Procedure: Enter General Ledger Transactions - Accounts After you enter the account type, use the following steps to enter the line item detail by selecting Lines on the menu bar. 1. Select an account number for the current account type in the Account field. 2. Use the Offset account drop-down list to select an offset account to use with the transaction. 3. Enter the debit amount in the given currency in the Debit field. 4. Enter the credit amount in the given currency in the Credit field. NOTE: Set up the default offset account for an account in the Journal names form. By creating a default offset account, this field is populated automatically without specifying the account every time. Also, set up default accounts and posting account restrictions in the Journal names form by clicking the Journal Control button.

Procedure: Enter General Ledger Transactions - Post Journal After you enter General Ledger transactions into the journal and you verify that the information is correct, you now can post the journal. Perform the following steps to post the journal: 1. Click Post, then select Post the general journal to post without first validating. If the journal contains erroneous entries, you will receive an error message and the journal will not post. Click Validate to verify that there are no errors before you click Post. 2. Click Post, then Post and transfer to transfer the line that contains errors into the next journal of the same type. All of the correct lines will then post.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Enter General Ledger Transactions - View Results You can view the results of posting the journal by printing the journal. Perform the following steps to view the results: 1. Click Print and select Journal or click on General Ledger, then click Reports, then click Journals, then click Print Journal and select the journal number you just created. The Print journal form prints a list of transactions for each journal. 2. Select the Specifications check box to print additional information, such as invoice number and approval information. 3. Select the Totals check box to show total amounts in currencies for ledger accounts for every journal. 4. Select the Accrual schemes check box to identify accrued transactions. 5. Click OK to print the journal report.

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Chapter 4: General Ledger Daily Procedures

Lab 4.1 - Daily Transactions This lab will demonstrate creating and posting transactions in a General journal. Scenario Ken is the Controller for Contoso. On June 30, 2011 Contoso paid 6,000.00 USD for audio-visual equipment. Use the information in the following table to enter the transaction. Option Name of Journal

GenJrn

Journal Number

Accept the System Default

Description

AV Equipment

Account Description

Invoice

Debit

6000

Offset Account

110180

Challenge Yourself! 1. Help Ken record the activity in the prepaid rent expense account in Microsoft Dynamics AX. Enter a journal for the prepaid rent expense. 2. After you enter the transaction information, post the journal.

Need a Little Help? 1. Select the journal name. 2. Select the desired transaction description. 3. Click the Post button on the Journal voucher form. NOTE: Normal accounting procedures would not disburse a large payment from a Petty Cash account. This account (number 110180) has been chosen to simplify this lab procedure.

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Financials I in Microsoft Dynamics® AX 2012 Step by Step Create the Journal: 1. On the Navigation Pane, click General ledger, click Journals, click General journal. 2. Click the New button to add a line. 3. In the Name field, click the arrow to select GenJrn. 4. In the Journal batch number field, accept the system default. 5. In the Description field, enter AV Equipment. Create the Journal Lines: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Click the Lines button. In the Date field, enter 06/30/2011. In the Account type field, select Vendor. In the Account field, enter 1001. In the Description field, enter payment. In the Debit field, enter 6000. In the Offset account type field select Bank In the Offset account field, select USA OPER. Click the Payment tab and in the Method of payment field select USA_EL. 10. In the Bank transaction type field select 02. Post the Journal (Only if Fiscal Year has been set up): 1. If a fiscal year and period has been set up for this fiscal period you may click Post to post this transaction. If a fiscal period has not been set up you will receive a message that you cannot post until setting up a fiscal period for this date.

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Chapter 4: General Ledger Daily Procedures

Lab 4.2 - Daily Transactions with Balance Control This lab will demonstrate the use of the Balance control feature. Scenario Ken is the controller for Contoso. On June 25, 2011 he received an invoice from vendor for 800.00 USD. A journal is to be created, using the GenJrn journal, for the expense, debiting the Bank Operating account and entering a second line, crediting 131100. Help Ken validate the journal and review the balance control accounts online.

Challenge Yourself! 1. Enter a journal for office expenses, using two lines of entry instead of an offset account. 2. Validate the journal. 3. Review the balance control accounts online.

Need a Little Help? 1. Validate the journal in the Journal voucher form by clicking the Validate button. 2. Review the balance control accounts from the Journal voucher form by using the Balance control option available from the Inquiries button.

Step by Step Create the General Journal: 1. On the Navigation Pane, click General ledger, click Journals, and then click General journal. 2. Click the New button to add a line. 3. In the Name field, click the arrow to select GenJrn. 4. In the Journal batch number field, accept the system default. 5. In the Description field, enter Electricity. 6. Click the Lines button. 7. In the Date field, enter 06/25/2011. 8. In the Account Type field, click the arrow to select account Bank. 9. In the Description field, select invoice. 10. In the Debit field, enter 800. 11. Press the down arrow key to add a line. 12. In the Date field, enter 06/25/2011. Note that this field may already be filled in. 13. In the Account Type field, click the arrow to select account Ledger.

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Financials I in Microsoft Dynamics® AX 2012 14. In the Account field, click the arrow to select account 131100. 15. In the Description field, enter invoice. 16. In the Credit field, enter 800. Validate the General Journal: 1. Click the Validate button, and then click the Validate. An Infolog form displays, which provides information for issues in the journal that may affect posting. 2. Close the Infolog form. Review the Balance Control: 1. 2. 3. 4. 5.

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Click the Inquiries button. Click the Balance control option. Note the display for the accounts. Close the Balance control form. Close the Journal voucher form. Close the General Journal form.

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Chapter 4: General Ledger Daily Procedures

Posting Multiple Journals You can use the Post journals menu option to post multiple journals with large processes in a batch. You can also post multiple journals that you have created in the following modules by selecting the Post journals menu option: •

General ledger

•

Accounts receivable

•

Accounts payable

•

Project

You can post journals immediately or set them up as a job for batch processing.

Scenario Contoso uses batch processing at the end of its business day to process large jobs. During the day, Susan, the order processor, opens and creates multiple journals. The journals are not posted in case Susan must make corrections or add more items to the journals during the day. At the end of the day, Susan runs a journal batch job to post all the open journals at the same time.

Procedure: Post Multiple Journals - Select Journals Follow these steps to post multiple journals: 1. Open the Post journals form by clicking General Ledger, click Periodic, click Journals, and then click Post Journals. 2. Click the Select button to open journals for multiple posting. The range is already set up to include open journals. Click OK to return to the Post journals form. 3. Manually add or delete journals from the resulting list of journals to be posted. To add a journal, press CTRL+N to create a line, and then select the appropriate journal type and number. 4. When necessary, press ALT+F9 to delete a journal. 5. Select the Transfer errors check box on the individual journal lines so that vouchers with errors do not delay the posting of vouchers without errors. When this check box is selected, the posting process posts vouchers without errors and transfers vouchers with errors to a new journal.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: If using batch job processing, you may click the Late selection check box to build a query, and to have the system use all journals that meet the criteria for posting when the batch is run. By selecting this check box, the journal does not have to exist prior to being selected for the batch processing job.

FIGURE 4.2 POST JOURNALS FORM

Procedure: Post a Journal Batch - Transfer Errors and Post You can configure the transfer of errors for just the selected lines by clicking Default values. 1. Select or clear the Transfer errors check box in the Set up posting form, and then click Apply. 2. Click Insert All to apply the setting to all the selected journal lines or click User default to apply the setting to all users. 3. Click OK to return to the Post journals form. 4. Click OK to post the multiple journals. NOTE: If Lines limit is set up in the Journal names form, you may have to create several journals during posting. The number of the first journal posted is saved automatically in each associated journal that you create. NOTE: A power failure during posting can cause some journals to post while others do not post. If this occurs, start the posting again by using the same criteria for subsequent selection in the original request. The journals that did not get posted appear in this form for posting.

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Chapter 4: General Ledger Daily Procedures

HINT: Use the Delete posted journals form (General ledger > Periodic > Cleanup > Ledger journals clean up) to cleanse the Journals form. The Delete posted journals form deletes all posted journals in the Journals form to free space. This does not delete the posted vouchers.

Approval Journals To set up an unlimited number of journal templates, use the Journal names form. You can set up the journal templates with or without a mandatory approval of the transactions before posting. The person responsible for journal routines sets up the approval system in one of the journals.

Scenario: Journal Approval At Contoso, a sample of 100 daily journal transactions shows that less than half are completed correctly, are authorized correctly, or have documented support sufficiently for the recorded transaction amounts. The sample shows that in many instances, information fields were left blank or contain insufficient or incomplete information. Without appropriate journal approval controls, the causes of these errors or misstatements are difficult to identify. Therefore Phyllis, the accounting manager, has decided to start the journal approval procedure to make sure specific user groups approve and validate the journals.

Procedure: Create an Approval Journal Perform the following steps to start the approval journal feature. 1. Open the Journal names form by clicking General Ledger, click Setup, click Journals, and then click Journal Names. 2. Click on the New button and enter the name of the journal that you use throughout Microsoft Dynamics AX in the Name field. Give it a name that is recognizable by its name alone. 3. Enter a description of the journal's purpose in the Description field.

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Financials I in Microsoft Dynamics® AX 2012 4. Select the type of journal in the Journal type field. The journal type determines what the journal is used for and which module it is available in. For example, the Customer payment journal type is used only for customer payment journals. The customer payment journal is used only within Accounts Receivable, to post a payment directly to a customer account. Therefore, a description such as "AR Payment" would be appropriate when you select this journal type.

FIGURE 4.3 JOURNAL NAMES FORM

Procedure: Create an Approval Journal - Number Sequences To create number sequences for an approval journal select a number sequence for the journal name in the Voucher series list. Number sequences manage automatic allocation of voucher numbers, invoice numbers, and journal numbers used by Microsoft Dynamics AX. You can set up number sequences in the General ledger parameters form. The number sequence automatically is applied to, for example, journal lines.

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Chapter 4: General Ledger Daily Procedures Procedure: Create an Approval Journal - Accounts Perform the following steps to select the Account type and other options for an approval journal: 1. Select the default account type for the journal name in the Account type list. For example, when you record a vendor disbursement and specify Bank in Account type, posting occurs in the bank account selected in the journal. At the same time, posting occurs automatically in the bank's posting account in the General Ledger. 2. Optionally, you can select a default offset account for the journal in the Offset account list. NOTE: If an offset account is set up, select the Fixed offset account check box to prevent users from changing the default offset account. 3. Select the Active check box to start the approval system. This enables journal transactions to be reported as ready, approved, or rejected. 4. Specify the user group whose members should approve the journal in the Approve field. 5. Close the Journal names form. NOTE: There is also a Workflow approval process which is separate from this approval process. if you are using Workflow approval, do not use steps 3 and 4.

Procedure: Create an Approval Journal - Restricting Access The following ways are available to further restrict access to the journal: •

On the General tab, specify if the journal should be available only for a limited group of people. In the Private for user group list, select a user group to restrict the usage of the journal.

•

On the Posting restrictions button, you can create an additional layer of control on posting.

•

In the Approval workflow field, you can enable approval workflow for the journal by selecting and selecting a workflow Configuration. However, if workflow is used, you cannot use the approval system enabled by the Active field within the same journal name record.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create an Approval Journal - Entering Data in the Journal Perform the following steps to create an approval journal when another person enters data into the journal in which the approval system is set up. Note that the Post button is unavailable until the journal is approved. 1. Go to General Ledger, click Journals, and then click General Journal. 2. Click the New button to create a new journal and select the journal name with the approval system enabled. Other journal types also may use the approval system, although this example uses a General Journal. HINT: View the history of approvals on the History tab of the Journal form and the Journal voucher form. 3. Click the Lines button to open the Journal voucher form. 4. Create the journal transactions by clicking the New button and entering information in the fields. 5. Click Approval, and click Report as ready to make the journal ready for approval as soon as you complete the transaction.

Procedure: Create an Approval Journal - Approval Follow these example steps to approve a journal when a member of the user group designated in the Journal names form approves, for example, a General journal. If a different journal type was created and used, the path in step 1 will be different, but the remaining steps 2 and 3 will be the same. 1. Click General ledger in the Navigation pane, click Journals, then click General journal. 2. Click the Approval button, and then click Approve to approve the journal. 3. When the journal is approved, the Post button is enabled within that journal. This allows the user who created the journal and the journal lines to post the transactions. NOTE: If the journal has errors, click Approval, and click Reject.

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Chapter 4: General Ledger Daily Procedures

Example: Gathering Data for an Approval Journal The following is an example in gathering some of the data needed to create an Approval journal.

Scenario Phyllis, the Accounting Manager for Contoso, has the responsibility for guaranteeing the accuracy of transactions posted in Microsoft Dynamics AX. Phyllis has noticed many errors on entries posted by Alfredo Fuentes Espinosa (AFE) in the GenJrn journal, a journal used only by Admin. Now Phyllis has decided that entries made to GenJrn must be approved by a member of the Finance team, Alex Roland (ASR). Phyllis needs help establishing the proper procedures to enable this approval.

What Data Is Needed? In this scenario, the following tables will be used to assist to gather the needed information. Request to Link Users to Groups

Required Data or Field Value

User ID User Group User ID User Group Request to Enable Journal Approval

Required Data or Field Value

Journal Name Active

Select

Approve Private for user group How would you complete the following tables to provide Phyllis with the setup that she needs? Some hints and the completed table are shown in the next lesson sections.

Helpful Information Here are some hints: •

Alfredo is a member of the Admin user group.

•

Because only Admin makes entries to the GenJrn journal, you can use the Private for user group field to prevent other users from accessing the journal. If you do this, then the approving user must also be a member of the Private for user group value selected to see the journal for approval.

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Financials I in Microsoft Dynamics® AX 2012 Solution: Data Required The completed tables are as follows: Request to Link Users to Groups

Required Data or Field Value

User ID

AFE

User Group

Admin

User ID

ASR

User Group

Finance; Admin

Request to Enable Journal Approval

Required Data or Field Value

Journal Name

GenJrn

Active

Select

Approve

Finance

Private for user group

Admin

Voucher Templates A voucher template is a voucher that can be used as the basis for future vouchers. Use voucher templates with a general journal or an accounts payable invoice journal.

Scenario Phyllis, the Accounting Manager at Contoso, is entering a voucher to record interest expense on a fixed-rate long-term note. The voucher debits Interest Expense and credits Interest Payable for 350.00 U.S. dollars (USD) each. This voucher for the same amount must be recorded each month. To reduce future data entry time, Phyllis decides to save the voucher as a voucher template by amount. The next time Phyllis records an interest expense, she selects the Load voucher template action and chooses the interest entry. The original ledger accounts and amounts are loaded into the form automatically.

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Chapter 4: General Ledger Daily Procedures Scenario April, the Accounts Payable Coordinator, receives a telephone bill that she must enter. At Contoso, April records the telephone expenses across all departments equally. April enters the voucher with the appropriate department breakdown. The following table shows is an example of the distributions for an invoice in the amount of 600.00 U.S. dollars (USD). Account

Debit Amount

Telephone Expense - Sales

150 USD

Telephone Expense - Accounting

150 USD

Telephone Expense - Production

150 USD

Telephone Expense - Administration

150 USD

Accounts Payable

Credit Amount

600 USD

April saves this entry as a Voucher template by percent. This will hold the value assigned to each account as a percentage of the total. In this case, April will assign each department 25 percent. The next time April receives the telephone bill, she must retrieve the Voucher template and enter only the amount of the telephone bill. The distributions then are created based on the original percentage.

Procedure: Create a Voucher Template Perform the following steps to create a voucher template. 1. Enter a transaction through in the General journal by clicking General ledger, click Journals, click General journal, and then click the Lines button. 2. Select a line item. 3. Click Functions, and then click Save voucher template. 4. From the Template type list, select one of the following: o Percent - uses the percentage of the original voucher total represented by each voucher line. o Amount - uses the original voucher total and line amounts. 5. Click OK.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Use a Voucher Template After a voucher template has been created, perform the following steps to use a voucher template to create a new general journal or accounts payable invoice journal. 1. Enter a transaction through in the General journal by clicking General ledger, click Journals, click General journal, then click the Lines button. 2. Highlight a line item. 3. Click Functions, and then click Select voucher template. 4. Select the correct template in the Voucher templates form. 5. Click OK. 6. If you select a percent voucher template, enter the Amount of the new transaction. When you create a new voucher based on a percent type voucher template, the percentage calculated for each new line automatically is applied to the value entered in the Voucher amounts dialog. It determines the amount for that new voucher line.

Periodic Journals A periodic journal only has data entered periodically. For example: •

During each month-end accounting close, a user makes the same entry with the same account numbers and currency amounts.

•

The user sets up a periodic journal to make this process quicker.

•

Then, each month, the user retrieves the journal and posts it with the appropriate accounting date.

Procedure: Create a Periodic Journal Perform the following steps to create a periodic journal that is the same as a regular journal. 1. Click on General Ledger, click Journals, and then click General Journal. 2. Click the New button to create a new journal. 3. Use a GenJrn type and enter the periodic journal description to define it as a periodic journal. 4. Click the Lines button to open the Journal voucher window. 5. Create the transactions in the periodic journal the same way that you would create a transaction in a normal General journal. Decide whether to leave the date field blank. If you plan to use this journal more than one time, you can leave the date blank. However, if you want to use the automatic period incrementation functionality of periodic journals, enter a starting date.

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Chapter 4: General Ledger Daily Procedures 6. Click the Period journal. Click Save Journal when the transaction is complete. A new window appears. 7. Either save the journal in an existing journal or create a new journal.

Procedure: Create a Periodic Journal - Notes and Hints HINT: Be as descriptive as possible when entering the Name of a new periodic journal. It is easier to identify the correct journal when you retrieve the periodic journal. NOTE: When you create a new periodic journal, the Period journal you select must first exist as a Journal name with Journal type periodic in the Journal names form. This can be found by clicking General ledger, click Setup, click Journals, and then click Journal names. NOTE: After you create the periodic journal, you can post or delete the General journal that you created by these steps. A record will be created automatically in the Periodic journals form found by clicking General ledger, click Periodic, click Periodic journals.

Procedure: Retrieve the Periodic Journal - First Steps Perform the following steps to retrieve and use the periodic journal from the Journal voucher window. 1. Go to and click General Ledger, click Journals, then click General Journal. 2. Click the New button or open an existing journal. 3. Click the Lines button. 4. Click Period Journal button, click Retrieve Journal on the Journal voucher window. A new form appears titled Period journal.

Procedure: Retrieve the Periodic Journal - Set Date Conditions Perform the following steps to set up the conditions for retrieving lines from a periodic journal to the current journal: 1. Enter the posting date for transactions or last date for transfer of periodic transactions, in the To date field. This is the date the system uses when searching through the periodic journals, and evaluating whether to retrieve the periodic journal. Enter a date that is after the date you saved the journal, even if the journal does not have an accounting date.

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Financials I in Microsoft Dynamics® AX 2012 2. Enter a date to use for the accounting date in the Empty date field if the Date field in the periodic journal is empty. If the Date field is empty, the To date is automatically used as a posting date. 3. Select the periodic journal to use in the Periodic journal number field list. 4. Select either Copy or Move in the Copy or move journal field list. This will determine whether or not the lines from the selected Periodic journal number are left in a reusable status. If the lines are copied, you can use the journal again. If the lines are moved, the journal is not available for further retrieval. 5. Click OK to create the journal lines. 6. Post the journal as you normally would. 7. Go to General Ledger, click Periodic, then click Periodic Journal to view or create all the periodic journals.

Procedure: Modify a Periodic Journal After you create a Periodic journal, you can modify it. Perform the following steps to modify a periodic journal. 1. Go to and click on General ledger, click Periodic, click Journals, then click Periodic journals. 2. Click to highlight the desired periodic journal. 3. Click the Lines button to open the Journal voucher form. 4. Make the changes you want. 5. Close the form. NOTE: You also can create periodic journals by using this form.

Periodic Journal: Fields on The Periodic Tab You can access the Periodic journal at General ledger, Periodic, Journals, Periodic journals. When you modify a periodic journal, note the following about the Periodic tab:

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•

Unit field - select the unit to use for the selected periodic transaction, for example, Months for monthly postings. If you do not select a date, the Unit field does not apply.

•

Number of units field - enter the number of units defined in the Unit field that make up the interval in which to post transactions for the selected journal line. For example, if you have entered Months in the Unit field and want to make quarterly postings, enter 3 in the Number of units field. If you entered Days in the Unit field and 14 in Number of units field, you indicate that the periodic journal line is posted every two weeks.

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Chapter 4: General Ledger Daily Procedures •

Last date field - this field contains the Session date of the last time you transferred the periodic line to a journal. The system updates the field automatically.

NOTE: To automatically establish an initial baseline date for Periodic journal posting, ensure that the Date field of the Journal voucher form within a Periodic journal is populated.

Periodic Journal: Using Periodic Tab Fields When Retrieving Periodic Journals You can access the Periodic Tab Fields by clicking General ledger, click Periodic, then click Periodic journals. Next, click the Lines button, and then click the Periodic tab. Use these fields to determine the next Periodic journal posting date. You can also determine whether a journal will be retrieved automatically into the General journal form based on the selection criteria you set up. Every time you post the Periodic journal by using the General journal form, the Date field in the Periodic journal, Journal voucher is automatically incremented by the values set up in the Periodic tab. This field is found by clicking General ledger, click Periodic, then click Periodic journals. Next, click the Lines button, and click the Date field. When you select a Periodic journal to retrieve into the General journal form, the value found in the To date field (go to General ledger, click Journals, click Lines, click the Period journal button, then click Retrieve journal, then click To date) determines whether to retrieve the journal. The system retrieves the journal only when the To date field value entered in the retrieval form is equal to or greater than the Date field in the Periodic journal Journal voucher form line (found at General ledger, click Periodic, click Periodic journals, and then click Lines). However, if the Date field in the Periodic journal Journal voucher form line is blank, the line automatically transfers one time per retrieval, and the posting date is set based on the values entered during retrieval.

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Financials I in Microsoft Dynamics® AX 2012

Lab 4.3 - Entering Periodic Transactions This lab demonstrates creating a Periodic Journal Scenario Ken is the Controller for Contoso. It is the end of June and therefore one-sixth of the prepaid rent must be expensed. Accounting staff must make an entry to move the used portion of 1,000.00 USD to Rent Expense. Ken asks you to create the Periodic journal and post the June entry. Use the following information to enter the transaction. Option Name of Journal

RentExp

Description

Rent Expense

Date

06/30/2011

Account

131100

Transaction Text

Rent Expense

Credit

$1,000.00

Offset Account

605150 Rent Expense

Unit

Month(s)

Number

1

Challenge Yourself! 1. Create a Periodic journal to use for posting the monthly expense. 2. Post the entry for June. NOTE: Set the Session date to 06/30/2011 for this lab.

Need a Little Help? 1. Create a Journal name for RentExp. 2. After you enter the Periodic Journal, click the Save button. 3. Retrieve the Periodic Journal and post the first transaction on June 30, 2011.

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Chapter 4: General Ledger Daily Procedures Step by Step Set up the Journal name: 1. On the Navigation Pane, click General ledger, click Setup, click Journals, then click Journal names. 2. Click the New button to add a line. 3. In the Name field, enter RentExp. 4. In the Description field, enter Rent Expense. 5. In the Journal type field, click the arrow to select Periodic. 6. In the Voucher series field, select the first Acco_23. 7. In the Offset account field, enter 605150. 8. Close the Journal names form. Create the Periodic Journal: 1. On the Navigation Pane, click General ledger, click Periodic, click Journals, then click Periodic journals. 2. Click the New button on the Menu bar to add a line. 3. In the Name field, click the arrow to select RentExp. 4. In the Journal number field, accept the system default. In the Description field, the field populates based on the Journal names form setup. 5. Click the Lines button. 6. In the Account field, enter 131100. 7. In the Description field, enter periodic. Use the Tab key to move to the next field. 8. In the Credit field, enter 1000. 9. In the Unit field, use the arrow to select Months. 10. Enter 1 in the Number of units field. 11. Close the Journal voucher form. 12. Close the Journal form.

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Financials I in Microsoft Dynamics® AX 2012 Post the entry for June: 1. On the Navigation Pane, click General ledger, click Journals, then click General journal. 2. Click the New button to add a line. 3. In the Name field, click the arrow to select GenJrn. 4. Click the Lines button on the Menu bar. 5. Click the Period journal button. 6. Click the Retrieve journal option. 7. In the To date field, enter 06/30/2011. 8. In the Periodic journal number field, use the arrow to select RentExp. 9. Click OK to retrieve the journal information. 10. In the Journal voucher form, click the Post button. 11. Click Post, then click Post. 12. Close the Infolog form. 13. Close the Journal voucher form. 14. Close the Journal form.

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Chapter 4: General Ledger Daily Procedures

General Ledger Transaction Reversal Microsoft Dynamics AX enables users to easily reverse transactions posted incorrectly. The transaction reversal feature includes: •

Setup options in General Ledger parameters

•

Number sequences for tracing purposes

•

The ability to reverse a transaction and subledger transactions

•

The ability to undo a reversal

•

Inquiry on tracing

The following transactions can be reversed: •

General Ledger transactions

•

Customer transactions, except transactions that relate to sales orders, projects or bank.

•

Vendor transactions, except transactions that relate to purchase orders or bank.

•

Fixed asset transactions

General Ledger Transaction Reversal - Further Description You can select only one transaction at a time for reversal, and you must reverse it at the last transaction level. For example, an invoice can only be reversed if it is not paid. To reverse a paid invoice, you first must reverse the payment. The reversal functionality applies to: •

The last transaction level

•

Transactions in the origin module

The reversal functionality does not apply to: •

Transactions included in the bank reconciliation

•

Project invoices and credit notes

•

Vendor invoices entered through purchase orders

•

Sales invoices entered through sales orders

•

Inventory transactions

•

Delivery notes posted into the ledger

NOTE: You also can enable Reason codes for transaction reversal.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Reverse a Transaction - Set Up Number Sequence Before using reverse functionality, select a number sequence for Transaction Reversal and Trace number in General ledger parameters on the Number sequences tab. Perform the following steps to reverse a transaction. 1. Enter a number sequence for the Trace number reference. The system uses the trace number on the original transaction and also on the reversal of the reversal. This makes it possible to trace the: o Original transaction o Reversed transaction o Reversal of the reversed 2. Enter a number sequence for the Transaction reversal reference. NOTE: You can set the number sequence to Continuous by clicking General Ledger, click Setup, click General ledger parameters, then click Number Sequences, and check the appropriate box. 3. Optionally, select the Correction check box on the Ledger tab to reverse the connected ledger transaction by using correction. You can reverse a debit transaction by adding a minus debit transaction, and you can reverse a credit transaction by adding a minus credit transaction. NOTE: You cannot reverse a transaction in a previously closed fiscal year.

Procedure: Reverse a Transaction - Transaction Level Perform the following steps to reverse a transaction in the General ledger module: 1. Click General Ledger, click Common, and then click Main accounts. 2. Select a Main account. 3. Clicked on the Posted button on the tool bar. 4. Click Reverse transaction on the action pane strip. 5. Select the date of posting for the reversal transaction. The date cannot be before the original posting date or in a closed period. 6. Click OK. The transaction itself and all related transactions that were created when the original transaction is posted are reversed.

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Chapter 4: General Ledger Daily Procedures NOTE: Parameter settings for a module determine whether you must enter a reason for the reversal, in addition to entering a posting date. The results include the following: •

Both new and old reversed transactions now receive a special marking ''R(eversed)'' allowing you to select these transactions in: o o o

•

Reports Inquiries Periodic jobs

The ''R'' marking identifies all transactions settled through reversal and are currently still settled.

Procedure: Reverse a Transaction in Accounts Payable and Accounts Receivables It is also possible to reverse transactions in Accounts Receivables and Accounts Payable. Below are the steps to reverse a transaction in Accounts Receivable: 1. Click Accounts Receivables, click Common, click Customers, and then click All customers. 2. Select a customer and click Transactions. 3. Select a transaction to reverse. 4. Click Reverse transaction on the action pane strip. 5. Select the date of posting for the reversal transaction. The date cannot be before the original posting date or in a closed period. 6. Click OK. The transaction itself and all related transactions that were created when the original transaction is posted are reversed. The results include the following: •

Both new and old reversed transactions now receive a special marking ''R(eversed)'' allowing you to select these transactions in: o o o

•

Reports Inquiries Periodic jobs

The ''R'' marking identifies all transactions settled through reversal and are currently still settled.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Revoke a Reversed Transaction You also can reverse a reversal which involves the following actions: •

Settlements between the original transaction and its reverse are canceled.

•

The original transaction is marked as an original transaction.

Perform the following steps to reverse a reversal. 1. Click General Ledger, click Common, and then click Main accounts. 2. Select a main account. 3. Clicked on the Posted button on the tool bar. 4. Click Reverse transaction on the action pane strip. 5. Select the reversed or original transaction to revoke the reversed transaction. 6. Select the date of posting for the revocation transaction, and then click OK. The reversed transaction and all transactions that you created by using the reversal are revoked, and the revocation transactions share the same trace number. 7. Select a transaction to view all the transactions with the same trace number, and then click Reversed Tracing. NOTE: Reversed tracing is active only for reversed transactions and reversed transactions that you revoke.

Inquiry and Reports on Transaction Reversal Consider the following when you use inquiries and reports:

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•

The identification of the reversal (trace number) and the reversal marking ('R') must be displayed.

•

In the dialog of some inquiries and reports in General Ledger, Accounts Receivable, and Accounts Payable, select whether the report or inquiry should include transactions that are reversed and settled ('R' transactions).

•

The 'Include reversed' parameter is, for example, included in reports such as account statements and aging reports.

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Chapter 4: General Ledger Daily Procedures

Reversing Entries - General Journals The action of reversing entry functionality lets users enter a general journal transaction with a reversing date. After you post the transaction in the general journal, the original transaction is posted based on the transaction date, and the transaction reversal is posted based on the reversing date. The action of reversing entry functionality provides an easy way to perform transaction reversal for accruals. You need accrual type transactions to accurately reflect balances on financial statements.

Scenario An interest note is issued on September 16, with interest payable on October 15. Assuming the interest payment at the end of the 30-day period is 100.00 USD, half of the expense must be reported in September, because that is when the costs were incurred. Phyllis, the Accounting Manager, enters a month-end transaction on September 30, as shown in the following table. Account

Debit amount

Interest on bank loans

50 USD

Long term interest payable

Credit amount 50 USD

Because the full payment will not be made until October 15, Phyllis sets the previous transaction with a reversing date of October 1. This action creates a reversal of the previous transaction in the new accounting period, as shown in the following table. Account

Debit amount

Long term interest payable

50 USD

Interest on bank loans

Credit amount 50 USD

When the actual transaction for payment of interest is entered on October 15, the following transaction occurs: Account

Debit amount

Interest on bank loans

100 USD

Cash

Credit amount 100 USD

The overall balance for the interest expense for October is a debit of 50.00 USD.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Reversing Entry You can set up the Reversing entry and Reversing date fields in the General Journal header to default on all lines or on the journal lines. Perform the following steps to designate on the header that a general journal entry is a reversing entry: 1. To access the Journal form, click General ledger, click Journals, then click General journal. 2. Enter or select a journal. 3. Select the Reversing entry check box. If the Reversing entry check box is selected, you must enter a date in the Reversing date field. 4. In the Reversing date field, enter a posting date for the reversing voucher. NOTE: You also can access the Reversing entry and Reversing date fields from the General tab in the Journal form. NOTE:To change the reversing date of an individual transaction in this journal, click the Lines button to open the Journal voucher form. Enter a new date in the Reversing date field.

Inquire and View Reports on Daily Journal Transactions You can run various reports to help you review and reconcile General Ledger posted data.

Report: Print Journal There are two ways to print a list of transactions in a General journal:

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•

Go to General ledger, click Journals, then click General journal. Next, highlight and select the journal you wish to print, click the Print button, and finally click Journal.

•

Go to General Ledger, click Reports, click Journals, and click Print Journal to print a list of transactions entered in the current journal.

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Chapter 4: General Ledger Daily Procedures Report: General Journal Entries That Have Not Been Posted The General journal entries that have not been posted prints the journal lines that have not yet been posted. To print the General journal entries that have not been posted report, open General Ledger, click Reports, click Journals, then click General journal entries that have not been posted. NOTE: The account must be the account in the Chart of Accounts. For example, no value displays if you enter the account in the journal as a debit to the bank account, and then later you make an inquiry on the ledger account for that specific bank account.

Report: Account Balances To verify a specific account balance, go to General Ledger, click Common, click Main accounts. Highlight the desired account and view the FactBox pane on the right of the form to view account balances.

Report: Balance List Print a Balance list report that shows the opening and closing balance for all accounts for a given period. Use the report to do the following: •

View debit and credit totals

•

Quickly analyze development in the different accounts

To access this report, click General ledger, click Reports, click Transactions, then click Balance list.

Report: Trial Balance If the total of the debits and credits are error free and posted correctly to the General Ledger: •

The total of all the debit balances should equal the total of all the credit balances. If the debits do not equal the credits, then an error occurred somewhere in the process.

•

The total of all accounts on the debit side and on the credit side is known as the trial balance. Print the trial balance to verify the debits and the credits equal.

To access this report, click General ledger, click Reports, click Transactions, then click Trial balance.

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Financials I in Microsoft Dynamics® AX 2012 Report: Audit Trail Use the Audit trail form to trace a transaction to its origin for internal and external auditing and analysis. An audit trail is a time-stamped record of all the changes made to a record. It contains the name/identification of the user who made the modification and typically also includes the reason for the change. An audit trail enables you to audit the system for a record of alterations, and also to reconstruct the data at a specified time. To access this form, click General ledger, click Inquiries, then click Audit trail.

Report: Voucher Transactions Use the Voucher Transactions form to view ledger transactions by voucher number and posting date. To access this form, click General ledger, click Inquiries, then click Voucher transactions. After you enter the criteria in the Inquiry form, click OK to continue.

Summary By using the connectivity in Microsoft Dynamics AX, many transactions in the general ledger are posted automatically. This applies to sales and purchases, cost of goods sold, discounts, interest payments, exchange rate adjustments of accounts receivable and accounts payable, project invoices and costs, work in progress, fixed asset transactions and inventory transactions. However, you also can enter General Ledger transactions manually when you use general ledger journals. You can control the posting in the journals by the way you set up of the Chart of Accounts and the journal templates. The journal itself also offers various posting options.

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Chapter 4: General Ledger Daily Procedures

Test Your Knowledge Test your knowledge with the following questions. 1. General journals are used to post transactions in which of the following accounts? (Select all that apply) ( ) General ledger ( ) Bank ( ) Customer ( ) Vendor 2. The information you enter in a general journal is temporary and changeable as long as the journal is unposted. ( ) True ( ) False 3. What information is needed to create a journal entry? (Select all that apply) ( ) Accounting date ( ) Ledger account ( ) Offset account ( ) Debit or credit amount 4. When can Multiple journals be posted? (Select all that apply) ( ) Yearly ( ) Immediately ( ) On a delayed schedule ( ) Set up as a job for batch processing 5. In Microsoft Dynamics AX, you can set up journals that require mandatory approval. ( ) True ( ) False 6. With which journals can you use voucher templates? (Select all that apply) ( ) General journal ( ) Fixed assets journal ( ) Accounts payable invoice journal ( ) Purchase journal

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Financials I in Microsoft Dynamics® AX 2012 7. Which voucher template type allows users to recreate a voucher for the same accounts and values as the original entry? ( ) Percent ( ) Division ( ) Aggregate ( ) Amount 8. Is it possible to select multiple transactions for reversal at the same time? ( ) Yes ( ) No 9. Which of the following statements correctly describe Microsoft Dynamics AX Reversing Entry functionality? (Select all that apply) ( ) Reversing entry functionality allows users to enter a general journal transaction with a reversing date. ( ) After you post transactions, the original transaction posts based on the transaction date, and the transaction reversal posts based on the reversing date. ( ) Reversing entry functionality provides transaction reversal for accruals. Accrual type transactions are needed to accurately reflect balances on financial statements. ( ) Reversing entry functionality serves only the purpose of correcting or backing out incorrect transactions. 10. Which of the following fields designates a reversing entry? (Select all that apply) ( ) Reversing entry ( ) Correcting entry ( ) Reversing date ( ) Correction date

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Chapter 4: General Ledger Daily Procedures

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 Test Your Knowledge 1. General journals are used to post transactions in which of the following accounts? (Select all that apply) (√) General ledger (√) Bank (√) Customer (√) Vendor 2. The information you enter in a general journal is temporary and changeable as long as the journal is unposted. (•) True ( ) False 3. What information is needed to create a journal entry? (Select all that apply) (√) Accounting date (√) Ledger account (√) Offset account (√) Debit or credit amount 4. When can Multiple journals be posted? (Select all that apply) ( ) Yearly (√) Immediately ( ) On a delayed schedule (√) Set up as a job for batch processing 5. In Microsoft Dynamics AX, you can set up journals that require mandatory approval. (•) True ( ) False

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Chapter 4: General Ledger Daily Procedures 6. Which journals can you use voucher templates? (Select all that apply) (√) General journal ( ) Fixed assets journal (√) Accounts payable invoice journal ( ) Purchase journal 7. Which voucher template type allows users to recreate a voucher for the same accounts and values as the original entry? ( ) Percent ( ) Division ( ) Aggregate (•) Amount 8. Is it possible to select multiple transactions for reversal at the same time? ( ) Yes (•) No 9. Which of the following statements correctly describe Microsoft Dynamics AX Reversing Entry functionality? (Select all that apply) (√) Reversing entry functionality allows users to enter a general journal transaction with a reversing date. (√) After you post transactions, the original transaction posts based on the transaction date, and the transaction reversal posts based on the reversing date. (√) Reversing entry functionality provides transaction reversal for accruals. Accrual type transactions are needed to accurately reflect balances on financial statements. ( ) Reversing entry functionality serves only the purpose of correcting or backing out incorrect transactions. 10. Which of the following fields designates a reversing entry? (Select all that apply) (√) Reversing entry ( ) Correcting entry (√) Reversing date ( ) Correction date

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Chapter 5: Sales Tax Setup

CHAPTER 5: SALES TAX SETUP Objectives The objectives are: •

Provide an overview on sales tax.

•

Create Ledger Posting Groups.

•

Create Sales Tax Authorities.

•

Create Sales Tax Settlement Periods.

•

Create Sales Tax Codes.

•

Create Sales Tax Codes Intervals.

•

Create Sales Tax Groups.

•

Create Item Sales Tax Groups.

•

Set up Sales Tax Jurisdictions.

•

Create Sales Tax Transactions.

•

Create Sales Tax Exempt Data.

•

Calculate and Post Withholding Sales Tax.

Introduction The requirements for tax calculation and tax reporting differ significantly for different countries. Therefore, the tax module of a true international Enterprise Resource Planning (ERP) system must be comprehensive. In Microsoft Dynamics AX®, the tax module offers many different options for: •

Tax calculation

•

Posting

•

Reporting

This content explores the extensive functionality for sales tax handling. NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

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Sales Tax Overview All businesses must collect and pay taxes to various tax authorities. Different countries have different rules and rates. In some countries, the rules differ between states or counties. This topic provides a general overview on taxes, with the focus on sales taxes, although the tax system in Microsoft Dynamics AX can process many kinds of taxes and duties. The sales tax system within Microsoft Dynamics AX functions as follows:

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•

The user specifies where to post sales taxes by entering a ledger account in the Ledger posting groups.

•

The user specifies the sales tax authorities by using the Sales tax authorities form.

•

The user specifies when and how frequently to settle under sales tax settlement periods.

•

The user defines how much to collect or pay as a certain amount or percentage. The user sets this up under the Sales tax codes.

•

The system determines whether a sales tax should be imposed on a sale or purchase order through a combination of the Sales tax group and the Item sales tax group.

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Chapter 5: Sales Tax Setup Sales Tax Overview - Suggested Steps The image illustrates the steps for setting up tax information. If you follow the steps in this order, you can avoid going back and forth between dialog boxes in Microsoft Dynamics AX.

FIGURE 5.1 SALES TAX SETUP IMAGE

When you buy an item from a vendor or sell an item to a customer, the system must calculate all the applicable sales taxes. The calculated sales tax in Microsoft Dynamics AX is based on the sales tax codes included in both of the tax groups that are attached to the customer or vendor and the item.

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Financials I in Microsoft Dynamics® AX 2012 Sales Tax Overview- Example The following table shows the: •

Sales tax setup for a customer and an item

•

Attached tax groups and the associated tax codes

If you sell the item P Lamp to customer TTL Tire, the system calculates the sales taxes based on tax codes CA and Fed because those codes exist in both groups.

FIGURE 5.2 AFFECT OF SALES TAX CODES ON SALES TAX CALCULATION

When you attach settlement period and posting group to the tax codes, you specify how to post and pay the taxes. Finally, you can set up the tax reporting on the sales tax code.

Ledger Posting Groups The ledger posting groups control the automatic posting of sales taxes in Microsoft Dynamics AX. You must create the accounts that General Ledger uses in the Chart of Accounts before using them to set up the ledger posting groups. The following characteristics apply to ledger posting groups:

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•

A ledger account is updated automatically when the system calculates taxes and updates invoice posting.

•

The system attaches the ledger accounts that the taxes are posted in to the sales tax code.

•

Because each ledger account can use several tax codes, a ledger posting group determines posting.

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Chapter 5: Sales Tax Setup •

Each ledger posting group can contain several ledger accounts. The help text indicates the purpose of each account and how it is used.

•

You can set up ledger accounts that have the posting type Sales tax to select the accounts in the Account group form.

•

Changes that you make to the ledger account numbers in Ledger posting groups only affect transactions that have not yet posted.

Ledger Posting Groups - Types of Accounts The number of accounts you must set up depends on the use of the group and national law. For example, you can set up accounts for the following: •

Sales-tax payable

•

Use-tax payable

•

Settlement account

•

Sales-tax receivable

Procedure: Create Ledger Posting Groups Perform the following steps to create ledger posting groups: Go to General ledger, click Setup, click Sales Tax, then click Ledger posting groups. 1. Click the New button to create a new record. 2. Enter a unique name for the ledger posting group in the Ledger posting group field. 3. Enter a meaningful name to describe the ledger posting group in the Description field. The description appears on reports and other areas throughout Microsoft Dynamics AX. HINT: Describe the groups so that you can recognize them. This description appears with the code of the ledger posting group.

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Financials I in Microsoft Dynamics® AX 2012 4. Select the ledger account in the Sales tax payable list, where you must post the outgoing sales tax as part of the company's revenue. The system debits the outgoing tax in the customer account and then credits this account. Debits are automatically recorded in the account and settled upon payment of the taxes. The ledger accounts available in the Sales tax payable list are the posting type of sales tax in the Chart of accounts.

FIGURE 5.3 ACCOUNT GROUP- LEDGER POSTING GROUPS FORM

Create Ledger Posting Groups - Posting Example The following is a brief example about posting sales taxes. These sales taxes are collected by the company on behalf of the tax authority when you sell taxable goods and services. The amount you receive includes the sales tax. For example, if a customer makes a purchase of 95.00 USD and the tax amount is 5.00 USD, the ledger transactions are as follows: Ledger account

Debit (USD)

Customer account (Accounts Receivable)

100

Credit (USD)

Sales tax payable*

5

Sales account (domestic)

95

* The sales tax payable line represents the ledger account specified in the Sales tax payable field on the Ledger posting group form. The system credits this account for sales tax amounts received from customers and debits the appropriate customer accounts.

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Chapter 5: Sales Tax Setup Procedure: Create Ledger Posting Groups - Sales Tax Receivable Perform the following steps to create sales tax receivable ledger posting groups: 1. Select the ledger account for incoming taxes (receivable from the tax authority) in the Sales tax receivables field. Vendors collect these taxes on behalf of the tax authority when the company purchases taxable goods and services, and the amount paid to the vendor includes taxes. For example, if a vendor sends an invoice of 100.00 USD, of which 5.00 USD is value-added tax, the ledger transactions are as follows: Ledger account

Debit ($)

Vendor account (Accounts payable)

Credit ($) 100

VAT paid (Sales tax receivable)**

5

Inventory account (Expense account)

95

** This account represents the ledger account specified in this field. The system debits to this account the sales tax amounts that you pay vendors and credits the appropriate vendor accounts. 2. Enter the ledger account for posting deductible incoming taxes that vendors do not claim or report to the tax authority in the Use-tax expense list. NOTE: If the Apply US sales tax and use tax rules check box is selected on the General Ledger Parameters form on the Sales tax tab, the Sales tax payable field is unavailable. Instead, the system debits sales taxes paid to vendors as expenditures (costs) to the same accounts as the purchases.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create Ledger Posting Groups - Use Tax Payable Perform the following steps to create use tax payable ledger posting groups: Enter the ledger account that offsets the use tax expense for taxes that vendors do not claim in the Use tax payable list. The way you use this account depends on the type of tax system your company chooses. 1. Non-U.S. taxes - You must indicate a use tax expense account for the Ledger posting group. For any sales tax groups that contribute amounts to this ledger account, you must select the Use Tax field on the Setup tab on the Sales tax group form, found at General Ledger, Setup, Sales tax. 2. U.S. taxes - The amount in this account offsets the taxes posted as expenses if the Apply US sales tax and use tax rules check box is selected on the Parameters form. The vendor is not required to collect the tax. However, the company may still owe taxes to a sales tax authority and must track such taxes.

Create Ledger Posting Groups- Use Tax Payable Example The following is an example of the use tax payable concept. A company buys office supplies on the Internet from an out-of-state vendor. The vendor charges 100.00 USD for the supplies and no tax. The company may still owe use taxes to the sales tax authority in its own state. The ledger transactions are as follows: Ledger account

Debit (USD)

Credit (USD)

Vendor account (Accounts Payable)

100

Use tax payable***

5

Office supplies (Expense account)

105

***This account represents the ledger account specified in this field. NOTE: This field is visible only when the Apply U.S. sales tax and use tax rules check box is selected in the General ledger parameters form on the Sales tax tab.

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Chapter 5: Sales Tax Setup Procedure: Create Ledger Posting Groups Settlement Perform the following steps to create settlement accounts for ledger posting groups: 1. Select the ledger account that the system debits when you pay taxes in the Settlement account field. To ease use, group the account with other ledger accounts in the Chart of accounts that contain posted taxes. The sum of these accounts is the total balance of taxes due. 2. Perform the following in the Ledger posting groups form: o Enter the ledger account for the posting of vendor cash discounts that include a sales tax amount. If you use this field, you must also select the Reverse sales tax on cash discount and Cash discount is calculated on amount incl. sales tax check boxes in the Parameters form. o Select the account for posting loss on cash discounts in the Customer cash discount list. You can use this account to view a more accurate audit trail on the transaction. The ledger posting groups have the following characteristics: •

They can be attached to individual sales tax codes

•

They determine the ledger accounts to which the sales taxes calculated for the sales tax code are posted

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Lab 5.1 - Create a Ledger Posting Group During this lab, you will set up ledger accounts and a ledger posting group for use in posting sales tax transactions. Scenario Phyllis is the Accounting Manager for Contoso. Contoso has a new customer in Alabama. A ledger account must be set up to record the sales tax liability and payments made (settlements) to the taxing authority in Alabama automatically. Phyllis asks you to perform these tasks for her. NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! 1. Create an account to record the sales tax payable and the sales tax settlements for the Alabama customer. 2. Set up a new ledger posting group to assign to the Alabama customer to automate postings of sales tax transactions.

Need a Little Help? 1. When you create a new account for the sales tax liability for the Alabama customer, use account number 220105. 2. Create a new ledger posting group for the Alabama customer in the Ledger posting form that uses the Ledger posting group ALST (Alabama State Tax).

Step by Step Set up the ledger account: 1. On the Navigation Pane, click General ledger, click Common, then click Main accounts. 2. Click the Main account button to add a line. 3. In the Main account field, enter 220105. 4. In the Name field, enter Alabama state sales tax payable. 5. In the Select the level of main account to display field, select Chart of accounts. 6. In the Main account type field, click the arrow to select Balance sheet. 7. Click the Setup FastTab. 8. In the Posting type field, click the arrow to select Sales tax. 9. Close the Main Accounts - Chart of accounts form.

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Chapter 5: Sales Tax Setup Set up the ledger posting group: 1. Click General ledger, then click Setup, then click Sales Tax, and then click Ledger posting groups. 2. Click the New button to add a line. 3. In the Ledger posting group field, enter ALST. 4. In the Description field, enter Alabama State Tax. 5. In the Sales tax payable field, click the arrow to select account 220105. 6. In the Settlement account field, click the arrow to select account 220105. 7. Close the Ledger posting groups form.

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Sales Tax Authorities Companies pay and report taxes to authorities. The authorities determine when and where the company pays its taxes. Tax authorities can be countries, states, regions, and cities. You can pay sales tax through a vendor or to the sales tax authority directly. To pay sales tax through a vendor, specify the vendor's account number together with the correct sales tax authority. Sales tax payments are transferred by the system to the vendor making the payment. To make payments to the sales tax authority, enter the sales tax authority's address information.

Procedure: Create a Sales Tax Authority Perform the following steps to create a sales tax authority: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax authorities. 2. Click the New button. 3. Enter a unique code for the authorities that you send tax declarations and payments in the Authority field. Microsoft Dynamics AX uses this code throughout the system to refer to a particular authority. 4. Enter the name of the tax authority in the Name field. It displays on reports and in other areas throughout the system. NOTE: Give the tax authority a name that is easy to identify. The name displays together with the tax authority code.

5. Select the vendor to make tax payments to the appropriate authorities in the Vendor account list. The sales tax payments are then posted automatically to the settlement account specified in the Ledger posting group. If you leave the field blank, you must pay the tax authorities directly.

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Chapter 5: Sales Tax Setup 6. Select the report layout to print for the tax authority in the Report layout list.

FIGURE 5.4 AUTHORITY FORM

Procedure: Create a Sales Tax Authority - General Perform the following steps to create a sales tax authority, for fields on the General FastTab: 1. Select the vendor to make tax payments to the appropriate authorities in the Vendor account list. The sales tax payments are then posted automatically to the settlement account specified in the Ledger posting group. When you select a vendor, the vendor's address is entered automatically. If you leave the field blank, you must pay the tax authorities directly. 2. Select the report layout to print for the tax authority in the Report layout list. 3. Select the rounding form to use for rounding the sales tax amount in the Rounding form list. o Normal - round up numbers five and higher and round down numbers lower than five to the right of the specified unit. o Downward - round down any number to the right of the specified unit. o Rounding-up - round up any number adjacent to the specified unit. o Own advantage - round any number to the company's advantage. When the system settles sales tax, the total sales tax amount rounds automatically according to the setup on the sales tax authority. 4. Specify the general unit for rounding sales tax amounts in the Round-off field, according to the chosen rounding form.

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Financials I in Microsoft Dynamics® AX 2012 EXAMPLE: If you select Own advantage, with a Round-off of 0.10, the system rounds a figure of 10.16 to 10.10 and -10.16 to -10.20. This ensures that the rounding is always to the advantage of the company.

Procedure: Create a Sales Tax Authority- Address and Contact Perform the following steps to create a sales tax authority, for fields on the Address and Contact information FastTabs: 1. On the Address FastTab, enter the address of the Sales tax authority. 2. Enter the remaining contact information on the Contact Information FastTab of the Sales tax authority. Create as many sales tax authorities as needed, each with specific address and contact information and report layout. The company can pay sales taxes to the authority directly or through a vendor account created for the sales tax authority. NOTE: If you have not set up the tax authority as a vendor, prepare a manual payment to the tax authority on the appropriate due date.

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Chapter 5: Sales Tax Setup

Lab 5.2 - Create a Sales Tax Authority During this lab you will demonstrate how to create a sales tax authority in Microsoft Dynamics AX. Scenario Phyllis, the Accounting Manager for Contoso, has asked for your assistance in setting up a sales tax authority. Contoso recently started conducting business with a customer in Alabama. A new sales tax authority must be set up to use to report sales taxes to the Alabama authorities. NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! Set up the Alabama sales tax authority. Use ALA for the authority name.

Need a Little Help? 1. Click General ledger, then click Setup, then click Sales tax, and then click Sales tax authorities. 2. Create a new sales tax authority. Contoso uses the field value "Normal" for the rounding method and it rounds to the nearest penny.

Step by Step 1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, and then click Sales tax authorities. 2. Click the New button to add a new line. 3. In the Authority field, enter ALA. 4. In the Name field, enter Alabama Authorities. 5. Expand the General FastTab 6. In the Report layout field, click the arrow to select U.S. report layout. 7. In the Rounding form field, click the arrow to select Normal. 8. In the Round-off field, enter .01. 9. Close the Sales tax authorities form.

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Lab 5.3 - Create and Assign a Vendor to the Sales Tax Authority To make paying the sales tax authorities more efficient, you can assign a vendor to the authority. During this lab you will assign a vendor. Scenario Phyllis, the Accounting Manager for Contoso, has discovered that assigning a vendor to a sales tax authority has the following advantages: •

She can make payments as a part of the typical payment routines.

•

When she runs the Sales tax payment periodic job, the amount the company owes the sales tax authority transfers to the sales tax authority's vendor account.

•

During the company's usual payment routine, the payment to the sales tax authority is created automatically with payments to other vendors.

To automate payments to the Alabama sales tax authority, Phyllis has asked you to set the Alabama sales tax authority up as a vendor. Use the following information for the vendor. Field

Value

Name

State of Alabama

Search name

AL tax

Group

10

Terms of payment

M15-Month end + 15 days

Method of payment

USAUSD_CHK

NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! 1. Create a vendor for Alabama sales tax. 2. Assign the vendor to the sales tax authority for Alabama.

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Chapter 5: Sales Tax Setup Need a Little Help? 1. When you add a vendor, Microsoft Dynamics AX can assign the vendor number because of the Accounts Payable setup in Contoso. Ensure that this setup is correct. 2. Assign the new vendor to the sales tax authority for the State of Alabama.

Step by Step Set up the vendor: 3. On the Navigation Pane, click Accounts payable, click Common, click Vendors, then click All Vendors. 4. Click the New - Vendor button to add a record. In Contoso, because of accounts payable setup, the next available vendor number is assigned automatically. 5. In the Name field, enter State of Alabama. 6. In the Search name field, enter AL tax. 7. In the Group field, click the arrow to select 70- Tax Authorities. 8. Click the Payment FastTab. 9. In the Term of payment field, use the arrow to select M15. 10. In the Method of payment field, use the arrow to select USAUSD_CHK. 11. Close the Vendor form. Assign the vendor to the authority: 1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, and then click Sales tax authorities. 2. Locate the line for Alabama Authorities. 3. In the Vendor account field, click the arrow to select State of Alabama. 4. Close the Sales tax authorities form.

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Sales Tax Settlement Periods Sales tax settlement periods specify the intervals when the company reports and pays taxes. The company then can determine which sales tax settlement period to report to the authorities. The system automatically marks the posted tax transaction with the settlement period when it must report the transaction. NOTE: If the Include corrections field on the Sales tax tab page in the General ledger parameters form is selected, Microsoft Dynamics AX includes corrections from previous periods into the tax report for the actual period. Otherwise it is possible to manually select what information is included before running the report. Reporting periods depend on the size of the company, laws, and the authorities. Typical periods could be: •

Monthly

•

Quarterly

•

Yearly

Procedure: Create Sales Tax Settlement Period Perform the following steps to create sales tax settlement periods. Click General ledger, click Setup, click Sales tax, then click Sales tax settlement periods. 1. Click the New button. 2. Enter a code in the Settlement period field that the system will use in the other forms to refer to the settlement period. For example, sales tax codes associate with a settlement period through the Settlement period field in the Sales tax codes form.

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Chapter 5: Sales Tax Setup 3. Enter the name of the settlement period that appears on reports and in other areas throughout the system in the Description field.

FIGURE 5.5 SALES TAX SETTLEMENT PERIODS FORM

Procedure: Add Terms of Payment Perform the following steps to set up terms of payments: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax settlement periods. 2. Select a record. 3. Select the terms of payment for the sales tax settlement in the Terms of payment list. Create and manage terms of payment in the Terms of payment form in Accounts Receivable or Accounts Payable. 4. Select the tax authority that you report and pay taxes to for each settlement period in the Authority list. NOTE: The Terms of payment field, which is attached to the settlement period, only applies if a vendor account is set up on the sales tax authority. In this case, this payment term overrules any terms of payment set on the vendor in the Accounts Payable module. Also note that the Due date calculates based on the date set when you run Sales tax payment from General ledger > Periodic > Sales tax payment.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Specify Period length Perform the following steps to set up period intervals for the sales tax settlement periods: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax settlement periods. 2. Select a record. 3. Select the reporting interval in days, months, or years, in the Period interval list, on the General FastTab. 4. Enter the length of the settlement period in the Number of units field. Based on how you define the Period interval, the settlement period displays in days, months, or years. EXAMPLE: If the Period interval is set to Month(s) and the Number of units is set to 1, a new period automatically is one month. However, if the Period interval is set to Month(s) and the Number of units is set to 12, the length of one period is one year or 12 months. You can create new periods automatically by clicking New periods.

Procedure: Specify the Actual Periods Perform the following steps to set up new Sales Tax Settlement periods for a already created Settlement Period record: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax settlement periods. 2. Select a record. 3. To create a new period, click on the Periods FastTab, and then click the Add button. 4. Enter the first day and last day of a period interval in the From date and To date fields. You cannot change an updated period interval. This means that you cannot remove tax transactions from the original period interval. You can correct errors with an offset transaction that is identical to the original transaction, but with the opposite mathematical sign. 5. Add additional periods by clicking the New Period action.

Example: Create Sales Tax Settlement Periods In the year 2011, Contoso settles its sales taxes every quarter. To create the first period, enter January 1, 2011 in the From date field and March 31, 2011 in the To date field. To create the other quarters of the year, click the Add button three additional times.

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Chapter 5: Sales Tax Setup CAUTION: The sum of period intervals must cover whole periods so that no tax transactions fall outside the calculation periods. Period intervals may not overlap.

Inquire about Sales Tax Settlement Periods When you set up the sales tax settlement periods, you can inquire, report and pay sales tax for specific settlement periods. The Sales Tax Settlement Periods form contains several methods to inquire on Sales tax transactions: •

View the sales tax payments for a specific sales tax settlement period by selecting a sales tax settlement period and clicking Sales tax payments. Additionally, view sales tax payments for a specific period by selecting an interval on the Periods tab and clicking Interval sales tax settlements.

HINT: Click General ledger > Reports > External > Sales tax payments to print a report about all settled sales taxes. •

View posted sales tax transactions for a specific sales tax settlement period by selecting a sales tax settlement period and clicking Posted sales tax. This provides an overview of each sales tax transaction, which is posted in Microsoft Dynamics AX with a sales tax code. Alternatively, click Sales tax per interval to view posted sales tax transactions for a specific interval.

Use settlement periods to create and manage the periods the company uses to report sales tax.

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Lab 5.4 - Setup of Sales Tax Settlement Periods During this lab you set up a sales tax settlement period. Scenario Ken, the Controller for Contoso, wants April, the accounts payable coordinator, to pay Contoso's Alabama sales tax liability quarterly. The sales tax authorities expect settlement 15 days after the close of the quarter. The sales tax settlement period and deadlines are laid out in the following table: Settlement period

Deadline for reporting

January 1 - March 31

April 15

April 1 - June 30

July 15

July 01 - September 30

October 15

October 1 - December 31

January 15, the following year

April has asked for your assistance in completing the setup for the Alabama sales tax settlement so that April can generate the tax payments automatically. NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! Set up the required sales tax settlement for Alabama.

Need a Little Help? 1. 2. 3. 4.

Create the Sales tax settlement period. Attach the Terms of payment to the settlement period. Set up the Period length. Create the individual Settlement periods.

Step by Step Set up the Tax Settlement: 5. On the Navigation Pane, click General ledger, click Setup, click Sales tax, and then click Sales tax settlement periods. 6. Click the New button to insert a line. 7. In the Settlement period field, enter AL. 8. In the Description field, enter Alabama Quarterly. 9. Expand the General FastTab.

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Chapter 5: Sales Tax Setup 10. In the Authority field, click the arrow to select ALA-Alabama Authorities. 11. In the Terms of payment field, use the arrow to select N015. 12. In the Period interval field, use the arrow to select Months. 13. In the Number of units field, enter 3. Set up the Periods tab: 1. 2. 3. 4. 5.

Click the Periods tab. Press Add button to add a line, if needed. In the From date field, enter 01/01/2011. In the To date field, enter 03/31/2011. Click the New Period action three additional times to create the remaining quarters. 6. Close the Sales tax settlement periods form.

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Sales Tax Codes The Sales tax code is a central part of the setup. It specifies the following: •

How taxes are calculated

•

The value that is used for tax calculation

The sales tax value is very important because no tax is calculated without it. A sales tax code includes information about the following: •

How the tax is calculated, posted and reported

•

When the payments are made

•

To whom the payments are made

You can define the sales tax rate for the following: •

Various intervals and periods in Values

•

Limits on sales tax amounts in Limits

Sales Tax Codes - When to Create Create sales tax codes when you initially set up the system. Update the sales tax codes when you need to make changes to existing taxes or when you add new taxes. Because taxes frequently depend on geographic location, changes to the company's market can result in the need for new sales tax codes. NOTE: If a company operates in the United States, it is highly recommended that you set up sales tax jurisdictions, as well as sales tax codes. You must attach sales tax jurisdictions to sales tax groups. You can attach sales tax codes to the sales tax group through the sales tax jurisdictions.

Procedure: Create a Sales Tax Code - Overview Perform the following steps to create a sales tax code: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax codes 2. Click the New button to create a line for the new sales tax code. 3. Enter a unique identifier for the sales tax code in the Sales tax code field. This is the basis for calculation of tax, purchase duty, and packing duty throughout the system. 4. Enter a meaningful name for the new sales tax code in the Name field. This describes the function of the code and appears on reports and throughout the system.

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Chapter 5: Sales Tax Setup NOTE: If a company operates in the United States, set up sales tax jurisdictions in the Sales tax jurisdiction list.

FIGURE 5.6 SALES TAX CODES FORM

Procedure: Create a Sales Tax Code - General Perform the following steps to enter general information when creating a sales tax code: 1. Click the General tab. Select the currency in which tax must be calculated and paid in the Sales tax code form on the General tab in the Currency list. If the original transaction is in another currency, the tax converts automatically 2. Select the period and the sales tax authority used to calculate the sales tax code in the Settlement period list. 3. Select the ledger posting group for a sales tax code in the Ledger posting group list. The posting group contains information about which accounts to use when the sales tax amounts are automatically posted in the General Ledger. You can create the posting groups in the Ledger posting groups form. 4. Select whether a user-defined code or the sales tax rate should print with the sales tax specifications in invoice documents by making a selection in the Print field on the General tab. 5. Define an identifier that specifies the sales tax code on printed invoices in the Print code field, but only if Print code is selected in the Print list. The sales tax code identifier is an alphanumeric string that may include special characters. 6. Enter a Packing duty Sort code to help identify the packing duty.

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Financials I in Microsoft Dynamics® AX 2012 7. Select the Negative sales tax percentage check box to allow a negative tax percentage for the sales tax code. This feature, can be used when a legal entity must retain tax (for example IRPF Impuesto sobre la Renta de las Personas Físicas—personal income in Spain) from vendors, and pay this amount to the sales tax authorities. 8. In the Payment sales tax code field, select a sales tax code to which sales taxes are posted when invoices are settled with payments. This setting is used for “unrealized sales tax” when a sales tax is calculated at time of invoicing but will be due (realized) for payment to the tax authorities only at the time when the invoice has been paid. The sales tax rate must be the same sales tax rate that you entered in the Sales tax code field. NOTE: For the transfer to occur, set up the general ledger to allow the posting of conditional sales taxes. In the General ledger parameters form, select the Conditional sales tax check box.

Procedure: Create a Sales Tax Code - Calculation Perform the following steps to enter calculation information when creating a sales tax code: 1. Click General ledger, click Setup, click Sales tax, click Sales tax codes, then click the Calculation FastTab. 2. Select from the following options in the Origin list: o Percentage of net amount - percentage of purchase or sale, excluding any other taxes. o Percentage of gross amount - percentage of purchase or sale, including any other taxes. Sales tax calculates as a percentage of the purchase or sale amount. This includes all other taxes or duties. o Percentage of sales tax - percentage of another tax. The tax code that this calculation is based on must exist in the system. On the Calculation tab, set up the specific sales tax code that you based the current sales tax code on, in the Sales on sales tax field. o Amount per unit - indicate the unit on which the sales tax will be calculated in the Unit field. If the transaction is in another unit, it converts automatically based on Unit conversion in Inventory. o Calculated percentage - of the net amount -the calculated percentage of net amount calculation method can be used to calculate input tax deduction for per diem expenses (as used for example in Germany).

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Chapter 5: Sales Tax Setup 3. On the Calculation tab in the Unit list, select the unit to use when taxes are calculated. If the transaction is expressed in another unit, it converts automatically according to the Unit conversion. NOTE: If the basis for tax is the number of units, this Unit field is mandatory.

FIGURE 5.7 SALES TAX CODE CALCULATIONS

Procedure: Create a Sales Tax Code - Calculation Rounding Options Perform the following steps to set up rounding when you create a sales tax code: 1. Click General ledger, click Setup, click Sales tax, click Sales tax codes, then click the Calculation tab. 2. Enter the lowest absolute value of a calculated tax on the Calculation tab in the Round-off field. For example, if taxes should round off to a unit that is 1/100 of the currency of the tax, enter the value as a decimal (0.01). The Rounding form field indicates the kind of rounding to use. Refer to the following table for rounding on the amount 98,765.435 USD with different rounding values set up. Round-off = 0.01

Round-off = 0.10

Round-off = 1.00

Round-off = 100.00

98,765.43

98,765.40

98,765.00

98,800.00

NOTE: There is no requirement that the value be less than 1. If the value must round to the nearest 10, enter 10.00 in the field.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Sales Tax Code - Calculation Packing Duty Select the Packing duty check box to specify that the sales tax code is a packing duty. You can only select this check box when the Amount per unit option is selected in the Origin field. When you convert a unit of measure, the unit that it is converted to depends on whether or not this field is selected. •

If this check box is selected, the unit of measure is converted to the unit of measure of the product as shown in the Unit field in the Product per company details form.

•

If this check box is clear, the unit of measure is converted to the unit of measure displayed in the Unit field in the Sales tax codes form.

Select the Calculate before sales tax check box to calculate and add a duty or tax to the net amount before sales tax is calculated. For example, you could calculate a duty and a sales tax on the same transaction, and add the duty amount to the net amount before the sales tax is calculated. Example:

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•

In the Origin field, Percentage of net amount is selected.

•

The net amount is 100.00.

•

The purchase duty is 10.00.

•

The sales tax is 25 percent.

•

The Calculate before sales tax check box is selected.

•

The sales tax is calculated as (100 + 10) x 25% = 27.50.

•

The total amount is 127.50.

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Chapter 5: Sales Tax Setup Procedure: Create a Sales Tax Code - Additional Calculation Options Perform the following steps to set up additional calculation options when you create a sales tax code: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax codes 2. Click the Values button on the action bar. Enter the Percentage/Amount in the Values form. Enter Values to set up the sales tax rate. Also refer to the procedure on how to create sales tax codes intervals. Close the Values form.

Procedure: Create a Sales Tax Code- Report Setup Perform the following steps to create sales tax codes: 1. Click General ledger, click Setup, click Sales tax, click Sales tax codes, then click the Reports Setup FastTab or click the Report setup- credit note FastTab. 2. Insert the Reporting code numbers to facilitate reporting on the Report setup and Report setup - credit note tab pages. Frequently the tax authorities have special forms with numbered cells for reporting of taxes. For example, in the Taxable sales list, you can select the number of the field in the tax report that contains taxable sales. A series of forms exists within Microsoft Dynamics AX, which contains numbered cells that you can report to various authorities. The sales tax code is included in these reports in the cell indicated in this field.

FIGURE 5.8 SALES TAX CODE REPORT SETUP

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Financials I in Microsoft Dynamics® AX 2012 Rounding and Report Setup Notes NOTE: Click General ledger > Reports > Base data > Sales tax codes to print a report listing all the sales tax codes. NOTE: In the Parameters form (click General ledger, click Setup, click General ledger parameters, then click the Sales tax link in the navigation pane), select the Calculation date type to determine the date that sales tax calculates. In the Method of calculation list, select whether the sales tax should calculate for each line or the total amount.

Example Setup: Calculation Methods for Sales Tax Codes The following is an example showing a sample setup for sales tax codes: Scenario: Phyllis is the Accounting Manager at Contoso. Contoso's customer base includes many international customers. To increase the understanding of sales tax, Phyllis is asking your assistance in reviewing the calculation of sales tax by using various options available in Microsoft Dynamics AX. The following table shows Phyllis's review of setups in Contoso: Setup 1 - Use percentage of amount

Setup 2 - Use percentage of sales tax

Rate

Duty 1

Percentage of net amount

Percentage of net amount

10%

Duty 2

Percentage of net amount

Percentage of sales tax (Duty 1 in the sales tax on sales tax list)

20%

Sales Tax Calculation

Percentage of gross amount

Percentage of gross amount

25%

Example Setup: Calculation Methods for Sales Tax Codes- Incomplete Table How would you apply the information in the table above to determine the effect of each setup on an invoice for 10.00 USD by completing the following table with the provided information? Setup 1 Rate

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Duty 1

10%

Duty 2

20%

Formula

Setup 2 Calculation

Formula

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Calculation

Chapter 5: Sales Tax Setup Setup 1

Setup 2

Gross Amount Sales Tax Calculation

25%

Duty + Sales Tax Total Sale The completed table is shown in the next lesson section.

Example Setup: Calculation Methods for Sales Tax Codes- Completed Table The completed table is as follows: Setup 1

Setup 2

Rate

Formula

Calculation

Formula

Calculation

Duty 1

10%

$10 * 10%

$1.00

$10 * 10%

$1.00

Duty 2

20%

$10 * 20%

$2.00

($10+1)* 20%

$2.20

$10+1+2

$13.00

$10+1+2 .20

$13.20

$13 * 25%

$ 3.25

$13.20 * 25%

$ 3.30

Duty + Sales Tax

$1+2+3.25

$ 6.25

$1+2.20 +3.30

$ 6.50

Total Sale

$10 + 6.25

$16.25

$10 + 6.50

$16.50

Gross Amount Sales Tax Calculation

25%

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Financials I in Microsoft Dynamics® AX 2012

Sales Tax Codes Intervals Use Microsoft Dynamics AX to specify the following: •

The sales tax rates to use in different intervals

•

A lower and upper amount limit for sales tax calculations

Sales taxes lower than the minimum limit amount are not recorded, and sales taxes over the upper limit amount are set to the upper limit amount automatically. You can attach the limits to specific dates. The sales tax code defines the limits. Changes to minimum and upper limits do not affect sales tax that is already updated and posted.

Procedure: Create Sales Tax Codes Intervals - Effective Dates Perform the following steps to set up the From date and To date field in sales tax code intervals, both Limits and Values: Click General ledger, click Setup, click Sales tax, click Sales tax codes, then click the Limits OR click General ledger, then click Setup, then click Sales tax, then click Sales tax codes, then click the Values button. 1. Enter the first date the tax limits apply in the From date field. NOTE: The previous limits are visible because they are not overwritten when users make changes. 2. Enter the last date the tax limits apply in the To date field. 3. With From date and To date fields, indicate a period that the calculated tax applies to. The posting date determines when the tax falls outside the given period.

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Chapter 5: Sales Tax Setup If you have made changes to the limits, close the old period to indicate an ending date in the To date field and create a period with a new starting date in the From date field. Extend the old period by changing the date in the To date field. You can change the limits taking effect at a later date.

FIGURE 5.9 SALES TAX LIMITS

Procedure: Create Sales Tax Codes Intervals - Minimums and Maximums Perform the following steps to set up the minimums and maximums in sales tax code intervals in the Limits form: 1. Enter the lower sales tax limit in the Minimum sales tax field. If the tax is lower than this minimum amount, it is reduced to zero automatically. The amount in this field must be the same currency as the currency specified in the sales tax code. 2. Enter the upper sales tax limit in the Maximum sales tax field. If the tax is more than the amount indicated, it is adjusted automatically to match this amount. The amount in this field must be the same currency as the currency specified in the sales tax code.

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Financials I in Microsoft Dynamics® AX 2012 Perform the following steps to set up the field in the Values form: 1. In the Values form, specify a sales tax rate for the different intervals. 2. In the Value field, define the tax percentage, or amount for each unit. If the basis for the calculation of tax is an amount, the entry in the Value field on the Overview tab of the Values form is the percentage value used in the calculation. 3. If the basis is several units, such as Purchase duty or Packing duty, the entry in the Value field on the Overview tab of the Values form is the amount for each unit used in the calculation. You can define units by using the Unit field found on the Calculation tab on the Sales tax codes form.

Sales Tax Code Intervals- Values Versus Limits For a sales tax code, Values define the tax to calculate, on either a percentage or amount per unit, based upon the effective interval dates and the minimum and upper limits. These minimum and upper limits are the minimum and upper sales amount to which the amount entered in the Value field applies. For a sales tax code, Limits define the tax to calculate, based upon the effective interval dates and the minimum and maximum sales tax. These minimum and maximum sales tax limits are the minimum and maximum sales tax that will be calculated on the sale, after all tax calculations are performed.

Procedure: Create Sales Tax Codes Intervals - Marginal Base Options Perform the following steps to set up the marginal base options in sales tax code intervals: 1. In the Sales tax code form on the Calculation FastTab, select the origin for the sales tax limits in the Marginal base list. 2. Select from the following options: o Net amount per line - value of the line, excluding any other taxes. o Net amount per unit - value of the unit, excluding any other taxes. This can involve the unit price specified by using a unit in the Unit field. o Net amount of invoice balance - the total value for the invoice, excluding any other taxes. o Gross amount per line - value of the line. This includes any other taxes. You can include only one tax code with this or the next property in the individual calculation.

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Chapter 5: Sales Tax Setup o

o

Gross amount per unit - value of the unit. This includes any other taxes. You can include only one tax code with this or the previous property in the individual calculation. Invoice total incl. other sales tax amounts - The total value for the invoice. This includes any other taxes. You can include only one tax code with this property in the individual calculation.

Procedure: Create Sales Tax Codes Intervals - Method of Calculation Perform the following steps to set up the method of calculation in sales tax code intervals: 1. Select the origin for the sales tax limits in the Method of calculation, in the Sales tax code form on the Calculation tab. 2. Select from the following options: o

o

Whole amount - the sales tax calculates for the whole amount, which the tax rate for the interval that includes the transaction determines. Interval - the base is divided into intervals. The part within a given interval is calculated automatically based on the tax rate for that interval.

NOTE: Click the Inquiries button > Included in sales tax groups or Included in item sales tax groups to view or attach sales tax codes to sales tax groups or item sales tax groups. Click the Inquiries button > Posted sales tax to display posted sales tax transactions for a sales tax code and an itemization of each tax. Use this function for inquiries and error detection. In the Sales tax transactions form, click Voucher to view related ledger transactions. Click the Recalculate tax button to recalculate taxes on unposted transactions if the settings of a sales tax code have been modified.

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Financials I in Microsoft Dynamics® AX 2012

Lab 5.5 - Set Up Sales Tax Codes Intervals During this lab you get to practice setting up sales tax code intervals. Scenario Ken, the Controller for Contoso, has received a notification from the State of Florida that as of 07/01/2011, a tiered tax is due on video recorder sales. Ken asks for your assistance in setting up tax codes that comply with the new structure. The notice specifies the following rates: Minimum limit

Maximum limit

Tax rate

0.00

50.00

10%

50.001

100.00

9%

100.001

8%

NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! 1. Use sales tax code intervals to structure the AV_FLST tax rate in Microsoft Dynamics AX for the new rates. 2. Microsoft Dynamics AX will require an 'ending' date for the tax. Plan to enter an artificial date of 12/31/2020.

Need a Little Help? 1. Before you add a new line to the Values form, you must enter dates on the existing line. Suggested dates are 1/01/2006 - 6/30/2011. 2. Add the lines to the Values form. All of them will be assigned the same date range assigned.

Step by Step Edit the State of Florida Tax code record: 1. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, and then click Sales tax codes. 2. Locate the line for AV_FLST. 3. Click the Values button.

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Chapter 5: Sales Tax Setup Edit the existing line by adding dates: 1. 2. 3. 4. 5. 6. 7. 8.

In the From date field, enter 01/01/2006. In the To date field, enter 06/30/2011. Click the New button to add a line. In the From date field, enter 07/01/2011. In the To date field, enter 12/31/2020. In the Minimum limit field, enter 0.00. In the Upper limit field, enter 50.00. In the Value field, enter 10.00.

Create the rest of the lines: 1. Click the New button to add a line. 2. Repeat steps 1 through 8 to add the remaining tax intervals to the form. 3. Close the Values form. 4. Close the Sales tax codes form.

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Financials I in Microsoft Dynamics® AX 2012

Sales Tax Groups A sales tax group includes all sales tax codes that apply when you trade goods or services with customers and vendors. In most countries, different tax rules apply when you trade with domestic and foreign customers. The tax rules for foreign trade frequently are split up based on bilateral and multilateral trade agreements. Therefore, you must create tax groups depending on the taxes that may apply for a certain group of customers or vendors. A careful analysis of the different types of customers and vendors that the company trades with is a good starting point for determining the types of Sales tax groups needed, and the setup of those Sales tax groups.

Sales Tax Groups - Example Comparison If your company needs the following tax codes, here is an example of how to apply sales tax codes to a sales tax group: •

VAT (only applies for domestic customers)

•

Export Tax (only applies for foreign customers)

•

Environmental duty (applies to all customers)

In a table, the tax codes appear as follows: Domestic customers

Foreign customers

VAT

Yes

No

Export Tax

No

Yes

Environmental Duty

Yes

Yes

The two groups of customers (domestic and foreign) do not have identical tax needs. Therefore, you must create two different sales tax groups that reflect the differences: •

Foreign customers: this group would contain the Export Tax and Environmental Duty tax codes

•

Domestic customers: this group would contain the VAT and Environmental Duty tax codes

After you create the sales tax groups, attach the appropriate sales tax group to:

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•

Customers

•

Vendors

•

Ledger accounts

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Chapter 5: Sales Tax Setup Procedure: Create a Sales Tax Group Because the geographic location of the customer or the supplier determines taxes, you usually assign the same Sales tax group to similar trading partners in the system. The correct tax codes used by the system are attached to this Sales tax group. The Sales tax group then associates with customer information specified in the Sales tax group field found on the Setup tab in the Customers form. Perform the following steps to create a sales tax group: 1. Click General ledger, click Setup, click Sales tax, click Sales tax groups, then click the New button. 2. Enter a unique name for the sales tax group in the Sales tax group field. 3. Enter a name that identifies the sales tax group in the Description field.

FIGURE 5.10 SALES TAX GROUP FORM

Procedure: Create a Sales Tax Group - General Information Perform the following steps to set up additional fields in Sales tax groups: 1. Click General ledger, click Setup, click Sales tax, click Sales tax groups, then click the General FastTab. 2. Enter a form of identification to identify a sales tax group based on specific criteria, such as country, state, or county, in the Country/State and County/Purpose fields. This provides another method to identify the group.

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Financials I in Microsoft Dynamics® AX 2012 3. Select the Reverse sales tax on cash discount check box to reverse sales tax on a cash discount. States in the United States have different requirements, so you must set up this information on the sales tax group. When you create a sales tax group, the selection in the Reverse sales tax on cash discount field in General ledger parameters defaults to the field. 4. Select Sales tax setup section, select a code in the Sales tax group setup list. If the company is located in a country with sales tax jurisdiction, select the Sales tax jurisdictions value. NOTE: If the Sales tax jurisdictions value is selected in the Sales tax group setup list, a new tab called Jurisdictions setup appears and you cannot add sales tax codes to the Sales tax group.

Rounding By- Additional Information The following is additional information on the General FastTab in the Sales tax group form. The Rounding by field controls the rounding principle that applies to the taxes of the sales tax group. This field is available if your company configuration includes sales tax jurisdictions. The two kinds of rounding that you can select that apply to the sales tax group are: •

Sales tax codes – rounding is according to the sales tax code roundoff. You can see the value in the Round-off field on the Calculation tab of the Sales tax codes form.

•

Sales tax code combinations - rounding is according to the sales tax code combination that is attached to each invoice line.

Printing Taxes on Invoices Select the way you want the sales taxes to appear on the printed invoice by selecting one of the following in the Invoicing - Print field.

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•

Sales tax codes – the sales taxes are shown by sales tax code.

•

Sales tax groups – the sales taxes are shown by sales tax group.

•

No details – no sales tax details are shown on the invoice. This option is a logical selection for sales tax groups that are based on sales tax jurisdictions for which you have selected the Exempt check box on the Jurisdiction setup tab.

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Chapter 5: Sales Tax Setup Recalculating Taxes on Unposted Transactions After changing the settings of a Sales tax group you can click Recalculate taxes on all transactions with the modified Sales tax group or all unposted transactions.

Procedure: Create a Sales Tax Group - Setup Perform the following steps to set up additional tax codes with this Tax Group: 1. Click the Add button to create a new tax code line. 2. Select one or more sales tax codes to use with the sales tax group. The fields on the Setup tab automatically fill in with values from the Sales tax codes form. 3. Select the Use-tax check box to indicate whether the company is responsible for calculating and paying use-tax on the purchase. If the company is not responsible, the vendor calculates and pays the tax. If the vendor did not charge tax, the system credits the tax to the account shown in the Use-tax payable field in Ledger posting groups. How the tax is debited depends on how you set the Apply U.S taxation rules parameter in the General Ledger parameters. If the Apply U.S. taxation rules parameter option is selected in General ledger parameters , the tax posts to the same account as the expense. If the option is not selected, the tax posts to the account specified in the Use-tax expense field in Ledger posting groups, there are no deductions for taxes on purchases and the tax posts together with the expense. The value is entered automatically from the Use-tax field in Sales tax groups, but you can change it if necessary.

Procedure: Create a Sales Tax Group - Attach to Customer or Vendor Attach a sales tax group to a customer or vendor on the Setup area of the Customers form or Vendors form. This is the default sales tax group for transactions that involve the customer. As with all defaults, you can change the sales tax group on individual transactions, if necessary. Additionally, you can attach a default sales tax group to each ledger account for purchases or sales excluding a customer or vendor are posted, for example, the ledger account for office equipment. The default sales tax group appears automatically on transactions for the customer or vendor; however, you can change the sales tax group on individual transactions before you post transactions. It is also possible to specify a default sales tax group on Customer and Vendor groups which will then be defaulted to customers and vendors for the group.

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Financials I in Microsoft Dynamics® AX 2012 Amount Includes Sales Tax- Additional Information You can indicate if the amounts entered in journals include sales tax or do not include sales tax. You can specify this information in three different forms: General ledger, Parameters form – specify the default setting of lowest priority regarding the inclusion of sales tax in journal amounts. This is the setting that will apply to amounts on journals if no other information is supplied through a default setting of higher priority or through a manual setting in a line. General ledger, Journal names form – specify a default setting that overrides the default setting on the Parameters form. Lines in journals that are patterned on a specific journal template automatically receive the journal template default setting regarding the inclusion of sales tax in journal amounts, unless you have entered a setting on the journal itself. Individual Journal forms – specify a default setting on an individual journal to override the default settings of the Journal names and Parameters forms. The highest priority setting is entered automatically on journal templates, journals, and journal lines as they are created, but you can select or clear the Amount incl. sales tax field at any time. If you select the Amount incl. sales tax field, you must enter gross amounts in journals. Sales taxes are calculated on the basis of the gross amount and posted to the sales tax account. The net amount is posted to the ledger account entered in the journal. If you do not select the Amount incl. sales tax field, you must enter net amounts in journals. The net amount is posted to the ledger account entered in the journal. The sales taxes are calculated on the basis of the net amount and are posted automatically.

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Chapter 5: Sales Tax Setup

Item Sales Tax Groups Because items generally determine taxes, you must indicate how taxes are calculated for each item. The Item sales tax group includes all the sales tax codes that apply when you sell that item. The Item sales tax group also may include most of the sales tax codes in the system. When you create the Item sales tax groups, attach the group to Items. NOTE: This information is in Item sales tax group. The association between sales tax codes and the item sales tax group is in the Item sales tax group form, on the Setup tab.

Procedure: Create Item Sales Tax Groups Perform the following steps to create item sales tax groups: 1. Click General ledger, click Setup, click Sales tax, then click Item sales tax groups. 2. Enter a unique name for the item sales tax group in the Item sales tax group field, and a description in the Description field. This information appears on reports and in other areas throughout Microsoft Dynamics. 3. Select the sales tax code for an item sales tax group on the Setup tab. For a sales tax code to be valid, you must select it for the sales tax group and the item sales tax group. The sales tax codes calculated are determined automatically when you post. 4. Select where the item sales tax line amount will be included on the EU sales list in the Reporting Type field: o Blank – the sales tax line amount is included in the Not assigned value column. o Item – the sales tax line amount is included in the Items value column. o Service – the sales tax line amount is included in the Services value column. o Investment – the sales tax line amount is included in the Investment value column. This column is relevant only for Belgium.

Procedure: Set Up a Default Item Sales Tax Group for an Item To ensure sales tax calculates on all transactions for a specific item group, set up a default item sales tax group. Perform the following steps to set up the default: 1. Click Inventory and warehouse management, click Inventory and then Item groups. 2. Select an item group and then click the Setup FastTab.

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Financials I in Microsoft Dynamics® AX 2012 3. Select a value in the Item sales tax group lookup field in the Purchase tax section. This value is the default item sales tax group for the selected item group when you enter it on a purchase order line. 4. Select a value in the Item sales tax group lookup field in the Sales tax section. This value is the default item sales tax group for the selected item group when you enter it on a sales purchase line.

Set Up a Default Item Sales Tax Group for a Ledger Account To ensure sales tax calculates on all journal transactions that you post to ledger accounts: •

Set up a default item sales tax group for all ledger accounts

•

Set up default item sales tax groups for particular ledger accounts, if necessary

You can change any default item sales tax group that appears automatically on a journal line as necessary before the transaction posts. NOTE: In sales journals, purchase journals, and other journals where you enter an item number, the item sales tax group attached to the item automatically is entered on the journal lines.

Procedure: Set Up a Default Item Sales Tax Group for a Ledger Account Perform the following steps to select a default item sales tax group for all ledger accounts: 1. Click General ledger, click Setup, click General ledger parameters. 2. Click the Sales tax link on the navigation pane and then select the default item sales tax group in the Item sales tax group list on the General FastTab. The item sales tax group in this field is entered automatically on journal lines as you create them, unless a specific item sales tax group is attached to the ledger account that you enter in the line. Follow these steps to set up a default item sales tax group for a particular ledger account: 1. Click General ledger, click Chart of accounts and select the ledger account. 2. Select the default item sales tax group in the Item sales tax group list on the Setup tab.

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Chapter 5: Sales Tax Setup

Sales Tax Jurisdictions Use Sales Tax Jurisdiction functionality to create the sales tax jurisdictions for which the company must collect sales tax. The sales tax jurisdiction functionality is designed for companies that operate in the United States, but is not a legal requirement. The form is available if an administrator enables the Sales tax jurisdictions configuration key. A sales tax jurisdiction is a grouping of sales tax codes for a particular settlement period (including the sales tax authority). Each jurisdiction is assigned one or more sales tax codes and has only one tax authority. Additionally, transactions that are posted for the sales tax jurisdiction are posted to the accounts of the Sales tax ledger posting group which is assigned to the tax account group that is selected in this form. Some state tax authorities collect taxes for all the jurisdictions within the state. If a state has many jurisdictions and a complex tax code structure, using jurisdictions makes it easier for a company to pay correct tax amounts to the authority. NOTE: A sales tax jurisdiction is not a geographical area. A geographical area can be covered by several jurisdictions, for example a district, town, country or state.

Procedure: Set Up Sales Tax Jurisdictions Perform the following steps to set up sales tax jurisdictions: 1. Make sure that the configuration key is turned on for sales tax jurisdictions (see Licensing configuration help) 2. Click General ledger, click Setup, click Sales tax, then click Sales tax jurisdictions. 3. Click New button on the toolbar to create a new sales tax jurisdiction record. 4. In the Sales tax jurisdiction code text box, enter a unique identifier for a sales tax jurisdiction. 5. In the Name text box, enter the name of the jurisdiction. 6. In the Settlement period and the Ledger posting group lookup fields, select values. 7. In the Currency lookup field, select the currency of the sales tax jurisdiction. 8. Click Sales tax codes. In the Sales tax codes form, create sales tax codes for the sales taxes that the sales tax authority collects in the sales tax jurisdiction.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: Click General ledger > Reports > Base data > Sales tax codes. In the line for the sales tax code, in the Sales tax jurisdiction code lookup field, select a jurisdiction.

Procedure: Set Up Sales Tax Groups for Jurisdictions Perform the following steps to set up sales tax groups for jurisdictions: 1. Click General ledger, click Setup, click Sales tax, and click Sales tax groups. 2. In the Sales tax group setup drop-down list, select Sales tax jurisdictions. 3. In the Rounding by drop-down list, select the rounding convention for the sales tax group. 4. On the Jurisdiction setup tab, add the sales tax jurisdictions that apply to the sales tax group, and enter information about tax exempt status and use tax if applicable. The sales tax codes that are attached to a selected sales tax jurisdiction appear automatically on the Setup tab. 5. If necessary, you can change the sales tax codes of the jurisdiction in the Sales tax jurisdictions form. 6. In the Print drop-down list, select the way you want sales taxes printed on the invoice. 7. Close the Sales tax groups form. When a journal line or purchase or sales order line is created, the sales tax codes on the sales tax jurisdictions that are attached to sales tax groups are matched to the sales tax codes on the item sales tax groups, and sales taxes are calculated for the transaction.

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Chapter 5: Sales Tax Setup

Lab 5.6 - Comprehensive Setup of Sales Tax During this lab you gain comprehensive practice in setting up sales tax information in Microsoft Dynamics AX. Scenario Ken, the Controller for Contoso, has decided to do business with a new vendor, Blue Yonder Airlines, located in Little Rock, Arkansas where business has not previously been conducted. April, the accounts payable coordinator, receives an invoice for 50,000 USD from Blue Yonder Airlines, and comes to you for help because the necessary setups are to post this invoice are not in Microsoft Dynamics AX. You determine to do the following: •

Set up Blue Yonder Airlines as a vendor

•

Set up the Arkansas Department of Revenue as a vendor

•

Set up two accounts in the Chart of Accounts: one for the Arkansas state sales tax payable (account 220107) and one for the Little Rock city sales tax payable (account 220245)

•

Set up both ledger posting groups

•

Set up a sales tax authority

•

Set up sales tax settlement periods

•

Set up sales tax codes

•

Set up sales tax code intervals

•

Set up sales tax groups

•

Set up item sales tax groups

The vendor's information is in the following table: Field

Value

Name

Blue Yonder Airlines

City

Little Rock

State

AR

ZIP Code/Postal Code

72205

Group

10

Currency

USD

Terms of Payment

N030

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Financials I in Microsoft Dynamics® AX 2012 NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Comprehensive Setup of Sales Tax - Additional Lab Data The information for Arkansas is in the following table: Field

Value

Name

The Arkansas Department of Revenue

Search Name

AR tax

Group

70

Terms of Payment

M15

Method of Payment

USAUSD_CHK

You can set up the sales tax authority by using the U.S. Report layout. Plan to round taxes in a typical manner to the nearest penny. Any gain or loss that occurs when you round will post to account 618160. The tax breakdown for city and state taxes is as follows: •

City of Little Rock: three percent, the maximum tax limit that can be paid is 1000 USD in sales tax

•

State of Arkansas: two percent

Challenge Yourself! 1. Setup two ledger posting groups, by using ARST for Arkansas and LRAST for Little Rock. 2. Setup a sales tax group by using ARLRA as the group name. 3. Setup a sales tax authority by using ARA as the authority name. 4. Enter a sales tax settlement period (AR) to use for each code. The term of payment is 15 days. The settlement period is an interval of one month. Then set up three new periods starting with the beginning of the current month. 5. Plan to set up two sales tax codes, one for each authority, by using the codes ALL_LRCITY and ALL_ARST. Use the standard ledger posting group for each tax code.

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Chapter 5: Sales Tax Setup 7. Add the two new sales tax codes to the ALL item tax group. 8. After you complete the sales tax setup, record the invoice in an accounts payable Invoice journal. Make sure when creating the journal that you have deselected the Amount incl. sales tax field found on the Setup tab of the journal. Set your session date to 6/30/2011. 9. Review the tax calculation in the journal.

Need a Little Help? For a visual representation of the sales tax setup process, refer to the lesson titled Sales Tax Overview- Suggested steps. Note that Sales tax jurisdictions will not be used in this lab. Review the tax calculation by clicking Inquiry and then clicking Sales tax totals. It is not necessary to post the invoice.

Step by Step Set up Blue Yonder Airlines as a vendor: 1. On the Navigation Pane, click Accounts payable, click Vendors, then click All vendors. 2. Click the New - Vendor button on the action pane. In CEU, the next available vendor number is assigned automatically based on setups in the sample data. 3. In the Name field, enter Blue Yonder Airlines. 4. In the Search name field, enter Blue Yonder. 5. In the Group field, click the arrow to select 10. 6. Click the Address FastTab, and click the Add button to create a new address. 7. In the Name and description field enter Primary. 8. In the Country/region field select USA from the drop down list. 9. In the Zip code field, enter 72205. 10. Verify that the tab entries are correct. These values were populated automatically based on setups in the sample data. Click the OK button and close the window. 11. Click the Payment FastTab. 12. In the Terms of payment field, use the arrow to select N030. 13. In the Method of payment field, use the arrow to select USAUSD_CHK. 14. Close the window.

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Financials I in Microsoft Dynamics® AX 2012 Set up the Arkansas Department of Revenue as a vendor: 1. On the Navigation Pane, click Accounts payable, click Vendors, then click All vendors. 2. Click the New - Vendor button on the action pane. In CEU, the next available vendor number is assigned automatically based on setups in the sample data 3. In the Name field, enter The Arkansas Department of Revenue. 4. In the Search name field, enter AR tax. 5. In the Group field, click the arrow to select 70. 6. Click the Payment FastTab. 7. In the Terms of payment field, use the arrow to select M15. 8. In the Method of payment field, use the arrow to select USAUSD_CHK. 9. Close the Vendor form. Set up accounts in the Chart of accounts account for sales tax payable: 1. On the Navigation Pane, click General ledger, click Common, then click Main accounts. 2. Click the New - Main account button on the Action Pane. 3. In the Main account field, enter 220107. 4. In the Name field, enter Arkansas state sales tax payable. 5. In the Main account type field, click the arrow to select Balance sheet. 6. Click the Setup FastTab. 7. In the Posting type field, click the arrow to select Sales tax. 8. Repeat steps 2 through 8, adding an account 220245 for Little Rock city sales tax payable. 9. Close the Main accounts form. Set up ledger posting groups: 1. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Ledger posting groups. 2. Click the New button to add a line. 3. In the Ledger posting group field, enter ARST. 4. In the Description field, enter Arkansas State Tax. 5. In the Sales tax payable field, click the arrow to select account 220107. 6. In the Settlement account field, click the arrow to select account 220107. 7. Repeat steps 2 through 6, adding a ledger posting group for Little Rock. 8. Close the Account group form.

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Chapter 5: Sales Tax Setup Set up a sales tax authority for Arkansas: 1. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Sales tax authorities. 2. Click the New button to add a new line. 3. In the Authority field, enter ARA. 4. In the Name field, enter Arkansas Authorities. 5. In the Vendor account field, click the arrow to select The Arkansas Department of Revenue. 6. In the Report layout field, click the arrow to select U.S. report layout. 7. In the Rounding form field, click the arrow to select Normal. 8. In the Round-off field, enter .01. 9. Close the Authority form. Set up a sales tax settlement periods: 1. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Sales tax settlement periods. 2. Click the New button to insert a line. 3. In the Settlement period field, enter AR. 4. In the Description field, enter Arkansas Monthly. 5. In the Authority field, click the arrow to select ARA-Arkansas Authority. 6. In the Terms of payment field, use the arrow to select M15. 7. In the Period interval field, use the arrow to select Months. 8. In the Number of units field, enter 1. 9. Click the Periods FastTab. 10. If a new line is not available, press the Add button to add a line. 11. In the From date field, enter 06/01/2011. 12. In the To date field, enter 06/30/2011. 13. Click the Add button two more times to create two additional months. 14. Close the Sales tax settlement periods form. Set up sales tax codes and sales tax code intervals for Arkansas and Little Rock: 1. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Sales tax codes. 2. Click the New button to add a line. 3. In the Sales tax code field, enter ALL_ARST. 4. In the Name field, enter Arkansas State - All. 5. In the Settlement period field, click the arrow to select AR. 6. In the Ledger posting group field, click the arrow to select ARST. 7. Click the Values button on the menu bar.

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Financials I in Microsoft Dynamics® AX 2012 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

In the Minimum limit field, enter 0.00. In the Upper limit field, enter 0.00. In the Value field, enter 2.00 for the percentage. Close the Values form. Repeat steps 2 through 6 for Little Rock and enter ALL_LRCITY. Click the Values button. In the Minimum limit field, enter 0.00. In the Upper limit field, enter 0.00. In the Value field, enter 3.00 for the percentage. Close the Values form. Click the Limits button. In the Minimum sales tax field, enter 0.00 In the Maximum sales tax field, enter 1000.00 Close the Limits form. Close the Sales tax codes form.

Set up a sales tax group: 1. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Sales tax groups. 2. Click the New button to add a line. 3. In the Sales tax group field, enter ARLRA. 4. In the Description field, enter Arkansas and Little Rock. 5. In the Sales tax group setup field, select Sales tax codes. 6. In the Rounding by field, select Sales tax codes. 7. Click the Setup FastTab and click the Add button. 8. In the Sales tax code field, select ALL_ARST. 9. Click the Add button to add a line. 10. In the Sales tax code field, select ALL_LRCITY. 11. Close the Sales tax group form. 12. On the Navigation Pane, click General ledger, click Setup, click Sales tax, and then click Item sales tax groups. 13. In the left hand Navigation pane, click the ALL line. 14. Click the Setup FastTab. 15. Click the Add button to add a line. 16. In the Sales tax code field, use the arrow to select ALL_ARST. 17. Click the Add button to add a line. 18. In the Sales tax code field, use the arrow to select ALL_LRCITY. 19. Close the form.

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Chapter 5: Sales Tax Setup Record the invoice in an accounts payable invoice journal: 1. Click Accounts payable from the Navigation pane, click Journals, click Invoices, and click Invoice journal. 2. Click the New button to add a line. 3. Select the APInv in the Name field. 4. Click the Setup tab, and make sure that the Amount include sales tax check box is not selected. 5. Click the Lines button. 6. Enter 06/30/2011 in the Date field. Accept the Voucher number and Vendor Account type. 7. Select Blue Yonder Airlines in the Account field. 8. In the Invoice field, enter COMPLAB. 9. Enter 50,000 in the Credit field. 10. Enter 618900 in the Offset account field. 11. In the Sales tax group field, select ARLRA. 12. In the Item sales tax group field, select ALL. 13. Click the Inquiries button, then click Sales tax totals. Verify the correct calculation of sales tax: a. For Arkansas, two percent of 50,000 is 1,000. b. For Little Rock, three percent of 50,000 is 1,500; however, the maximum tax should be 1,000. c. Total tax should be 2,000. 14. Close all forms.

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Financials I in Microsoft Dynamics® AX 2012

Lab 5.7 - Including Sales Tax in Journal Amounts During this lab you will set up sales tax in journal amounts. Scenario Ken is the Controller for Contoso. He wants to include sales taxes in journal amounts to make it easier to create journal entries. Ken requests your assistance. For example, suppose the sales tax is ten percent and the total invoice amount is 110.00 USD. If it is specified that the journal amount includes sales tax, the net amount is 100.00 USD (110.00/1.10), and the sales tax amount is 10.00 USD. NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! Help Ken find the two forms that can specify whether the journal amounts include sales tax.

Need a Little Help? Check the General ledger parameters and the Journal names form.

Step by Step Follow these steps: 1. On the Navigation Pane, click General ledger, click Setup, then click General ledger parameters. 2. Click the Sales tax link on the left hand navigation pane. 3. In the Amount include sales tax field, select the field. 4. Close the form. 5. On the Navigation Pane, click General ledger, then click Setup, then click Journals, and then click Journal names. 6. Select the GenJrn journal from the left hand Navigation pane. 7. In the Amount include sales tax field, select the field. 8. Use the GenJrn journal. 9. Close the form.

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Chapter 5: Sales Tax Setup

Sales Tax Transactions Sales tax transactions are important in every business. In Microsoft Dynamics AX, you can do the following: •

Run a sales tax payment report

•

Revise the sales tax amount on a transaction before posting

•

Post sales tax on prepayments

•

Create transactions with conditional sales tax

•

Post sales tax for imported goods

Procedure: Run a Sales Tax Payment Report Perform the following steps to run a sales tax payments report to calculate the sales tax that is due for a given period: Click General ledger, click Periodic, click Sales tax payment, then click Sales tax payment. 1. In the Settlement period list, select the settlement period for which the sales tax payment is being calculated. 2. In the From date field, enter a date within the sales tax settlement period to be calculated. 3. In the Transactions date field, enter the posting for transactions which are posted for the Sales tax payment.

Procedure: Run a Sales Tax Payment Report - Sales Tax Payment Version Options Perform the following steps to select the kind of transactions to include in the Sales Tax Payment Report, when clicking the Sales Tax Payment Version field: 1. Select Original to select sales tax transactions on the first posted settlement calculation for the period interval. 2. Select Corrections to select sales tax transactions that are not included in the first posted settlement calculation for the period interval. The report includes all subsequent payments that are posted for the settlement period. 3. Select Latest corrections to select sales tax transactions that are included in the most recent settlement calculation made for the period. If you select the Update check box and this option, the settlement calculation of the current job becomes the most recent settlement calculation. 4. Select Total list to select all sales tax transactions to settle in the current period.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: This field is not available if you select the Include corrections check box on the Sales tax section of the General ledger parameters form.

Procedure: Run a Sales Tax Payment Report- Using the Update Check Box The settlement calculation only includes the sales tax that you have not yet paid to the sales tax authority. You can make several payments for a single period. Perform the following steps to enter additional information when you run a Sales Tax Payment Report: 1. To post the settlement automatically, specify a number sequence for the sales tax payment voucher on the Number sequences tab in the General ledger parameters form. 2. If you create a vendor account for the sales tax authority on the settlement period, a vendor transaction is created automatically when you select the Update check box and then click OK. If you do not specify a vendor account, you must create a payment to the sales tax authority manually to pay the sales tax you owe for the settlement period. 3. To run the Sales tax payment report without posting it to check the status of the outstanding sales taxes, run the report with the Update option deselected. 4. Click OK to run the report. HINT: To report the sales tax payment correctly to the sales tax authority, select the correct report format in the Report Layout list on the Sales Tax Authority form. HINT: Click General ledger > Reports > Transactions > Sales tax list to print a report about sales tax postings that you have not yet updated.

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Chapter 5: Sales Tax Setup Procedure: Revise the Sales Tax Amount on a Transaction Before Posting In Microsoft Dynamics AX, most of the sales tax posting and calculation occurs automatically. However, occasionally a company may receive several invoices on which the sales tax amount differs from what Microsoft Dynamics AX calculates automatically. To make the sales tax amounts match the invoices, the user may have to change the sales tax amount on a transaction before posting. Perform the following steps to change the calculated sales taxes in a journal line, purchase order line, or sales order line: 1. Select the transaction line that needs the sales tax revision. 2. Click the Sales tax button to open the Temporary sales tax transactions form.

Procedure: Revise the Sales Tax Amount on a Transaction Before Posting - Select Revision Type Perform the following steps to revise the sales tax amount: 1. Select one of the three types of revisions: o Enter a correction of the sales tax amount in the Actual sales tax amount field for a selected sales tax code line on the Adjustment tab. This amount appears in the Total actual sales tax amount field at the top of the form. o Enter an adjustment amount in the Total actual sales tax amount field if the transaction has several sales tax code lines. This amount distributes among the sales tax code lines that appear in the Temporary sales tax transactions form. o Enter adjustments to the use tax amount in the Actual sales tax charge field if the sales tax code line applies to use taxes on the Adjustment tab. View the original use tax for the sales tax code line in the Sales tax charge field. 2. Click File and then Save to save the record or click the Apply button. 3. Click the Reset actuals button to reset the adjustment. 4. Click the Close button to close the form.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Post Sales Tax on Prepayments A tax authority can require a company to record sales taxes on prepayments from customers, although a sale has not been made. Follow these steps to set up sales tax on prepayments: 1. Click Accounts receivable, click Setup, then click Accounts receivables parameters. 2. Select the Sales tax on prepayment journal voucher check box in the Ledger and sales tax section. Sales tax calculates and posts whenever you post a prepayment. 3. Select a posting profile in the Posting profile with prepayment journal voucher list that defines the ledger account where the sales tax transactions on prepayments post temporarily.

NOTE: Create a posting profile for the purpose of posting sales tax on prepayments in Accounts receivable > Setup > Posting profiles in the Posting profiles form. Then select the appropriate ledger account on the Setup tab in the Sales tax prepayments list. 4. Select the Prepayment journal voucher check box on the Payment tab when you post a prepayment through a journal. If you omit this step, the sales tax posts incorrectly. When you create a sales invoice and settle the prepayment, an automatic transaction on the sales tax prepayments account offsets the first temporary sales tax transaction.

Transactions with Conditional Sales Tax Users generally report sales taxes in the period when they create the invoice. When they use conditional sales tax, users must only report the sales tax and base amount to the sales tax authorities when they pay the invoice. If they do not settle the invoice in full with a single payment, the sales taxes automatically are reported proportionally to the actual amount paid on the invoice.

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Chapter 5: Sales Tax Setup EXAMPLE: On June 10 Contoso creates an invoice of EUR 10,000 plus EUR 2,500 in sales tax. On July 10 the company reports taxes for June. The EUR 2,500 is not included in the sales tax payment because the invoice is unpaid. On July 15 the customer pays half of its balance due, which is EUR 5,000 plus EUR 1,250 in sales tax. On August 10 the company reports taxes for July. The EUR 1,250 is included in the sales tax payment because the customer paid only part of the invoice. When the rest of the invoice is paid, the rest of the sales tax is reported. In some countries, the sales tax authorities require companies to report tax for the full invoice amount, regardless of whether the full amount is paid.

Procedure: Create Transactions with Conditional Sales Tax Perform the following steps to set up conditional sales tax on a transaction: 1. Create a separate ledger account(s) for posting sales taxes for invoices awaiting settlement (Optional). This step is optional, because you can choose to post the conditional tax on the same account as the ordinary sales tax. However, many countries legally require separation of these postings. 2. Create a separate ledger posting group for posting the conditional tax to the separate ledger accounts (Optional). If you post the conditional tax to a separate ledger account, you must create a separate ledger posting group to control the postings. 3. Create two settlement periods: one to control conditional tax and one to report sales taxes to the authorities. A separate settlement period for the conditional tax has the following advantages: o It prevents the conditional sales tax from being reported incorrectly o It allows you to generate a report that displays undeclared conditional sales tax amounts

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Financials I in Microsoft Dynamics® AX 2012 Perform the following steps to continue to set up conditional sales tax on a transaction: 1. Create two sales tax codes for: o the conditional tax o the sales taxes that you must report 2. When you create the sales tax code for the conditional sales tax, select the General section. 3. Select the sales tax code used for real sales taxes in the Payment sales tax code list. The conditional sales tax then transfers to the selected sales tax code. NOTE: The sales tax rate, which is set up in the Values form, must be the same for both. 4. Set up sales tax groups and item sales tax groups. 5. Select the Conditional tax check box in the General ledger parameters form in the Sales tax section. This parameter ensures the sales tax amount transfers from the ledger account for temporary posting of conditional taxes to the real sales tax account.

Sales Tax for Imported Goods If you must report the import sales tax, you may need to post a document with the whole amount treated as sales tax. This is necessary when you receive an invoice from the customs for imported goods. Such an invoice only states the tax amount.

Scenario: Sales Tax Import A European subsidiary of Contoso purchased goods from a vendor that is located in a non-EU country. The vendor did not charge sales tax on the invoice. The customs office sends an invoice to claim tax because the goods crossed the border and the company declared them at customs.

Procedure: Sales Tax Import - Direct Posting Direct posting of sales tax codes is the only situation in which the sales tax code manually is entered in the invoice journal on the General tab. Perform the following steps to make a direct posting of sales tax import: 1. Create a ledger account for import sales tax. 2. Create a sales tax code for import sales tax. 3. Create a ledger posting group for import sales tax and attach the ledger posting group to the import sales tax code.

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Chapter 5: Sales Tax Setup 4. Open an invoice journal by clicking Accounts payable, click Journals, click Invoices, click Invoice journals, then click Invoice journal lines. 5. Select the import sales tax code on the General tab in the Sales tax code list. 6. Enter the invoice amount and select the import sales ledger account in the Offset account on the Overview tab. The invoice amount also is listed in the Sales tax amount field. 7. Click Post to post the journal. The sales tax amount is registered in the import sales tax ledger account automatically.

Sales Tax Exemption Certain countries or regions, for example the European Union, require companies to record justification for sales tax exemption. If no sales tax applies to trade documents, you must report why the sales order is sales tax exempted. To report sales tax exemption, you must associate a sales tax exempt description in trade documents. The sales tax exempt description is saved on sales tax transactions for history and reprinting. When you post sales orders in Microsoft Dynamics AX: •

The sales tax group and sales tax rate is recorded automatically on the transaction.

•

The actual invoice groups the sales tax transactions according to sales tax rates when the sales tax is not exempted.

If the invoice has sales tax exemptions, it groups the transactions according to sales tax exempt descriptions.

Procedure: Create a Sales Tax Exempt Code Perform the following steps to provide justification to sales tax exemption: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax exempt codes. 2. Click the New button to create a new sales tax exempt code and then enter the Exempt code and the Description. Close the Sales tax exempt code form. 3. Open General ledger, click Setup, click Sales tax, then click Sales tax group. On the Setup tab, select the sales tax code that you want to use, select the Exempt check box and select an exempt code in the Exempt code list. The description of the sales tax exemption prints on the same line as the exempt code. Close the form.

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Financials I in Microsoft Dynamics® AX 2012 4. Open General ledger, click Setup, click Sales tax, then click Sales tax codes. Select the sales tax code that you checked as exempt on the Sales tax groups form in the Setup tab in step 2 of this process. 5. Click Print code in the Print list in the Sales tax code form on the General FastTab to print the sales tax exemption description in trade documents. The print code and the sales tax rate do not print on the sales tax specification line because several sales tax codes with different sales tax rates may be involved. NOTE: You also can print sales tax exempt rates on interest notes and collection letters. Select the Print sales tax exempt number on interest notes and collection letters check box in Accounts receivable > Setup > Forms > Form setup > Interest notes/collection letter sections. NOTE: You can set up tax exempt numbers for customers and vendors in the Customers or Vendors form on the Setup tab.

FIGURE 5.11 SALES TAX EXEMPT CODES

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Chapter 5: Sales Tax Setup

Lab 5.8 - EU 115 Sales Tax Directive This is a lab on the EU 115 Sales Tax Directive. Scenario Ken is the Controller of Contoso, a company that has decided to specify sales tax exemptions on invoices for their European subsidiary. Ken asks you to set this up. Before implementing the EU sales tax directive, test the setup using the California Sales tax groups. NOTE: The labs in this chapter must be completed in order as they are dependent on the previous lab.

Challenge Yourself! Set up the sales tax system so that, when you use tax codes that are marked exempt in the tax system, the Exempt code prints on invoices. Create a new sales tax code named Exempt. Use the Settlement periods, Ledger posting groups, and Sales tax groups already set up in the data for California. Use the following data: Field

Data value

Settlement period

CA

Ledger posting group

CAST

Sales tax group

CA

Customer

9100

Item number

10000

Exempt code

Subsidiary

Description

Sales to Subsidiary

Need a Little Help? Use the tax information that already is set up for California sales tax codes.

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Financials I in Microsoft Dynamics® AX 2012 Step by Step Follow these steps: 1. Click General ledger, click Setup, click Sales tax, then click Sales tax exempt codes. 2. Click the New button to create a new sales tax exempt code and then enter Subsidiary in the Exempt code field and Sales to Subsidiary in the Description field. Close the Sales tax exempt code form. 3. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Sales tax codes. 4. Click the New button to add a line. 5. In the Sales tax code field, enter Exempt. 6. In the Name field, enter Sales tax exemption. 7. In the Settlement Period field, use the arrow to select CA. 8. In the Ledger posting group field, use the arrow to select CAST. 9. In the Print field, click the arrow to select Print code. This will print the sales tax exemption description. 10. Close the Sales tax code form. 11. On the Navigation Pane, click General ledger, click Setup, click Sales tax, then click Sales tax groups. 12. Select the 'CA' sales tax group in the Sales tax group form. 13. In the Setup section, delete all the sales tax codes by highlighting the rows and then by using the Remove button. 14. Click Yes to confirm deletion. 15. Press the Add button to insert a line on the Setup tab. 16. In the Sales tax code list, use the arrow to select the 'Exempt' sales tax code that you just created. 17. Click to select the Exempt check box. 18. Click the Exempt code field, and select Subsidiary. 19. Close the form. 20. On the Navigation Pane, click General ledger, then click Setup, then click Sales tax, then click Item sales tax groups. 21. Click the ALL line in the left hand navigation pane within the form. 22. Click the Setup tab. 23. Click the Add button to add a line. 24. In the Sales tax code field, click the arrow to select Exempt. 25. Close the form. 26. On the Navigation Pane, click Sales and Marketing, click Common, click Sales orders, then click All sales orders. 27. Click the New - Sales Order button on the tool bar to add a new order. 28. In the Customer account field, use the arrow to select customer 9100.

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Chapter 5: Sales Tax Setup 29. 30. 31. 32. 33. 34. 35. 36. 37.

Click Yes to transfer the customer information, if prompted to do so. Click OK to close the Create sales order form. Click Close to close the Infolog form. Click the Item number field in the lower pane. In the Item number field, enter 10000. In the Quantity field, enter 10. In the Size field enter 01. In the Site field enter 1. Click the Line details FastTab and then click the Setup tab in the lower pane. 38. In the Item sales tax group field, use the arrow to select ALL 39. In the Sales tax group field, use the arrow to select CA. 40. Close the Sales order form.

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Withholding Sales Tax In some countries, the buyer is legally responsible for paying withholding tax. Withholding tax is due on non-inventory deliveries, frequently services, that a supplier, who is not an employee of the company, delivers. The buyer is legally responsible for withholding a certain percentage of the invoice amount at the time of payment. The net amount (= invoice amount reduced by the withholding tax) is paid to the supplier. The tax withheld posts to a ledger account for withholding tax, and periodically is paid to the authorities. The buying company is legally responsible for submitting a report to the tax authorities and to the supplier. Withholding tax: •

Is a tax on vendors that does not create sales tax transactions.

•

Is a liability if it is calculated on vendor payments and therefore only balance sheet accounts or liability accounts are valid accounts for posting withholding tax.

•

Is reported in fixed reports.

Procedure: Set Up Withholding Tax in Administration and General Ledger Perform the following steps to set up withholding tax in Administration and General Ledger: 1. Click System Administration, click Setup, then click Licensing, then click Licensing configuration. 2. Expand the General ledger node and select the Withholding tax check box. 3. Close the form. 4. Click General ledger from the Navigation pane, then click Setup, then click Withholding tax, and then click Withholding tax codes. 5. Enter withholding tax codes with values and limits using the Values and Limits buttons. 6. Close the form. 7. Click General ledger, then click Setup, then click Withholding tax, and then click Withholding tax groups. 8. Enter withholding tax groups and attach the relevant withholding tax codes on the Setup tab using the Add button.

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Chapter 5: Sales Tax Setup Procedure: Set Up Withholding Tax in Accounts Payable Because withholding tax applies only to vendor invoices, you must complete the setup in the Accounts payable section. Setting up withholding tax makes it more efficient to: •

Start the calculation of withholding tax when you pay a vendor invoice.

•

Keep basis data about the vendor for reporting.

•

Allow for the journal to propose this setup by default when you enter a payment into a journal for a vendor who is set up for withholding tax. However, you also can edit the calculated amounts, select a different withholding tax, or deactivate the withholding tax calculation for this particular payment.

Follow these steps to set up withholding tax in Accounts Payable and General Ledger: 1. Click Accounts payable, click Common, click Vendors, then click All vendors. On the Action Pane in the New section click Vendor. 2. On the Invoice and delivery FastTab, select the Calculate withholding tax check box and a Withholding tax group to activate the calculation when a payment is entered in a journal.

Procedure: Calculate and Post Withholding Tax Calculate and post withholding tax in the Payment journal form in the Accounts payable section, or in the General journal form in the General ledger section. The default withholding tax group of the vendor displays in the withholding tax group list. Perform the following steps to calculate and post withholding tax: 1. Click Accounts payable, then click Journals, then click Payments, and then click Payment Journals. 2. On the Action Pane in the New section click Payment journal. 3. Click New to add new payment journal and then click the Lines button. 4. Enter a payment date and select the vendor account that is set up to calculate withholding tax. 5. By default, the Withholding tax group field displays the withholding tax group for the vendor. You can select a different group or delete the field value if no withholding tax should be calculated for the line. 6. Click Functions, then Settlement, and select Yes or No to remove existing marked transactions. Use the Mark check box in the succeeding form to modify the open invoices that you want to pay. 7. Verify the Infolog information about the calculated withholding tax and close the Infolog.

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Financials I in Microsoft Dynamics® AX 2012 8. Optional: Click the Withholding tax tab for each selected line to change or delete the calculated withholding tax. You can also create lines and enter the information. 9. Close the Open transaction editing form. The payment amount on the journal line is reduced by the withholding tax amount. 10. Validate and post the payment journal by clicking the Validate button on the Action bar. In the Payment journal form, all transactions are considered as payments, and the withholding tax setup is always handled as described in the steps earlier in this section. In the General journal form, withholding tax is calculated automatically when the following conditions are true: •

A vendor account that is set up to calculate withholding tax is selected for the journal line.

•

There is no entry in the Invoice field for the selected journal line.

Procedure: Withholding Sales Tax Reports and Inquiry Perform the following steps to create withholding sales tax reports and an inquiry: 1. Click General ledger, click Reports, click Transactions, then click Withholding sales tax transactions to view a report about posted transactions with withheld sales tax. 2. Click General ledger, then click Inquiries, then click Tax, and then click Posted withholding tax to view withholding tax transactions with the possibility to view the ledger transactions for each withholding tax entry.

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Chapter 5: Sales Tax Setup

Summary The requirements for tax calculation and tax reporting differ greatly for different countries. Therefore the tax module of a true international ERP system must be comprehensive. In Microsoft Dynamics AX, the tax module offers many different options for tax calculation, posting, and reporting. The features include: •

Percentage calculation

•

Fixed tax amounts

•

Tax on tax

•

EU tax

•

Tax exemption

•

Packing duty

•

Multiple tax calculation

•

Flexible settlement periods

•

Country-specific tax reporting and additional options

For EU countries, special EU statistic reports such as Intrastate and EU sales list are also available.

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Test Your Knowledge Test your knowledge with the following questions. 1. Each ledger account can use several tax codes. True or False? ( ) True ( ) False 2. Changes that you make to the ledger account numbers in ledger posting groups only affect ____. ( ) Posted transactions ( ) Deleted transactions ( ) Not yet posted transactions ( ) Posted transactions from previous months 3. Before creating ledger posting groups, you must create a(n) _________ in the General Ledger to link to ledger posting group. ( ) Tax Group ( ) Sales Tax ( ) Account ( ) Group 4. Tax authorities can be ______. (Select all that apply) ( ) Countries ( ) States ( ) Regions ( ) Cities 5. Sales tax can be paid by the Microsoft Dynamics AX system to _____ ? (Select all that apply) ( ) A client ( ) An employee ( ) A vendor ( ) A sales tax authority 6. You use settlement periods to create and manage the periods the company uses to report sales tax. ( ) True ( ) False

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Chapter 5: Sales Tax Setup 7. Sales tax settlement periods specify at what intervals the company reports taxes. ( ) True ( ) False 8. You use settlement periods to create and manage the periods the company uses to report sales tax. ( ) True ( ) False 9. Sales tax settlement periods specify at what intervals the company reports taxes. ( ) True ( ) False 10. A sales tax code includes information about which of the following? Select all that apply. (Select all that apply) ( ) When the payments are made ( ) How the tax is posted ( ) How the tax is calculated ( ) The currency in which the sales tax is calculated 11. Sales taxes over the minimum limit amount automatically are discontinued and sales taxes under the upper limit amount are set to the upper limit amount. ( ) True ( ) False 12. Specify the origin for the sales tax limits in the Marginal base list. Match the options to the answers. _____ 1. Net amount for each line _____ 2. Net amount for each unit _____ 3. Net amount of invoice balance _____ 4. Gross amount for each line _____ 5. Gross amount for each unit _____ 6. Invoice total incl. other sales tax amounts

a. Value of the line, excluding any other taxes b. The total value for the invoice, including any other taxes c. Value of the line, including any other taxes d. Value of the unit, including any other taxes e. The total value for the invoice, excluding any other taxes f. Value of the unit, excluding any other taxes

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Financials I in Microsoft Dynamics® AX 2012 13. When the sales tax groups are created, attach the sales tax group to ______. (Select all that apply) ( ) Company ( ) Customers ( ) Ledger accounts ( ) Vendors 14. You cannot change any default item sales tax group that appears automatically on a journal line before you post the transaction. ( ) True ( ) False 15. Is it possible when you create a sales invoice and settle the prepayment, an automatic transaction on the sales tax prepayments account offsets the first temporary sales tax transaction? ( ) Yes ( ) No 16. If the invoice has sales tax exemptions, does it group the transactions according to sales code descriptions? ( ) Yes ( ) No 17. What is a withholding tax? (Select all that apply) ( ) Is calculated on a vendor payment, which is a liability. Therefore, only balance sheet accounts or liability accounts are valid accounts for posting withholding tax. ( ) Is recorded on the transaction. ( ) Is a tax on vendors, which does not create sales tax transactions. ( ) Is reported in fixed reports.

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Chapter 5: Sales Tax Setup

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 Test Your Knowledge 1. Each ledger account can use several tax codes. True or False? (•) True ( ) False 2. Changes that you make to the ledger account numbers in ledger posting groups only affect ____. ( ) Posted transactions ( ) Deleted transactions (•) Not yet posted transactions ( ) Posted transactions from previous months 3. Before creating ledger posting groups, you must create a(n) _________ in the General Ledger to link to ledger posting group. ( ) Tax Group ( ) Sales Tax (•) Account ( ) Group 4. Tax authorities can be ______. (Select all that apply) (√) Countries (√) States (√) Regions (√) Cities 5. Sales tax can be paid by the Microsoft Dynamics AX system to _____ ? (Select all that apply) ( ) A client ( ) An employee (√) A vendor (√) A sales tax authority 6. You use settlement periods to create and manage the periods the company uses to report sales tax. (•) True ( ) False

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Chapter 5: Sales Tax Setup 7. Sales tax settlement periods specify at what intervals the company reports taxes. (•) True ( ) False 8. A sales tax code includes information about which of the following? Select all that apply. (Select all that apply) (√) When the payments are made (√) How the tax is posted (√) How the tax is calculated (√) The currency in which the sales tax is calculated 9. Sales taxes over the minimum limit amount automatically are discontinued and sales taxes under the upper limit amount are set to the upper limit amount. ( ) True (•) False 10. Specify the origin for the sales tax limits in the Marginal base list. Match the options to the answers. a 1. Net amount for each line f 2. Net amount for each unit e 3. Net amount of invoice balance c 4. Gross amount for each line d 5. Gross amount for each unit b 6. Invoice total incl. other sales tax amounts

a. Value of the line, excluding any other taxes b. The total value for the invoice, including any other taxes c. Value of the line, including any other taxes d. Value of the unit, including any other taxes e. The total value for the invoice, excluding any other taxes f. Value of the unit, excluding any other taxes

11. When the sales tax groups are created, attach the sales tax group to ______. (Select all that apply) ( ) Company (√) Customers (√) Ledger accounts (√) Vendors

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Financials I in Microsoft Dynamics® AX 2012 12. You cannot change any default item sales tax group that appears automatically on a journal line before you post the transaction. ( ) True (•) False 13. Is it possible when you create a sales invoice and settle the prepayment, an automatic transaction on the sales tax prepayments account offsets the first temporary sales tax transaction? (•) Yes ( ) No 14. If the invoice has sales tax exemptions, does it group the transactions according to sales code descriptions? ( ) Yes (•) No 15. What is a withholding tax? (Select all that apply) (√) Is calculated on a vendor payment, which is a liability. Therefore, only balance sheet accounts or liability accounts are valid accounts for posting withholding tax. ( ) Is recorded on the transaction. (√) Is a tax on vendors, which does not create sales tax transactions. (√) Is reported in fixed reports.

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Chapter 6: Financial Features

CHAPTER 6: FINANCIAL FEATURES Objectives The objectives are: •

Create, modify, and delete financial reason codes.

•

Describe how and when to use the Fill utility.

Introduction This content describes features that you can use across the various financial modules in Microsoft Dynamics AX®. This content describes how to set up reason codes, which allow you analyze transaction history by specific reason. This content also describes how to use the Fill utility to update multiple records, similar to find and replace functionality.

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Financial Reason Codes Financial reason codes are standardized codes that you can use in various transaction types or changes to field values which provide background data about the transaction. For example, auditors or managers frequently want to see recorded reasons for various transactions. When you use standard reason codes instead of transaction text, users have guidelines on what codes to select from. Standard reason codes provide management and auditors with the ability to analyze transaction history by specific reason. Use reason codes with the following: •

General Ledger

•

Accounts Payable

•

Accounts Receivable

•

Cash and Bank Management

Scenario Cassie, the Accountant at Contoso, is responsible for managing the company's fixed assets. Contoso's auditors have required explanations for all new assets purchased, in addition to certain changes to existing assets. Cassie has decided that using reason codes will satisfy the auditors. To accommodate the auditors’ requirements, Cassie establishes internal controls in Microsoft Dynamics AX by setting up parameter values, which enforce use of reason codes during various transactions and value changes in the accounting records. Cassie also develops a list of standard fixed asset reason codes and descriptions. These codes can be used with asset transactions. For example, one of Contoso's vehicles (vehicle number 17) was recently in an accident. Because of the accident damage, Cassie must adjust downward the asset's value, service life, and expected scrap value. She creates a reason code titled “V-ACC-SC,” with a description of “Vehicle Accident - Single Car” for transactions related to this accident. Later, Cassie records the write-down adjustment to the vehicle and changes the other asset values. Because of the selected parameter settings, she uses the “VACC-SC” reason code with the asset journals and the other forms that require reason codes. When the auditors next review the accounting records, they can see within the accounting records and history forms that vehicle number 17 was adjusted because of the accident and that no other car was involved in the accident.

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Chapter 6: Financial Features Create a Financial Reason Code Use the Financial reasons form in Organization administration to create reason codes for a variety of financial modules, or you can open a reasons form from a specific module to set up reason codes for only that module. You also can specify whether reason codes are required for a module. You specify reason code requirements in the parameters form for most modules. The difference between the two methods is that the Financial reasons form in Organization administration provides additional fields to assign the reason code to any of five account types, but in each module, reason codes are assigned only to the account type that relates to that module. For example, if the Financial reasons form opens from Accounts Payable, the Account type is set to Vendor automatically, and the reason codes created can only be used with vendor transactions.

FIGURE 6.1 FINANCIAL REASONS

Procedure: Create a Financial Reason Code Perform the following steps to create a reason code. 1. To access the Financial reasons form, click one of the following: o Organization administration, click Setup, then click Financial reasons o Fixed assets, click Setup, then click Asset reasons o General ledger, click Setup, then click Ledger reasons o Accounts receivable, click Setup, click Customer, then click Customer reasons

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Financials I in Microsoft Dynamics® AX 2012 o o

Accounts payable, click Setup, click Vendor, then click Vendor reasons Cash and bank management, click setup, then click Bank reasons

2. Click the New button to create a new reason. 3. Enter a unique Reason code as identification. 4. Enter a Default comment for the reason code. The comment you enter here appears as the default comment when you select this reason in transactions. 5. Select the Account type with which to use the reason code. An account type limits the reason codes displayed in reason lists when you create or modify a transaction of that type. For example, only reason codes with an account type of Asset are available when you enter fixed asset transactions. All the account type fields are visible only if you open the Financial reasons form from Organization administration.

Procedure: Modify a Financial Reason Code You can modify reason codes at any time. You also can change the Default comment and Account types. 1. To access the Financial reasons form, click one of the following: o Organization administration, click Setup, then click Financial reasons o Fixed assets, click Setup, then click Asset reasons o General ledger, click Setup, then click Ledger reasons o Accounts receivable, click Setup, click Customer, then click Customer reasons o Accounts payable, click Setup, click Vendor, then click Vendor reasons o Cash and bank management, click setup, then click Bank reasons 2. Select the Reason code to modify. 3. Modify the Default comment for the reason code. 4. Select or clear the Account type check boxes. As soon as the account type is cleared, the reason code will not display in the transaction entry or asset forms, and the system will not allow its use.

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Chapter 6: Financial Features Procedure: Delete a Financial Reason Code Follow these steps to delete a reason code. 1. To access the Reasons form, click one of the following: o Organization administration, click Setup, then click Financial reasons o Fixed assets, click Setup, then click Asset reasons o General ledger, click Setup, then click Ledger reasons o Accounts receivable, click Setup, click Customer, then click Customer reasons o Accounts payable, click Setup, click Vendor, then click Vendor reasons o Cash and bank management, click setup, then click Bank reasons 2. Select the Reason code to delete. 3. Clear all Account type check boxes. You can delete a reason code only if no account types are associated with it. If you are using any form other than the Financial reasons form accessed from the Organization administration menu, ensure that you clear the necessary account types from other modules. 4. Click the delete button. 5. Click Yes in the Confirm deletion dialog box.

Financial Reason Codes After you have created reason codes, select reasons for transactions or other entries in the following forms. Module

Transaction Type

Path

General Ledger

General journal

General ledger > Journals > General Journal > Lines button > General tab

General Ledger

Process allocation request

General ledger > Periodic > Process allocation request

General Ledger

Elimination proposal

General ledger > Journals > Elimination > Lines button > General tab

General Ledger

Consolidation, Online

General ledger > Periodic > Consolidate > Consolidation, Online

Fixed Assets

Fixed assets journal

Fixed assets > Journals > Fixed assets > Lines button > General tab

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Financials I in Microsoft Dynamics® AX 2012 Module

Transaction Type

Path

Fixed Assets

Inventory to fixed assets journal

Fixed assets > Journals > Inventory to fixed assets > Lines button > General tab

Accounts Receivable

Cancel payment

Cash and bank >Common> Deposit slips > Cancel payment button

Accounts Receivable

Free text invoice

Accounts receivable >Common>Free text Invoices > All Free text invoices>Line details FastTab> Reasons tab

Bank

Payment reversal

Cash and bank management> Common>Checks > Payment reversal button

Accounts Payable

Invoice journal

Accounts payable > Journals> Invoice journal > Lines button > General tab

Accounts Payable

Check reversals journal

Cash and bank management> Journals > Check reversals > Lines button > General tab

Accounts Payable

Deposit slip payment cancellations journal

Cash and bank management >Journals> Deposit slip journals> Lines button> General tab

NOTE: You must select the reason codes as available for all transaction types within the journal line to be posted. This must include the ledger offset account.

Reason Comments Optional reason comments can be entered on the respective Financial reasons form. Although you can set up default reason comments for each reason code, no setup is required. If you select a reason code for a transaction, the default comment that is set up in the Financial reasons form displays in the Reason comment field. You can change the default reason comment. If you enter a reason comment first and then select a reason code, the typed reason comment is not replaced.

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Chapter 6: Financial Features

Fill Utility The Fill utility enables authorized users and/or administrators to mass-update records This is done in a similar manner to the Find and Replace function. This utility assists administrators or users during implementations or when business process changes affect multiple records.

Scenario Contoso has decided to change its payment terms. High-priority customers will now receive a longer discount period. Instead of updating each account individually, Phyllis, the Accounting Manager, will use the Fill utility to update the discount terms of all high priority customers in one step.

Procedure: Update Multiple Records Perform the following steps to update multiple records at the same time by using the Fill utility. This feature is available only if the Fill utility License configuration is enabled. NOTE: Make a backup before you perform this process. 1. Open the form where the field that you want to update is displayed. 2. Right-click the field that you want to update and select Record information from the menu. 3. In the Record information form, click the Fill utility button. 4. Specify the query criteria to find the records to update. 5. Click OK. 6. Verify that the list of records to be updated is correct. 7. Click OK. 8. Select the value to change the field to for the list of records. 9. Click OK. CAUTION: Be aware that changing numerous records at the same time can be time-consuming.

Fill Utility Log Use the Fill Utility Log form to view a record of the changes that you have made by using the Fill Utility. To do this navigate to Organization administration, click Inquiries, and then click the Fill utility log.

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Financials I in Microsoft Dynamics® AX 2012 The following tables provide descriptions for the fields in this form. Field

Description

Name of table

Displays the name of the table that was modified for the selected Fill Utility Log record.

Modified field

Displays the name of the field that was modified for the selected Fill Utility Log record.

New value

Displays the new value for the field that was modified for the selected Fill Utility Log record.

Created by

Displays the user name of the person who made the change, which is indicated in the selected Fill Utility Log record.

Created date and time

Displays the date and time that the change occurred.

Query statement

Displays the query statement that was used to update the records for the selected Fill Utility record.

Summary The Financial Features section described the setup of reason codes and the use of the Fill utility.

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Chapter 6: Financial Features

Test Your Knowledge Test your knowledge with the following questions. 1. What are reason codes?

2. Which of the following statements correctly describe the Fill utility? (Select all that apply) ( ) The Fill utility enables authorized users to mass-update records. ( ) Users can view a log of changes that the Fill utility made, ( ) The system prompts users to create a backup before they use the FillUtility. ( ) The system automatically makes a back up before it uses the Fill utility.

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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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Chapter 6: Financial Features

Solutions 1. What are reason codes? MODEL ANSWER: Reason codes are standardized codes that you can use in various transaction types or changes to field values which provide background data about the transaction. 2. Which of the following statements correctly describe the Fill utility? (Select all that apply) (√) The Fill utility enables authorized users to mass-update records. (√) Users can view a log of changes that the Fill utility made, (√) The system prompts users to create a backup before they use the FillUtility. ( ) The system automatically makes a back up before it uses the Fill utility.

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Chapter 7: Cash and Bank Management Setup

CHAPTER 7: CASH AND BANK MANAGEMENT SETUP Objectives The objectives are: •

Set up cash bank transaction types.

•

Set up bank transaction groups.

•

Set up bank parameters.

•

Set up payment purpose codes.

•

Set up bank groups.

•

Create a bank account.

•

Define the check layout for a bank account.

Introduction In Microsoft Dynamics AX®, companies use the Cash and Bank Management module to create and maintain bank accounts. The bank account table contains a record for each bank account. Each record contains bank account information, such as the following: •

Registration number and account number

•

Address

•

Other contact information

•

Currency

•

Check set up

•

Main account for posting

The application uses this information to process all bank transactions, such as payments and deposits. To use the Cash and Bank Management module, set up the following: •

Bank transaction types

•

Bank transaction groups

•

Bank groups

•

Cash and bank parameters

•

Bank accounts

•

Checks

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Financials I in Microsoft Dynamics® AX 2012 Scenario Annie, the bookkeeper at Contoso, must set up the banking functions for a new company. Annie first sets up the types of transactions Contoso must make, such as deposits and withdrawals. She then groups these transaction types to allow for an additional level for reporting and analysis. Next, Annie sets up bank groups for the banks with whom the company holds multiple accounts. Annie creates payment purpose codes for reporting to the central bank. Finally, Annie indicates which account is used for checks returned from the bank and the number series that is used for banking documents. After Annie finishes setting up the banking functions, she enters the information for the company's bank accounts and indicates, for each account, how checks are to be designed.

Bank Transaction Types Use bank transaction types to set up the types of transactions to be made in company bank accounts, such as deposit slips, fees, and interest charges. If the bank reports transactions on its account statements, companies can use a summation of the transaction types for summary reconciliation. Users can indicate the transaction type on journal worksheets. When the journal is recorded, the application copies the contents of the Bank transaction type field to the bank transaction. Create one transaction type for Non-Sufficient Funds (NSF) transactions. NSF transactions occur when a check is returned from the bank because the bank account lacks sufficient funds to honor the check.

Procedure: Create Bank Transaction Types Perform the following to create bank transaction types. 1. Click Cash and Bank Management, click Setup, and then click Bank transaction types. 2. Click the New button to create a new record. 3. Enter a unique code in the Bank transaction type field. 4. Enter the name of the transaction type in the Name field.

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Chapter 7: Cash and Bank Management Setup 5. Click the Main account arrow to select the ledger account to post corrections to and to add data for bank reconciliation. 6. Repeat steps 2 through 5 to create each new Bank transaction type.

FIGURE 7.1 BANK TRANSACTION TYPE FORM

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Bank Transaction Groups Use bank transaction groups to set up groups of different bank transaction types. In the bank statement reconciliation, calculate totals for each bank transaction group and for each bank transaction type. For example, a group of transfers may include the bank transaction types of transfer and wire transfer.

Procedure: Create Bank Transaction Groups Perform the following to set up bank transaction groups. 1. Click Cash and bank management, click Setup, and then click Bank transaction groups. 2. Click the New button to create a new record. 3. In the Bank transaction groups field, enter a group identification code that refers to this group when a code is used in other system tables. The bank transaction group is an alphanumeric string of up to 10 characters. 4. Enter a short description in the Description field. 5. Click the Type FastTab. 6. Click the Bank transaction type arrow and select a bank transaction type to relate to the selected bank transaction group. The Name field is populated automatically with the Bank transaction type name. 7. Click the Add button to add additional Bank transaction types to this Bank transaction group. 8. Click the Remove button to remove Bank transaction types from this Bank transaction group.

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Chapter 7: Cash and Bank Management Setup

Lab 7.1 - Create Bank Transaction Types and Bank Transaction Groups Scenario Annie, the bookkeeper at Contoso, must create a bank transaction type for cash withdrawals. In addition, Contoso wants the option to analyze the total charges paid to each bank. Annie will create an additional bank transaction group for bank fees and interest charges.

Challenge Yourself! Help Annie by creating a new bank transaction type of 20 for cash withdrawals and a new bank transaction group of 80.

Need a Little Help? 1. Create a bank transaction type for cash withdrawals. 2. Create a bank transaction group for bank charges. 3. Associate the new bank transaction group with fees and interest charges.

Step by Step Create a bank transaction type for cash withdrawals. 1. Click Cash and bank management, click Setup, and then click Bank transaction types. 2. Click the New button to insert a new record. 3. In the Bank transaction type field, enter 20. 4. Enter the name Cash Withdrawal in the Name field. 5. Type in 110110 in the Main account field. 6. Close the Bank transaction type form. Create a bank transaction group for bank charges. 1. Click Cash and bank management, click Setup, and then click Bank transaction groups. 2. Click the New button to insert a new record. 3. In the Bank transaction groups field, enter 80. 4. Enter Bank Charges in the Description field. 5. From the Bank transaction groups form click the Type FastTab.

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Financials I in Microsoft Dynamics® AX 2012 6. Click the Bank transaction type arrow and select the bank transaction type of 07 for Fees. The Name field is automatically populated with the Bank transaction type name. 7. Click the Add button to insert a new record. 8. Click the Bank transaction type arrow and select the bank transaction type of 08 for Interest charges. The Name field is automatically populated with the Bank transaction type name. 9. Close the form.

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Chapter 7: Cash and Bank Management Setup

Cash and Bank Management Parameters Use the Cash and bank management parameters form to define rules for checks and to indicate the number sequences for the various kinds of transactions within Microsoft Dynamics AX.

Procedure: Define Cash and Bank Parameters Perform the following to set up Bank parameters. 1. Click Cash and bank management, click Setup, and then click Cash and bank management parameters. 2. Click General on the left hand navigation pane. 3. Select the Bank transaction type that is used for Non-Sufficient Funds (NSF) from the NSF list. NSF is used to identify returned payments. When the bank returns a payment the NSF identifier automatically cancels the payment from the system. It also marks the payment so that it is not selected when you reconcile the bank account. 4. Select the Allow checks for bank or ledger accounts check box to indicate whether a check can be printed for a bank or ledger account. 5. Select the Allow check reuse check box to indicate whether a check number can be reused if the check was printed incorrectly or the check stock was not used.

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Financials I in Microsoft Dynamics® AX 2012 6. To require reason codes for bank transactions, select one or more of the following check boxes in the Reason code requirements area: o Require reasons for payment reversals o Require reasons for deposit slip payment cancellations

FIGURE 7.2 CASH AND BANK PARAMETERS FORM

Procedures: Define Reversal Process Select the Use review process for payment reversals check box to require that check reversals must be reviewed in the Check reversals journal before they are posted. If this check box is cleared, the reversal is posted immediately when you click the Payment reversal button in the Check form. Select the Use review process for deposit slip payment cancellations check box to require that deposit slip payment cancellations must be reviewed in the Deposit slip payment cancellations journal before they are posted. If this check box is cleared, the cancellation is posted immediately when you click the Cancel payment button in the Deposit slips form

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Chapter 7: Cash and Bank Management Setup Prenotes and Copies of Payments Select the Allow prenote creation on inactive bank accounts check box to allow users to create prenotes for inactive bank accounts. Select the Allow copies of payments check box to allow users to print copies of payments. These include checks, promissory notes, and electronic payments. The payment copies are printed as non-negotiable checks, which users can use to settle disagreements with vendors or customers.

Credit Limit Tolerance Use the Bank credit limit tolerance list to select how to notify the user when a payment journal that is posted, causes a balance that exceeds the credit limit. The following options are available: •

None - no warning or error is generated in the system.

•

Warning - the system generates a warning notification.

•

Error - the system generates a error notification.

Define Number Sequence Click Number sequence on the left navigation pane to select or change the number sequences for each reference and corresponding sequence code. Select a number sequence to associate with each reference from the Number sequence code list.

Payment Purpose Codes Use the Payment purpose codes form to create payment purpose codes for the central bank, if it is required. The central bank is the official bank of a country or region.

Procedure: Create Payment Purpose Codes Perform the following to set up payment purpose codes. 1. Click Cash and bank management, click Setup, and then click Payment purpose codes. 2. Click the New button to enter a new record or click on a line record to modify an existing code. 3. In the Central bank purpose code field, enter the code used when reporting to the central bank. 4. Enter the name of the payment purpose code in the Name field. 5. Click the General FastTab.

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Financials I in Microsoft Dynamics® AX 2012 6. Enter a description of the payment purpose code in the Purpose text field. 7. Enter any additional information about the payment purpose code in the Text field. 8. Close the form.

FIGURE 7.3 PAYMENT PURPOSE CODES

Bank Groups Use bank groups when several bank accounts share the same address information or routing number. When you create a new bank account and enter the bank group, the bank group information is copied to the account automatically. For example, you can create a bank group for one financial institution at which five accounts are open.

Procedure: Create Bank Groups Perform the following to create bank groups. 1. Click Cash and bank management, click Setup, and then click Bank groups. 2. Click the New button to create a new record. 3. Enter a unique code in the Bank groups field 4. Enter the bank's routing number in the Routing number field. The bank provides the routing number. 5. Enter a brief description of the bank group in the Description field. 6. Click on the General FastTab to enter any additional information for this account, such as the following: o Routing number Type: code identifying the type of the routing number. o Company ID: banking identification of the bank group that is used in connection with payments. o Currency: currency code for the bank group.

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Chapter 7: Cash and Bank Management Setup o

o o o

Post account: also known as PTT. This is an account that is used in European countries for electronic banking. It is a combined postal, telephone, and telegraph ID. Days: time limit, in days, for feedback from the bank on payments. Suffix: suffix of the bank. Drawer: code of the drawer. The bank provides this code.

7. Click the Address FastTab and enter the address for the bank. 8. Click the Contact information FastTab and enter the information for the bank group's contact person.

FIGURE 7.4 BANK GROUPS FORM

Bank Accounts Enter and maintain all information for the company bank accounts in the Bank accounts form. Use the options on the form to view the details for each bank account, such as transactions, current balance, and checks that have been created.

Procedure: Create Bank Accounts - General Perform the following to create general information for a new bank account. 1. To access the Bank accounts form, click Cash and bank management, click Common, and then click Bank accounts. 2. Click the New- Bank account button to create a new record. 3. Select the kind of bank account routing number from the Routing number type field. If your company makes international payments, you may be required to make a selection in this field.

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Financials I in Microsoft Dynamics® AX 2012 4. In the Bank account field, enter a unique ID number to identify the bank account. You cannot modify the bank account value for existing bank accounts. 5. Use the Bank account number field to enter the account number specified by your bank. It is an alphanumeric string up to 34 characters. 6. Select the group to which this bank belongs, if applicable, from the Bank groups list. If a Bank group is selected, the Routing number field will be populated automatically based on the bank group setup.

FIGURE 7.5 BANK ACCOUNTS

Procedure: Create Bank Accounts - General Descriptions Perform the following to create descriptions for a new bank account. 1. In the Name field, enter a name that is used to identify this account on printed reports and other areas. 2. Use the Company statement name to enter the company name as you want it to appear on your bank statement. This field is only available when the company's primary address is in Canada or the United States. 3. Use the Destination name field to enter the name of the Automated Clearing House (ACH) or receiving point of an Electronic Funds Transfer (EFT) transaction. This field is only available to legal entities whose primary address is in the United States. NOTE: Name accounts so that they can be easily identified. In Microsoft Dynamics AX, bank accounts are identified by name and account number.

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Chapter 7: Cash and Bank Management Setup Prenotes Select the Prenote required check box if the bank requires prenotes for electronic transactions. If prenotes are required, specify the number of days that the bank requires to process a prenote in the Prenote response days field. The bank must process the prenote before electronic payments will be accepted. This field is available only if you selected the Prenote required check box.

Active Status Use the Active fields to enter specific dates when the bank account becomes active. The following two fields are optional and available if the Bank account status field is set to Active for all transactions: •

Active from: enter the date when the bank account will become active and be available for new transactions. If you do not enter a date, the bank account is immediately available for new transactions.

•

Active to: enter the date when the bank account will no longer be active for new transactions. Any existing transactions that are not completed by this date, such as pending payments, will still occur as they were originally scheduled. If you do not enter a date, the bank account remains active indefinitely.

Use the Bank account status to select the status to use for the bank account. •

Active for all transactions - the bank account is active and available for all transactions.

•

Inactive for new transactions - no new transactions can be scheduled for this bank account. Existing transactions that have not yet been completed, such as pending payments, will still occur as they were originally scheduled.

•

Inactive for all transactions - no transactions, either new or existing, can be scheduled or processed for this bank account.

Credit Limit If the bank uses credit limits for this account, use the Credit limit field to enter the amount that the bank offers for this account.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create Bank Accounts - Additional Information Follow these steps to enter additional details on the bank account. 1. From the Bank accounts form, click the Additional identification FastTab. 2. In the SWIFT code field, enter the Society for Worldwide Interbank Financial Telecommunication code, also known as the Bank Identifier Code (BIC). 3. In the IBAN field enter the International Bank Account Number (IBAN). 4. Enter the bank or postal identification of the company in the Company ID field. 5. Enter the Post, Telegraph, and Telephone (PTT) account number in the Post account field. It is used when transferring money to a PTT bank account. 6. Enter the code stated by the Banks Automated Clearing System (BACS) in the Sort code field. This code is used for electronic bank payments for BACS 7. Use the Debit Direct ID field to enter the customer number of the company for debit direct. 8. Use the Clearing field to enter the control code of the bank.

Procedure: Create Bank Accounts - Currency Management Perform the following to enter more information about Currency management for the bank account. 1. Click the Currency management FastTab. 2. Select a Main account to which all bank account transactions are automatically posted. Corrections, which are entered during the reconciliation of the bank account with the bank account statement, are posted to the main account when the statement reconciliation is complete and posted 3. Select the More currencies check box to enable posting in more than one currency for this bank account. When you generate deposit slips, one deposit slip is generated for each currency. 4. Select the currency code from the Currency list. 5. Enter a maximum number of days for the bank to return a paymentrelated message in the Days field. The value determines the date in the Deadline field on the Open transaction editing form. 6. Select the Keep check box to keep the bank account number of the payment transaction if the transaction is removed from a remittance batch. 7. Enter the bank suffix in the Suffix field.

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Chapter 7: Cash and Bank Management Setup 8. Enter the bank-issued drawer code in the Drawer field. 9. In the Discounting maximum field, enter an amount for the maximum remittance for discount amount granted for the current bank. The amount is displayed in the Remittance journal. NOTE: The values in the Days, Suffix, and Drawer fields all default from the Bank group, if defined.

FIGURE 7.6 CURRENCY MANAGEMENT

Procedure: Create Bank Accounts - Other Perform the following to complete the remaining bank account setup. 1. From the Bank accounts form, click the Negotiable instrument FastTab. 2. Select the journal to hold the generated remittance fees from the Fee journal list. 3. Enter any additional information about fees and the ledger accounts to which the application posts the fees as required by the company in the remaining fields on the Negotiable instrument FastTab. 4. Click the Address FastTab and enter the address for the bank. 5. Click the Contact information FastTab and enter the information for the bank group's contact person.

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Lab 7.2 - Create a Bank Group and Bank Account Scenario Contoso has opened a new bank account. The bank account will operate primarily in Chinese Yuan (CNY), but may operate in other currencies. Annie, the bookkeeper, must create a new bank group and new bank account in Microsoft Dynamics AX for this bank. Annie does not have address information for the bank account, but she does have the following specifications: •

For the bank group: o o

•

The bank group name is CHTB for Chinese Trade Bank. The bank group routing number is 9876.

For the bank account: o o o o

The bank account name is Bank Account - CNY. The bank account is part of the Chinese Trade Bank group. The bank account number is 433090321489. Postings should use a new balance account called Bank account CNY.

Challenge Yourself! 1. Create the new bank group. 2. Create the new bank account.

Need a Little Help? 1. Add a new account for Cash in bank - CNY to the Chart of accounts. 2. Create the new bank group and assign the Chinese Yuan (CNY) to the group. 3. Create the new bank account, which is part of the CHTB bank group. Select the option to enable posting in more than one currency for this bank account.

Step by Step Create a new account for Cash in bank - CNY to the Chart of accounts. 1. Click General ledger, click Common, and then click Main accounts. 2. Click the Main account button to create a new record. 3. In the Main account field, enter 110115. 4. In the Name field, enter Bank Account – CNY. 5. Click the General FastTab and select Balance sheet in the Main account type field.

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Chapter 7: Cash and Bank Management Setup 6. Click the Setup FastTab. 7. Click the arrow in the Currency field, click the All tab, and then click CNY. 8. Close the form. Create the new bank group and assign the Chinese Yuan (CNY) to it. 1. Click Cash and bank management, click Setup, and then click Bank groups. 2. Click the New button to create a new record. 3. In the Bank groups field, enter CHTB. 4. Enter 9876 in the Routing number field. 5. In the Description field, enter Chinese Trading Bank. 6. Click the General FastTab. 7. From the Currency list select CNY. 8. Close the Bank groups form. Create the new bank account that is part of the CHTB bank group. 1. From the Navigation pane, click Cash and bank management, click Common, and then click Bank accounts. 2. Click the Bank Account button to create a new record. 3. In the Bank account field, enter CNYBANK. 4. In the Name field, enter Bank Account - CNY. 5. Click the Bank groups arrow and select CHTB. 6. The Routing number field automatically will display 9876. 7. In the Bank account number field, enter 433090321489. 8. Click the Currency management FastTab. 9. Click the Main account field arrow and select 110115. 10. The Currency field automatically displays CNY, which defaults from the bank group. 11. In the More currencies field, select the check box to enable posting in more than one currency for this bank account. 12. Close the form.

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Check Layout Use the Check layout form to set up the check layout for the bank accounts. You can define a different check layout for each bank account.

FIGURE 7.7 CHECK LAYOUT FORM

Procedure: Define the Check Number Perform the following to define the check numbering. 1. To access the Check layout form, first access the Bank accounts form by clicking Cash and bank management, click Common, and then click Bank accounts. 2. Double-click on a Bank account. 3. On the Action Pane, click the Setup tab, and then click Check. 4. Select the method to use for generating check numbers from the Check number method list. Select either method: o Fixed: use this method when you have preprinted checks. Before you can use checks for payment, they must be created by clicking Check numbers from the Set up tab on the Action Pane in the Bank accounts form. o Free: use this method when you do not have preprinted checks. Check numbers are automatically proposed when you use checks for payment.

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Chapter 7: Cash and Bank Management Setup Procedure: Define Check format To define the check format, follow these steps: 1. In the Check layout form, select a layout for the check in the Check form field. 2. Enter the length of the paper on which the check is printing in the Paper length field. 3. Select the unit in which the paper size is measured from the Paper length unit list 4. Enter the starting position on the paper where the check must be printed in the Check start position field. 5. Enter the unit in which the start position is measured from the Unit for the start position of the check list. EXAMPLE: To start the check 3 inches from the top of the paper, enter 3.00 in the Check start position field and select 'Inch' in the Unit for the start position of the check field. 6. Enter either 1 or 2 to indicate whether to print one or two slip text copies in the Number of slip copies field. Even if you enter a number larger than two, no more than two copies can be printed at the same time. BEST PRACTICES: Print two slip texts so that you can keep one and send the other. 8. In the Prefix field, enter the text to print in front of the amount on the check. For example, if you are entering USD in this field and the check amount is 1000.00, the printer will print USD 1000.00 on the check. 9. From the Ruler list, select one of the following rulers to display when you test print. o None: shows no ruler on test prints. o cm: shows the ruler in centimeters. o Inches: shows the ruler in inches.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Select the Fields to Print on the Check Perform the following to select the fields that print on the check. 1. From the Check layout form, click the Setup tab. 2. Select from the following list of check boxes for every field to be printed on the check. o Bank account o Bank name o Bank number o Company name o Company logo If you select the Company logo check box, click the Company logo button to select the company logo to print on the checks. From the Image form, click the Change button to select the file that contains the company logo. 3. Click the Codes tab. 4. Select the option to print ABC codes on the check. For each check box selected, enter the associated routing number to print on the check.

FIGURE 7.8 CHECK LAYOUT FORM, SETUP TAB

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Chapter 7: Cash and Bank Management Setup Procedure: Define MICR Options Perform the following to define MICR options. 1. From the Check layout form, click the Codes tab. 2. Select the Print MICR line check box to print the MICR line on the check. 3. Enter the following information: o o o

Leading zeros: indicate whether the MICR line contains leading zeros. Length of check number: indicate the number of characters entered in the MICR line for the check number. MICR-line: enter the complete MICR line, which includes the delimiters. The check number cannot be entered because it is unique to each check. Designate the place for the check number in the MICR line with the character sequence %1.

NOTE: The MICR line can be included only if the check is to be printed on blank paper without preprinted information, such as watermarks.

Procedure: Define Signatures Perform the following to define signatures. 1. From the Check layout form, click the Signatures tab. 2. Select the check box for Print first signature or Print second signature to print signatures on the check. 3. Enter the highest amount that each signature is allowed in the First amount limit and Second amount limit fields.

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Financials I in Microsoft Dynamics® AX 2012 4. If the Print first signature or Print second signature check boxes are selected, click the Signature button to select the signatures to print on the checks. 5. For each selected signature, click the Change button to select the file that contains the signature.

FIGURE 7.9 CHECK LAYOUT FORM, SIGNATURE TAB

Procedure: Print a Test Check When the check layout is complete, click the Print test button to preview the check layout.

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Chapter 7: Cash and Bank Management Setup

Lab 7.3 - Define a Check Layout During this lab you will define a check layout. Scenario Set up the check layout for the new bank account that you created in the previous lab. Use these check layout requirements. •

Pre-printed checks cannot be used for this account.

•

Checks must be printed in the U.S. format.

•

The paper must be 8.5 inches long.

•

The checks must print two inches under the top of the page.

•

Two slip copies are required for each check.

•

Before the check amount, the letters CHY must be displayed.

•

The bank account, name, and number must be printed on the check.

Challenge Yourself! 1. Define the check layout for CNYBANK. 2. Preview the check layout.

Need a Little Help? 1. 2. 3. 4.

From the Bank accounts form, select CNYBANK. Open the Check layout form. On the General and Setup tabs, enter the specified information. Print a preview of the check layout.

Step by Step 1. Click Cash and bank management, click Common, and then click Bank Accounts. 2. Double-click the line for CNYBANK. 3. Click the Setup tab, then click the Check button on the Action Pane. 4. In the Check number method field, select Free, because pre-printed checks are not used. 5. In the Check form field, select U.S. check format. 6. In the Paper length field, enter 8.5. 7. In the Paper length unit field, select Inch. 8. In the Check start position field, enter 2. 9. In the Unit for the start position of the check field, select Inch. 10. In the Number of slip copies field, enter 2.

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Financials I in Microsoft Dynamics® AX 2012 11. In the Prefix field, enter CHY. 12. Click the Setup tab. Select the check boxes for: o Bank account o Bank name o Bank number 13. Click the Print test button to preview the check layout.

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Chapter 7: Cash and Bank Management Setup

Summary This course focuses on how banking functions are structured in Microsoft Dynamics AX. Companies define bank transaction types to manage transactions, such as the following: •

Deposits

•

Fees

•

Payments

Companies then create groups of transaction types for analysis and reporting. In Microsoft Dynamics AX, companies have the option to create bank groups for banks in which they hold more than one bank account. The bank account window holds all the information about each company bank account and provides quick access to detailed information about each account, which includes transactions and current balance. For each bank account from which checks are printed, companies define how the checks for that account will look.

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Test Your Knowledge Test your knowledge with the following questions. 1. What is a Bank Transaction Group?

2. What is a Bank Group?

3. If you are using pre-printed checks, what method do you select in the Check number method field? ( ) Variable ( ) Fixed ( ) Print ( ) Original 4. How many signatures can the application print on a check? (Select all that apply) ()1 ()2 ()3 ()4

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Chapter 7: Cash and Bank Management Setup

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 1. What is a Bank Transaction Group? MODEL ANSWER: A bank transaction group is used to set up groups of different bank transaction types. In the bank statement reconciliation, totals can be calculated for each bank transaction group and for each bank transaction type. 2. What is a Bank Group? MODEL ANSWER: A bank group is used when several bank accounts share the same address information or routing number. When you create a new bank account and enter the bank group, the bank group information is copied to the account automatically.. 3. If you are using pre-printed checks, what method do you select in the Check number method field? ( ) Variable (•) Fixed ( ) Print ( ) Original 4. How many signatures can the application print on a check? (Select all that apply) (√) 1 (√) 2 ()3 ()4

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Chapter 8: Cash And Bank Management Daily Procedures

CHAPTER 8: CASH AND BANK MANAGEMENT DAILY PROCEDURES Objectives The objectives are: •

Create checks.

•

Delete checks.

•

Create a bank deposit entry.

•

Void checks.

•

Create a refund that prints a check.

•

Use bank remittances.

•

Reverse a posted check payment.

•

Reconcile bank statements.

Introduction Within the Cash and Bank Management module, users manage the financial transactions between the company and its bank accounts. These transactions include the following: •

Processing payments to bank and ledger accounts

•

Processing payments from bank and ledger accounts

•

Reconciling the records of financial transactions from banks with the records in Microsoft Dynamics AX

This section discusses the various processes available to manage bank transactions in Microsoft Dynamics AX®.

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Financials I in Microsoft Dynamics® AX 2012 Scenario At Contoso Annie is the Bookkeeper that manages the creation, deletion, and voiding of checks and electronic payments. Annie creates check refunds for customers when required and processes payments to vendors. Also, when Contoso receives a bank statement, Annie reconciles the statement with the transactions in the application.

Create Checks In Microsoft Dynamics AX, the Check form provides access to view existing check transactions and to create new checks.

Procedure: Create Checks Perform the following steps to create checks. 1. Click Cash and bank management, click Common, and then click Bank accounts. 2. Double-click on the Bank account from which the checks will be written. 3. On the Action Pane, click the Setup tab. 4. Click the Check numbers button. This option is only available if the Check number method is set to Fixed in the Check layout form. If the method is set to Free, the check numbers option is not available. To verify, click the Check button on the Action Pane. 5. In the Creation of check form, the selected bank account is displayed in the Bank account field. 6. In the From field, enter the check number for the first check to be created. 7. In the Quantity field, enter the number of checks to be created. 8. Click OK. EXAMPLE: To create a total number of 1250 checks starting with check number 2000, in the From field, type 2000, and in the Quantity field, type 1250. This will create checks numbered 2000 to 3249. NOTE: As soon as created checks are available, checks generate through the Accounts Payable payment journal. See the Accounts Payable help for more information on this process.

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Chapter 8: Cash And Bank Management Daily Procedures

Delete a Check After users create a check in Microsoft Dynamics AX, they can delete the check if it has not been used. Checks created but not used have the status of Created in the Status field.

Procedure: Delete a Check Perform the following steps to delete a check. 1. Click Cash and bank management, click Common, and then click Checks. 2. Select the bank account from which to delete a check. 3. Click the Delete checks button. 4. In the From field, enter the number of the first check to delete. 5. In the To field, enter the number of the last check to delete. 6. To verify the deletion, type Delete in the Type Delete if you want to delete field, and then click OK. NOTE: If you include checks that have a status other than Created in the interval between the From and To fields, no checks are deleted and the Delete checks job is canceled.

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Lab 8.1 - Create and Delete a Check Scenario Annie, the Bookkeeper at Contoso, must complete a check run that consists of 15 checks, starting with check number 101. The checks are from the EUR OPER bank account. After Annie created the checks, she learned that only 12 of the checks were needed. The last 3 checks must be deleted.

Challenge Yourself! Help Annie to create checks, and then delete the unnecessary checks.

Need a Little Help? Create 15 checks for the EUR OPER bank account, starting with check number 101. Delete the final three checks.

Step by Step Create 15 checks for the EUR OPER bank account, starting with check number 101. 1. Click Cash and bank management, click Common, and then click Bank accounts. 2. Double-click on the EUR OPER Bank account. 3. On the Action Pane, click the Setup tab. 4. Click the Check numbers button. 5. In the From field, type 101. 6. In the Quantity field, type 15. 7. Click OK. 8. Click the Close button in the Infolog.

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Chapter 8: Cash And Bank Management Daily Procedures Delete the final three checks. 1. Click Cash and bank management, click Common, and then click Checks. 2. Click on the EUR OPER Bank account. 3. Click the Delete checks button. 4. In the From field, type 113. 5. In the To field, type 115. 6. Type Delete in the Type Delete if you want to delete field, and then click OK. 7. Click the Close button in the Infolog.

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Deposit Slips A deposit slip is a document used to deposit checks, credit card notes, and cash into a bank account. Use the Deposit slip form to view and manage deposit slips for payments into bank accounts.

FIGURE 8.1 DEPOSIT SLIP FORM

Procedure: Create a Deposit Slip Perform the following steps to create a deposit slip. 1. Click Accounts receivable, click Journals, click Payments, and then click Payment journal. 2. Click the New button to create a new record. 3. Select a journal name from the Name list. 4. Click the Lines button to access the Journal voucher form. Or, click the Enter customer payments button to enter the payment in the Enter customer payments form. 5. From the Journal voucher form, in the Account field, select the account of the customer who made the deposit. 6. Select a Description to attach information about the transaction to the deposit. 7. In the Credit field, type the deposit amount. 8. Select the Use a deposit slip check box. 9. In the Offset account type field, select Bank. 10. In the Offset account field, select the bank account in which to make the deposit.

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Chapter 8: Cash And Bank Management Daily Procedures 11. In the Currency field, enter the currency code of the bank account in which to make the deposit. 12. Select the Method of payment and Payment specification. 13. In the Payment reference field, enter a reference for the payment if applicable. 14. On the General, Payment, Payment Fee, and Bank tabs, enter any applicable information. 15. Click the Post button, and then click Post. 16. Close the Infolog form. 17. Click Functions, and then click Deposit slip. 18. In the dialog box, enter the date in the Bank statement date field, 19. Click OK to view the deposit slip.

Procedure: Cancel a Deposit Slip Payment You may want to cancel a deposit slip payment if a customer payment is invalid. If you have already reconciled the deposit slip in the bank statement, you cannot cancel the payment. Perform the following steps to cancel a deposit slip. 1. Click Cash and bank management, click Common, then click Deposit slips. 2. Select the line with the deposit slip to cancel. When you cancel a deposit slip payment, the single payment is canceled, not the entire deposit slip. Other deposit lines remain unchanged. 3. Click the Cancel payment button. 4. In the Cancel payment form, select a reason for cancellation from the Reason code list. NOTE: The system may require a Reason code if the Require reasons for deposit slip payment cancellations check box is selected on the General FastTab of the Cash and bank parameters form. 5. Accept the default value or modify the value in the Reason comment field. 6. Depending on which method your organization prefers and whether the Use review process for deposit slip payment cancellations check box is selected on the General tab of the Cash and Bank management parameters form, do one of the following: o Click the OK button to post the cancellation. o Enter a Journal name, and then click the OK button to send the cancellation for review.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Review a Deposit Slip Payment Cancellation You can submit a deposit slip payment cancellation for review. The system requires a review if the Use review process for deposit slip payment cancellations check box is selected on the General FastTab of the Cash and bank management parameters form. During review, you can either approve and post the journal, or reject the cancellation. Perform the following steps to review cancellations. 1. Click Cash and bank management, click Journals, and then click Deposit slip payment cancellations. 2. Select the cancellation journal to review and then click the Lines button. 3. Review the cancellation and select one of the following approval options: o To approve and post the cancellation journal, click the Post button, and then click Post or Post and transfer. o To reject the cancellation, click the Delete button on the toolbar.

Procedure: Verify a Deposit Slip Payment Cancellations Perform the following steps to verify that the system has canceled the deposit. 1. Click Cash and bank management, click Common, and then click Deposit slips. 2. Select the line for the canceled deposit slip in the Deposit slip form, and then click the General tab. 3. Verify that a check mark is in the Canceled field.

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Chapter 8: Cash And Bank Management Daily Procedures

Lab 8.2 - Create a Deposit Slip Scenario Annie, the Bookkeeper for Contoso, must enter a deposit for Customer 2022 for 1000 USD. The deposit was made to the USA OPER bank account and the payment reference is 1987. Annie realizes that she entered the deposit slip in error. The payment reference should be 1988.

Challenge Yourself! Help Annie complete the following: 1. 2. 3. 4.

Create a customer payment journal View the deposit slip to verify it exists Cancel the deposit slip Verify that the system canceled the deposit slip

Need a Little Help? 1. Select the Use a deposit slip check box in the Customer payment journal. 2. Click the Cancel payment button from the Deposit slip form to cancel the deposit slip.

Step by Step Create a customer payment journal: 1. Click Accounts receivable, click Journals, click Payments, and then click Payment journal. 2. Click the New button to create a new record. 3. Select ARPay in the Name list. 4. Click the Lines button to access the Journal voucher form. 5. In the Account field, select customer account 2022. 6. In the Credit field, type 1000. 7. Select the Use a deposit slip check box. 8. Make sure that the Offset account field contains USA OPER. 9. Make sure that the Currency field contains USD. 10. In the Payment reference field, type 1987. 11. Click the Post button, and then click Post. 12. Click the Close button in the Infolog.

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Financials I in Microsoft Dynamics® AX 2012 Verify that the deposit slip is created by viewing it: 1. Click the Functions button, and then click Deposit slips. 2. In the Deposit slip form, accept the default date, and then click OK. 3. Click OK again to view the deposit slip. Cancel the deposit slip: 1. Click Cash and Bank management, click Common, then click Deposit slip. 2. Select the line that contains the deposit slip to cancel. 3. Click the Cancel payment button. 4. Select ERROR in the Reason code field. 5. Select BA_Dep_Rev in the Journal name field. 6. Click OK. 7. Click the Close button in the Infolog. Verify that the system canceled the deposit slip: 1. Click Cash and bank management, click Common, and then click Deposit slips. 2. Select the line for the canceled deposit slip in the Deposit slip form, and then click the General tab. 3. Verify that a check mark is in the Pending Cancellation field.

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Chapter 8: Cash And Bank Management Daily Procedures

Void Unposted Checks After printing or trying to print checks, you may be unable to use them. For example, if a check is damaged while it is printed, you must void the unused checks.

Procedure: Void Unposted Checks Perform the following steps to void a check. 1. In the appropriate payment journal, select the lines ordered for the printing of the checks. For example, to void an unposted Accounts Payable payment journal, click Accounts payable, click Journals, click Payments, and then click Payment journal. 2. Click the Lines button and then click the Payment status button, and then click Rejected. The application removes the check numbers from the journal. NOTE: This procedure can be used only if you have not posted the checks.

Procedure: Verify Checks Are Void Perform the following steps to verify the checks are voided. 1. Click Cash and bank management, click Common, then click Checks. 2. Select the relevant bank account, and very the Status field, look for checks with the status of Void.

Refund Checks Under certain circumstances, companies must generate payment refunds to their customers or process refunds they received from their vendors. This usually occurs when credit notes, overpayments, and bonuses are involved in third-party transactions. In Microsoft Dynamics AX users can create a check refund that prints out a check. The refunding feature is implemented in payment journals for customers.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Check Refund Perform the following steps to create a check refund for a customer: 1. Create a customer payment journal line with a negative amount. To access the customer payment journal click Accounts receivable, click Journals, click Payments, and then click Payment journal. 2. Click the New button to create a new record, and then name the journal. 3. Click the Lines button to access the Journal voucher form. 4. From the Journal voucher form, in the Account field, select the account of the customer who will receive the refund. 5. Select a Description to attach information about the transaction to the check refund. 6. In the Credit field, enter a negative amount for the refund amount. 7. In the Offset account type field, select Bank. 8. In the Offset account field, select the bank account from which to draw the refund. 9. In the Currency field, enter the currency code of the bank account from which to draw the refund. 10. Modify the Method of payment to Refund. 11. On the General, Payment, Payment Fee, and Bank tabs, enter any applicable information. 12. Use the Financial Dimensions button to enter financial dimensions for the journal. 13. Click the Functions button, and then click Generate payments. 14. In the Method of payment field, select Refund. 15. Select the Bank account from which to draw the refund. 16. Click OK to generate the check. 17. Click the Post button, and then click Post. NOTE: Before you create a check refund, set up a Method of payment to refund a check to a customer if you have not done this already. For more information about Methods of payment, review the Accounts Receivable Setup and Accounts Payable Setup courses.

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Chapter 8: Cash And Bank Management Daily Procedures

Lab 8.3 - Check Refund Scenario Contoso received an overpayment on account from Triangle Headquarters. Annie, the Bookkeeper, must issue a refund check to Triangle Headquarters for 396 USD. The system should draw the refund from the US Operating Bank Account.

Challenge Yourself! Help Annie create a refund check to pay Triangle Headquarters the overpayment amount of 396 USD.

Need a Little Help? 1. From the customer payment journal, create a new journal. 2. Create in the Journal voucher form, create a line for Triangle Headquarters for the refund amount of 396 USD. 3. Enter the amount as a negative value to indicate that it is a refund. 4. Change the Method of payment to Refund. 5. Use the Functions button to create the check. 6. Post the refund amount.

Step by Step 1. To access the customer payment journal click Accounts receivable, click Journals, click Payments, and then click Payment journal. 2. Click the New button to create a new record. 3. In the Name field, select ARPay. 4. Click the Lines button to access the Journal voucher form. 5. From the Journal voucher form, in the Account field, select 2022, Triangle Headquarters. 6. In the Credit field, type -396. 7. Verify that Bank is selected in the Offset account type field and USA OPER display in the Offset account field. 8. From the Method of payment list, select Refund. 9. Click the Functions button, and then click Generate payments. 10. In the Method of payment field, verify that Refund is selected. 11. In the Bank account field, verify that USA OPER is selected 12. Click OK to generate the check. 13. Close the Infolog or Warning message. 14. Click the Post button, and then click Post.

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Bank Remittance Use the Remittance form to view the remittances made to company bank accounts.

Procedure: Create a Bank Remittance Perform the following steps to create a bank remittance entry. 1. Click Accounts receivable, click Journals, click Payments, and then click Remittance. 2. Click the New button to insert a new record. 3. In the Method of payment field, select the method of payment to use for this payment. 4. In the Bank account field, select the bank account for this remittance. 5. The Printed field displays the date in the printed payment advice. NOTE: For each step, you can define the minimum amount of information that the user must enter before he or she can continue to the next step. To ensure that the bank advice is printed before posting, set a post validation for print. 6. The File creation date field displays the date that the file was created. NOTE: For each step, you can define the minimum amount of information that must be filled in before continuing to the next step. To ensure that the file is created before posting, set a post validation for file creation date. 7. Click the General tab. 8. In the Payment step identification field, select the step associated with the payment. 9. In the Currency field, verify that the currency code used for the payment is displayed.

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Chapter 8: Cash And Bank Management Daily Procedures 10. In the Remittance format field, select the remittance format for the payment. 11. Click the Posting button, and then click Post to post the remittance.

FIGURE 8.2 REMITTANCE FORM

Payment Reversal Occasionally, you must reverse a check after you have made a payment and posted the check. For example, the delivery company may have the check or a member of the accounting staff may notice that an employee paid the check in error. Microsoft Dynamics AX provides a function to reverse posted check payments. There are two methods available for reversing posted checks. •

Reversals are posted immediately when you click the Payment reversal button in the Check form.

•

When you click the Payment reversal button in the Check form, the reversal first is sent to the Check reversals journal in Cash and bank management, where a reviewer can then post or reject the reversal.

You might reverse a check to reissue a payment made to a vendor. You can reverse only posted checks that have a status of Paid. Reversing differs from deleting or voiding checks because you can delete only checks that have a status of Created, and you can void only unposted checks.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Reverse a Payment Perform the following steps to reverse a posted check. 1. Click Cash and bank management, click Common, and then click Checks. 2. Select the check to reverse. 3. Click Payment reversal. 4. Enter the date and select a reason for the reversal. If your organization uses the Check reversals journal for review, you must also select a journal name. 5. Click OK to post the reversal or send the reversal for review, depending on which method your organization uses.

Procedure: Review a Payment Reversal It is possible to either approve and post the journal, or reject the reversal. To review reversals, follow these steps: 1. Click Cash and bank management, click Journals, and click Check reversals. 2. Select the reversal journal to review and then click Lines. 3. Review the reversal and select one of the following approval options: o To approve and post the reversal journal, click the Post button and then click Post or Post and transfer. o To reject the reversal, click the Delete button. 4. Close the form and then click the Delete button again to delete the journal header. 5. Close the form. NOTE: Deleting the journal removes the reversal from the system, but the original check remains in the Check form. The status of the check is no longer Pending cancellation.

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Chapter 8: Cash And Bank Management Daily Procedures

Reconcile a Bank Account Bank Reconciliation is an important component of the Microsoft Dynamics AX financial management system. Bank Reconciliation contains the features that provide the following functions: •

Enter additional transactions that affect balances

•

Automate the reconciliation process

Reconcile Overview It is not possible to reconcile a bank account statement with a bank account if any of the checks or deposit slip payments that are listed on the statement currently have a status of Pending cancellation. After a reviewer posts or rejects a check reversal or deposit slip payment cancellation, the status is no longer Pending cancellation, and it is possible to reconcile the bank account.

Procedure: Begin a Bank Account Reconciliation Perform the following steps to reconcile a bank account. 1. Click Cash and bank management, click Common, and then click Bank accounts. 2. Select the bank account for which to reconcile the bank account statement. 3. Click the Account reconciliation button on the Action Pane and enter information as appropriate. 4. In the Bank statement date field, enter the date from the bank account statement. 5. In the Bank statement field, enter the number of the bank account statement. 6. In the Currency field, verify that the application inserts the correct currency for the selected bank account. 7. In the Ending Balance field, enter the total ending balance on the bank account statement.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: The Reconciled field displays the date of account reconciliation. The system enters the date automatically when you post the transaction lines that reconcile company bank records with the bank statement.

FIGURE 8.3 BANK ACCOUNT STATEMENT FORM

Procedure: Reconcile Transactions As soon as you have entered information about the bank reconciliation, you can review the transactions in the bank account instead of the transactions on the bank statement. Perform the following steps to review transactions. 1. From the Bank statement form, click the Transactions button. 2. Select the transactions to include in the reconciliation by selecting the Cleared check box. 3. To select a check interval to clear for reconciliation, click the Mark check interval button. In the Mark check interval for reconciliation form, enter the range of cleared check numbers in the From and To fields. NOTE: You cannot change the amount of the transaction during reconciliation. To edit the amount of a transaction during reconciliation, enter the corrected amount in the Correction Amount field. Ensure that you enter the correction in the currency used for the account.

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Chapter 8: Cash And Bank Management Daily Procedures Procedure: Enter Missing Transactions Sometimes transactions that have not been recorded in the system appear on the bank statement. Perform the following steps to create transactions that have not been recorded in the account. 1. Click the New button. 2. Select the correct transaction type in the Bank Transaction Type list. 3. Enter the date of the transaction in the Date field. 4. If you used a check for the transaction, enter the check number in the Check number field. Click the Checks button to view a list of the checks for this account. 5. In the Deposit Slip field, enter the number for the deposit slip that a payment should be associated with, if applicable to the transaction. Click the Deposit Slips button to view a list of the deposits for this account. 6. In the Amount in transaction currency field, enter the transaction amount in the specified currency. 7. In the Main Account field, indicate which ledger account the system should offset when you create the new transactions during reconciliation. The corrections post when you update the reconciliation. 8. In the Description field, enter information that describes the transaction. 9. On the Financial dimensions tab, enter any required dimensions for the transaction. NOTE: When you create transactions manually during reconciliation, the application automatically will assign a voucher number, from the number sequence and will mark it Bank-account reconciled. The voucher number is displayed on the General tab.

Procedure: Complete a Bank Account Reconciliation After you have reconciled the transactions, click the Reconcile account button to perform the reconciliation of the Bank Account.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Print Reconciliation Reports Perform the following steps to print reconciliation reports. 1. Click the Print button, and then click Reconciliation summary to print a bank reconciliation report. In the Bank reconciliation form, select the fields to include in the report: o Reconciliation summary o Cleared transaction detail o Uncleared transaction detail 2. Click the Print button, and then click Bank reconciliation to print a report that takes non-reconciled transactions into account and shows transactions after the reconciliation date.

Summary This course covers the main procedures in the Cash and Bank Management module in Microsoft Dynamics AX. The application provides functionality to manage check payments, as well as procedures for resolving special situations with checks. Users can delete, refund, and void checks, in addition to generating and issuing checks according to company specifications. In addition, because the system records all financial transactions, companies can use the bank reconciliation function to match internal company records of transactions against bank statements.

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Chapter 8: Cash And Bank Management Daily Procedures

Test Your Knowledge Test your knowledge with the following questions. 1. Annie, the Bookkeeper at Contoso, must create checks numbered 2361 through 2366. What values must she enter in the From and Quantity fields to do this? ( ) Enter 2361 in the From field and 5 in the Quantity field ( ) Enter 2366 in the From field and 5 in the Quantity field ( ) Enter 2361 in the From field and 6 in the Quantity field ( ) Enter 2366 in the From field and 6 in the Quantity field 2. What status must a check have for you to delete it? ( ) Void ( ) Processed ( ) Created ( ) Invoiced 3. How can you tell if a deposit slip is canceled?

4. Create a check refund by placing the following steps in order: Step: _____: Create a customer payment journal line with a negative amount. _____: Post the payment journal. _____: Modify the method of payment to Check Refund on the negative payment journal line. _____: Generate the refund check.

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Financials I in Microsoft Dynamics® AX 2012 5. When you perform bank reconciliation, how do you exclude transactions that are in the application but not on the bank statement from the reconciliation? ( ) Open the transaction ( ) Delete the transaction ( ) Select the Cleared check box ( ) Do not select the Cleared check box 6. Explain the circumstances in which you would delete, void, or reverse a check.

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Chapter 8: Cash And Bank Management Daily Procedures

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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Financials I in Microsoft Dynamics® AX 2012

Solutions Test Your Knowledge 1. Annie, the Bookkeeper at Contoso, must create checks numbered 2361 through 2366. What values must she enter in the From and Quantity fields to do this? ( ) Enter 2361 in the From field and 5 in the Quantity field ( ) Enter 2366 in the From field and 5 in the Quantity field (•) Enter 2361 in the From field and 6 in the Quantity field ( ) Enter 2366 in the From field and 6 in the Quantity field 2. What status must a check have for you to delete it? ( ) Void ( ) Processed (•) Created ( ) Invoiced 3. How can you tell if a deposit slip is canceled? MODEL ANSWER: On the Deposit slip form, on the General tab, the Canceled check box is selected. 4. Create a check refund by placing the following steps in order: Step: 1

: Create a customer payment journal line with a negative amount.

4

: Post the payment journal.

2 : Modify the method of payment to Check Refund on the negative payment journal line. 3

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: Generate the refund check.

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Chapter 8: Cash And Bank Management Daily Procedures 5. When you perform bank reconciliation, how do you exclude transactions that are in the application but not on the bank statement from the reconciliation? ( ) Open the transaction ( ) Delete the transaction ( ) Select the Cleared check box (•) Do not select the Cleared check box 6. Explain the circumstances in which you would delete, void, or reverse a check. MODEL ANSWER: Checks that are created but not used have the status of Created in the Status field. Checks with a Created Status can be deleted. After printing or trying to print checks, but before posting, checks may be voided. This may happen if checks are damaged in printing. If payment has been made and a check has been posted, you can reverse it.

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Chapter 9: Accounts Payable Setup

CHAPTER 9: ACCOUNTS PAYABLE SETUP Objectives The objectives are: •

Create a payment schedule.

•

Create terms of payment.

•

Create a payment day.

•

Set up a cash discount.

•

Create a payment fee.

•

Create a method of payment.

•

Set up vendor groups.

•

Set up posting profiles.

•

Create a new vendor.

Introduction This course describes the different Accounts Payable setup options in Microsoft Dynamics® AX. It shows setup procedures and defaults used throughout the Accounts Payable module. This course explains topics such as payment options, vendor setup and posting profiles. Microsoft Dynamics AX offers extensive functionality for setting up different vendor payment options. These global payment options are used in the Accounts Payable and Accounts Receivable modules, and include the following: •

Payment schedules

•

Payment days

•

Terms of payment

•

Cash discounts

•

Methods of payment

•

Payment fees

This course also explains the vendor setup for efficient management of vendors and vendor transactions.

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Payment Schedule Use payment schedules to pay invoices in installments. Define the following to set up a payment schedule: •

Number of installments

•

Amount of each installment

•

Due date of each installment

A payment schedule consists of consecutive payments in set time intervals. The payments can be a: •

A set amount

•

A specified number of payments in which the amount owed is divided to create equal payments

For example, an invoice of 10,000 USD is recorded. It is paid at 2,000 USD each month until the balance is paid. During this period the invoice is not considered past due if the scheduled payments are made on time. This is also known as a finance plan, or contract payments.

Procedure: Create a Payment Schedule Perform the following to create a payment schedule: 1. To access the Payment schedules form, click Accounts payable, click Setup, click Payment, and then click Payment schedules. 2. Click the New button to enter a new record. 3. Enter a name to be used as identification of the payment schedule in the Payment schedule field. 4. Enter a description in the Description field. 5. Click the General FastTab. 6. In the Allocation list, select an allocation method: o Total - total amount outstanding on the invoice due. o Fixed amount - a specific, fixed amount is due for each payment on the specified payment dates. o Fixed quantity - payment of the total amount is divided into a fixed quantity of payments. o Specified - a specified amount is due on each specified payment date. If Specified is selected, the payment schedules and amounts must be defined on the Payment lines FastTab.

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Chapter 9: Accounts Payable Setup Depending on the value selected in the Allocation list, different fields are enabled on the General and Payment lines FastTabs.

FIGURE 9.1 PAYMENT SCHEDULES FORM

Procedure: Create a Total Payment Schedule If Total is selected in the Allocation list, no other fields are enabled on the General FastTab.

Procedure: Create a Specified Payment Schedule If the Specified option is selected in the Allocation list, Perform the following to complete the payment schedule setup: 1. From the Payment schedules form, click the General FastTab, in the Payment per list, select the date interval in Days, Months, or Years. The system uses this information when it calculates the due date of each installment. 2. Use the Sales tax allocation list to distribute the sales tax amount to the payment schedule installments. 3. Click the Payment lines FastTab to define the line information for the payment schedule, to designate how many different payments there should be, and to divide how much of the total should be paid in each payment. 4. Enter the time interval for each installment in the Quantity field. 5. Enter the value of the installment in the Amount in transaction currency field. Enter either the value of the installment as a percentage of the amount invoiced or as an absolute amount, depending on the value in the Percentage/Amount field. 6. Select whether the value entered is a percent or an absolute amount in the Percentage/Amount list.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Fixed Amount or Quantity Payment Schedule If Fixed amount or Fixed quantity is selected in the Allocation list, Perform the following to complete the payment schedule setup. 1. From the Payment schedules form, on the General FastTab, in the Payment per list, select the date interval in Days, Months, or Years. The system uses this information when it calculates the due date of each installment. 2. In the Change field, enter the number of units related to the payment per value between the due dates of each installment. 3. If the Allocation field is set to fixed quantity, enter the fixed number of installments in the Number of payments field. 4. If the Allocation field is set to fixed amount, enter the fixed amount in the Amount currency field. 5. In the Minimum field, enter the minimum installment amount. Minimum amounts override calculated payment amounts.

Terms of Payment Use the Terms of payment form to define all the terms of payment used by a company and the vendors. Use a term of payment for calculation of a due date based on the date of the invoice. Specify terms of payment for each of the following: •

Vendor in the Vendors form.

•

Customer in the Customers form.

•

Purchase order in the Purchase order form.

•

Sales order in the Sales order form.

Scenario Contoso has a standard vendor payment term of Net 30 days. If an invoice with a Net 30 payment term ships goods on September 15, and the invoice is dated November 15, then payment is due December 15. With a Net 30 Days settlement, Contoso must pay the net due within 30 days of the invoice date, according to the settlement. After that date, if the payment is not completed, an interest charge of a specified percent per month may be added to the invoice. Other services charges may also apply.

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Chapter 9: Accounts Payable Setup Procedure: Create Terms of Payment Perform the following to create a term of payment: 1. Click Accounts payable, click Setup, click Payment, and then click Terms of payment. 2. Click the New button to create a new record. 3. In the Terms of payment field, enter a code or a short name for the term of payment. 4. Enter a descriptive name for the current terms of payment in the Description field.

FIGURE 9.2 TERMS OF PAYMENT FORM

Procedure: Create Terms of Payment - Setup Perform the following to define the setup information for a term of payment: 1. From the Terms of payment form click the Setup FastTab. 2. Select the method that is used to calculate the due date in the Payment method list. o Net o Current month o Current quarter o Current year o Current week o Cash on Delivery (C.O.D.) 3. Enter the number of months to add to the payment method to calculate the due date in the Months field.

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Financials I in Microsoft Dynamics® AX 2012 4. Enter the number of days to add to the payment method to calculate the due date in the Days field. For example, select Net and enter 20 in the Days field to pay a vendor 20 days after the invoice date. Or, select Current month to pay the vendor invoice during the month of the invoice date. To extend the period add days to the Days field. 5. Link a payment schedule to the term of payment in the Payment schedule list. The payment schedule defines how an invoiced amount is split into installments that must be paid in specific intervals. NOTE: If a term of payment is linked to a payment schedule, the rules set up in the term of payment are used to calculate the due date of the first installment. The rules set up in the payment schedule are used to calculate the due date of the following installments. 6. Select a payment day to be used for calculation of the due date in the Payment day list. The due date is always rounded up to the nearest specified date. The payment day can be specified: o For a specific day in the week o For a specific day in the month

Procedure: Create Terms of Payment - Language Perform the following to define additional language options for the terms of payment: 1. From the Terms of payment form, click the Translation button to translate the search name into more languages. For example, if a French language text is created the text is shown on invoices for all vendors that are set up with French as the language. 2. Click the New button to enter a new record. 3. In the Language field, select the language that you are translating. 4. In the Text field, enter the translated text.

Procedure: Create Terms of Payment - C.O.D. If the C.O.D. (Cash on delivery) payment method is selected, follow these steps, to complete the term of payment setup. 1. Select the Cash payment check box to indicate if payments should be made in cash and not by check. 2. In the Ledger posting area from the Cash field, select a ledger account for settlement of invoices that will be used for cash payment.

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Chapter 9: Accounts Payable Setup

Payment Days Use payment days to define the payment day used for calculating due date. The due date always is rounded up to the nearest specified date. Payment day can be specified for one of the following: •

Day in the week

•

Day in the month

Procedure: Create a Payment Day Perform the following to create a payment day. 1. Click Accounts payable, click Setup, click Payment, and then click Payment days. 2. Click the New button to create a new record. 3. In the Payment day field, enter a short identification of the payment day and enter a description of the payment day identification in the Description field. 4. On the Payment day lines FastTab, click the Add button to add a new line to the payment day. 5. Select between Week and Month in the Week/Month field. If Week is selected, enter a value from the Day of Week field, and if Month is selected, enter in the Day of month field a value between 1 and 31.

FIGURE 9.3 PAYMENT DAYS FORM

Set up the payment day in the Terms of Payment form on the Setup FastTab to define the payment date used for calculation of the due date.

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Financials I in Microsoft Dynamics® AX 2012

Lab 9.1 - Terms of Payment Scenario Cassie, the Accountant at Contoso, has been asked to set up a new term of payment for a vendor that Contoso has been slow in paying. The vendor, Southbridge Insurance Co., now requests that payments are paid in 12 days.

Challenge Yourself! Help Cassie create the new term of payment titled N012 and assign it to the vendor.

Step by Step Create the new term of payment and name it N012. 1. Click Accounts payable, click Setup, click Payment, and then click Terms of payment. 2. Click the New button. 3. In the Terms of payment field, type N012. 4. In the Description field, type Net 12 days. 5. Click the Setup FastTab. 6. Click the Payment method arrow, and then click Net. 7. In the Days field, type 12. 8. Close the form. Assign the new term of payment to the vendor Southbridge Insurance Co. 1. Click Accounts Payable, click Common, then click Vendors, and then click All vendors. 2. Double- click the record for vendor 8004 (Southbridge Insurance Co.). 3. Click the Edit button on the Action Pane. 4. Click the Payment FastTab. 5. In the Terms of payment list, select the newly created term of payment N012. 6. Close the form.

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Chapter 9: Accounts Payable Setup

Cash Discounts The following information applies to cash discounts: •

Accrue if a company meets the vendor payment terms on time, or are given to customers when they pay their invoices in a specified period.

•

Link to the Customer tables and Vendor tables.

•

Post to the ledger account specified for the cash discount automatically if an invoice is settled on time.

Scenario Contoso obtains a cash discount if it pays vendor invoices within certain dates. Contoso has set up the following codes: •

5D10% - cash discount of 10 percent when the amount is paid within five days.

•

10D5% - cash discount of five percent when the amount is paid within ten days.

•

14D2% - cash discount of two percent when the amount is paid within 14 days.

The three cash discounts occur sequentially as the cash discount date nears. However, only one cash discount is granted. To specify the cash discounts following the 5D10% code, the 10D5% code is selected in the Next discount code list. On the 10D5% code, the 14D2% code is selected in the Next discount code list. Finally, on the 14D2% code the Next discount code is left blank.

Procedure: Set Up Cash Discounts Perform the following to set up cash discounts. 1. Click Accounts payable, click Setup, click Payment, and then click Cash discounts. 2. Click the New button. 3. Enter an alphanumeric code for the cash discount in the Cash discount field. For example, enter 7D4 to indicate the company receives a four percent discount if payment is made seven days before the due date. 4. Enter a brief description for the cash discount in the Description field. For example, enter 7 days - 4% Discount for the discount code 7D4. 5. Select the cash discount code used when the criteria for obtaining the current cash discount is exceeded in the Next discount code list.

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Financials I in Microsoft Dynamics® AX 2012 This selection lets you to define a set of cash discounts that are sequential.

FIGURE 9.4 CASH DISCOUNTS FORM

Procedure: Set Up Cash Discounts - Setup Perform the following to define setup options for cash discounts. 1. From the Cash discounts form click the Setup FastTab. 2. Select the method applicable for the cash discount from the Net/Current list. The method specified, with the value given in the Days field and/or Months field, is used to calculate the last date make a payment and receive any available cash discount. 3. Enter the number of months during the period when the cash discount is applicable in the Months field. 4. Enter the number of days during the period when the cash discount is applicable in the Days field. 5. Enter the cash discount as a percentage of the invoiced amount in the Discount percentage field. 6. Select the Main account for customer discounts and the Main account for vendor discounts. NOTE: Assign cash discounts to vendors, journals, or purchase orders.

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Chapter 9: Accounts Payable Setup Procedure: Define Accounts Payable Parameters Perform the following to specify accounts payable parameter values that affect the cash discount calculation. 1. To access the Accounts payable parameters form, click Accounts payable, click Setup, and then click Account payable parameters. 2. Click Settlement in the left navigation pane. 3. In the Cash-discount administration field select what to do with an overpayment or underpayment when a cash discount is not deducted correctly when the invoice is settled. Select from the following values: o Unspecific - the underpayment amount is posted to the vendor cash discount account. If the applicable cash discount was posted in the same company as the overpayment, the system will adjust the cash discount. If the applicable cash discount was not posted in the same company as the overpayment, it is posted to the system cash discount account. If there are multiple cash discounts so that an overpayment was settled against multiple invoices, the adjustment to the discount is from the last invoice to the first discount.

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Financials I in Microsoft Dynamics® AX 2012 o

Specific - the overpayment or underpayment amount is posted to the vendor cash discount account. For example, a vendor's invoice total is 105.00 USD, and the obtainable cash discount is 10.50 USD. Considering the cash discount, the vendor will be paid 94.50 USD (105-10.50). However the amount actually paid to the vendor is 95.00 USD. If the Cash-discount administration parameter is set to Unspecific, the invoice is settled, and the difference of 0.50 USD is posted to the ledger account specified for cash discount differences. If the Cash-discount administration parameter is set to Specific, the invoice is settled, and the difference of 0.50 USD is posted to the vendor's cash discount account.

FIGURE 9.5 ACCOUNTS PAYABLE PARAMETERS

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Chapter 9: Accounts Payable Setup Procedure: Define General Ledger Parameters Perform the following to specify general ledger parameter values that affect the cash discount calculation. 1. To access the General ledger parameters form, click General ledger, click Setup, and then click General ledger parameters. 2. Click Sales tax on the left navigation pane. 3. Expand the Tax options FastTab. Select the Cash discount is calculated on amount including sales tax check box in the Vendor cash discount Area to specify that the cash discount is calculated based on the amount plus sales tax.

FIGURE 9.6 GENERAL LEDGER PARAMETERS FORM

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Payment Fee Use payment fees to do the following: •

Specify if any additional charges are added to the vendor invoice. For example, a vendor might add a fee for issuing a promissory note or a company might be charged a vendor bank remittance fee.

•

Define fee identifications, specify bank relations, and identify how to generate fees.

Scenario Contoso electronically transfers invoice amounts (that are due to the vendor) to its bank. The bank then transfers the money directly into a vendor's designated banking account. After the invoice amount is transferred, a paper remittance invoice is sent automatically to each vendor explaining the specific account the payment is posted to and the amount of the payment issued. To manage the payment fees from the bank, Contoso decides to set up payment fees for vendor invoices.

Procedure: Create a Payment Fee Perform the following to create a payment fee. 1. Click Accounts payable, click Setup, click Payment, and then click Payment fee. 2. Click the New button to create a new record. 3. Enter an identification in the Fee ID field. 4. Enter a brief description in the Description field.

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Chapter 9: Accounts Payable Setup 5. Select whether to charge the Vendor or Ledger to use a financial cost for the fee in the Charge field. If Ledger is selected, select an account in the Main account field for posting in the ledger. 6. Select the journal type for which the fee is valid for in the Journal type field. This journal type is typically vendor bank remittance.

FIGURE 9.7 PAYMENT FEE FORM

Procedure: Define Payment Fee Setup You can define a payment fee to set up lines for each fee used for different banks, methods of payment, remittance types, payment specifications, currencies, time periods, and amount intervals. Perform the following to set up a payment fee. 1. From the Payment fee form, click the Payment fee setup button. 2. Select the kind of bank information that is required to start the fee in the Grouping field. The fee is valid for each field for: o Table - the bank account selected in the field Bank relation o Group - the bank group selected in Bank relation o All - all the bank accounts

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Financials I in Microsoft Dynamics® AX 2012 3. Select a bank relation from the Bank relation field if: o A bank account - table is selected in the Grouping field o Bank groups - group is selected in the Grouping field o Skip - all is selected in the Grouping field Select a method of payment used for the actual payment fee in the Method of payment field.

FIGURE 9.8 PAYMENT FEE SETUP FORM

4. If the company agrees with the bank to specify the payment, select the payment specifications in the Payment specification field. 5. Select the currency that enables the fee in the Currency field. Only transactions with this currency can enable the fee. If you leave this field blank, all currencies enable the fee. 6. Select the calculation method in the Percentage/Amount list. Select among: o Amount o Percent o Interval 7. Enter the size of the fee in the percentage of the payment or the amount for one payment in the Fee amount field. 8. Select the currency code for the fee in the Currency field.

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Chapter 9: Accounts Payable Setup Procedure: Define Payment Fee Setup - General Perform the following to define additional options for the Payment Fee Setup. 1. From the Payment fee setup form, click the General tab. 2. Enter the minimum transaction amount to enable the fee in the Minimum field. 3. Enter the maximum transaction amount to enable the fee in the Maximum field. 4. Enter the date the date interval starts for fee calculation in the From date field. 5. Enter the ending date for date interval for fee calculation in the To date field. 6. If the calculated fee is less than the value entered in the Minimum fee field, it will not be applied. 7. If a financial cost is selected, you can select a Sales tax group and an Item sales tax group to generate the relevant taxes. NOTE: If sales tax is calculated, the net amount is posted on a ledger account, and the sales tax amount is posted on a sales tax account.

FIGURE 9.9 PAYMENT FEE SETUP FORM, GENERAL TAB

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Define Payment Fee Setup - Interval You can enter fees for the selected payment fee setup line that depend on the interval between the remittance and due dates. Perform the following to define an interval payment fee setup. 1. From the Payment fee setup form, click the Interval tab. 2. Enter the number of days between the posting date (discounting date) of the remittance and the due date of the promissory note in the Days field. 3. Select whether the specification is a percentage or an absolute amount in the Percentage/Amount field. 4. Enter the size of the fee in percent of the payment or amount for one payment in the Fee amount field.

FIGURE 9.10 PAYMENT FEE SETUP FORM, INTERVAL TAB

Methods of Payment Many companies offer several methods to pay due invoices, such as the following:

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•

Credit

•

Cash in advance

•

Bill of exchange

•

Check and electronic payments

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Chapter 9: Accounts Payable Setup In the Methods of payment form, specify all the methods of payment the company uses to pay its vendors. For each method of payment, enter information that states how payments should be summarized and posted. Methods of payment can be assigned to: •

Vendors

•

Journals

•

Purchase orders

Procedure: Create a Method of Payment Perform the following to create a method of payment. 1. Click Accounts payable, click Setup, click Payment, and then click Methods of payment. 2. Click the New button to create a new record. 3. Enter a name for the new method of payment in the Method of payment field. 4. Select whether the system should total the invoices in an automatic payment proposal. Options include the following: o Invoice - creates one payment transfer for each invoice o Date - combines the payment for all invoices for vendors with the same due date o Week - combines all invoices for vendors with a due date within the same week o Total - combines all invoices from vendors for the same payment 5. Enter a description of the method of payment in the Description field. 6. Enter the number of days the vendor gives to make the payment after the specified method of discount, and still give a cash discount in the Grace period field. 7. Select the payment status that is required to post a payment with this method of payment in the Payment status field.

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Financials I in Microsoft Dynamics® AX 2012 8. Select what type of payment is allowed in the Payment type field. o Other - method of payment is none of the other choices or is not yet assigned. This is the default value. o Check - the method of payment is a check. o Electronic Payment - the method of payment is electronic, such as electronic funds transfer (EFT). When this payment type is used, the system performs bank validations that are skipped if you use other payment types. o Promissory note - the method of payment is a promissory note. 9. Select the Allow copies of payments check box to allow users to print non-negotiable copies of payments for the selected method of payment. Users might need to print copies of payments to resolve payment disputes, or to let vendors know which invoices were paid on a particular date.

FIGURE 9.11 METHOD OF PAYMENTS

Procedure: Create a Method of Payment - General Perform the following to add general information to the method of payment: 1. From the Methods of payment - vendors form click the File formats FastTab. 2. In the Posting area in the Account type field, select the kind of offset account that is used for payments. The most common account type is Bank. 3. Select the liquidity account for payment in the Payment account field.

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Chapter 9: Accounts Payable Setup 4. Enter the transaction type for a bank account in the Bank transaction type field. The transaction type is marked on every transaction generated in the payment proposal. This field is active only when the account type is Bank. 5. In the Promissory note area, select one of the following in the Type of draft field: o No draft - no draft is created. o Bill with no acceptance - the bill of exchange can be included directly in a bank remittance. The bill is not printed and you agree to pay without an acceptance step. o Bill with acceptance - you accept the bill of exchange from the vendor and include a remittance. The bill can be printed and sent from the vendor with an invoice or an account statement. When you receive the draft, enter the acceptance date or approval date. o Promissory note - you promise to pay the vendor on a specified date. You do not receive a bill of exchange from the vendor, and you agree to pay without an acceptance step. o Bill of exchange with bank acceptance - a bill of exchange can be included directly in a bank remittance. The bill is not printed, and the bank is responsible for paying the bill to the vendor.

Procedure: Create a Method of Payment - File Formats Perform the following to specify the file format. 1. From the Methods of payment - vendors form click the File formats FastTab. 2. Specify the file formats to use with this Method of Payment by using the following table to complete the File formats tab: Format

Action

Export format

Specify the format to export payment, for example, a promissory note or a check format. The export format tells the system how to communicate with the bank.

Return format

Enter a format to return a message from the export format, if the bank supports an electronic return file.

Remittance format

Enter a format for remittance to a specific bank.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: If the format list is empty, click the Setup button and select from the available formats.

FIGURE 9.12 METHODS OF PAYMENT , FILE FORMATS FASTTAB

Procedure: Create a Method of Payment - Payment control Perform the following to select the validation for the method of payment. 1. From the Methods of payment - vendors form click the Payment control FastTab. 2. Select the validation for the method of payment. Validation is executed during posting if a method of payment is selected on a journal. Select one or more of the following validation methods: o Payment reference is mandatory - verifies that a payment reference is entered o Payment note is mandatory - verifies that a note follows the payment o Payment ID is mandatory - verifies that a payment identification is filled in

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Chapter 9: Accounts Payable Setup o o o o

Payment specification is mandatory -verifies that the payment method's specification is entered Check number is mandatory - verifies that the check number is entered Offset account has the type bank - verifies that the offset account type selected is Bank Bank transaction type is mandatory -verifies that a bank transaction type is selected

FIGURE 9.13 METHODS OF PAYMENT, PAYMENT CONTROL FASTTAB

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Lab 9.2 - Method of Payment, Terms of Payment, and Cash Discount Scenario April, the Accounts Payable Clerk at Contoso has been asked to set up a new method of payment called special cash discount (SCD). The SCD was requested by Lake Electronics, a vendor with whom Contoso collaborates. The vendor has asked Contoso to pay cash with a special discount, for the next few months to help them with some accounts receivable shortfalls. Lake Electronics is offering good terms with a two percent cash discount if the invoice is paid within seven days and net payment due in 14 days. Other details are as follows: Field

Value

Payment status

None

Account type

Bank

Payment account

EUR OPER

Bank transaction type

03

Export

Format 1 (Test)

Return

Retur. Format 1 pr. payment

Challenge Yourself! Help April set up the method of payment. Attach the new terms of payment and cash discount to the vendor.

Need a Little Help? 1. Create a new method of payment and name it SCD, Special Cash Discount. 2. Assign the new method of payment to the vendor. Also, assign the N014 terms of payment to the vendor, which specifies that the balance is due in 14 days.

Step by Step Create a new method of payment called SCD, Special Cash Discount. 1. Click Accounts payable, click Setup, click Payment, and then click Methods of payment. 2. Click the New button to create a new method of payment. 3. In the Method of payment field, type SCD. 4. Click the Period arrow, and then click Invoice.

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Chapter 9: Accounts Payable Setup 5. 6. 7. 8. 9. 10. 11.

In the Description field, type Special Cash Discount. In the Grace period field, type 0. Click the Payment status field, and then click None. Click the General FastTab. Click the Account type arrow, and then click Bank. Click the Payment account arrow, and then click EUR OPER. Click the Bank transaction type arrow, and then click 03 (ChecksPrinted). 12. Click the File formats tab. 13. Click the Export format arrow, and then click Format 1 (Test). 14. Close all the forms. Assign the new method of payment to the vendor. Also assign the N014 Terms of payment to the vendor, which specifies that the balance is due in 14 days. 1. Click Accounts payable, click Common, and then click All vendors. 2. Double-click Vendor account 4103. 3. Click the Payment FastTab. 4. Click the Edit button on the Action pane. 5. Click the Terms of payment arrow, and then click N014. 6. Click the Method of payment arrow, and then click SCD. 7. Click the Cash discount arrow, and then click 2%D07. 8. Close the form.

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Vendor Groups Use vendor groups to set up certain information that always defaults when you enter a new vendor. For example, use the vendor group to set up automatic posting to General Ledger accounts for consumption generated by vendor transactions. In the Vendor groups form, set up vendor groups. You must set up at least one vendor group, because a vendor group must be specified when you create a new vendor.

Scenario Contoso has multiple vendors to monitor. To simplify the management of vendors, Contoso has set up several vendor groups to do the following: •

Specify ledger posting per vendor group - to specify accounts for each vendor group. You can specify accounts, that is, for vendor debts, an arrival account for a vendor with a corresponding offset account, a receipt account, item consumption account and account for vendor line discounts.

•

Record sales budgets per vendor group - find additional information about how to set up budgets for each vendor group in Financials II training material.

•

Generate trade statistics per vendor group - to generate sales statistics that, for example, show monthly consumption for each vendor group.

Procedure: Create a Vendor Group Perform the following to create a new vendor group: 1. Click Accounts payable, click Setup, click Vendors, and then click Vendor groups. 2. Click the New button to create a new record. 3. Enter a short name for the vendor group in the Vendor group field. This name is used throughout the system. 4. Enter the full name of the vendor group in the Description field. The name acts as additional specification of the vendors included in the vendor group. To view the name of the vendor in all dialog boxes that display a vendor group move the pointer over the vendor group and wait until the name is displayed. 5. Specify a payment term that corresponds to the default time interval between the purchase of an item and the invoice due date in the Terms of payment field. Use the Terms of payment list for cash flow forecasting.

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Chapter 9: Accounts Payable Setup For example, the payment term is used for vendor payment coverage based on one purchase budget per vendor group. If a purchase budget is set up for vendor group X and a purchase of 10,000 USD is budgeted for June 15, a payment term is specified to correspond to the current month + 30 days. On this basis, coverage is arranged so that the budgeted item price of 10,000 USD is due for payment on July 30. 6. Specify a term of payment that corresponds to the default interval between the due date and the actual payment time in the Settle period field. Use the payment terms with vendor payment coverage based on one purchase budget for each vendor group. Use the Settle period field in cash flow calculations. 7. Enter or select the default tax group for the selected vendor group in the Default tax group field.

FIGURE 9.14 VENDOR GROUPS FORM

Procedure: Define Inventory Posting Perform the following to set up automatic postings to ledger accounts for a vendor group: 1. From the Vendor groups form, click the Item posting button. 2. Set up general posting rules for all items, accounts, and sales-tax codes by selecting one of the following in the Item code field. o Table - This option is the highest in the hierarchy. By selecting Table, the posting in ledger only applies to a specific item number. o Group - The posting in the ledger only applies to a particular item group.

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Financials I in Microsoft Dynamics® AX 2012 o

All - Each transaction is posted for all item numbers in the same account in the ledger. The first matching account is used for posting.

Based on the kind of business that you run, decide which accounts you must set up. The focus of finance is related to consumption and revenue accounts, whereas the focus of logistics is the issue, receipt, and packing slip accounts.

FIGURE 9.15 INVENTORY POSTING FORM

Perform the following to further define parameter values: 1. To access the Accounts payable parameters form, click Accounts payable, click Setup, and then click Accounts payable parameters. 2. Click Ledger and sales tax on the left navigation pane. 3. Click the Posting FastTab and select whether the primary posting should be assigned to Item or Vendor in the Primary receipt posting field. For example, set up the Primary receipt posting list to prioritize the Item. If you buy some of item type B-R14 from vendor 3000, which is part of vendor group 50, the system posts the transaction to account number 510120, because the item relation is more specific than the account relation. Item code

Item relation

Account code

All

All

All

Group

Table

B-R14

Account relation

Main account 510100

50

All

510800 510120

If the posting is set up as illustrated in the following table, and the Primary receipt posting list is set to Vendor, and you bought some of item type B-R14 from vendor 3000, the transaction is posted to account number 510100 because of the Accounts Payable parameter setup.

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Chapter 9: Accounts Payable Setup Item code

Item relation

All Table

B-R14

Account code

Account relation

Main account

Table

3000

510100

All

510120

FIGURE 9.16 ACCOUNTS PAYABLE PARAMETERS FORM, LEDGER AND SALES

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Lab 9.3 - Create a Vendor Group Scenario Phyllis, the Accounting Manager, has asked April, the Accounts Payable Clerk, to create a new vendor group. Phyllis will use the vendor group to group vendors who require Contoso to pay cash on delivery. The new group should be called 83, and the description should be cash vendor group. After April creates the vendor group, she must set up automatic posting of receipts to General ledger accounts. The posting should have the account relation of 80 (other vendors), and post to account number 211300.

Challenge Yourself! Help April create a new vendor group that has automatic posting.

Need a Little Help? 1. Create a new vendor group, which is titled 83 for cash vendors. 2. Assign the terms of payment as cash and the settle periods as COD.

Step by Step Create a new vendor group, which is titled 13 for cash vendors. Assign a cash terms of payment and COD settle period. 1. Click Accounts payable, click Setup, click Vendors, and then click Vendor groups. 2. Click the New button to create a new group. 3. In the Vendor group field, type 83. 4. In the Description field, type Cash Vendors for the description. 5. Click the Terms of payment arrow, and then click P007. 6. Click the Settle period arrow, and then click P007. Assign the automatic posting to the new vendor group. 1. 2. 3. 4. 5. 6. 7.

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From the Vendor groups form, click the Item posting. Select Purchase inventory receipt and click the Add button. Click the Item code arrow, and then click All. Confirm that the Account code field is set to Group. In the Account relation field, type 80 – Other vendors. In the Main account field, type 141250. Close the form.

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Chapter 9: Accounts Payable Setup

Accounts Payable Posting Profiles Posting profiles are common throughout all modules in Microsoft Dynamics AX. In Accounts Payable posting profiles, the summary accounts are defined for vendors. Summary accounts are temporary accounts where all invoices are posted to and offset when the vendor is paid. Assign posting profiles to the following: •

All vendors

•

Groups of vendors

•

Single vendor

When you post a vendor transaction automatically, the system searches for the ledger accounts shown in the previous order. Consider the following examples: •

A posting profile line exists for the vendor, this line is used.

•

No posting profile line exists for the vendor, however, the line specified for the vendor group that the vendor is attached to is used.

•

Neither of these exists, the posting profile line for all vendors are used.

In the Vendor posting profiles dialog box, you can set up many vendor posting profiles. If all vendor transactions are processed together, set up only one posting profile for all vendors.

Procedure: Create a Posting Profile Perform the following to create a posting profile: 1. Click Accounts payable, click Setup, and then click Posting profiles. 2. Click the New button to create a new record. 3. Enter a code or a short name for the posting profile in the Posting profile field. 4. Enter a description of the posting profile in the Description field. 5. Click the Table restrictions FastTab. 6. Select the Settlement check box to indicate whether entries should be created by using this posting profile for automatic settlement or the settlement must be manual and use open-transaction editing.

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Financials I in Microsoft Dynamics® AX 2012 7. Select the Cancel check box to indicate whether you want to be able to cancel transactions created that have this posting profile. 8. Select the name of any other posting profile to change to when transactions with this posting profile are closed in the Close list. A transaction automatically becomes closed when it is settled in full.

FIGURE 9.17 VENDOR POSTING PROFILES FORM

Procedure: Create a Posting Profile - Setup Perform the following to set up the ledger accounts that are posted to when you post transactions in Accounts payable: 1. From the Vendor posting profiles form, click the Setup FastTab. 2. Click the Add button to add a new line. 3. Select an Account code: o Table o Group o All 4. Specify which vendors belong to the current posting profile in the Account/Group number field. o If Table is selected in the Account code field, enter the account number of the vendor to whom the posting profile relates. o If Group is selected in the Account code field, enter the vendor group to which the posting profile relates. o If All is selected in the Account code field, do not fill in the field.

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Chapter 9: Accounts Payable Setup 5. Select the account number of the ledger account that is used as the vendor summary account for the vendor(s) to whom the posting profile relates in the Summary account field. If you use an invoice register and invoice approval journal, all vendor invoices recorded as having arrived but not yet approved are posted in the Arrivals account and the Arrivals offset account. When these invoices are approved, the debt is transferred to the vendor summary account. If your company does not use an invoice register and invoice approval journal, all vendor invoices are updated directly in the vendor summary account. 6. Select the liquidity ledger account that is used for cash flow forecast. Cash flow forecast in the Settle account field. For more about Cash flow forecast refer to the Microsoft Dynamics AX Financials II course. 7. Select the account used for Sales tax prepayments. 8. Select a ledger account number that is used to make temporary postings of unapproved vendor invoices, which are updated through invoice register in the Arrival list. 9. Select in the Offset account list, the ledger account number that is used for offsetting unapproved vendor invoices, which are updated through the invoice register. The offset account acts as the offset account for arrival and contains unapproved vendor purchases.

Procedure: Set Parameter Values Perform the following to define parameter values: 1. To set up default values for posting click Accounts payable, click Setup, and then click Accounts payable parameters. 2. Click Ledger and Sales tax on the navigation pane. 3. In the Posting profile field, enter or select the short name of the default vendor posting profile. A posting profile must be specified for every update of a vendor transaction.

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Lab 9.4 - Vendor Posting Profile Scenario Phyllis, the Accounting Manager has asked April, the Accounts Payable Clerk, to set up a new posting profile for a group of vendors to be paid from a different cash account than other vendors. Phyllis explained that the profile should be selected for automatic settlement and should allow for cancellation. The following details apply: Field

Value

Posting Profile

COD

Description

Cash on Delivery Profile

Account Code

Group

Account/Group Number

80 - Other Vendors

Summary Account

211100

Settle Account

110180

Arrival

211310

Offset Account

211320

Challenge Yourself! Help April create the new vendor posting profile for group 80.

Need a Little Help? You can find the Automatic settlement and Cancel check boxes on the Table restrictions FastTab.

Step by Step 1. Click Accounts payable, click Setup, and then click Vendor posting profiles. 2. Click the New button to create a new profile. 3. In the Posting profile field, type COD. 4. In the Description field, type Cash on delivery profile. 5. Click the Table restrictions FastTab. 6. Verify the Settlement check box is selected. 7. Verify the Cancel check box is selected. 8. Click the Setup FastTab. 9. Click the Account code arrow, and then select Group. 10. In the Account/Group number, type 80. 11. In the Summary account field, type 211100.

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Chapter 9: Accounts Payable Setup 12. 13. 14. 15.

In the Settle account field, type 110180. In the Arrival field, type 211310. In the Offset account field, type 211320. Close the form.

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Accounts Payable Vendors A company purchases goods and services from vendors. Each accounts payable transaction must be associated with a vendor. Use the Vendors form to create, maintain and inquire about vendors. Enter as much data as possible when you set up Microsoft Dynamics AX because the data is used throughout the system for: •

Invoices

•

Payments

•

Reports

The base data automatically appears as the default for all transactions involving the vendor. Default information can always be changed.

Procedure: Create a Vendor - General Perform the following to create a new vendor: 1. Click Accounts payable, click Common, click Vendors, and then click All vendors. 2. Click Vendor in the New group on the the Action Pane. 3. Enter a Vendor ID with up to 10 characters in the Vendor account field, and a vendor name with up to 30 characters in the Name field. The Vendor account is generated automatically if the vendor account number sequence is specified in the Accounts payable parameters form in the Number sequences section. Some companies prefer to enter the number sequences manually. To do this, select the Manual check box on the General FastTab in the Number sequences form. Avoid using numbers that can be changed, such as telephone numbers. 4. Select a Record type of either Person or Organization. This selection will determine what fields are available on the form. 5. Enter the name to use when you search for the vendor in the Search name field. If it is not entered, the Name field is used by default. 6. Select the vendor group to which the vendor belongs in the Group list. 7. As appropriate, enter values in the other fields in the Organization details and Other information area. NOTE: In the Other information section, select the language that is used for all external documents, such as purchase orders in the Language field. The language code is mandatory.

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Chapter 9: Accounts Payable Setup NOTE: To display more fields on the General FastTab, click the Show more fields button.

FIGURE 9.18 VENDORS FORM

Procedure: Create a Vendor - Address and Contact Perform the following to add addresses and contact information about the vendor: 1. From the Vendors form, enter the vendor's address and contact details on the Addresses and Contact information FastTabs. 2. If a vendor has more than one address, such as invoice, delivery, purchase, alternative delivery address, or SWIFT, enter additional addresses by clicking the Add button. 3. Additionally, enter address, contact information, and parameters for access from the Internet. Click the Add button on the Contact information FastTab. NOTE: This Area is for non-postal contact information for the vendor organization. Example: Website URL, additional phones numbers

NOTE: If alternative delivery addresses are in different states or countries, ensure that you enter the appropriate tax group for each alternative address. You must associate tax groups with a delivery address.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Vendor - Miscellaneous Details Perform the following to set Miscellaneous vendor details. 1. From the Vendors form, click the Miscellaneous details FastTab. 2. Enter the vendor credit rating in the Credit rating field. It is used for statistical purposes only. 3. Enter the maximum outstanding amount allowed in the balance of the vendor's account in the Credit limit field. This amount always is stated in the default currency. 4. As part of updating purchase orders or invoices, set up the system to verify whether an account is over its credit limit in the Credit rating section of the Accounts payable parameters form. If an account is beyond the credit limit specified, the update is stopped. 5. To apply vendor holds, click the Vendor tab, then click the On hold button in the Maintain group of the Action Pane. The following types of holds are available: No - the vendor has no holds. All types of transactions are permitted o Invoice - no invoices can be created or posted for this vendor. o All - all transactions for this vendor are on hold o Payment - no payments can be generated for this vendor. Payments that were generated before the hold was applied can still be posted. o Requisition - no requisitions can be generated for this vendor. o Never - prevents vendors from being put on hold for inactivity. This may occur if a batch job is configured to periodically sweep the vendor master for inactive vendors. 6. After selecting a type of vendor hold, select the Release date and Reason code for the vendor hold in the same drop down menu.

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Chapter 9: Accounts Payable Setup 7. Select a buyer group in the Buyer group list. Your selection creates links between vendors, employees, and items/planned orders when you create purchases and productions. For example, use buyer groups to determine which employees are associated with the current buyer group and to change the buyer group if an employee changes an area of responsibility. 8. Select a Customer account number if vendor is also a customer and used in Intercompany transactions.

FIGURE 9.19 VENDORS FORM, MISCELLANEOUS FASTTAB

Procedure: Create a Vendor - Define Vendor Profile Vendor profiles allow organizations to track specific details about vendors. Perform the following to define vendor profiles. 1. From the Vendors form, click the Vendor profile FastTab. 2. Select the Bid only check box if the vendor has submitted quotes or proposals but has not yet been approved for purchases. You can use this indicator to associate bids and other documentation with the vendor account. 3. Select the One-time supplier check box if the vendor is a one-time supplier. If the One-time supplier check box is selected when a purchase order is created, the distinction is indicated here. 4. Select the Locally owned check box if the vendor meets your guidelines for being a locally owned business. Collecting this data allows local businesses to have priority on certain contracts. 5. Select the Small business check box if the vendor meets your guidelines for being a small business. You can collect this data to generate reports about this information.

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Financials I in Microsoft Dynamics® AX 2012 6. Select the Woman owner check box if the vendor is owned by a woman. This field is used for statistical purposes only. 7. Continue selecting the appropriate check boxes as appropriate in this section. NOTE: If you are using one-time suppliers you must set up a number sequence for one-time suppliers in the Accounts payable parameters form in the Number sequence section. In the General section of the Accounts payable parameters form, select a vendor's account number that can serve as the default template for one-time suppliers. Information is copied automatically when you create a onetime supplier in the Vendors form. The system automatically creates a one-time vendor when a purchase order is created for a one-time supplier. Except for the vendor number, the one-time supplier inherits all base information from the vendor number specified in this field. The one-time vendor number sequence must be specified in the Number sequences form. If you have no one-time suppliers, leave the Default vendor number blank.

Procedure: Create a Vendor - Purchasing Demographics Enter or view the currency, line of business, chain and contact name for the vendor in the Vendors form, on the Purchasing Demographics FastTab.

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Chapter 9: Accounts Payable Setup Procedure: Create a Vendor - Invoice and Delivery Enter or view invoice defaults, delivery, and tax for the vendor in the Vendors form, on the Invoice and Delivery FastTab.

FIGURE 9.20 INVOICE AND DELIVERY FASTTAB.

Procedure: Create a Vendor - Purchase Order Defaults and Payment Enter or view the default location, discounts and change management for purchase orders when created for the vendor in the Vendors form, on the Purchase Order Defaults FastTab. Enter information about how to manage payments on the invoices entered in Accounts Payable in the Vendors form, on the Payment FastTab.

Procedure: Create a Vendor - Tax 1099 and Financial Dimensions Enter or view information for tax 1099 reporting in the United States for the selected vendor in the Vendors form, on the Tax 1099 FastTab. This option is available only to legal entities whose primary address is in the United States. Set up specific dimensions for a vendor on the Financial dimensions FastTab. Throughout Microsoft Dynamics AX, you can use dimensions to group data in different ways. If you designate dimensions for a vendor, those dimensions automatically default for transactions made that use that vendor.

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Lab 9.5 - Vendors Scenario Contoso has begun working with a new vendor, Dakota Travel. April, the Accounts Payable Clerk, must set up this new vendor. The following details apply: Field

Value

Vendor group

80 - other vendors

Credit limit

10,000

Method of payment

Check payment - USD

Cash discount

4%D10

Terms of payment

N015

Challenge Yourself! Help April create a new vendor.

Step by Step Create the new vendor. 1. Click Accounts payable, click Common, click Vendors, and then click All vendors. 2. Click the New Vendor button on the action pane to create a new vendor. A new vendor account number will be assigned automatically. 3. In the Name field, type Dakota Travel. 4. Tab to the Group field and type 80. 5. Click the General tab. 6. Click the Miscellaneous details FastTab and then type 10,000.00 in the Credit Limit field. 7. Click the Payment FastTab. 8. Click the Terms of payment arrow, and then click N015. 9. Click the Method of Payment arrow, and then click USAUSD_CHK. 10. Click the Cash discount arrow, and then click 4%D10. 11. Close the form.

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Chapter 9: Accounts Payable Setup

Summary Payment options in Microsoft Dynamics AX are flexible to accommodate different business processes. You can do the following with payment options: •

Define terms based on the number of months and/or days, based on a current period (for example, current month or current quarter), and with or without additional months or days.

•

Set up terms of payment for cash payment so that the payment posts automatically when you issue the invoice.

•

Set up advanced payment schedules and use them as terms of payment based on many factors, including the following: o o o

•

Percentage allocation of the actual invoice amount Allocation based on a fixed number of installments Combined amounts and percentages of the invoice amount

Set up cash discounts similar to the terms of payment, based on the following: o o

The current period The number of net days

•

Set up the cash discounts as multiple (for example, ten days three percent and 30 days one percent). You can decide whether you want special ledger accounts to post.

•

Set up Microsoft Dynamics AX to manage the cash discount with or without sales tax to comply with the tax legislation in various countries.

You also can group vendors to categorize information so that it is meaningful. By grouping vendors you can do the following: •

Set up automatic posting rules for vendor transactions to ensure that the transactions affect the correct accounts.

•

Become aware of situations and trends more quickly by grouping vendors with a common identifier to view and analyze financial causes in more detail. For example, you can group vendors by the kinds of products you purchase from them or by the dollar volume of purchases.

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Test Your Knowledge Test your knowledge with the following questions. 1. A payment schedule consists of which of the following? ( ) Payments ( ) Consecutive time intervals ( ) Consecutive payments ( ) Consecutive payments in set time intervals 2. What elements must be defined to create a payment schedule? (Select all that apply) ( ) Vendor account ( ) Due date of each installment ( ) Amount of each installment ( ) Number of installments 3. What interval can the payment day can be specified? (Select all that apply) ( ) Specific day in a week ( ) Specific date in a month ( ) Specific day in a year ( ) Specific day in a quarter 4. Cash discounts are linked to what tables? ( ) Sales and Purchase Order ( ) Payment Days and Payment Fees ( ) Terms of Payment and Payment Days ( ) Customer and Vendor 5. What are some methods of payment a company might use? (Select all that apply) ( ) Credit ( ) Cash in advance ( ) Check and electronic payments ( ) Bill of exchange 6. How many vendor groups must be set up? ( ) None ( ) One ( ) Two ( ) Ten

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Chapter 9: Accounts Payable Setup

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 Test Your Knowledge 1. A payment schedule consists of which of the following? ( ) Payments ( ) Consecutive time intervals ( ) Consecutive payments (•) Consecutive payments in set time intervals 2. What elements must be defined to create a payment schedule? (Select all that apply) ( ) Vendor account (√) Due date of each installment (√) Amount of each installment (√) Number of installments 3. Outline the steps to setting up a term of payment. Place the following steps in order. Step:

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1

: Access the Terms of payment form in Accounts Payable.

6

: Specify the days (or other time unit).

4

: Enter a description.

3

: Enter a terms of payment identifier.

2

: Create a new record.

5

: Select the payment method.

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Chapter 9: Accounts Payable Setup 4. What interval can the payment day can be specified? (Select all that apply) (√) Specific day in a week (√) Specific date in a month ( ) Specific day in a year ( ) Specific day in a quarter 5. Cash discounts are linked to what tables? ( ) Sales and Purchase Order ( ) Payment Days and Payment Fees ( ) Terms of Payment and Payment Days (•) Customer and Vendor 6. What are some methods of payment a company might use? (Select all that apply) (√) Credit (√) Cash in advance (√) Check and electronic payments (√) Bill of exchange 7. How many vendor groups must be set up? ( ) None (•) One ( ) Two ( ) Ten

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Chapter 10: Accounts Payable Daily Procedures

CHAPTER 10: ACCOUNTS PAYABLE DAILY PROCEDURES Objectives The objectives are: •

Explain the different invoice journals available.

•

Register an invoice journal.

•

Approve an invoice register journal.

•

Create an invoice excluding posting.

•

Create an invoice journal.

•

Use a voucher template to create vouchers.

•

Create a payment proposal.

•

Run a payment proposal for a marked settlement.

•

Create a payment journal.

•

Generate a payment.

•

Set up a prepayment.

•

Post a prepayment.

•

Describe invoice matching.

•

Add charges to a purchase order invoice.

•

Edit open transactions.

•

Reverse a closed transaction.

•

Define print management settings.

Introduction This chapter discusses the various Invoice Journals in the Accounts Payable module. It describes what to use each Invoice Journal for and how to enter transactions into each journal. Purchasing goods for resale or as materials for manufacturing or services is a large responsibility. Tracking those purchases and paying the vendors that supply the goods is just as challenging. Companies must monitor Accounts Payable closely and implement procedures to enable management to easily obtain the financial information that they must have to stay informed about changes in the costs of goods. To give an accurate view of the financial condition of the business, all the expenses that affect the net profit are included in Accounts Payable.

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

Registered

•

Approved

•

Paid

Consider the following about Microsoft Dynamics ®AX: •

Supports several methods of managing incoming invoices to cater to different company procedures

•

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

The following types of invoices are available: •

Invoice Register

•

Invoice Approval Journal

•

Invoice Pool excluding Posting

•

Invoice Journal

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

Vendor account

•

Invoice number

•

Amount

•

Person who approves the invoice

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

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Chapter 10: Accounts Payable Daily Procedures Procedure: Register an Invoice Perform the following steps to register an invoice for approval: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice register. 2. In the Show field, select to view Open, Posted, or All journals. The default view is Open journals. 3. Click New to create a new journal. 4. Enter the name of the journal in the Name field or select the name from the selection list that contains journal names with the relevant journal type. HINT: Create and define journal names in the Journal names form. To access the Journal names form, click General ledger, click Setup, click Journals, and then click Journal names. 5. The number and description are entered automatically in the Journal number and Description fields. These values default from the Journal names form. All subsequent ledger transactions created in this journal contain the same journal number. This feature enables you to print a list of ledger transactions created in a specific journal. Journal numbering is controlled by a number sequence.

FIGURE 10.1 INVOICE REGISTER

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Register an Invoice - General Most of the fields on the General tab inherit data from the Journal names form. Perform the following steps to view or define additional posting parameters for the journal: 1. From the Journal form click the General tab. In the Identification and Journal areas, you can view information that was defined on the Overview tab. 2. The kind of transactions that you can post in this journal display in the Posting layer field. 3. Select the summation level from the Detail level list. Select from the following: o Details - use to post every instance of an account number in the journal lines as a separate account transaction o Summary - use to combine the journal lines into one transaction during posting if vouchers have the same date, account number, dimension, and currency code values, and the Payment reference field is blank. 4. Select to delete journal lines when posting is completed by selecting the Delete lines after posting check box. When you delete journal lines, however, you also lose the ability to inquire into journal lines later. 5. Enter the maximum number of lines in a journal in the Lines limit field. If this number is exceeded, the posting process distributes the lines into several smaller journals. This value defaults from the Journal names form but you can overwrite it.

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Chapter 10: Accounts Payable Daily Procedures NOTE: Most of the fields on the General and the Setup tabs are inherited from the Journal names form and the Currency exchange rate form. Explanations of these fields are available in the topic about journal names and exchange rates.

FIGURE 10.2 INVOICE REGISTER, GENERAL TAB

Procedure: Register an Invoice - Setup Most of the fields on the Setup tab inherit data from the Journal names form and Exchange rates form, but you can overwrite them. Perform the following steps to view or change posting parameters for the journal: 1. From the Journal form, click the Setup tab. 2. View the account type that the journal uses as the default offset account type in the Account type field. 3. View the default offset account that copies automatically to all lines in the journal in the Offset account field. 4. Enter the number of the external document in the Document field. The number copies to the journal lines. 5. View the voucher number allocation in journals at the time of posting in the Number allocation at posting field. 6. Enter the currency code in the Currency field. The code appears in the Currency field in the journal lines. If you leave the field blank, the default currency is inserted in the journal lines. 7. Select the Forced rate check box to use an exchange rate other than the rate that you usually would use according to the posting date for the selected currency code.

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Financials I in Microsoft Dynamics® AX 2012 8. Enter the currency exchange rate that applies to the transaction in the Exchange rate field. The exchange rate is expressed as the number of units of the foreign (non-company) currency that displays in the Quotation unit field in the Currency exchange rates form. 9. Enter the secondary exchange rate in the Secondary exchange rate field. 10. Select the Amounts include sales tax check box if the amount in the journal line includes sales tax.

FIGURE 10.3 JOURNAL FORM, SETUP TAB

Procedure: Register an Invoice - Blocking Perform the following steps to enter and view parameters that indicate how the selected journal can be blocked by the system for use. 1. From the Journal form, click the Blocking tab. 2. The In use check box will be marked if the journal is currently in use. 3. View the name of the user who is using the journal currently in the Used by user field. 4. If the system has blocked the journal, the Locked by system check box is selected, and you cannot post in the journal. You also can select this check box manually. To release a blocked journal, clear this check box. 5. To exclude users or user groups from the journal, select the Private check box.

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Chapter 10: Accounts Payable Daily Procedures NOTE: For security reasons, only one user at a time can enter lines in a particular journal. 6. If you select the Private check box, the Private for user field contains your user identification. 7. To exclude users or user groups from the journal, select a group in the Private for user group field. Only the users associated with the selected group can access the journal.

FIGURE 10.4 INVOICE REGISTER, BLOCKING TAB

Procedure: Register an Invoice - Financial Dimensions Perform the following steps to select financial dimension values to propose on the journal lines for the selected journal. 1. From the Journal form, click the Financial dimensions tab. 2. Select a financial dimension value in any of the dimension fields. These values display on the journal lines but you can change them.

Register an Invoice - History View details about the approval procedure, if any, for the selected journal on the History tab.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Register Invoice Lines Perform the following steps to create journal vouchers to validate, print, and post: 1. From the Journal form, click the Lines button. 2. Enter the posting date in the Date field. The system date displays, but you can change it. 3. The Voucher is entered automatically, because it is attached to the journal name in the Voucher field in the Journal names form. If you set the number sequence code with the Continuous option selected and no user changes are enabled, the field is skipped. 4. Select the vendor to register the invoice of in the Account field. 5. Enter the invoice number in the Invoice field. You cannot post the invoice register, if you do not specify an invoice number. 6. Select the description regarding the transaction in the Description field. When you specify an offset account, the system uses the same description, until you specify offset transaction description. 7. Enter the appropriate amount in the given currency in the Debit or Credit fields. Enter an amount in the Credit field if you are entering an invoice. Enter an amount in the Debit field if you are entering a credit note.

FIGURE 10.5 JOURNAL VOUCHER FORM

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Chapter 10: Accounts Payable Daily Procedures Procedure: Register Invoice Lines - Sales Tax Perform the following steps to view or edit sales tax information for the journal vouchers: 1. In the Journal voucher form, select a sales tax group for the transaction in the Sales tax group field. The value defaults from the Sales tax group field in the Vendor form. 2. Specify the item sales tax group for each journal line in the Item sales tax group list. The value defaults from the Item sales tax group field in the Main accounts - chart of accounts form. If this field is empty, the value in the Item sales tax group field in the Sales tax area of the General ledger parameters form is used. View the sales tax amount that calculates on the invoice in the Sales tax amount field. NOTE: If the Exempt field in the Main chart of accounts is selected, the field is always empty, but you can manually enter a value. 3. To view, edit, or enter additional sales tax to the transaction, click the Sales tax button. Edit or view the calculated taxes for the current line. 4. To edit the sales tax, enter either an adjusted amount in the Adjusted amount field or open the Adjustment tab and enter the corrections. 5. To save the changes, click the Apply button. To cancel the changes, click the Reset actuals calculated button. 6. Close the window to return to the journal.

Procedure: Register Invoice Lines - Invoice Perform the following steps to view or edit invoice information for the journal vouchers: 1. In the Invoice area of the Journal voucher form, specify in the Approved by list which employee approves the transaction. Restrict the approval function to a specific User group in the Approve field on the Setup tab of the Journal names form. 2. Enter the terms of payment for the current invoice in the Terms of payment field. 3. Enter the due date for the invoice in the Due date field. The due date calculates by the terms of payment, but you can change it manually. The calculation of the due date only occurs if an invoice number appears in the Invoice field. 4. Enter the payment identification used upon payment in the Payment ID field. If a payment proposal is used, the system suggests the payment ID from the invoice or credit note, but you can change it.

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Financials I in Microsoft Dynamics® AX 2012 5. Select the tax exempt number for the transaction. The tax exempt numbers are created in Tax exempt numbers form (General ledger > Setup > Sales tax > External > Tax exempt numbers). 6. Specify the purchase order numbers regarding this invoice in the Purchase order field. This field is informational only.

Procedure: Register Invoice Lines - Payment Perform the following steps to view or edit payment information for the journal vouchers: 1. In the Payment area of the Journal voucher form, select the payment method to use on the current payment, invoice, or credit note in the Method of payment field. 2. Specify the payment specification, if any, for the current method of payment in the Payment specification field.

Procedure: Register Invoice Lines - Currency Perform the following steps to view or edit currency information for the journal vouchers: 1. In the Currency area of the Journal voucher form, specify the currency to use in the Currency field. The default value is determined by using the following priority: o The Currency field in the Main accounts - chart of accounts form. o The Currency field in the Journal form, taken from the Journal names form. o The Accounting currency field in the Ledger form. (Click General ledger > Setup > Ledger). 2. Enter the currency exchange rate that applies to the transaction. This is set up in the Currency exchange rates form, but you can change this rate. The Exchange rate is expressed as the number of units of the foreign (non-accounting) currency that is indicated in the Quotation unit field in the Currency exchange rates form. 3. View the secondary exchange rate in the Secondary exchange rate field. 4. View the cross rate for the two exchange rates in the Cross rate field. 5. View the basis for the calculation of the cross rate in the Calculation method field. NOTE: In the Validate currency code field in the Chart of Accounts form, you can set up validation rules for the currency.

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Chapter 10: Accounts Payable Daily Procedures Procedure: Register Invoice Lines - Cash Discount Perform the following steps to view or edit cash discount information for the journal vouchers: 1. In the Cash discount area of the Journal voucher form select the code for the cash discount in the Cash discount field. 2. Enter the latest payment date to qualify for a cash discount in the Cash discount date field. The discount date is calculated based on the cash discount setup, but you can change it manually. 3. Enter the cash discount amount in the Discount amount field. When you make a payment before the cash discount date, the discount amount is redeemed and posted automatically. The cash discount information is set up on the Cash discount tab.

Procedure: Register Invoice Lines - General Use this form to enter and post basic information about vendor invoices as soon as they arrive. The actual balance in the journal is reflected in the Journal and Per voucher fields. The invoices are not yet approved for posting to ledger cost accounts, but they are posted to the accounts that are specified in the Arrival and Offset account fields in the Vendor posting profiles form. From the Journal voucher form click the General tab and then do the following: 1. Select the posting profile for the transaction in the Posting profile field. The posting profile defaults from the setup for the vendor. 2. Select the account number for the current offset account transaction type in the Offset account field.

NOTE: In the Main accounts - chart of accounts form, you can set up a default offset account that appears automatically in the Offset account field. This can also be done in the Offset account field in the Vendors form 3. Select an offset transaction text in the Offset-transaction text list. 4. Enter the number or name of the document that is the basis of the transaction in the Document field. 5. Enter a date for the document in the Document date field. 6. Enter or view the amount to report on the 1099 form in the 1099 amount field. 7. Select the location on the 1099 form where you want to print the 1099 amount in the 1099 box list.

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Financials I in Microsoft Dynamics® AX 2012 8. Specify the state for the delivery in the State field. 9. Enter the amount to report in the 1099 form in the 1099 state amount field.

FIGURE 10.6 JOURNAL VOUCHER FORM, GENERAL TAB

Procedure: Register Invoice Lines - Dimension On the Financial dimensions button, set up the financial dimensions for the invoice register transaction. If you designate financial dimensions in the Journal form, they default on each transaction. Override any of those defaults now or enter financial dimensions if no defaults are set up in the Journal form.

Procedure: Delete an Invoice To delete an unposted journal line, highlight the line and either click the Delete button from the Toolbar or click the Functions button and select Delete journal lines.

Procedure: Post an Invoice After you enter all the invoice journal lines, click the Post button to post the invoice journal. The following two posting options are available: •

Post and transfer: post lines that do not have errors and transfer lines that have errors to a new journal.

•

Post: post the selected lines. If an error exists, no lines are posted and an error message is displayed.

When you post the journal lines, you transfer them to an invoice pool. In an invoice approval journal, you can transfer them from the invoice pool into the invoice approval journal.

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Chapter 10: Accounts Payable Daily Procedures HINT: If the invoice register is not being used or if most of the incoming invoices do not require approval, enter the vendor invoices directly into an invoice journal.

Invoice Approval Journal After you post the lines of the invoice register, the postings display in the invoice pool.

Scenario April, the Accounts Payable Clerk, registers an incoming invoice in the invoice register and posts the registration. April sends the physical invoice to Phyllis, the Accounting Manager, for approval. Phyllis approves the invoice with a signature or a stamp and returns the invoice to April. April registers and posts the approval in the invoice approval journal. The invoice is now ready to be paid.

Invoice Pool To view the postings in the invoice pool click Accounts Payable, click Inquiries, and then click Invoice pool. The following applies to the invoice pools: •

The invoice pool displays the relevant information about the invoices awaiting approval.

•

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

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Financials I in Microsoft Dynamics® AX 2012 NOTE: All tabs and fields in the Invoice pool form are discussed in the Invoice Register lesson.

FIGURE 10.7 INVOICE POOL FORM

Procedure: Print Invoices Not Approved The Invoices not approved report displays a list of invoices awaiting approval. For example, you may want to run this report by employee, and then give the report to the relevant people. The report reminds them to approve the invoices. Perform the following steps to print the Invoices not approved report: 1. Click Accounts payable, click Reports, click Status, and then click Invoices not approved. 2. In the query window, you can specify: o Vendor account o Employee o Due date 3. Click the OK button.

Procedure: Approve an Invoice Register Journal Perform the following steps to create an approval journal: 1. Click Accounts Payable, click Journals, click Invoices, and then click Invoice approval journal. 2. Click New to create a record. 3. Select the approval journal in the Name list. 4. Enter all the other relevant information. Refer to the Invoice Register lesson to view the field explanations. 5. Click the Lines button to create line records. 6. Select the line and click Find vouchers.

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Chapter 10: Accounts Payable Daily Procedures 7. In the Find vouchers form, select the invoice register entries that need approval and click OK to save the entries and transfer to the approval journal. 8. Click the Approval button to create an approval record. The following options are available: o Report as ready – specify that the selected journal is ready for approval. o Approve – approve the selected journal. o Reject – reject the selected journal. NOTE: The Approval button is available only if the Active check box is selected in the Journal names form.

Procedure: Approve an Invoice Register Journal After the vouchers have been approved, Perform the following steps to continue to process the invoice register: 1. Click Accounts Payable, click Journals, click Invoices, and then click Invoice approval journal. 2. Click New to create a record. 3. Select the approval journal in the Name list. 4. Enter all the other relevant information. Refer to the Invoice Register lesson to view the field explanations. 5. Click the Lines button. 6. Click the Validate button, and then click Validate voucher only to verify that the invoice in the upper pane is ready for posting. 7. Select the next invoice, and enter the account information. 8. Repeat steps 1-3 until you have entered and validated account information for all the invoices. HINT: Instead of validating each line, click the Validate button, and then click Validate when the account information is complete for all the invoices. 9. Click the Post button, and then click Post. You can now settle the posted invoices in the Payment journal.

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Financials I in Microsoft Dynamics® AX 2012

Lab 10.1 - Register an Invoice Scenario April, the Accounts Payable Clerk at Contoso, creates invoice registers and approves invoices. April's typical workflow is to create invoice registers on Monday, view the invoices to be approved in the invoice pool on Tuesday, and if there are enough to process, approve the invoices by using the invoice journal on Tuesday and Wednesday. Apply the following details: Field

Value

Invoice register

Inv_R

Vendor account

3002

Invoice number

INV123

Transaction text

Invoice

Credit

150

Approved by

BKD

Terms of payment

D30

Cash discount

7D4

Invoice approval

Inv_A

Invoice approval description

Invoice approval

Invoice offset account

601500

Challenge Yourself! Use the invoice register, invoice pool, and invoice approval journal to complete the workflow outlined in the scenario.

Need a Little Help? 1. The invoice register and the invoice approval journal are in journals. 2. The invoice pool is in inquiry. 3. The approver must be specified in the Approved by field in the invoice register.

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Chapter 10: Accounts Payable Daily Procedures Step by Step Perform the following steps to pre-register the invoice and transfer it to an invoice pool: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice register. 2. Click New to create a new register. 3. Click the Name arrow, and then click APInvReg. 4. Click the Lines button. 5. Click the Account arrow, and then click 3002. 6. In the Invoice field, type INV123. 7. In the Description field, enter Invoice. 8. In the Credit field, type 150. 9. Click the Approved by arrow, click Brooke Drynan, and then Select. 10. Click the Terms of payment arrow, and then click N030. 11. Click the Cash discount arrow, and then click 4%D10. 12. Click the Post button, and then click Post. 13. Close the Infolog. 14. Close the remaining forms. Perform the following steps to view the invoice in the invoice pool: 1. Click Accounts payable, click Inquiries, and then click Invoice pool. 2. View the line for the invoice previously created. 3. Close the form. Perform the following steps to create and post an invoice approval journal: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice approval journal. 2. Click the New button to create a new invoice approval journal. 3. Click the Name arrow, and then click APInvApp. 4. Click the Lines button. 5. Click the Find vouchers button. 6. Click the voucher for INV123. 7. Click the Select button. The voucher appears in the List of selected vouchers area.

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Financials I in Microsoft Dynamics® AX 2012 8. Click the OK button. 9. In the Journal voucher form, click the Account arrow, and then click 601500. 10. Click the Post button, and then click Post. 11. Click Close to close the Infolog. 12. Close all the forms.

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Chapter 10: Accounts Payable Daily Procedures

Vendor Invoice Pool Excluding Posting Details Invoice pools excluding posting have the following characteristics: •

The invoice register excluding posting is another kind of journal available in the Accounts Payable module.

•

Using the invoice journal represents another procedure for handling incoming invoices, although it is similar to the invoice register with posting. The difference is that you cannot post the lines. The lines go directly into the invoice pool.

•

To post the lines, create a new invoice journal, and then click Functions. Select Invoice pool and accept the individual invoices in the pool after you approve them.

•

If you activate the invoice pool by accessing the invoice pool exclude posting item in the Accounts Payable menu, the invoices shown on the window are registered, unapproved invoices. Although the invoices are unposted, they are registered in the system.

•

Use the invoice journal to transfer the invoices for approval and posting.

Scenario April, the Accounts Payable Clerk at Contoso, registers the incoming invoice in the journal invoice pool excluding posting. April sends the invoice to Phyllis, the Accounting Manager, for approval. Phyllis approves the invoice with a signature or a stamp and returns the invoice to April. April creates a new invoice journal, uses the Function button to find the invoice from the invoice pool, and posts the journal. Now the invoice is ready to be paid.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create Vendor Invoice Pool Excluding Posting Details Perform the following steps to create an invoice without posting it: 1. Click Accounts payable, click Journals, click Invoices, and then click Vendor invoice pool excluding posting journal details. 2. Enter the information necessary to create an invoice excluding posting. The fields are the same as described in the invoice register lesson.

FIGURE 10.8 INVOICE POOL EXCLUDING POSTING DETAILS FORM

Procedure: Approve and Post an Invoice Excluding Posting Perform the following steps to approve and post the invoice excluding posting journal: 1. Click Accounts payable, click Journals, click Invoices, click Invoice journal to open the Journal form. 2. Click New to create a new journal. Refer to the topic Procedure: Approve an Invoice Register Journal for more information. 3. Click the Lines button to open the Journal voucher form to transfer the invoice pool excluding posting record for approval and posting. 4. To find the invoice from the invoice pool excluding posting form, click the Functions button, and then click Invoice pool excl. posting. 5. Select one or more invoices in the Invoice pool excl. posting form, and then click the Accept button to transfer the invoices to the Journal voucher form. 6. To post the transactions click the Post button, and then click Post. After the invoice posts, it is ready to be paid.

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Chapter 10: Accounts Payable Daily Procedures

Lab 10.2 - Invoice Pool Excluding Posting Scenario Phyllis, Accounting Manager at Contoso, has asked April, the Accounts Payable Clerk, to enter invoices to the invoice pool excluding posting. Phyllis wants to review April's work. Apply the following details: Field

Value

Vendor account

3002

Description

Invoice

Credit

1000

Invoice number

INV777

Invoice journal name

APInv

Approver

Phyllis

Offset account

601500

Challenge Yourself! Help April enter the invoices into the invoice pool excluding posting. Then help Phyllis review and approve them in an invoice journal.

Need a Little Help? 1. Designate an approver from the Invoice pool excl. posting form. 2. Approve the invoice from the invoice journal.

Step by Step 1. Click Accounts payable, click Journals, click Invoices, and then click Vendor invoice pool excluding posting details. 2. Click File - New to create a new journal. 3. In the Date field, type today’s date. 4. Click the Vendor account arrow, and then click 3002. 5. Click the Description arrow, and then click invoice. 6. In the Credit field, type 1000. 7. In the Invoice field, type INV777. 8. Click the History tab. 9. Click the Approved by arrow, click Phyllis Harris, and then click Select. 10. Close the form.

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Financials I in Microsoft Dynamics® AX 2012 11. Click Accounts payable, click Journals, click Invoices, and then click Invoice journal. 12. Click New to create a new journal. 13. In the Name field, type APInv. 14. Click Lines. 15. Click the Functions button, and then click Invoice pool excl. posting. 16. Click the line for INV777. 17. Click Accept. 18. Click the Invoice tab. 19. Select the Approved check box. 20. Click the General tab and select Bank in the Offset account type field. 21. Click the Offset account arrow, and then click USA OPER. 22. Click the Post button, and then click Post. 23. Click Close to close the Infolog. 24. Close all the forms.

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Chapter 10: Accounts Payable Daily Procedures

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

By default, the user who is logged in and who enters the journal lines approves the invoices.

•

The invoice journal is designed for users to enter the invoices they receive from vendors without using the approval journal. As soon as the user enters the incoming invoices, the user can post.

Scenario April, the Accounts Payable Clerk at Contoso, enters the invoice directly into a new invoice journal, and then approves and posts the journal. Now the invoice is ready to be paid.

Procedure: Create an Invoice Journal Perform the following steps to create an invoice journal: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice journal. 2. Click New to create a new invoice journal. 3. Select a journal name in the Name list. 4. Enter the other relevant information. Refer to the Invoice Register lesson for field explanations.

Procedure: Create Invoice Journal Lines Perform the following steps to add invoice journal lines: 1. From the Journal form, click the Lines button. 2. Enter any other relevant information. Refer to the Invoice Register lesson for field explanations.

Procedure: Validate a Journal After you enter transactions, you must post them to update the vendor's balance in the subsidiary ledger and the general ledger account balances. You can validate and post from two forms. The process is the same regardless of which window you use. •

Journal form

•

Journal voucher form

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Financials I in Microsoft Dynamics® AX 2012 Validate the Journal before it posts. The validation process ensures that the journal is correct. For example, the system verifies that all mandatory fields have information entered and that the journal balances. To validate a journal, click the Validate button from either of the forms, and then click either Validate to validate all the journals or Validate voucher only to validate only the selected line. If

Then

The journal is correct

A window appears with the message: Journal is OK.

The journal is incorrect

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

Procedure: Post a Journal After you validate the journal, it is ready to be posted. To post the journal, click the Post button from either of the previous windows. There are two options to select from:

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•

Post - Posts the journal (provided it has no errors).

•

Post and transfer - Posts all correct vouchers in the journal and transfers the lines with errors to a separate journal.

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Chapter 10: Accounts Payable Daily Procedures

Lab 10.3 - Invoice Journal Scenario April, the Accounts Payable Clerk at Contoso, has been asked by Phyllis, the Accounting Manager, to enter an invoice into an invoice journal, validate the journal, and then post it. The following details apply: Field

Value

Invoice journal name

APInv

Vendor account

3002

Invoice number

INV879

Credit

1300

Offset account type

Bank

Offset account

USA OPER

Challenge Yourself! Help April enter, validate, and post a journal.

Need a Little Help? 1. 2. 3. 4. 5.

Open Accounts payable, and create a new journal. Use the account 3002. In the Invoice field, type INV879. In the Credit field, type 1300. Validate and Post the journal.

Step by Step 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice journal. 2. Press CTRL+N or click the New button to create a new journal. 3. Click the Name arrow, and then click APInv. 4. Click the Lines button. 5. Click the Account arrow, and then click 3002. 6. In the Invoice field, type INV879. 7. In the Credit field, type 1300. 8. Click the Offset account type arrow, and then click Bank. 9. Click the Offset account arrow, and then click USA OPER. 10. Click the Validate button, and then click Validate.

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Financials I in Microsoft Dynamics® AX 2012 11. 12. 13. 14.

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Click Close to close the Infolog. Click the Post button, and then click Post. Click Close to close the Infolog. Close all forms.

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Chapter 10: Accounts Payable Daily Procedures

Voucher Template Use a voucher template as the basis of future vouchers. You can use voucher templates with an accounts payable invoice journal.

Scenario Phyllis, the Accounting Manager, is entering a voucher to record interest expense on a fixed-rate long-term note. The voucher debits Interest Expense and credits Interest Payable for 350 U.S. dollars (USD) each. Phyllis must record this voucher for the same amount each month. To reduce future data entry time, Phyllis decides to save the voucher as a voucher template by amount. The next time Phyllis records an interest expense, she selects the Load voucher template action and chooses the interest entry. The original ledger accounts and amounts load into the form. April, the Accounts Payable Coordinator, receives a telephone bill that she must enter. At Contoso the telephone expenses are distributed across all departments equally. April enters the voucher with the appropriate departments. The following table is an example of the distributions for an invoice in the amount of 600.00 U.S. dollars (USD). Account

Debit amount

Telephone Expense - Sales

150 USD

Telephone Expense - Accounting

150 USD

Telephone Expense - Production

150 USD

Telephone Expense - Administration

150 USD

Accounts Payable

Credit amount

600 USD

April chooses to save this entry as a Voucher template by percent. This will hold the value assigned to each account as a percentage of the total. In this case, she will assign each department 25 percent. The next time April receives the telephone bill she must retrieve the Voucher template and enter only the amount of the telephone bill. The distributions will be created automatically based on the original percentage.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Voucher Template Perform the following steps to create a voucher template: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice journal. 2. Enter a transaction by creating a new record or selecting and existing record and then click the Lines button. 3. Click the Functions button, and then click Save voucher template. 4. From the Template type field, select one of the following: o Percent - Uses the percentage of the original voucher total represented by each voucher line. o Amount - Uses the original voucher total and line amounts. 5. Click OK.

Procedure: Use a Voucher Template After you create a voucher template, Perform the following steps to use a voucher template to create a new accounts payable invoice journal: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice journal. 2. Click New to create a new journal. Refer to the Invoice Journal lesson for more field information. 3. Click the Lines button. 4. Click the Functions button, and then click Select voucher template. 5. In the Voucher templates form, select the correct template. 6. Click OK. 7. If a percent voucher template is selected, enter the Amount of the new transaction. When you create a new voucher based on a percenttype voucher template, the percentage calculated for each new line is applied automatically to the value in the Voucher amounts dialog. The percentage determines the amount for the new voucher line.

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Chapter 10: Accounts Payable Daily Procedures

Payment Journals After you register, approve, and post the invoice, it is time to pay the invoice. Payment journals have the following characteristics: •

You can create payments through the payment journal.

•

Use the payment journal to enter and post payments. Make payments and enter them according to the terms of payment established with the vendors. In the payment journal there are several ways to create payment lines: o o o

•

There are two methods for selecting the invoices to pay through the payment journal. o o

•

Click Payment proposal. Click Functions and select Settlement. Create a journal line and enter the payment details manually.

The Payment proposal option searches for invoice lines that meet selected search criteria. Use the Settlements option to select the specific invoice lines to pay.

After you create all the payment lines, use the Generate payments command on the Functions button to generate the payment. This is the selected method of payment and the setup of controls if the system should, for example, print checks or create a payment file.

NOTE: To learn more about all the tabs and fields on the Journal window, review the Invoice Register lesson.

Payment Proposal You must post payments made to vendors to ensure the Accounts Payable subsidiary ledger matches the General Ledger. •

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

•

The payment proposal function verifies vendor transactions that are open and approved.

The system includes only transactions with either a due date or a cash discount date in the search. As soon as the payment lines generate, edit them in the payment journal.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Payment Proposal Perform the following steps to create a payment proposal: 1. Click Accounts payable, click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. Enter the additional information as necessary. Refer to the Invoice Register lesson for more information about the fields. 3. Click the Lines button. 4. Click the Payment proposal button, and then click Create payment proposal.

FIGURE 10.9 VENDOR PAYMENT PROPOSAL FORM

Procedure: Create a Payment Proposal - Options Perform the following steps to designate options for vendor payment proposal: 1. Select the kind of payment proposal to create in the Proposal type field. Select from the following options: o Per due date - transfers the set of vendor payments for due invoices o By cash discount - transfers the set of vendor payments that fulfills the criteria for obtaining a cash discount o Due date and cash discount - transfers the set of vendor payments that fulfills the criteria for obtaining a cash discount

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Chapter 10: Accounts Payable Daily Procedures

2. 3. 4. 5. 6. 7. 8. 9. 10.

and after that, transfers vendor transactions proposed after the due date Click the Select button to select specific vendors or a range of vendors. Select the Generate check box to generate a payment journal. Enter the total amount to selected for payment in the Amount limit field. Enter the maximum lines to pay in the Transaction limit field. Select the Delete negative payments check box to delete payments, if the amount to be paid is negative. Enter the period for the vendor transactions to include in the payment proposal in the From date and To date fields. Enter the lowest date for the payment in the Minimum date field. Enter the date the payment is due in the Total payment date field. Add other criteria as appropriate in the other fields, and then click the OK button.

Procedure: Create a Payment Proposal - Payment Proposal Lines After you select options and then click the OK button, the Vendor payment proposal form opens and will display the following information for you to verify: •

Payment proposal lines that meet the criteria appear in the lower Payment proposal pane.

•

When you select a payment proposal line, view the open invoice transactions that contribute to the payment proposal line in the upper Open transactions pane.

•

Review each proposal line and the associated open transactions before settlement. For example, delete an open invoice from the open transactions lines if you are unsatisfied with the items and you do not want to pay the invoice. To delete a line, put the pointer on the line and click the Delete button.

To change certain fields on several lines in one operation, select the lines, click the Multiple change button, and enter the values to be implemented.

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Financials I in Microsoft Dynamics® AX 2012 HINT: Select the Link check box in the middle of the form to synchronize the two parts of the form. When this option is selected the Open transactions pane only shows transactions related to the current payment suggestion. When you move between payment suggestions, the system updates open transactions.

FIGURE 10.10 VENDOR PAYMENT PROPOSAL FORM

Procedure: Create a Payment Proposal - Transfer, Validate, and Post Follow these steps after you are satisfied with the results in the Vendor payment proposal form and are ready to transfer the proposal lines to the payment journal. 1. After you inspect all the proposed lines click the Transfer button to move the lines to the payment journal. 2. In the Payment journal lines form, continue to edit the lines in the payment journal if necessary. 3. Verify the balances of company bank accounts to ensure you can make the payments. To view the balances, click the Inquiries button, and then click Balance control. 4. Click the Validate button to validate the payment lines. 5. Click the Post button, and then click Post to generate the payments.

Generate Payment Transfers Use the Payment transfer form to manage payments with a status of Sent that are not posted. These include payments that have lines with statuses of Rejected or Approved. Click Accounts payable > Journals > Payments > Payment transfer.

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Chapter 10: Accounts Payable Daily Procedures Procedure: Mark Settlements Use the settlement option as a second option for selecting invoice lines to pay. Perform the following steps to run a payment proposal for a marked settlement: 1. Click Accounts payable, click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. Enter the additional information as necessary. Refer to the Invoice Register lesson for more information about the fields. 3. Click the Lines button. 4. Select a vendor account in the Account field.

NOTE: The Vendor account and Currency fields must contain values to select the Settlements option. 5. Click the Functions button, and then click Settlement to open the Settle open transaction form.

Procedure: Mark Settlements - Open Transaction Editing Perform the following steps to mark invoices for settlement: 1. From the Settle open transaction form select the Mark check box to transfer the invoice to the Vendor payment proposal form. Select one or several invoices for settlement.

NOTE: A red mark displays in the Is marked field if a transaction already is marked for settlement. 2. Select the Payment proposal check box. 3. Close the form after you select the invoices for payment. When you close the Settle open transaction form, the Vendor payment proposal form opens and shows the payment proposal and the open transactions.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Mark Settlements - Transfer, Validate, and Post Follow these steps after you are satisfied with the results in the Vendor payment proposal form and are ready to transfer the proposal lines to the payment journal: 1. Click the Transfer button to move the proposal lines to the payment journal after you inspect all the proposed lines. 2. In the Payment journal lines form, continue to edit the lines in the payment journal if necessary. 3. Verify the balances of company bank accounts to ensure that you can make the payments. To view the balances, click the Inquiries button, and then click Balance control. 4. Click the Validate button to validate the payment lines. 5. Click the Post button, and then click Post to generate the payments.

Procedure: Create a Manual Payment Journal You can create a payment journal by entering the invoice information. Perform the following steps to create a manual payment journal: 1. Click Accounts payable, click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. Enter the additional information as necessary. Refer to the Invoice Register lesson for more information about the fields. 3. Click the Lines button. 4. Enter values in the relevant fields in the first line on the Overview tab of the Journal voucher form. Some fields may be entered automatically with values from fields in the Journal form. Make entries in the following fields: o Account - select a main account o Description (This is optional, but it eases the entry of lines in the journal because the pointer automatically goes to the appropriate Debit or Credit field.) o Enter an appropriate amount in the Debit or Credit field. o Select an Offset Account Type in the Offset account type list. o Select an offset account in the Offset Account list. o Press the down arrow key on your keyboard to create a new line, and then enter information about the next voucher.

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Chapter 10: Accounts Payable Daily Procedures Procedure: Create a Manual Payment Journal - Validate and Post Perform the following steps to check the entry and post the payment: 1. From the Journal voucher form click the Validate button after you enter all the voucher lines, and then click Validate or Validate voucher only. This verifies that all the lines or the selected lines are ready for posting. 2. Post the lines in the Journal voucher form or in the Journal form. Click the Post button, and then click Post. NOTE: Click the Inquiries button, and then click Balance control to ensure that the bank account has funds available to pay the vendor.

Procedure: Generate Payments After you create the payment journal, it is ready to be paid. The procedure on how to generate payments is the same for the following: •

Payment proposals

•

Settlements

•

Manual payment journals

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Financials I in Microsoft Dynamics® AX 2012 Perform the following steps to generate a payment. 1. From the Journal voucher form, click the Functions button, and then click Generate payments. 2. Select the method of payment for the invoice lines you are paying in the Method of payment list. For example, if you are making a check payment, select the method of payment for checks. Or, select an export format in the Export format list. 3. Select the bank account from which to withdraw the payment in the Bank account list.

FIGURE 10.11 GENERATE PAYMENTS FORM

Procedure: Generate Payments - Print Checks Perform the following steps to print checks: 1. From the Generate payments form, click the Dialog button to pay with checks. 2. Fill in the fields and then click the Document button to print the check. 3. Click OK to print the checks.

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Chapter 10: Accounts Payable Daily Procedures NOTE: To print checks, before you run the generate payments process, run the create checks process in bank management. For information about this refer to the Bank Management course. HINT: Before checks print, ensure that the printer has the correct checks ready to print. NOTE: To void checks after they are printed, click Payment status and select Reject. CAUTION: As soon as checks are printed, the journal lines cannot be deleted unless the checks are voided.

Print Payments as Non - Negotiable Checks After a payment has been generated and posted to the payment journal, you can print a copy of the payment as a non-negotiable check. A non-negotiable check is a document that cannot be bought, sold, exchanged, or transferred. Print a copy of a payment from payment history by following these steps: 1. Click Accounts payable > Common > Vendors > All vendors. On the Action Pane, select the Invoice tab, and then click the Payment history button. 2. Select a payment or payments, and then click Print payment copy. Print a copy of a payment from a promissory note journal by following these steps: 1. Click Accounts payable > Journals > Promissory notes > Draw promissory note journal. 2. Select a journal or click New to create a new line, and then click Lines. The Journal voucher form opens. 3. Select a payment or payments, and then click Print > Payment copy. NOTE: You can print a copy of a payment only if its method of payment allows for payment copies and the offset account type is Bank. For more information, see Methods of payment - vendors (form) and Journal voucher - Vendor payment journal (form).

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Generate Payments - Post Perform the following steps to post the payment: 1. View the status of the payment in the Status field in the Payment journal lines form. After the payment generates, the status is set to Sent automatically. 2. Click Post to update the vendor account balance in the subsidiary ledger and General Ledger account balances.

Procedure: Placing Payments on Hold You can put Accounts payable payments on hold until a specified date, or indefinitely. You can hold all payments for a specific vendor or invoice. You might want to hold all payments for a vendor until a dispute is resolved, or you might want to hold the payment for an invoice until funds become available. 1. 2. 3. 4.

Click Accounts payable > Common > Vendors > All vendors. Select a vendor account. On the Action Pane, click On hold. In the form that is displayed, select Payment in the Vendor hold field. 5. In the Vendor hold release date field, enter the date when the payment hold should end, and payments should again be made to the vendor. If you do not enter a date, the payment hold lasts indefinitely.

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Chapter 10: Accounts Payable Daily Procedures

Lab 10.4 - Payment Journals Scenario Sara, the CFO at Contoso, has returned from the annual Microsoft conference called Convergence. She has submitted her expenses using an outside travel agency called Margie's Travel. April, the Accounts Payable Clerk at Contoso, must register and post the invoices, each in a separate journal. She must then validate and post each journal. Apply the following details: Airfare for trip to Convergence Option

Value

Date

4/1/2011

Invoice number

1000

Amount

550 USD

Approver

Brooke Drynan

Hotel for trip to Convergence Option

Value

Date

4/1/2011

Invoice number

1001

Amount

600 USD

Approver

Brooke Drynan

Challenge Yourself! Help April with the following tasks: 1. Register the invoices. 2. Post the approvals for these transactions in one journal. 3. Enter the expense accounts to balance each line item: o For the Airfare line, use account 601500 o For the Hotel line, use account 601500 4. 5. 6. 7.

After you complete the required steps, validate and post this journal. Make the appropriate edits and validate the journal again. Post the journal. Generate the payment(s) for this invoice.

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Financials I in Microsoft Dynamics® AX 2012 Step by Step Perform the following steps to enter invoices in Accounts Payable. Airfare Invoice: 1. To register the invoice, use the Invoice Register. Click Accounts payable, click Journals, click Invoices, and then click Invoice register. 2. Click New to create a new journal. 3. Click the Name arrow, and then click APInvReg. 4. Click the Lines button. 5. Enter 4/1/11 for the date. 6. In the Account field select 8005 - Margie's Travel. 7. In the Invoice field enter 1000. 8. In the Description field enter Airfare for Convergence. 9. Enter 550 in the Credit field. 10. In the Method of payment field select USA_EL. 11. Click the Approved by arrow, click Brooke Drynan and then click the Select button. 12. Click the Validate button, and then click Validate. 13. In the Infolog click the Close button. 14. Click the Post button, and then click Post. 15. In the Infolog click the Close button. 16. Close the Journal voucher form. Hotel Invoice: 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice register. 2. Click New to create a new journal. 3. Click the Name arrow, and then click APInvReg. 4. Click the Lines button. 5. Enter 4/1/11 for the date. 6. In the Account field select 8005 - Margie's Travel. 7. In the Invoice field enter 1001. 8. In the Description field enter Hotel for Convergence. 9. Enter 600 in the Credit field. 10. In the Method of payment field select USA_EL. 11. Click the Approved by arrow, click Brooke Drynan and then click the Select button. 12. Click the Validate button, and then click Validate. 13. In the Infolog click the Close button. 14. Click the Post button, and then click Post.

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Chapter 10: Accounts Payable Daily Procedures 15. In the Infolog click the Close button. 16. Close the Journal voucher form. Perform the following steps to use the invoice approval journal. 1. Click Accounts payable, click Journals, click Invoices, and then click Invoice approval journal. 2. Click New to create a new journal. 3. Click the Name arrow, and then click APInvApp. 4. Click the Lines button. 5. Click the Find vouchers button. 6. Select the Airfare line and click Select. Then click OK. 7. Enter 601500 in the Account field. 8. Click the Validate button, and then click Validate. 9. In the Infolog click the Close button. 10. Click the Find vouchers button. 11. Select the Hotel line and click Select. Then click OK. 12. Enter 601500 in the Account field. 13. Click the Validate button, and then click Validate. 14. In the Infolog click the Close button. 15. Click the Post button, and then click Post. 16. In the Infolog click the Close button. 17. Close the forms. Perform the following steps to make payments for the invoices: 1. Click Accounts payable, click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. 3. Click the Name arrow, and then click APPay. 4. Click the Lines button. 5. Click the Payment proposal button, and then click Create Payment Proposal. 6. In the Proposal type list, select Due date & cash discount. 7. Click the Select button. 8. Enter 8005 (Margie's Travel) in the Criteria field for the Vendor account, and then click OK. 9. Enter 5/15/11 in the To Date field. 10. Click OK. 11. In the Vendor Payment Proposal form, click the Transfer button. 12. Click OK. 13. Click the Functions button, and then click Generate payments. 14. Select the Method of Payment of USAUSD_CHK, 15. In the Bank account field select USA OPER

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Financials I in Microsoft Dynamics® AX 2012 16. Click OK. 17. You will receive a print stop error if printers are not set up properly. Clear and Close the Infolog form. 18. Close all forms.

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Chapter 10: Accounts Payable Daily Procedures

Prepayments Advance payments of expenses such as taxes or insurance can be used as prepayments. The system functionality can automate a process for making a prepayment for a purchase order. This functionality allows the prepayment to be settled against the purchase order to help prevent over or double payment. In addition, parameters allow for the posting of prepayments to be directed to a different posting profile.

Prepayment Process Five basic steps involved with processing a prepayment for a purchase order include the following: 1. 2. 3. 4. 5.

Create the purchase order. Set up the prepayment. Post the prepayment. Make a payment. Settle the prepayment against the final invoice

Scenario: Prepaid Purchase Order Alicia, the Purchasing Agent, has created a purchase order for 100 televisions from a local television supplier. The sales representative at the vendor has communicated to Alicia that a 10 percent prepayment is required before the order can be processed. Alicia must create the purchase order and submit a request to April, the Accounts Payable Coordinator, to process the prepayment. Once April has received the request, she must post the prepayment and print the check to the vendor. Once the televisions are delivered, April receives the invoice for the goods. She must now settle the invoice from the purchase order against the prepayment that was made previously.

Procedure: Set Up the Prepayment To create a purchase order with a request for a prepayment, follow these steps: 1. Open Procurement and sourcing > Common > Purchase orders > All purchase orders. 2. Click New > Purchase order to create a new purchase order. 3. Select the Vendor account. 4. If required, click Yes to transfer the vendor information to the purchase order. 5. Click OK to create the order. 6. In the Lines tab, select the desired Item number. 7. Type the Quantity and Unit price.

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Financials I in Microsoft Dynamics® AX 2012 8. Click the Purchase tab on the action pane. 9. Click Prepay > Prepayment to open the Create or edit a prepayment form. 10. Optionally, type a Description for the prepayment. 11. Select an option for Fixed or Percent based prepayment. 12. In the Value field type the amount. o If Fixed is selected for the type, the Value field represents a flat amount in the currency of the purchase order. o If Percent is selected for the type, the Value field represents a percentage of the purchase order total. 13. Select the desired Prepayment category ID. 14. Click Save. 15. Click Generate > Confirm to confirm the purchase order.

FIGURE 10.12 CREATE PURCHASE ORDERS FORM

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Chapter 10: Accounts Payable Daily Procedures Procedure: Post the Prepayment Invoice To post a prepayment invoice, follow these steps: 1. Verify a posting account is set up in the Posting form. Open Inventory and warehouse management > Setup > Posting > Posting > Purchase order tab. Click on the Prepayment radio button to set up a Main account for prepayments. 2. Open Procurement and sourcing > Common > Purchase order > All purchase orders. 3. Search for the desired purchase order. 4. Click the Invoice tab. 5. Click Prepayment invoice. 6. Enter a unique invoice number into Number field. 7. Verify the invoice information, ensuring that the Prepayment check box is selected. 8. Click Post to post the transaction 9. Close the Purchase order details form A new transaction is posted to the vendor account for the amount of the prepayment.

Procedure: Make a Payment To make a payment for the prepayment invoice, follow these steps. 1. Open Accounts payable > Journals > Payment > Payment journal. 2. Click New to create a new journal header. 3. Select a journal name from the Name field. 4. Enter a brief Description. 5. Click Lines. 6. Select the desired vendor in the Account field. 7. Click Functions > Settlement. 8. Select the desired prepayment invoice to be paid. 9. Close the Open transaction editing form. 10. Click Post > Post the vendor payments journal. 11. Close the Journal voucher form. 12. Close the Payment journal form.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Record Final Invoice and Application of the Prepayment To settle the payment, follow these steps: 1. Open Accounts payable > Common > Vendor invoice > Open vendor invoices. 2. Click New > Invoice > Vendor invoice. 3. Select the Invoice account. 4. Enter the Invoice number. 5. Enter additional invoice information as necessary. 6. Click Apply prepayment. 7. Click Post to finalize and post the invoice with the settlement.

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Chapter 10: Accounts Payable Daily Procedures

Lab 10.5 - Setup and Track a Prepayment This lab provides practice for creating and posting a vendor prepayment. Scenario Alicia, the Purchasing Agent, needs to create a purchase order for 100 LCD Monitors, item number 10003, for a unit price of 2,565.00 U.S. Dollars (USD). The sales representative at the vendor has communicated to Alicia that a 10 percent prepayment is required before the order can be processed. Alicia must create the purchase order and submit a request to April, the Accounts Payable Coordinator to process the prepayment. Once April has received the request, she must post the prepayment and print the check to the vendor. Once the televisions are delivered, April receives the invoice for the goods. She must now settle the invoice from the purchase order against the prepayment that was made previously.

Challenge Yourself! Using the information provided, create a new purchase order and setup an prepayment for 10 percent of the purchase order total. Next, post the prepayment invoice for the purchase order created in the previous step. Process and post a payment journal for the prepayment vendor invoice.

Need a Little Help? 1. 2. 3. 4. 5.

Create a new purchase order for Vendor 1003. Add Item 10003 to the order. Setup a prepayment for 10 percent of the purchase order total. Post the vendor invoice for the prepayment. Create and post a vendor payment, ensuring that the vendor prepayment is marked for settlement.

Step by Step To create a purchase order with a request for a prepayment, follow these steps: 1. Open Procurement and sourcing > Common > Purchase orders > All purchase orders. 2. Click New > Purchase order to create a new purchase order. 3. Select 1002 in the Vendor account field. 4. Click Yes to transfer the vendor information to the purchase order. 5. Click OK to create the order.

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Financials I in Microsoft Dynamics® AX 2012 6. In the Purchase order lines tab, select 10003 in the Item number field. 7. Enter "100" into the Quantity field and "2,565.00" into the Unit price field. 8. Click the Purchase tab on the action pane. 9. Click Prepayment to open the Create or edit a prepayment form. 10. Type a Description for the prepayment. 11. Select Percent based prepayment. 12. In the Value field enter "10.00". 13. Select Audio as the Prepayment category ID. 14. Click Save. 15. Click Generate > Confirm to confirm the purchase order. 16. Close the Infolog form if you receive this message. 17. Click the Invoice tab, and click Prepayment invoice action to open the Vendor invoice form. 18. Enter a unique invoice number into Number field. 19. Verify the invoice information, ensuring that the Prepayment check box is selected. 20. Close the Vendor invoice form. 21. Close the Purchase order form. To post a prepayment invoice, follow these steps: 1. Verify a posting account is set up in the Posting form. Open Inventory and warehouse management > Setup > Posting > Posting > Purchase order tab. Click on the Prepayment radio button to set up a Main account for prepayments. 2. Click the Add button and enter All in the Item code and Account code fields. 3. Enter 110110 in the Main account field. 4. Close the Posting form. 5. Open Procurement and sourcing > Common > Purchase orders > All purchase orders. 6. Search and open the purchase order created in the Create a Purchase Order with a Prepayment step. 7. Click the Invoice tab. 8. Click Prepayment invoice to create an invoice. 9. Enter a unique invoice number into the Number field. 10. Verify the invoice information, ensuring that the Prepayment check box is selected. 11. Click Post on the Action pane, and then click the Post button. 12. Close all forms.

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Chapter 10: Accounts Payable Daily Procedures To make a payment for the prepayment, follow these steps: 1. Open Accounts payable > Journals > Payments > Payment journal. 2. Click New to create a new journal header. 3. Select a journal name from the Name field. 4. Enter a brief Description. 5. Click Lines. 6. Select 1002 in the Account field. 7. Click Functions > Settlement. 8. Select the prepayment invoice created during the Post the Prepayment procedure. 9. Close the Settle open transactions form. 10. Select USA_EL in the Method of Payment field. 11. Click Post > Post. 12. Close the Infolog form 13. Close the Journal voucher and Payment journal form.

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Financials I in Microsoft Dynamics® AX 2012

Invoice Matching Accounts payable invoice matching is the process of matching the vendor invoice, purchase order, and product receipts information. Vendor invoices are frequently based on product receipts that represent actual shipments, instead of on purchase orders. Sometimes the invoiced amounts do not match the purchase order amounts, and sometimes the shipped quantities do not match the invoiced quantities. To manage this information, Microsoft Dynamics AX enables you to do the following things: •

Create an accounts payable invoice based on product receipts. Product receipts are automatically suggested for invoicing, and you can select which product receipts to use. You can also select specific product receipt line items from multiple purchase orders, if necessary.

•

Enter and save an invoice before a shipment arrives. After the product receipt that represents the shipment arrives, you can match the appropriate product receipt lines to the invoice lines.

•

View and approve quantity differences between the invoiced quantity on the invoice and the received quantity on the product receipt. If there is a difference, you can save the invoice and later match it to a different product receipt or change the invoice quantity to match the received quantity.

•

Enter invoice amounts that were not included on the original purchase order so that the invoice information matches the invoice that you received from your vendor. You can compare the miscellaneous charges for purchase orders with the miscellaneous charges for invoices. If necessary, you can add miscellaneous charges to invoices and allocate them to invoice lines.

•

View and approve price match discrepancies between the invoice net unit price and the purchase order net unit price. You can set up price tolerance percentages for companies, vendors, and items. If the vendor invoice line price is not within the acceptable price tolerance, you can save the invoice until it is approved for posting, or until you receive a correction from the vendor.

Types of Accounts Payable Invoice matching You can use the following types of Accounts payable invoice matching:

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•

Invoice totals matching – match the total amounts on the invoice to the total amounts on the purchase order. This type of invoice matching includes the least amount of detail, so you can use this option to set up controls that minimize the staff time that is required to review invoice matching information.

•

Two-way matching – match the price information on the invoice to the price information on the purchase order.

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Chapter 10: Accounts Payable Daily Procedures •

Three-way matching – match the price information on the invoice to the price information on the purchase order. Also match the quantity information on the invoice to the quantity information on the product receipts that are selected for the invoice.

•

Charges matching – match the charges information (amounts) on the invoice to the charges information (amounts) on the purchase order.

NOTE: Refer to the User Help In Microsoft Dynamics AX for more details on the types of Invoice Matching.

Scenario Alicia, the Buyer at Contoso, enters a purchase order with one line item for 50 bulbs at a price of 2.00 U.S. dollars (USD) each. The purchase order is approved and submitted to the vendor. The vendor ships only 30 bulbs. Sammy, the Shipper, enters a product receipt for 30 bulbs. April, the Accounts payable clerk, receives the invoice in the mail for 50 bulbs at a price of 2.00 USD each for a total of 100 USD, but the totals that April is viewing reflect 30 bulbs at 2.00 USD each, for a total of 60 USD. April examines the vendor invoice and notices that the quantity is 50, not 30 as the system defaulted. She changes the invoice quantity to 50. The system flags April with a Quantity matching discrepancy, because the quantity on the invoice does not equal the total matched quantity for the invoice line. April cannot post the invoice, but she chooses to put it on hold so she can check with Alicia or Sammy to inquire why the invoice has arrived for a quantity that differs from the product receipt quantity currently posted in the system.

Procedure: Define Parameters Invoice Matching enables the set up of price tolerance percentages that you can use to identify discrepancies among purchase order line prices, product receipt line quantities, and invoice line prices and quantities. Perform the following steps to enable invoice matching: 1. Click Accounts Payable, click Setup, and then click Accounts payable parameters. 2. Click Invoice validation, and then select the Enable invoice matching validation check box. 3. In the Post invoice with discrepancies field, select whether approval is required before an invoice that contains discrepancies for invoice matching can be posted.

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Financials I in Microsoft Dynamics® AX 2012 4. Optional: To match actual invoice totals with expected totals, based on information on the purchase order, select the Match invoice totals check box. a. In the Display invoice totals match icon field, select whether an icon is displayed if a discrepancy for invoice matching exceeds the tolerance. You can select to display the icon when a positive discrepancy exceeds the tolerance, or when either a positive or a negative discrepancy exceeds the tolerance. For example, the tolerance is 5 percent, and the total invoice amount on the purchase order is 100.00. Therefore, a price match icon is displayed if the total invoice amount on the invoice exceeds 105.00. If you select If greater than or less than tolerance, the icon is also displayed if the invoice amount is less than 95.00. b. In the Invoice totals tolerance percentage field, enter the maximum percentage variance that is acceptable. 5. Optional: To match price or price and quantity information for line items on invoices, follow these steps: a. In the Line matching policy field, select a value to be used as the default policy for the legal entity that you are working with. b. To allow a different level of matching to be applied for an item, vendor, vendor and item combination, or purchase order line, select a value in the Allow matching policy override field. c. In the Display unit price match icon field, select when an icon is displayed if a discrepancy for invoice matching exceeds the tolerance for the net unit price. The icon can be displayed when a positive discrepancy exceeds the tolerance, or when either a positive or a negative discrepancy exceeds the tolerance. For example, the tolerance is 5 percent, and the unit price on the purchase order is 10.00. Therefore, a price match icon is displayed if the net unit price on the invoice exceeds 10.50. If you select If greater than or less than tolerance, the icon is also displayed if the net unit price on the invoice is less than 9.50.

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Chapter 10: Accounts Payable Daily Procedures 6. Optional: To match price totals for line items on invoices, select a value in the Match price totals field. a. Enter the price totals tolerance percentage, amount, or percentage and amount. b. In the Display price total match icon field, select when an icon is displayed if a discrepancy for invoice matching exceeds the tolerance. The icon can be displayed when a positive discrepancy exceeds the tolerance, or when either a positive or a negative discrepancy exceeds the tolerance. For example, the tolerance is 5 percent, and the line price total on the purchase order is 10.00. Therefore, a price match icon is displayed if the line price total on the invoice exceeds 10.50. If you select If greater than or less than tolerance, the icon is also displayed if the line price total on the invoice is less than 9.50.

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Financials I in Microsoft Dynamics® AX 2012 7. Optional: To match actual charges with expected charges, based on information on the purchase order, select the Match charges check box. a. In the Display charges match icon field, select when an icon is displayed if a discrepancy for invoice matching exceeds the tolerance. The icon can be displayed when a positive discrepancy exceeds the tolerance, or when either a positive or a negative discrepancy exceeds the tolerance. For example, the tolerance is 5 percent, and the expected charge, based on the purchase order, is 10.00. Therefore, a charges match icon is displayed if the actual charge exceeds 10.50. If you select If greater than or less than tolerance, the icon is also displayed if the charge is less than 9.50. b. In the Charges tolerance percentage field, enter the maximum percentage variance that is acceptable.

FIGURE 10.13 ACCOUNTS PAYABLE PARAMETERS FORM, INVOICE VALIDATION

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Chapter 10: Accounts Payable Daily Procedures Procedure: Modify an Inventory Model Group for Invoice Matching Price discrepancies between the price of an item on a product receipt and the price on a corresponding invoice may affect the recorded inventory cost of the item. To help ensure that users record inventory costs correctly, invoice matching requires that product receipt information be posted before invoice information can post. Perform the following steps to modify an inventory model group for invoice matching: 1. Click Inventory and warehouse management, click Setup, click Inventory, and then click Inventory model groups. 2. Select an inventory model group. 3. On the Setup FastTab, select the Receiving requirements check box to designate that users must update item receipts physically before they can update the receipts financially. Users must enter and post a product receipt before they can post the corresponding vendor invoice. If there is a difference between the received quantity on the product receipt and the invoiced quantity on the invoice, an icon displays in the Packing slip quantity match column in the Posting invoice form.

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Financials I in Microsoft Dynamics® AX 2012 4. Select the Deduction requirements check box. When selected, users must update item deductions physically before they update them financially. Users must enter and post a product receipt before they post a corresponding vendor invoice. If there is a difference between the deducted quantity on the product receipt and the negative invoiced quantity on the invoice, an icon displays in the Packing slip quantity match column in the Posting invoice form. 5. Repeat steps 2 through 4 for the inventory model groups for which you want to use invoice matching.

FIGURE 10.14 INVENTORY MODEL GROUPS FORM, SETUP FASTTAB

Procedure: Create Item Price Tolerance Groups You can set up price tolerance information for all items in your company, for item price tolerance groups, or for individual items. To set up item price tolerances by group, first create item price tolerance groups and then assign each item to the appropriate group. For example, you might set up three item price tolerance groups: High, Medium, and Low. Perform the following steps to set up price tolerance information: 1. Click Inventory and warehouse management, click Setup, click Price/Discount, and then click Item price tolerance groups. 2. Click New to create a new item price tolerance group. 3. Enter an identifier for the item price tolerance group and a name. 4. Repeat steps 2 and 3 for the remaining item price tolerance groups. 5. Click Product Inventory management, click Common, and then click Released products. 6. Select an item. On the Action Pane, click Edit. 7. Click the Grid View at the bottom of the form, and then select an item in the list.

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Chapter 10: Accounts Payable Daily Procedures 8. On the Purchase FastTab, select an item price tolerance group. 9. Repeat steps 7 and 8 for each item.

FIGURE 10.15 ITEM PRICE TOLERANCE GROUPS FORM

Procedure: Create Vendor Price Tolerance Groups Set up price tolerance information for all vendors in your company, for vendor price tolerance groups, or for individual vendors. To set up vendor price tolerances by group, first create vendor price tolerance groups and then assign each vendor to the appropriate group. For example, set up two vendor price tolerance groups: 10 percent and 5 percent. Perform the following steps to set up price tolerance information for vendors: 1. Click Accounts payable, click Setup, click Vendors, and then click Vendor price tolerance groups. 2. Click New to create a new vendor price tolerance group. 3. Enter an identifier and a name for the vendor price tolerance group. 4. Repeat steps 2 and 3 for the remaining vendor price tolerance groups. 5. Click Accounts payable, click Common, click Vendors, and then click All Vendors. 6. Select a vendor account. On the Action Pane, click Edit. 7. On the Invoice and delivery FastTab, select a Vendor price tolerance group. 8. Repeat steps 6 and 7 for the remaining vendors.

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Financials I in Microsoft Dynamics® AX 2012 Price Tolerance Setup Set up price tolerance percentages for your company, items, and vendors. When the system compares vendor invoices with purchase order information, it searches for the applicable price tolerance percentage in the following order. Item code

Account code

Table

Table

Table

Group

Table

All

Group

Table

Group

Group

Group

All

All

Table

All

Group

All

All

The default company price tolerance is zero percent and it applies to all items and all accounts (All, All). You cannot delete the default company price tolerance record. For example, you can set up the following price tolerance percentage records. Item code

Item relation

All

Table

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Battery

Account code

Account relation

Price tolerance percentage

Notes

All

1%

This percentage applies to all items and all vendors, unless one of the other scenarios applies. This is the legal entity price tolerance percentage.

All

1%

This percentage applies to the Battery item from all vendors.

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Chapter 10: Accounts Payable Daily Procedures Item code

Item relation

Account code

Group

Low

Group Group

Account relation

Price tolerance percentage

Notes

All

2%

This percentage applies to all items whose item value model group has the “Low” item price tolerance group assigned to their item value model groups, and all vendors.

Medium

All

6%

High

All

15%

All

Group

5 percent

5%

All

Group

10 percent

10%

This percentage applies to vendors who are assigned to the “10 percent” group, and All items.

Procedure: Set Up Price Tolerance Perform the following steps to set up price tolerance: 1. Click Accounts payable, click Setup, click Invoice matching, and then click Price tolerances. 2. In the first row, you can change the default company price tolerance. 3. Click New to create a new price tolerance percentage. 4. Enter information about the item and vendor combination that the price tolerance applies to, and the price tolerance percentage. 5. Repeat steps 3 and 4 for the remaining price tolerance percentages. NOTE: By default, negative price discrepancies are allowed. However, you cannot enter a negative number as the price tolerance percentage. To track negative price tolerance percentages, select If greater than or less than tolerance in the Display unit price match icon field in the Accounts payable parameters form. Then enter price tolerance percentages in the Price tolerances form.

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Financials I in Microsoft Dynamics® AX 2012

Charges to Purchase Order Invoices Add or change charges during the purchase order invoicing process. You can apply the charges to the invoice header or the invoice lines. Additionally, you can connect the transactions to the purchase order header or lines to correct differences, if necessary. For each customer/vendor charge code, determine whether you want to compare charges values on purchase orders and invoices. Example If a charge on an invoice differs from the expected charge on the corresponding purchase order, you can change the charge transaction for the invoice. For example, a charges transaction for a handling fee might be 10.00 USD on the purchase order, but when the invoice arrives, the handling fee may have increased to 20.00 USD.

Account for Purchase Order Invoice Variance Caused by Charges If the charges for an invoice differ from the charges for the purchase orders, you can change the charges for the unposted invoice. Charges are copied to an unposted invoice from the applicable purchase orders. NOTE: Charges values for an invoice are not included in the price tolerance calculations for accounts payable invoice matching. However, you can view expected and actual values for Customer/Vendor type charge codes in the Compare misc. charges values - Invoice form. When you post a purchase order invoice, the system posts the charges transactions from the invoice. The system removes corresponding charges transactions from the purchase order. NOTE: If you are working with an invoice for an intercompany purchase order, you cannot change charges on the invoice. The charges for the intercompany purchase order must match the charges for the corresponding intercompany sales order, and any changes to charges for the invoice for the purchase order will cause posting to fail.

Procedure: Add Charges to a Purchase Order To add charges to a purchase order, follow these steps: 1. Open Procurement and sourcing > Common > Purchase order > All purchase orders. 2. Select a purchase order and then click Invoice tab on the Action pane and then click Invoice in the Generate group. 3. If necessary, click Edit record in the Maintain group Action Pane.

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Chapter 10: Accounts Payable Daily Procedures 4. Select which charges transactions to add, change, or delete: a. To add, change, or delete charges transactions for the invoice header, click Maintain Charges on the Financial tab. b. To add, change, or delete charges transactions for an invoice line, in the Lines Action pane strip, click Financials > Maintain misc. line charges. 5. In the Charges transactions form, enter the charge from the invoice that you received from your vendor. 6. Click Connect to selected charges transaction for an invoice header or line to the corresponding purchase order header or line. Close the form. 7. Close the Charges transactions form.

Update Charges and Allocation If a charges transaction was added to purchase order lines and the charges amount is different on the invoice, you can enter a new charge transaction for the difference and then allocate it to the invoice lines. NOTE: If you are working with an invoice that has been summarized and you add a charge to the summary invoice header (on the Overview tab), allocation affects all invoice lines included in the summary invoice. If you add a charge to one of the individual invoice headers (on the Purchases tab), allocation affects only the invoice lines associated with the selected invoice header. For example, assume that a charge for freight was expected to be 20.00 U.S. dollars (USD) and was allocated equally to four purchase order lines. If the freight charge on the invoice is 30.00 USD, enter an additional charge transaction for the invoice header and allocate it to the four invoice lines. The additional charge amount is allocated only to the invoice lines. The purchase order lines are not affected.

Procedure: Update Charges and Allocation To allocate charges, follow these steps: 1. Open Procurement and sourcing > Common > Purchase order > All purchase orders. 2. Select a purchase order and then click Invoice tab on the Action pane and then click Invoice in the Generate group. 3. To add charges transactions to the invoice header, click Maintain charges in the Financial tab of the Action Pane. 4. In the Charges transactions form, enter the charge from the invoice that you received from your vendor. In this example, enter 10.00, because that is the difference between the purchase order charge and the invoice charge.

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Financials I in Microsoft Dynamics® AX 2012 5. Close the Charges transactions form. 6. Click Allocate charges in the Charges group of the Action Pane. 7. Select how to allocate the charge to the lines. For this example, select Per line to allocate the charges equally to all lines on the invoice.

Landed Cost Charges A landed cost enables a company to capture all the costs related to an inventory item. Calculating landed cost is valuable when the additional costs are a significant part of the item cost. Determining landed costs is also helpful when you compare item costs between vendors. For example, vendor A sells an item for 4.75 USD and vendor B sells the item for 4.25 USD. However, vendor B charges more in freight charges so that the total cost of the item is more than vendor A's cost. Landed costs can be added when an item is posted and will provide the item's total cost. Third-party charges, such as freight and import duty, can be posted to an item so that the item transactions include these charges. This process provides a landed cost for the item. You can add these additional charges during the following points in time: •

Before the order is posted, if known.

•

Later, if the charges come in after posting.

Adding Landed Costs After an Invoice Update Charges can be added to a purchase order until it is invoiced. If an invoice from the vendor contains a charge, it must be added and allocated among the items before or during invoicing. However, in some cases, a company might receive a bill from a third-party at a later stage. To adjust the cost price for the items, you must set up the Charge code as a Debit to the Item and a Credit to the Ledger account.

Procedure: Adjust Charges Using a Journal To make an adjustment on an invoice from the Invoice Journal form, follow these steps: 1. Open Accounts payable, click Inquiries, click Journals, and then click Invoice journal. 2. On the Invoice Journal form, select the invoice to adjust. 3. Click Charges > Adjustment. The Allocate charges form appears. 4. If the charge is for a fixed amount, select the allocation method in the Charges allocation field. 5. In the Posting date field, enter the date of posting in the ledger.

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Chapter 10: Accounts Payable Daily Procedures 6. Click the Allocate charges to lines arrow and decide how to allocate charges to the lines. 7. Click the Charge code arrow and select the relevant code. 8. Update the Description, if it is necessary. 9. In the Charges value field, enter a value. 10. Click the Category arrow and select how to calculate the charge. 11. Click OK to adjust the charges to the lines. 12. To view the adjustment to the lines, click the Lines tab of the adjusted invoice and then click Charges. Each line will display the charges as allocated.

Procedure: Adjust Charges on a Purchase Order Make adjustments on an invoiced order directly from the Purchase order form. For example, a freight bill is received from a third-party vendor after the original purchase order was received and invoiced. The charge can still be allocated to the items received on the original purchase order through the adjustment process. Purchase order adjustments use the same process as the Invoice journal. To access the Allocate charges form for the purchase order, follow these steps: 1. Open the purchase order that requires the adjustment, and then from the Action pane locate Invoice tab and the click Invoice in the Journals group. 2. On the Invoice journal, click Charges > Adjustment and enter the adjustment. 3. If the charge is for a fixed amount, select the allocation method in the Charges allocation field. 4. In the Posting date field, enter the date of posting in the ledger. 5. Click the Allocate charges to lines arrow and decide how to allocate charges to the lines. 6. Click the Charge code arrow and select the relevant code. 7. Update the Description, if it is necessary. 8. In the Charges value field, enter a value. 9. Click the Category arrow and select how to calculate the charge. 10. Click OK to adjust the charges to the lines. 11. To view the adjustment to the lines, click the Lines tab of the adjusted invoice and then click Charges. Each line will display the charges as allocated. NOTE: Make sure that the charge debits the item and credits the appropriate ledger account or it will not appear in the Charges transactions form.

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Edit Open Transactions If a payment was entered and posted, but not yet settled with an invoice or other transaction, you can settle the payment and invoice by opening the Settle open transactions form from the Vendor form. When you click the Update button, the selected payment and invoice transactions are settled. If the payment and invoice transactions are in the same legal entity, the transactions change status according to the following rules: •

If an invoice is not settled in full, it remains open.

•

If the amount paid is greater than the amount due, the invoice is settled and closed. The payment transaction for the customer remains open for the amount by which the payment exceeds the amount due.

•

If the payment amount is less than the amount due, the payment amount is subtracted from the amount due, and the invoice remains open. The payment transaction is fully settled and is closed.

•

If the amount paid equals the amount due, the payment and invoice transactions are closed.

Procedure: Settle Invoices and Payments Perform the following steps to settle invoices against payments or make corrections to open transactions. 1. Click Accounts payable, click Common, click Vendors, and then click All vendors. 2. Select the customer or vendor whose open transactions you want to settle. 3. To settle open vendor transactions, on the Action Pane, click the Invoice tab, and then click Settle open transactions. 4. In the Settlement posting date field, select whether to post settlement transactions using the date of the most recent transaction, today's date, or a date that you specify. 5. Optional: To designate one of the transactions as the primary payment transaction, select the transaction and then click Mark payment. The purpose of a primary payment is to settle all the other transactions that are selected. The transaction date of the primary payment is used in cash discount calculations and exchange rate calculations. If a primary payment is selected, the cross rate can be entered. 6. Select the Mark check box on the other open transactions to be settled. A red icon indicates that a transaction is already marked for settlement.

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Chapter 10: Accounts Payable Daily Procedures 7. Enter the cross rate for each transaction that you selected to be settled with a primary payment transaction in step 5. 8. Click Update The marked transactions are offset against each other.

FIGURE 10.16 OPEN TRANSACTION EDITING FORM

Procedure: Enable Automatic Settlement In some cases, it is more convenient to use automatic settlement of invoices and payments, for example, if a company must handle many small vendors with few payments. Perform the following steps to enable automatic settlement. 1. Click Accounts payable, click Setup, and then click Vendor posting profiles. 2. Select the relevant vendor posting profile. 3. Click the Table restrictions FastTab. 4. Select the Settlement check box.

FIGURE 10.17 VENDOR POSTING PROFILES FORM, TABLE RESTRICTIONS FASTTAB

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Reverse a Closed Transaction Consider the following when you work with reverse settlements: •

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

•

Use reverse settlements if the bank does not honor a payment or if you use the wrong date or settlement amount.

•

Note that a settlement is not a transaction, but it is a link between the payment and the invoice.

•

Note that the system considers an unsettled invoice unpaid.

Scenario Phyllis, the Accounting Manager at Contoso, reviews and approves the Accounts Payable transactions. Phyllis realizes that a consulting fee was paid twice and she wants to reverse the settlement.

Procedure: Reverse a Closed Transaction Perform the following steps to reverse a closed transaction. 1. Click Accounts payable, click Common, click Vendors, and then click All Vendors. 2. Select a vendor record. 3. On the Action Pane, click the Invoice tab, and then click Closed transaction editing. 4. Select the Mark check box to reverse the invoice or payment associated with the settlement. The Mark field of the transaction that offsets the transaction marked is selected automatically.

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Chapter 10: Accounts Payable Daily Procedures 5. Select how to determine the settlement reversal posting date to use: o Latest date: use the date of the most recent original settlement. o Today's date: use today's date. o Selected date: use the date that you specify. The date must be the same as, or later than, the date of the most recent transaction involved in the settlement. 6. Click the Reverse button. The system changes the settlement amount, makes corrections, and changes the status. History displays an overview of settlements for the current voucher.

FIGURE 10.18 CLOSED TRANSACTION EDITING FORM

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Lab 10.6 - Reverse a Closed Transaction Scenario April, the Accounts Payable Clerk at Contoso, realizes the last transaction posted for vendor account 5001 should have been posted to vendor account 2001. She must reverse the transaction and check history to ensure she reverses the transaction. She then will make a note to enter the transaction correctly in the morning.

Challenge Yourself! Help April reverse the transaction and check history to ensure she reversed it correctly.

Need a Little Help? You can reverse closed transactions by using the closed transaction editing function.

Step by Step 1. Click Accounts payable, click Common, click Vendors, and then click All Vendors. 2. Click Vendor account 5001. 3. On the Action Pane, click the Invoice tab, and then click Closed transaction editing. 4. Click the last line in the form. 5. Select the Mark check box. 6. Click the Reverse button. 7. Click the Inquiry button, and then click History to view the reversed transactions. 8. Close all forms.

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Chapter 10: Accounts Payable Daily Procedures

Print Management You can define print management original records, copy records, and conditional settings at the module, account, or transaction level. You can control various activities that include the following: •

Number of copies to produce

•

Multilingual document footer text

•

Print destination

How Print Management Works When you print documents such as invoices or packing lists, use defined settings for the original or copy records in print management. The effective records are the records established in Print management that control the printed output of original and copy records. An original or copy record contains the information that print management uses to print the document. The record that is used to print a document determines the footer text for the document, the printer to use, and how many copies to print. For example, to print three copies of the sales order product receipt, each with different footer text, set up an original record and two copy records. You can define the print management setup information for each document type in a hierarchical list that consists of modules, accounts, and transactions. At each level of the hierarchy, define print management original records, copy records, and settings for any of the available document types. When a document generates, it prints according to the effective original record and effective copy records. An effective record can inherit information from a higher level in the hierarchy or create a new record for the current level in the hierarchy, or it can override an inherited record that has the same name. Each original record or copy record can associate with a default setting that specifies the footer text, printer destination, and number of identical copies to print. If the Default setting check box in the Print management setup form is selected, a document prints according to the specifications for the default setting. If this field is not selected, a document prints only if a query for an associated conditional setting successfully returns results. Each original record or copy record can have up to 19 conditional settings associated with it. Each conditional setting has a related query. For example, you can create a query to print footer text in a different language for a specific vendor. When the document generates during posting, the queries that associate with the conditional settings are evaluated automatically in the order in which the settings appear in the Print Management setup form. The setting that associates with the first successful query is used to print the document.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Print Management at the Module Level You can define print management settings for each module, account, transaction, or any combination of these three. You can create up to 99 original or copy records for every document type. You can create up to 19 conditional settings for each original or copy record, in addition to the default setting. Setting up print management at the module level requires the least amount of setup and minimizes the maintenance work when settings change, such as installation of a new printer. However, if business needs require, settings for specific accounts or individual transactions can override module settings. NOTE: You can use print management settings when you reprint documents. Select Preview/Print > Use print management to reprint a document that uses the effective print management settings.

Procedure: Set Up Print Management Perform the following steps to set up print management at the module level: 1. Click Accounts Payable, click Setup, click Forms, and then click Form Setup. 2. Click the Print management button. The hierarchical list in the left pane displays the module, documents, original or copy records, and conditional settings. The fields in the right pane are the options that you can specify for each type of record. The displayed fields vary, depending on the selected record. When the hierarchy list is unexpanded, a plus (+) icon in front of the document type indicates that a setup record exists. 3. To create a new record, right-click a document name and select New. A new original or copy record is created and is displayed in the list automatically. 4. In the right pane in the Original/copy field, select to create an original or copy record. You can create only one original record for each document, but you can create multiple copy records for each document.

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Chapter 10: Accounts Payable Daily Procedures 5. If you are creating a copy, enter a name in the Name field. 6. If the Do not print check box is selected, the original or copy will not print. If there is an override of an original or copy record from a higher level in the print management hierarchy, use this option to stop a document from printing instead of only changing the destination, number of copies, or footer text.

FIGURE 10.19 PRINT MANAGEMENT SETUP FORM

7. If the Default setting check box is selected, the original or copy prints even if the queries for any applicable conditional settings do not return any results. The original or copy is denoted in the hierarchical list by the word Default. 8. By default, the document goes to the printer destination that you specify by clicking Printer setup from the posting form for the document. To change the printer destination, click the Destination field's lookup button > Printer setup and select a destination. 9. When you finish making changes, click OK to return to the Print management setup form. 10. In the Number of copies field, enter the number of identical copies to print, up to 99 copies. 11. In the Footer text field, enter up to 50 characters to include at the bottom of the document. To print footer text in other languages, click the Footer text lookup button and set up footer text for the additional languages.

Scenario Alicia, the Purchasing Agent at Contoso, is entering a purchase order for a new vendor. Because this is her first time buying from the vendor, the terms are cash on delivery. She must enter the order with the vendor's payment terms so that she receives the material on time.

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Financials I in Microsoft Dynamics® AX 2012 To speed up establishing an open account with the vendor, Alicia sets up a document copy for the purchase order. She enters “New Vendor - need credit established” as the footer and sets the print destination to the printer that belongs to Connie, the Credit and Collections Manager. She also enters a note that will print on Connie's copy explaining how much business they plan on doing with the vendor. This information will help Connie determine how much credit to request from the vendor. Alicia posts and prints the purchase order which prints a copy to Connie's printer.

Procedure: Set Up Print Management for an Account Perform the following steps to set up print management for a specific vendor account: 1. Click Accounts payable, click Common, click Vendors, and click All vendors. 2. Select an account. 3. On the Action Pane, click the General tab. In the Set up group, click Print management. 4. In the left pane, expand the list for a document that is listed under the customer or vendor account that you are working with. Any original or copy records are displayed. 5. Review the original or copy record information. If changes are needed, you can override an inherited record, copy an inherited record, create a new record, or create a new setting. o To override, right-click an original or copy record and select Override. The icon changes to display a red X to indicate that the record is now an override record. o To copy, right-click an original or copy record and select Copy. A copy is displayed in the list. You must give the copy a new name. o To create a new original or copy record, right-click a document in the list and select New. A new record is displayed in the list. o To create a new conditional setting, right-click an original or copy record and select New. A new conditional setting is displayed in the list. You must give the conditional setting a description and select query information. 6. By default, the document will be sent to the default printer. To change the printer destination, click Destination lookup button > Printer setup and select a destination. When you have finished making changes, click OK to return to the Print management setup form. 7. Select a report format.

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Chapter 10: Accounts Payable Daily Procedures 8. The report format must be created by a developer and be added to the Application Object Tree (AOT) before it is available for selection in the Print management setup form. Report formats can be specific to a country/region. 9. Enter the number of identical copies to print. 10. Enter the footer text to include at the bottom of the document. To print footer text in other languages, depending on the language of the document, click the Footer text lookup button and set up footer text for the additional languages. 11. Repeat steps 4 through 9 for the remaining documents in the list.

Procedure: Set Up Print Management for a Transaction Set up print management original or copy records and conditional settings for a transaction, such as a purchase order. This may be necessary if you use a different printer for a specific transaction. Refer to the following table for the paths to setup a print management for a specific transaction type. Document

Path

Purchase order Purchase order invoice Purchase order packing slip Purchase order receipts list

Procurement and sourcing > Common > Purchase orders > All purchase orders.

Request for quotations

Procurement and sourcing > Common > Requests for quotations > All requests for quotations

Request for quotation replies

Procurement and sourcing > Common > Requests for quotations > Request for quotation replies

1. Select a transaction. If you opened the Request for quotation details form, select a vendor. 2. On the Action Pane, click the General tab. In the Setup group, click Print management. 3. In the left pane, expand the list for a document that is listed under the transaction that you are working with. Any original or copy records are displayed. An icon with a blue arrow indicates that the original or copy record is inherited from the module level or account level of the hierarchy. This is the print management information used for the customer or vendor, unless you make changes at the account or transaction level.

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Financials I in Microsoft Dynamics® AX 2012 4. Review the original or copy record information. If changes are needed, you can override an inherited record, copy an inherited record, create a new record, or create a new conditional setting. o To override, right-click an original or copy record and select Override. The icon changes to display a red X to indicate that the record is now an override record. o To copy, right-click an original or copy record and select Copy. A copy is displayed in the list. You must give the copy a new name. o To create a new original or copy record, right-click a document in the list and select New. A new record is displayed in the list. o To create a new conditional setting, right-click an original or copy record and select New. A new conditional setting is displayed in the list. You must give the conditional setting a description and select query information. 5. By default, the document will be sent to the default printer. To change the printer destination, click Destination lookup button > Printer setup and select a destination. When you have finished making changes, click OK to return to the Print management setup form. 6. Select a report format. The report format must be created by a developer and be added to the Application Object Tree (AOT) before it is available for selection in the Print management setup form. Report formats can be specific to a country/region. 7. Enter the number of identical copies to print. 8. Enter the footer text to include at the bottom of the document. To print footer text in other languages, depending on the language of the document, click the Footer text lookup button and set up footer text for the additional languages. 9. Repeat steps 3 through 8 for the remaining documents in the list. Customize the document output by using conditional settings that apply based on the results of a query. NOTE: Although conditional settings and queries provide flexibility in the print management settings, be aware that complex queries or many conditional settings can affect posting performance.

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Chapter 10: Accounts Payable Daily Procedures Procedure: Set Up Conditional Print Management Settings Perform the following steps to create a conditional print management setting. 1. Click Accounts Payable, click Setup, click Forms, and then click Form Setup. 2. Click the Print management button. 3. Right-click an original or copy record and select New. A new conditional setting is created and is displayed in the list. 4. In the right pane, enter a description for the setting, such as Vendors 4000 to 4050. 5. Click Select and enter the query condition that must be fulfilled in order to print the document by using the current settings. For example, you might select a range of customer accounts. Click OK to return to the Print management setup form. 6. By default, the document will be sent to the default printer. To change the printer destination, click Destination lookup button > Printer setup and select a destination. When you have finished making changes, click OK to return to the Print management setup form. 7. Select a report format. 8. The report format must be created by a developer and be added to the Application Object Tree (AOT) before it is available for selection in the Print management setup form. Report formats can be specific to a country/region. 9. Enter the number of identical copies to print. 10. Enter the footer text to include at the bottom of the document. To print footer text in other languages, depending on the language of the document, click the Footer text lookup button and set up footer text for the additional languages. 11. Repeat steps 3 through 9 for the remaining documents in the list.

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Summary Microsoft Dynamics AX offers the following important features for managing Accounts Payable: •

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

•

Payment proposals.

•

Prepayments

•

Print Management

Microsoft Dynamics AX enhances the preferred procedures for handling financial interactions with both simple and advanced options. If you record invoices for every date, do so in the invoice pools. Record approved invoices directly in the invoice journal.

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Chapter 10: Accounts Payable Daily Procedures

Test Your Knowledge Test your knowledge with the following questions. 1. After you post the lines of the invoice register, the postings display in the payment proposal. ( ) True ( ) False 2. You can use the invoice pool to view registered invoices that are ready for posting. ( ) True ( ) False 3. You must validate the journal before you post. ( ) True ( ) False 4. Which voucher template type lets users re-create a voucher for the same accounts and values as the original entry? ( ) Percent ( ) Division ( ) Aggregate ( ) Amount 5. Invoice matching is the process of matching information from what documents? (Select all that apply) ( ) Purchase Order ( ) Vendor Invoice ( ) Product Receipt ( ) Vendor Checks 6. In the Is marked field, a red icon appears if a transaction already is selected for settlement. ( ) True ( ) False 7. What is the purpose of the closed transactions editing functionality? (Select all that apply) ( ) To edit settlements ( ) To Reverse settlements not honored by the bank ( ) To Reverse settlements with incorrect information, such as dates ( ) To Edit fully applied or settled transactions

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Financials I in Microsoft Dynamics® AX 2012 8. How are print management settings defined? ( ) They are set up for each module ( ) They are set up for each account ( ) They are set up for each transaction ( ) They are set up for each module, account, transaction, or any combination of these three. 9. Which of the following activities are uncontrollable with print management settings? ( ) Number of copies to produce ( ) Page orientation ( ) Multilingual document footer text 10. What are the different invoices available in Microsoft Dynamics AX? (Select all that apply) ( ) Invoice register ( ) Invoice approval journal ( ) Invoice journal ( ) Invoice pool excluding posting 11. What does validation do? (Select all that apply) ( ) Ensures that everything is correct prior to posting. ( ) Ensures that you have selected the correct vendor. ( ) Verifies that the journal balances. ( ) Verifies that all mandatory fields are filled in. 12. How do you create payment lines in the payment journal? (Select all that apply) ( ) Manual payment journal ( ) Payment transfer ( ) Settlement ( ) Payment proposal

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Chapter 10: Accounts Payable Daily Procedures

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 Test Your Knowledge 1. After you post the lines of the invoice register, the postings display in the payment proposal. ( ) True (•) False 2. You can use the invoice pool to view registered invoices that are ready for posting. (•) True ( ) False 3. You must validate the journal before you post. ( ) True (•) False 4. Which voucher template type lets users re-create a voucher for the same accounts and values as the original entry? ( ) Percent ( ) Division ( ) Aggregate (•) Amount 5. Invoice matching is the process of matching information from what documents? (Select all that apply) (√) Purchase Order (√) Vendor Invoice (√) Product Receipt ( ) Vendor Checks 6. In the Is marked field, a red icon appears if a transaction already is selected for settlement. (•) True ( ) False

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Chapter 10: Accounts Payable Daily Procedures 7. What is the purpose of the closed transactions editing functionality? (Select all that apply) ( ) To edit settlements (√) To Reverse settlements not honored by the bank (√) To Reverse settlements with incorrect information, such as dates (√) To Edit fully applied or settled transactions 8. How are print management settings defined? ( ) They are set up for each module ( ) They are set up for each account ( ) They are set up for each transaction (•) They are set up for each module, account, transaction, or any combination of these three. 9. Which of the following activities are uncontrollable with print management settings? ( ) Number of copies to produce (•) Page orientation ( ) Multilingual document footer text ( ) Print destination 10. What are the different invoices available in Microsoft Dynamics AX? (Select all that apply) (√) Invoice register (√) Invoice approval journal (√) Invoice journal (√) Invoice pool excluding posting 11. What does validation do? (Select all that apply) (√) Ensures that everything is correct prior to posting. ( ) Ensures that you have selected the correct vendor. (√) Verifies that the journal balances. (√) Verifies that all mandatory fields are filled in. 12. How do you create payment lines in the payment journal? (Select all that apply) (√) Manual payment journal ( ) Payment transfer (√) Settlement (√) Payment proposal

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Chapter 11: Accounts Receivable Setup

CHAPTER 11: ACCOUNTS RECEIVABLE SETUP Objectives The objectives are: •

Create a payment schedule.

•

Create terms of payment.

•

Create a payment day.

•

Set up a cash discount.

•

Create a payment fee.

•

Create a method of payment.

•

Set up customer groups.

•

Set up posting profiles.

•

Create a new customer.

Introduction This course introduces the setup procedures and defaults you can use throughout the Accounts Receivable module. Accounts Receivable offers extensive functionality to set up different customer payment options. This includes the following: •

Payment schedules

•

Payment days

•

Terms of payment

•

Cash discounts

•

Methods of payment

•

Payment fees

This course also explains Customer setup so you can process customers and customer transactions quickly and efficiently.

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Payment Schedule Use payment schedules to pay invoices in installments. To set up a payment schedule, define the following: •

Number of installments

•

Amount of each installment

•

Due date of each installment

A payment schedule consists of consecutive payments in set time intervals. The payments can be a: •

Set amount

•

Specified number of payments wherein the amount owed is divided to create equal payments

For example, an invoice of 10,000 U.S. dollars (USD) is recorded. The customer pays 2,000 USD each month until the balance is paid. During this period the invoice is not considered past due as long as the customer makes the scheduled payments on time. This is known as a finance plan, or contract payments.

Procedure: Create a Payment Schedule Perform the following steps to create a payment schedule: 1. To access the Payment schedules form, click Accounts receivable, click Setup, click Payment, and then click Payment schedules. 2. Enter a name as identification of the payment schedule in the Payment schedule field. 3. Enter a description in the Description field. 4. Click the General FastTab. 5. Select an allocation method in the Allocation list: o Total - the total amount outstanding on the invoice is due. o Fixed amount - a specific, fixed amount is due for each payment on the specified payment dates. o Fixed quantity - payment of the total amount is divided into a fixed quantity of payments. o Specified - a specified amount is due on each specified date. If Specified is selected, the payment schedules and amounts must be defined on the Payment lines tab.

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Chapter 11: Accounts Receivable Setup Depending on the value you select in the Allocation list, the General and Payment lines sections enable different fields.

FIGURE 11.1 PAYMENT SCHEDULES FORM

Procedure: Create a Total Payment Schedule If Total is selected in the Allocation list, no other fields are enabled on the General FastTab.:

Procedure: Create a Specified Payment Schedule If you select Specified in the Allocation list, Perform the following steps to complete the Payment schedule setup: 1. From the Payment schedules form, General FastTab, in the Payment per list, select the date interval in Days, Months, or Years. The system uses this information when it calculates the due date of each installment. 2. Use the Sales tax allocation list to distribute the sales tax amount on a bill of exchange to the payment schedule installments. 3. Click the Payment Lines FastTab to define the line information for the payment schedule, designate the number of different payments, and divide the percent of the total that is due in each payment. 4. In the Quantity field, enter the time interval for each installment. 5. In the Amount currency field, enter the value of the installment as a percentage of the amount invoiced or as an absolute amount, depending on the value you select in the Percentage/Amount field. 6. In the Percentage/Amount list, select whether the value entered is a percent or an absolute amount.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Fixed Amount or Quantity Payment Schedule If Fixed amount or Fixed quantity is selected in the Allocation list, perform the following steps to complete the payment schedule setup: 1. From the Payment schedules form, General FastTab, in the Payment per list, select the date interval in Days, Months, or Years. The system uses this information when it calculates the due date of each installment. 2. In the Change field, enter the number of units related to the value in the Payment per field between the due dates of each installment. 3. If the Allocation field is set to Fixed quantity, enter the fixed number of installments in the Number of payments field. 4. If the Allocation field is set to Fixed amount, enter the fixed amount in the Amount currency field. 5. Enter the minimum installment in the Minimum field. Minimum amounts override calculated payment amo

Terms of Payment Use the Terms of payment form to define all the terms of payment that a company and its customers use. You can also use a term of payment to calculate the due date based on the date of the invoice. Specify terms of payment for each: •

Vendor in the Vendors form.

•

Customer in the Customers form.

•

Purchase order in the Purchase order form.

•

Sales order in the Sales order form.

Scenario Contoso has a standard customer payment term of Net 30 days. If an invoice with a Net 30 payment term ships goods on September 15, and the invoice is dated November 15, payment is due December 15. With a Net 30 Days settlement, the customer must pay the net due within 30 days of the receipt of goods or receipt of the invoice, according to the settlement. After that date, if the payment is not completed, you may add an interest charge of a specified percent for each month to the invoice along with other services charges.

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Chapter 11: Accounts Receivable Setup Procedure: Create Terms of Payment Perform the following steps to create a term of payment: 1. Click Accounts receivable, click Setup, click Payment, and then click Terms of payment. 2. Click New to create a new record. 3. In the Terms of payment field, enter a code or a short name for the term of payment, and then enter a descriptive name for the current terms of payment in the Description field.

FIGURE 11.2 TERMS OF PAYMENT FORM

Procedure: Create Terms of Payment - Setup Perform the following steps to enter setup information for a term of payment: 1. From the Terms of payment form, click the Setup FastTab. 2. In the Payment method list, select the method to calculate the due date: o Net o Current Month o Current Quarter o Current Year o Current Week o COD 3. Enter the number of months to add to the payment method to calculate the due date in the Months field.

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Financials I in Microsoft Dynamics® AX 2012 4. Enter the number of days to add to the payment method to calculate the due date in the Days field. 5. In the Payment schedule field, link a payment schedule to the term of payment. The payment schedule defines how an invoiced amount is split up into installments that must be paid in specific intervals. NOTE: If a term of payment is linked to a payment schedule, the rules set up in the term of payment are used to calculate the due date of the first installment. The rules set up in the payment schedule are used to calculate the due date of the following installments. 6. In the Payment day field, select a payment day used for calculation of due date. 7. Use the Translation button to translate the search name into more languages. For example, if a French language text is created the text is shown on invoices for all customers set up with French as the language.

Procedure: Create Terms of Payment - COD If the Cash on delivery (COD) payment method is selected, perform the following steps to complete the term of payment setup: 1. Select the Cash payment check box to indicate whether customers must make payments in cash and not by check. 2. In the Ledger posting area from the Cash list, select a ledger account for settlement of invoices that the system will use for cash payment.

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Chapter 11: Accounts Receivable Setup Procedure: Attach a Payment Term You can attach the terms of payment to sales orders, free text invoices, or customers. For example, click Accounts receivable, click Common, click All customers and then click a customer account. Click Edit on the Action Pane, and then on the Payment defaults FastTab, select the terms of payment in the Terms of payment field.

FIGURE 11.3 CUSTOMERS FORM

Payment Days Use payment days to define the payment day to use for calculating the due date. The due date is always rounded up to the nearest specified date automatically. You can specify the payment day for: •

A specific day in the week

•

A specific date in the month

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Payment Day Perform the following steps to create a payment day: 1. Click Accounts receivable, click Setup, click Payment, and then click Payment days. 2. Click New to create a new record. 3. Enter a short identification of the payment day in the Payment day field and then enter a description of the payment day identification in the Description field. 4. On the Payment day lines FastTab, select between Week and Month in the Week/Month field. If you select Week, select a value from the Weekday list, and if you select Month, enter a value between one and 31 in the Day field. Set up the payment day in the Terms of Payment form on the Setup FastTab to define the payment date to use to calculate the due date.

FIGURE 11.4 PAYMENT DAYS FORM

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Chapter 11: Accounts Receivable Setup

Lab 11.1 - Terms of Payment Scenario Connie, Contoso's Credit and Collections Manager, has been reviewing the outstanding customer balances. She noticed that the customer Cave Wholesales has a large outstanding balance. After a telephone call to Cave Wholesales, both parties agreed that Cave Wholesales will now make payments within 18 days.

Challenge Yourself! Help Connie create a new term of payment to fulfill this requirement and assign it to Cave Wholesales.

Need a Little Help? The term of payment is assigned to the customer on the Payment defaults FastTab of the Customers form.

Step by Step Perform the following steps to create a new term of payment: 1. Click Accounts receivable, click Setup, click Payment, and then click Terms of payment. 2. Click the New button. 3. In the Terms of Payment field, enter N018. 4. In the Description field, enter Net 18 days. 5. On the Setup FastTab, in the Payment Method field, select Net. 6. In the Days field, type 18. 7. Close the window. Perform the following steps to assign a new term of payment to Cave Wholesales: 1. Click Accounts receivable, click Common, click Customers, and then click All Customers. 2. Select 1103, Cave Wholesales as the customer. 3. Click Edit on the Action pane. 4. Click the Payment defaults FastTab. 5. In the Terms of payment field, select N018. 6. Close the forms.

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Financials I in Microsoft Dynamics® AX 2012

Cash Discount Cash discounts are: •

Earned if a customer pays the invoices within a specified period.

•

Used for both customers and vendors.

•

Posted to the ledger account specified for the cash discount when an invoice is settled in time to obtain a cash discount.

Scenario Contoso's customers receive a cash discount if they pay invoices due within certain dates. Contoso has set up the following codes: •

5D10% - Cash discount of 10 percent when the amount is paid within five days.

•

10D5% - Cash discount of 5 percent when the amount is paid within ten days.

•

14D2% - Cash discount of 2 percent when the amount is paid within 14 days.

The three cash discounts follow one another as the payment nears the cash discount date. However, only one cash discount is granted. To specify this on the 5D10% code, the 10D5% code is selected in the Next discount code list. On the 10D5% code, the 14D2% code is selected in the Next discount code list. Finally, on the 14D2% code the Next discount code is left blank.

Procedure: Set Up Cash Discounts Perform the following steps to set up cash discounts: 1. Click Accounts receivable, click Setup, click Payment, and then click Cash discounts. 2. Enter an alphanumeric code for the cash discount in the Cash discount field. For example, enter 10D2% to indicate the customer receives a two percent discount if payment is made ten days before the due date.

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Chapter 11: Accounts Receivable Setup 3. Enter a brief description for the cash discount in the Description field. For example, enter 10 days/2% for the discount code 10D2%. 4. Select the cash discount code used when the criteria for obtaining the current cash discount is exceeded in the Next discount code list. This selection allows you to define a set of cash discounts that follow one another.

FIGURE 11.5 CASH DISCOUNTS FORM

Procedure: Set Up Cash Discounts - Setup Perform the following steps to define setup information for cash discounts: 1. From the Cash discounts form, click the Setup FastTab. 2. Select the method applicable for the cash discount from the Net/Current list. The method specified, together with the value given in the Days field and/or Months field, is used to calculate the last date the customer can make a payment and receive any available cash discounts. 3. Enter the number of months during the period when the cash discount is applicable in the Months field. 4. Enter the number of days during the period when the cash discount is applicable in the Days field. 5. Enter the cash discount as a percentage of the invoiced amount in the Discount percentage field. 6. Select the main account for posting the cash discount given to customers in the Main account for customer discounts field. 7. Select the main account for posting the cash discount given to Main account for vendor discounts field. NOTE: Assign cash discounts to customers, journals, or sales orders.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Define Accounts Receivable Parameters Perform the following steps to specify accounts receivable parameter values that affect the cash discount calculation: 1. To access the Accounts receivable parameters form, click Accounts receivable, click Setup, and then click Accounts receivable parameters. 2. Click Settlement. 3. In the Cash-discount administration field select what to do with an overpayment or underpayment when a cash discount is not deducted correctly when the invoice is settled. Select from the following values: o Unspecific - the underpayment amount is posted to the customer cash discount account.

o

If the applicable cash discount was posted in the same company as an overpayment, the system will adjust the cash discount. If the applicable cash discount was not posted in the same company as an overpayment, it is posted to the system cash discount account. If there are multiple cash discounts so that an overpayment was settled against multiple invoices, the adjustment to the discount is from the last invoice to the first discount. Specific - the overpayment or underpayment amount is posted to the customer cash discount account. For example, a customer's invoice total is 105.00 USD and the obtainable cash discount is 10.50 USD. Considering the cash discount, the customer should pay 94.50 USD ($105-10.50). However the amount actually paid by the customer is 95.00 USD. If the Cash-discount administration parameter is set to Unspecific, the invoice is settled and the difference of 0.50 is posted to the ledger account specified for cash discount differences automatically. If the Cash-discount administration parameter is set to Specific, the invoice is settled, and the difference of 0.50 is posted to the customer's cash discount account.

Procedure: Define General Ledger Parameters Perform the following steps to specify general ledger parameter values that affect the cash discount calculation: 1. To access the General ledger parameters form, click General ledger, click Setup, and then click General ledger parameters. 2. Click Sales tax.

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Chapter 11: Accounts Receivable Setup 3. Click on the Tax options FastTab. 4. Select the Customer Cash Discount: Cash discount is calculated on amount include sales tax check box to specify that the cash discount is calculated based on the amount plus sales tax.

Payment Fee Use payment fees to: •

Specify if any additional charges are added to the customer invoice.

•

Define fee identifications, specify bank relations, and identify how to generate fees.

Scenario Contoso defined guidelines on how to handle late payments: •

If a customer does not pay an invoice within the due date, it is subject to late payment fees.

•

Contoso assesses most invoices late payment fees 30 days after the invoice date.

Procedure: Create a Payment Fee Perform the following steps to create a payment fee: 1. Click Accounts receivable, click Setup, click Payment, and then click New or Payment fee. If you select Payment fee, default values will automatically be added to some fields. 2. Enter an identification in the Fee ID field. 3. Enter a brief description in the Description field.

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Financials I in Microsoft Dynamics® AX 2012 4. Select whether to charge the Customer or Ledger to use a financial cost for the fee in the Charge list. If Ledger is selected, select an main account number in the Main account field for posting in the ledger. 5. Select the journal type for which the fee is valid in the Journal type field.

FIGURE 11.6 PAYMENT FEE FORM

Procedure: Define Payment Fee Setup You can define a payment fee to set up lines for each fee used for different banks, methods of payment, remittance types, payment specifications, currencies, time periods, and amount intervals. Perform the following steps to set up a payment fee: 1. From the Payment fee form, click the Payment fee setup button. 2. Select the kind of bank information required to start the fee in the Groupings field. The fee is valid for each field for: o Table - the bank account selected in the field Bank relation o Group - the bank group selected in Bank relation o All - all the bank accounts 3. Select a bank relation from the Bank relation field if: o A bank account - table is selected in the Grouping list o Bank groups - group is selected in the Grouping list o Skip - all is selected in the Grouping list 4. Select a method of payment used for the actual payment fee in the Method of payment field.

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Chapter 11: Accounts Receivable Setup 5. If the company agrees with the bank to specify the payment, select the payment specifications in the Payment specification field. 6. Select the currency that activates the fee in the Currency field. Only transactions with this currency can activate the fee. If you leave this field blank, all currencies activate the fee. 7. Select the calculation method in the Percentage/Amount list. Select among: o Amount o Percent o Interval 8. Enter the size of the fee in the percentage of the payment or the amount for one payment in the Fee amount field. 9. Select the currency code for the fee in the Currency field.

FIGURE 11.7 PAYMENT FEE SETUP FORM

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Define Payment Fee Setup - General Perform the following steps to define additional options for the payment fee setup: 1. From the Payment fee setup form, click the General tab. 2. Enter the minimum transaction amount to activate the fee in the Minimum field. 3. Enter the maximum transaction amount to activate the fee in the Maximum field. 4. Enter the date the date interval starts for fee calculation in the From date field. 5. Enter the ending date for date interval for fee calculation in the To date field. If the calculated fee is less than the value entered in the Minimum fee field, it will not be applied. If a financial cost is selected, you can select a Sales tax group and an Item sales tax group to generate the relevant taxes.

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Chapter 11: Accounts Receivable Setup `NOTE: If sales tax is calculated, the net amount is posted on a ledger account, and the sales tax amount is posted on a sales tax account.

FIGURE 11.8 PAYMENT FEE SETUP FORM, GENERAL TAB

Procedure: Define Payment Fee Setup - Interval You can enter fees for the selected payment fee setup line that depend on the interval between the remittance and due dates. Perform the following steps to define an interval payment fee setup: 1. From the Payment fee setup form, click the Interval tab. 2. Enter the number of days between the posting date (discounting date) of the remittance and the due date of the invoice in the Days field. 3. Select whether the specification is a percentage or an absolute amount in the Percentage/Amount field. 4. Enter the size of the fee in percent of the payment or amount for one payment in the Fee amount field.

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Financials I in Microsoft Dynamics® AX 2012

Methods of Payment Many companies offer several methods to pay due invoices, such as the following: •

Credit

•

Cash in advance

•

Bill of exchange

•

Check and electronic payments

In the Methods of payment form, specify all the methods of payment the company uses to receive pay from its customers. For each method of payment, enter information that states how payments should be summarized and posted. Methods of payment can be assigned to: •

Customers

•

Journals

•

Sales orders

Procedure: Create a Method of Payment Perform the following steps to create a method of payment: 1. Click Accounts receivable, click Setup, click Payment, and then click Methods of payment. 2. Click New to create a new record. 3. Enter a name for the new method of payment in the Method of payment field. 4. Select whether the system should total the invoices in an automatic payment proposal in the Period list. Select from the following options: o Invoice - creates one payment transfer for each invoice o Date - combines all invoices for customers who have the same due date o Week - combines all invoices for customers who have a due date within the same week o Total - combines all invoices from customers for the same payment 5. Enter a description of the method of payment in the Description field. 6. Enter the number of days the customer can make the payment after the specified method of discount, and still receive a cash discount in the Grace period field.

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Chapter 11: Accounts Receivable Setup 7. Select the payment status required to post a payment with this method of payment in the Payment status field. 8. Select the Payment type that is associated with the method of payment. o Bill of exchange: the method of payment is a bill of exchange. o Check: the method of payment is a check. o Credit card: the method of payment is a credit card. o Electronic payment: the method of payment is electronic, such as electronic funds transfer (EFT). When this payment type is used, bank validations are performed that are otherwise skipped if you use other payment types o Other: the method of payment is not one of the other choices, or is not yet assigned. This is the default value.

FIGURE 11.9 METHODS OF PAYMENT - CUSTOMERS FORM

Procedure: Create a Method of Payment - General Perform the following steps to specify general information format: 1. Enter or view the number of the last file that was sent in the Last file field. 2. In the Today field, enter or view the number of the last file that was sent on the system date, which is usually today’s date. 3. In the Posting area in the Account type list, select the type of offset account that is used for payments. The most common account type is bank. 4. Select the liquidity account for payment in the Payment account list.

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Financials I in Microsoft Dynamics® AX 2012 5. Enter the transaction type for a bank account in the Bank transaction type field. The transaction type is marked on every transaction generated in the payment proposal. This field is only active when the account type is bank. 6. Select the Bridging posting check box and select a Bridging account if payments that have the selected method of payment are first posted to a temporary ledger account and later are transferred to another ledger account.

Procedure: Create a Method of Payment - File Formats Perform the following steps to specify the file format: 1. Click the File formats FastTab. 2. Specify the file formats to use with this Method of Payment by using the following table to complete the File formats tab:

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Format

Action

Export format

Specify the format to export electronic payment.

Import format

Specify the file format for the bank report about payments from customers.

Return format

Specify a format to return a message from the export format if the bank supports an electronic return file.

Remittance format

Specify the file format for remittances to a specific bank.

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Chapter 11: Accounts Receivable Setup NOTE: If the format list is empty, click the Setup button and select from the available formats.

FIGURE 11.10 METHODS OF PAYMENT - CUSTOMER FORM, FILE FORMATS FASTTAB

Procedure: Create a Method of Payment - Payment Control Perform the following steps to select the validation for the method of payment: 1. From the Methods of payment - Customers form click the Payment control FastTab. 2. Select the validation for the method of payment. Validation is executed in the journals upon posting when the payment method is used. Select one or more of the following validation methods: o Check number is mandatory - verifies that the check number is entered o Payment reference is mandatory - verifies that a payment reference is entered o Use deposit slip must be checked - indicates that the option to use a deposit slip must be selected

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Financials I in Microsoft Dynamics® AX 2012 o o

Offset account has the type bank - verifies that the offset account type selected is Bank Bank transaction type is mandatory - verifies that a bank transaction type is selected

FIGURE 11.11 METHODS OF PAYMENT - CUSTOMERS FORM, PAYMENT CONTROL FASTTAB

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Chapter 11: Accounts Receivable Setup

Lab 11.2 - Set up a Method of Payment Scenario One of Contoso's European customers has asked for the option to pay invoices in cash in the Euro. Phyllis, the Accounting Manager, has decided to also offer a two-day grace period for all Euro cash payments. Details for the method of payment are as follows: Field

Value

Period

Total

Days of grace

2

Payment status

None

Account type

Bank

Payment account

EUR OPER

Bank transaction type

02

Challenge Yourself! Set up a new method of payment for European cash payments with a two-day grace period.

Step by Step 1. Click Accounts receivable, click Setup, click Payments, and then click Methods of payment. 2. Click New to create a new method of payment. 3. In the Method of payment field, type in CASH_EUR. 4. Click the Period arrow, and then click Total. 5. In the Description field, type Cash - Euro. 6. In the Grace period field, type 2. 7. Click the Payment status field, and then click None. 8. Click the Account type arrow, and then click Bank. 9. Click the Payment account arrow, and then click EUR OPER. 10. Click the Bank transaction type arrow, and then click 02. 11. Close the form.

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Financials I in Microsoft Dynamics® AX 2012

Customer Groups Consider the following about customer groups: •

Use Customer groups to set up certain information that always defaults when entering a new customer. For example, use the customer groups to set up automatic posting to General Ledger accounts for revenue generated by customers.

•

Also, set up ledger accounts for the automatic transactions generated in connection with receipt and issues of inventory.

•

In the Customer group form, set up any number of customer groups. At least one customer group must be set up, because a customer group must be specified when you set up a new customer.

Scenario Contoso has many customers to track. To simplify the handling of customers, the Contoso Company set up several customer groups to: •

Specify ledger posting per customer group. For each customer group, you can specify accounts, that is, for customer debts, an arrival account for a customer who has a corresponding offset account, a receipt account, item revenue account and account for customer line discounts.

•

Record sales budgets per customer group.

•

Generate trade statistics per customer group. For example, to generate sales statistics that shows monthly sales per customer group.

Procedure: Create a Customer Group Perform the following steps to create a new customer group: 1. Click Accounts receivable, click Setup, Click Customers, and then click Customer groups. 2. Click New to create a new record. 3. Enter a short name for the customer group in the Customer group field. Use this name for the customer group anywhere in the system, whenever required to specify a customer group. 4. Enter the full name of the customer group in the Description field. The name acts as an additional specification of the customers included in the customer group. To view the name of the customer in all dialog boxes in which customer group is shown, point the mouse at the customer group and wait until the name is displayed.

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Chapter 11: Accounts Receivable Setup 5. Specify a payment term that corresponds to the default time interval between the sale of an item and the due date on the invoice in the Terms of payment list. Use the payment term in connection with coverage of customer payments based on one sales budget per customer group. For example, a sales budget is set up for customer group X. Then a sale of 10,000.00 USD is budgeted for June 15. A payment term is then specified that corresponds to the current month + 30 days. On this basis, coverage is arranged so that the budgeted item sale of 10,000.00 USD is due for payment on July 30. 6. Specify a term of payment that corresponds to the default interval between the due date and the actual payment date in the Settle period list. Use the payment terms with coverage of customer payments based on one sales budget for each customer group. 7. Enter a Default tax group for this customer group.

FIGURE 11.12 CUSTOMER GROUP FORM

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Define Inventory Posting Perform the following steps to set up automatic postings to General ledger accounts for a customer group: 1. From the Customer groups form, click the Setup button, and then click Item posting. 2. Set up general posting rules for all items, accounts and sales-tax codes. In the Item code field, select one of the following: o Table: this option is the highest in the hierarchy. By selecting Table, the posting in ledger only applies to a specific Item number. o Group: the posting in the ledger only applies to a particular Item group. o All: Each transaction is posted for all Item numbers in the same account in the ledger. The first matching account is used for posting. o Category: the posting to an account in the general ledger applies to a particular category of items provided in the Category relation field. Posting by Category only applies to Sales and Purchasing transactions. Based on the type of business being run, decide which accounts must be set up. The focus of finance is related to consumption and revenue accounts, and the focus in logistics is the issue, receipt, and packing slip accounts.

FIGURE 11.13 ITEM POSTING FORM

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Chapter 11: Accounts Receivable Setup Procedure: Set Parameter Values Perform the following steps to define parameter values: 1. To access the Accounts receivable parameters form, click Accounts receivable, click Setup, and then click Accounts receivable parameters. 2. Click Ledger and sales tax. 3. On the General FastTab, in the Posting area, select in the Primary consumption transaction, Primary discount posting, and Primary sales posting fields to indicate whether the primary posting should be assigned to Item or Customer. For example, set up the Primary sales posting list to prioritize the Item. If you are selling some of item type B-R14 to customer 4000, which is part of customer group 40, the system posts the transaction to account number 401130, because the item relation is more specific than the account relation. Item code

Item relation

Account code

All

All

All

Group

Table

B-R14

Account relation

Account number 401100

40

All

401120 401130

If you have set up the posting as illustrated in the following table, and you set the Primary sales posting field to Customer, and some of item type B-R14 is sold to customer 4000, the transaction is posted to account number 401100 because of the Accounts receivable parameter setup. Item code

Item relation

All Table

B-R14

Account code

Account relation

Account number

Table

4000

401100

All

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401130

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Financials I in Microsoft Dynamics® AX 2012

Lab 11.3 - Create a Customer Group Scenario Contoso is negotiating a deal with a group of Travel Agencies. Kevin, the Sales Manager, has asked Arnie, the Accounts Receivable Clerk, to create a new customer group for travel agencies. Arnie should assign the new group the code of 60 and name it Travel Agencies. The payment term should be the current month plus 15 days, with a 14-day settle period. For this new group, automatic posting should have the Account code of all and post to the Main account 142300.

Challenge Yourself! Create the new customer group with the correct setup options.

Need a Little Help? 1. Create the new Customer Group 60, Travel Agencies. 2. Define automatic posting for the new group.

Step by Step Create the new Customer Group 60, Travel Agencies. 1. Click Accounts receivable, click Setup, click Customers, and then click Customer groups. 2. Click New to create a new group. 3. In the Customer group field, type 60. 4. In the Description field, type Travel Agencies. 5. Click the Terms of payment arrow, and then click M15. 6. Click the Settle period arrow, and then click N014. For the new group, define automatic posting. 1. From the Customer groups form, click the Setup button, and then click Item posting. 2. Verify that item posting has been set for the All Item code. 3. Click the arrow in the Account code field and select All. 4. Type "142300" in the Main account field. 5. Close the form.

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Chapter 11: Accounts Receivable Setup

Accounts Receivable Posting Profiles Posting Profiles are common throughout all modules. In Accounts Receivable posting profiles, the summary accounts, are defined for customers. Summary accounts are temporary accounts where all invoices are posted to and offset when the customer pays. Assign posting profiles to: •

All customers

•

Groups of customers

•

Single customers

When you post a customer transaction automatically, the system searches for the ledger accounts that are shown in the previous order. For example if: •

A posting profile line for the customer, this line is used.

•

No posting profile line exists for the customer, the line specified for the customer group that the customer is attached to is used.

•

Neither of these exists, the posting profile line for all customers is used.

In the Customer posting profiles form, you can set up many customer posting profiles. If all customer transactions are processed together, set up only one posting profile for all customers.

Procedure: Create a Customer Posting Profile Perform the following steps to set up a customer posting profile: 1. Click Accounts receivable, click Setup, and then click Customer posting profiles. 2. Click New to create a new record. 3. Enter in the Posting profile field, a code or a short name in the posting profile and a description of the posting profile in the Description field. 4. Click the Table restrictions FastTab. 5. Select the Settlement check box to indicate whether entries should be created using this posting profile for automatic settlement, or whether settlement must be manual by using open-transaction editing. 6. Select the Interest check box to indicate that the application should calculate interest on outstanding balances for customers who have this profile. If this check box is cleared, interest will not be calculated for customers who have this profile.

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Financials I in Microsoft Dynamics® AX 2012 7. Select the Collection letter check box if a collection letter may be issued for customers who have this profile. 8. Select from the Close field, the name of any other posting profile to change to when transactions with this posting profile are closed. A transaction is regarded as closed when it is settled in full.

FIGURE 11.14 CUSTOMER POSTING PROFILE FORM

Procedure: Create a Customer Posting Profile - Setup Perform the following steps to set up the ledger accounts that the system posts to when you post transactions in Accounts Receivable: 1. From the Customer posting profiles form, click the Setup FastTab. 2. Select an Account code: o Table o Group o All 3. Specify which customers belong to the current posting profile in the Account/Group number field. o If Table is selected in the Account code field, enter the account number of the customer to whom the posting profile relates. o If Group is selected in the Account code field, enter the customer group to which the posting profile relates. o If All is selected in the Account code field, do not fill in the field. 4. Select the account number of the ledger account that is used as the customer summary account for the customer(s) to whom the posting profile relates in the Summary account field. 5. Select the liquidity ledger account used for cash flow forecast in the Settle account field. To learn more about Cash flow forecast refer to the Microsoft Dynamics AX Financials II course.

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Chapter 11: Accounts Receivable Setup 6. Select a ledger account number to use for sales tax payments you receive in advance in the Sales tax prepayments list. 7. Select the ledger account for liabilities of discount in the Liabilities for discount account field. 8. Enter the identification of the collection letter sequence in the Collection letter sequence field. 9. Select the code used for calculation in the Interest code field. 10. In the Write-off account field, enter an account that will be used for the general ledger write-off entry when a transaction is written off.

Procedure: Define Parameters Perform the following steps to specify accounts receivable parameter values related to posting profiles: 1. To access the Accounts receivable parameters form, click Accounts payable, click Setup, and then click Parameters. 2. Click the Ledger and Sales tax tab. 3. Select a standard customer posting profile in the Posting profile list. The standard posting profile is used if no other posting profile is specified.

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Lab 11.4 - Set Up a Customer Posting Profile Scenario Phyllis, the Accounting Manager at Contoso, has asked Arnie, the Accounts Receivable Clerk, to set up a new posting profile for a group of retail customers. Select the appropriate options to ensure the following: •

Entries will be created using this profile for automatic settlement.

•

The application will calculate interest on outstanding balances for customers who have this profile.

•

A collection letter may be issued for customers who have this profile.

•

When transactions are settled in full, the transactions should not change to another posting profile.

•

Transactions for the retail customers group will post to the summary account 130100 and settle account 110110.

Use the following information for the new customer posting profile: Field

Value

Posting Profile

Prom

Description

Promotion

Account Code

Group

Collection letter sequence

High

Challenge Yourself! Help Arnie create the new customer posting profile.

Step by Step 1. Click Accounts receivable, click Setup, and then click Customer posting profiles. 2. Click the New button or press CTRL+N. 3. On the Overview tab, in the Posting Profile field, type Prom. 4. In the Description field, type Promotion. 5. On the Table restrictions tab, make sure that the following check boxes are selected: o Settlement o Interest o Collection letter

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Chapter 11: Accounts Receivable Setup 6. 7. 8. 9. 10. 11. 12.

Verify that the Close field is blank. On the Setup tab, in the Account code field, select group. In the Account\Group Number field, select 30 Retail Customers. In the Summary account field, select 130100. In the Settle account field, select 110110. In the Collection letter sequence field, select High. Close the form.

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Accounts Receivable Customers Each Accounts Receivable transaction must be associated with a customer. Use the Customer form to create, maintain and inquire about customers. Enter as much data as possible in advance, because the data is used throughout the system for: •

Invoicing

•

Payments

•

Reports

The base data is automatically displayed as the default for all transactions that involve the customer.You can change default information at any time. To expedite the process of creating customers, you can create templates based on the entries in fields for specific customers that you specify as template models. Templates can be used by all users or a single user. If a template is available when you create a new customer, a form appears that displays the available customer templates. Select the template that applies to the new customer. The field values of the template are copied to the fields for the new customer. You can make changes to the fields and enter more information, as appropriate.

Procedure: Create a Customer Perform the following steps to create a new customer: 1. Click Accounts receivable, click Common, click Customers, and then click All customers. 2. In the New group, click Customer on the Action Pane. 3. Enter a Customer ID with up to ten characters in the Customer Account field, and then enter a customer name with up to 30 characters in the Name field. The system automatically generates the Customer account if the customer account number sequence is specified in the Accounts receivable parameters form in the Number sequences section. 4. Select if this customer represents a person or a organization in the Record type field. 5. Select the customer group to which the customer belongs in the Customer group field. 6. Select the currency used for customer invoices in the Currency field. 7. Click the Save and open button and select Customer.

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Chapter 11: Accounts Receivable Setup NOTE: You can create and maintain currency codes and exchange rates in the Exchange rates form. You can change the customer's invoice currency in the invoice header before entering sales order lines.

FIGURE 11.15 CUSTOMERS FORM

Procedure: Create a Customer - General Perform the following steps to set additional customer options: 1. From the Customers form, click the Edit button on the action pane to edit fields. 2. Click the General FastTab.

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Financials I in Microsoft Dynamics® AX 2012 3. Select the customer group that the customer belongs to. You must specify a customer group for each customer. When you select the customer group, the values of certain fields in the Customer groups form are automatically copied to the customer account. The fields that are included are: o Terms of payment o Settle period o Item posting ledger accounts, including the Sales tax group account 4. Select a Classification group to be used with prioritization or sorting. 5. In the Organization details section select the following: o Number of Employees o Organization Number o ABC code o DUNS number 6. In the Other information area, select Address books, naming information and a language. The language select in the Language field is used for all external documents such as sales orders. The language code is mandatory. The language value defaults from the Company information form.

FIGURE 11.16 CUSTOMERS FORM, GENERAL FASTTAB

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Chapter 11: Accounts Receivable Setup Procedure: Create a Customer - Address and Contact Information Perform the following steps to define further setup information for a customer: 1. From the Customers form, enter on the Addresses and Contact information FastTab, enter the customer address and contact details. 2. If a customer has more than one address, such as invoice, delivery, purchase, or alternative delivery address, enter additional addresses by clicking the Add button and entering the relevant information. 3. On the Contact information FastTab, enter contact information and parameters for access from the Internet for external contact persons who associate with customers. NOTE: If multiple delivery addresses are in different states or countries, be sure that you enter the appropriate tax group for each alternative address. You must associate tax groups with a delivery address.

Procedure: Create a Customer - Miscellaneous Details Perform the following steps to further define miscellaneous information for a customer: 1. Select the One-time customer check box to indicate if the company only deals with this customer one time. NOTE: If using one-time customers, you must set up a number sequence in the Accounts receivable parameters form in the Number sequence section. In the General area of the Accounts receivable parameters form, select a customer's account number that can serve as the default template for one-time customers. Information is copied automatically when you create a one-time supplier in the Customers form. The system automatically creates a one-time customer when you create a sales order for a one-time customer. Except for the customer number, the one-time customer inherits all base information from the customer number specified in this field. You must specify the one-time customer number sequence in the Number sequences form. If you do not use a one-time customer, leave the Default customer number blank. 2. Select a statistical group in the Statistics group list to make reports and statistics about this customer. 3. Specify the frequency of when you send the customer an account statement by using the Account statement list. Select from the following options: o Always - monthly o Quarter - every three months o Biannually - every six months

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Financials I in Microsoft Dynamics® AX 2012 o o

Annually - one Time per year Never - not printed

4. In the Customer self service area, select to keep history on All Orders or just Web orders. 5. Depending on the selection in the Address book type field on the General FastTab, in the Government identification area you may enter values in the ID number, Country/region, or State fields. These government-established data values are commonly used to protect companies against financial loss due to delinquent accounts. 6. Select a vendor account number in the Vendor account field if the customer is also a vendor. Use the vendor account for reimbursement. If a customer has a credit amount because of overpayment or a credit note, you can transfer the amount to the vendor account.

Procedure: Create a Customer - Credit and Collections Perform the following steps to set up credit and collections information for the customer: 1. Select whether invoicing or deliveries have been placed on hold for the customer. o No: all transactions are possible. o Invoice: the main account is blocked for everything before Invoice. Money can still be received, and an invoice can be sent on goods delivered before the blocking. o All: all transactions are on hold. o Payment: payment transactions are on hold. o Requisition:requisitions transactions are on hold. o Never: never allow the transactions to be placed on hold. 2. Select the Mandatory credit limit check box to check for exceeded credit limits and, if found, to display an error message. 3. Enter in the Credit rating field, enter the credit rating of the customer. It is used only for statistical purposes. 4. Enter in the Credit limit field, enter the maximum outstanding amount allowed in the balance of the customer's account. This amount is always stated in the default currency. NOTE: Configure the system to check whether an account is over its credit limit in the Credit rating area of the Accounts receivable parameters form. NOTE: Configure the system to require identification in the Credit rating area of the Accounts receivable parameters form.

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Chapter 11: Accounts Receivable Setup Enter appropriate collections information in the following fields: •

Collections contact

•

Include interest charges

•

Exclude collections fees

Procedure: Create a Customer - Invoice and Delivery Perform the following steps to set up invoice and delivery information for the customer: 1. Select a customer account for invoicing in the Invoice account Field. For example, if you are linking several customers to one invoice account, if there is more than one customer who has the same payment address, or if the customer's account is paid through a thirdparty, then the invoice account is where the invoice amount is credited. If you leave the field blank, the system uses the customer account number by default. 2. Specify the delivery terms and options for this customer in the Delivery area. 3. Specify whether tax should be calculated on the invoice in the Sales tax group field. Select the Prices includes sales tax check box to ensure that you include sales tax when you inform customers about sales prices. Also enter the Tax exempt number and Packing duty license number fields.

Procedure: Create a Customer - Payment Information Enter information about how to manage payments on the invoices entered in Accounts Receivable in the Customer form, on the Payment FastTab. The following payment information can be entered: •

Terms of payment

•

Method of payment

•

Payment specification

•

Payment schedule

•

Payment day

•

Cash discount

•

Bank account

•

Bank account number

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Customer - Financial Dimensions Set up specific Financial dimensions for a customer on the Financial Dimensions FastTab. Throughout the system, you can use financial dimensions to group data in different ways. If you designate financial dimensions for a customer, those financial dimensions automatically default for transactions for that customer. You can change these defaulted values when you enter the transaction.

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Chapter 11: Accounts Receivable Setup

Lab 11.5 - Create a Customer Scenario Contoso has begun working with a new customer, Adventure Works. Arnie, the Accounts Receivable Clerk, must set up this new customer. The following details apply: Option

Value

Customer group

Major

Credit limit

10,000 USD

Mode of delivery

Air

Sales tax group

Illinois

Terms of payment

Net 30 days

Method of payment

CHCK

Challenge Yourself! Create a new customer.

Need a Little Help? 1. Open Accounts receivable and use the Customers form to create a customer. 2. Click the Edit button on the action pane and enter the information in the proper fields.. 3. After all the information is entered close the form.

Step by Step 1. iClick Accounts receivable, click Common, click Customers, and then click All customers. 2. Click the Customers button on the action pane to create a new record. 3. Use the default number in the Customer account field. 4. In the Record type field, select Organization. 5. In the Name field, type Adventure Works. 6. In the Customer group field, select customer group 20. 7. Click the Save and open button and select Customer. 8. Click the Edit button on the action pane. 9. Click the Credit and collections FastTab. 10. In the Credit limit field, enter 10000. 11. Click the Invoice and delivery FastTab.

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Financials I in Microsoft Dynamics® AX 2012 12. 13. 14. 15. 16. 17.

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In the Mode of delivery field, select 20, Air. In the Sales tax group field, select IL. Click the Payment defaults FastTab. In the Terms of payment field, select N030. In the Method of payment field, select CHCK. Close the form.

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Chapter 11: Accounts Receivable Setup

Summary Payment options in Microsoft Dynamics AX are flexible to accommodate different business processes. Using Accounts Receivable you can do the following: •

Define terms based on: o o

The number of months or days A current period (for example, current month or current quarter), and with or without additional months or days

•

Set up terms of payment for cash payment so that the payment posts automatically when you issue the invoice

•

Set up advanced payment schedules and use them as terms of payment based on many factors including: o o o

Percentage allocation of the actual invoice amount Allocation based on a fixed number of installments Combined amounts and percentages of the invoice amount

•

Set up cash discounts based on a current period or a number of net days. If you require cash discounts, you can set them up as multiple (for example, ten days 3 percent and 30 days 1 percent). Decide whether you need special ledger accounts to post

•

Manage the cash discount with or without sales tax to comply with the tax legislation in various countries

You can also group customers to categorize information so that it is meaningful. By grouping customers, you can do the following: •

Set up automatic posting rules for customer transactions to ensure that the transactions affect the correct accounts

•

Become aware of situations and trends more quickly by grouping customers who have a common identifier to view and analyze financial results in more detail. For example, you can group customers by the types of products you sell them or by the dollar volume of sales

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Test Your Knowledge Test your knowledge with the following questions. 1. What is necessary to set up a payment schedule? (Select all that apply) ( ) Number of schedules ( ) Number of installments ( ) Amount of each installment ( ) Due date of each installment 2. Which of the following can be selected in the Payment method list to calculate the due date? (Select all that apply) ( ) Net ( ) Current Week ( ) Current Year ( ) COD 3. Customers earn cash discounts by paying an invoice within a specified period. ( ) True ( ) False 4. What are some ways that companies may pay due invoices? (Select all that apply) ( ) Cash in advance ( ) Credit ( ) Bill of exchange ( ) Check and electronic payments 5. How many customer groups must you create in the system? ( ) At least one ( ) At least two ( ) At least three ( ) At least four

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Chapter 11: Accounts Receivable Setup 6. It is possible to assign posting profiles to which of the following? (Select all that apply) ( ) All customers ( ) All employees ( ) Groups of customers ( ) Single customers 7. Which of the following would you use to pay invoices in installments? ( ) Method of payment ( ) Customer groups ( ) Payment schedules ( ) Payment fee

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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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Chapter 11: Accounts Receivable Setup

Solutions Test Your Knowledge 1. What is necessary to set up a payment schedule? (Select all that apply) ( ) Number of schedules (√) Number of installments (√) Amount of each installment (√) Due date of each installment 2. Which of the following can be selected in the Payment method list to calculate the due date? (Select all that apply) (√) Net (√) Current Week (√) Current Year (√) COD 3. Customers earn cash discounts by paying an invoice within a specified period. (•) True ( ) False 4. What are some ways that companies may pay due invoices? (Select all that apply) (√) Cash in advance (√) Credit (√) Bill of exchange (√) Check and electronic payments

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Financials I in Microsoft Dynamics® AX 2012 5. How many customer groups must you create in the system? (•) At least one ( ) At least two ( ) At least three ( ) At least four 6. It is possible to assign posting profiles to which of the following? (Select all that apply) (√) All customers ( ) All employees (√) Groups of customers (√) Single customers 7. Which of the following would you use to pay invoices in installments? ( ) Method of payment ( ) Customer groups (•) Payment schedules ( ) Payment fee

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Chapter 12: Accounts Receivable Daily Procedures

CHAPTER 12: ACCOUNTS RECEIVABLE DAILY PROCEDURES Objectives The objectives are: •

Create a Free Text Invoice.

•

Edit an Open Free Text Invoice.

•

Create a Payment Proposal.

•

Mark customer transactions for Settlement.

•

Create a Payment Journal.

•

Edit Open Transactions.

•

Place an Accounts Receivable transaction on hold.

•

Reverse a Settlement.

•

Reimburse a customer.

•

Describe Reason codes in Accounts receivable.

•

Define print management settings.

•

Examine print management setup.

Introduction This course discusses the free text invoice and the payment journal. It also explains various Accounts Receivable transactions that you may use in daily procedures in the Accounts Receivable module.

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Free Text Invoice - Description and Usage Use free text invoices to create a sales invoice with order lines that include the following: •

Ledger accounts

•

Free-text descriptions

•

The entry of a sales amount

You cannot enter an item number on this kind of invoice; however, you can enter the appropriate sales tax information.

Comparing a Free Text and a Standard Invoice The difference between a free text invoice and a standard invoice is as follows: Standard invoice: •

The user specifies the item number, and the system posts the itemrelated transactions in the ledger. NOTE: It is also possible to create sales orders with non-inventory items.

•

A sales order makes inventory transactions, but a free text invoice never uses item inventory because a free text invoice does not create stock transactions. Users frequently use free text invoices to sell fixed assets because the free text invoices calculate the costs or income when you depreciate and sell the asset. Refer to the Fixed Assets training manuals to learn more about the fixed asset topic.

Free text invoice: •

No item numbers are specified by the user.

•

A ledger account for the sale is selected by the user and is displayed on each order line. The system posts the customer balance to the summary ledger account for the posting profile inherited from the customer, unless the user specifies a different posting profile on the free text invoice

Scenario At Contoso, the Accounts Receivable Administrator uses free text invoices for service charges that are not listed in the items table. For example, some of the Product Managers consult with customers about specific product design proposals, and the consulting fees are invoiced by using free text invoices. Contoso also uses the free text invoice for anything that the company owns and sells to customers that is not inventory-related. For example, the Accounts Receivable Administrator typically invoices old plant equipment such as hardware, furniture, and so on by using free text invoices.

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Configure a Free Text Invoice The following setup must be configured before you issue a free text invoice: 1. Set up the invoice number sequence in Accounts receivable using the Number sequences form. Click Accounts receivable, click Setup, then click Accounts receivable parameters. 2. Click Number sequences and set up the free text invoice number sequence for these references: o Free text invoice o Free text credit note o Free text invoice voucher o Free text invoice credit note voucher 3. Set up the chart of accounts in the Chart of accounts form and customer accounts in the Customers form. 4. Set up sales tax rates and codes in the Sales tax groups, Sales tax codes, and Currencies forms. 5. Set up charges codes in the Charges code form (Click Accounts receivable > Setup > Charges > Charges code.) and groups in the Customer charges groups form. 6. Set up free text invoice forms in the Form setup form.

Procedure: Create a Free Text Invoice To create simple free text invoice perform the following steps: 1. Open the Free text invoice form by clicking Accounts receivable, click Common, click Free text invoices, and then click All free text invoices. 2. On the Action Pane, click Free text invoice to open the Free text invoice form. 3. On the Free text invoice header FastTab, select the customer account. The default information for the customer account is displayed. 4. In the Invoice lines grid, enter a description, select the main account, and enter the quantity and unit price for the invoice line. 5. On the Line details FastTab, enter any additional information. 6. To save your changes without posting the invoice, click Close.

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Financials I in Microsoft Dynamics® AX 2012 NOTE: The Invoice field is updated automatically when the invoice posts.

FIGURE 12.1 THE FREE TEXT INVOICE FORM

Procedure: Post and Print a Free Text Invoice Use this procedure when you are ready to send an invoice to a customer. To generate electronic invoices, you can print to the screen, to a file, or to an email message. 1. Click Accounts receivable > Common > Free text invoices > All free text invoices. 2. Select the invoice that you want to post. On the Action Pane, click Post. 3. In the Post free text invoice form, select the Posting check box and the Print invoice check box. NOTE: If workflow is enabled, the Post button is not available. If you did not submit the invoice for approval, click Submit. To view the status of a submitted invoice, click Actions > View history. The Actions menu is available only if a workflow is activated. 4. To print the invoice by using the printing settings that have been set up, select the Use print management destination check box. Alternatively, to specify the printer destinations for the invoice, click Printer setup. Click OK. 5. In the Post free text invoice form, click OK. The invoice is posted to the general ledger and sent to the printer destination specified. The invoice displays the total of the amounts on the invoice lines and any charges.

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Chapter 12: Accounts Receivable Daily Procedures Adding Item Quantities and Unit Prices Frequently a free text invoice line can be used to sell a quantity of some type of goods, services, or rights. For this reason enabling the quantity to be identified on the line may be necessary. Similarly, if a good, service, or right has a unit price it is important to capture this information on the free text invoice line. Providing this information to the user and a basic amount calculation helps identify and explain charges to customers.

Scenario: Adding Item Quantities and Unit Prices to a Free Text Invoice Contoso Entertainment is selling surplus widgets left over from a large project recently completed. The widgets were not purchased through the inventory system so they cannot be sold through a sales order. Instead, they must be sold through a simple free text invoice transaction. A subcontractor has requested to purchase 15 and Contoso Entertainment agreed to sell them all 15 for 50 U.S. dollars (USD). Arnie, the Accounts Receivable Administrator, must now quickly create a customer invoice for surplus material using the total amount.

Procedure: Create a Free Text Invoice with Quantities and Amounts To create a free text invoice with quantities and amounts, perform the following steps: 1. Click Accounts receivable, click Common, click Free text invoice, and then click All free text invoices. 2. Click New, then click Free text invoice to create a new free text invoice. 3. Select a customer in the Customer field, and enter any additional information. 4. Click Add lines in the Invoice lines grid. 5. In the Description field, type a description for the invoice line. 6. In the Main account field, select the ledger account to be used for posting. 7. In the Quantity field, type a number for the quantity. 8. In the Unit price field, type an amount for each quantity in the invoice line. Notice the Amount field is updated with the extended amount. 9. Click Close when you are finished.

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Financials I in Microsoft Dynamics® AX 2012 Creating Recurring Free Text Invoices Recurring free text invoices are used when a customer is to be billed on a recurring basis. To create a recurring free text invoice, following these steps: 1. Create a Free text invoice template 2. Assign the template to a customer 3. Generate and post the recurring invoice

Procedure: Create a Recurring Free Text Invoice Template To create a recurring free text invoice template perform the following steps: 1. 2. 3. 4.

Click Accounts receivable > Setup > Free text invoice templates. Click New. Enter the Template name and Description. On the Invoice lines FastTab, assign an invoice line to the template and assign a Main account. 5. Optional: To distribute the line amount to multiple ledger accounts, click Distribute amounts. Enter the distribution information in the Accounting distribution templates form, and then close the form. 6. Optional: Repeat steps 4 and 5 for additional invoice lines. 7. Optional: To specify charges, such as freight and postage, click Charges. a. Enter the charge information in the Charges form. b. Optional: To distribute the charges line amount to multiple ledger accounts, click Distribute amounts. Enter the distribution information in the Accounting distribution templates form, and then close the form. c. Close the Charges form. 8. To save the changes, close the form.

Procedure: Assign a Recurring Free Text Invoice to a Customer Use this procedure to assign a free text invoice template to a customer and specify when and how frequently the invoice will recur. 1. Click Accounts receivable > Common > Customers > All customers. 2. Select the customer to assign the template to. 3. On the Invoice tab, click Recurring invoices in the Set up group to open the Recurring invoices form. 4. Click New. 5. Click the Setup FastTab to enter recurrence information.

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Chapter 12: Accounts Receivable Daily Procedures 6. Select a recurring template in the Template field. 7. Enter the recurrence start date in the Billing start date field. 8. Select the Recurrence pattern of: o Daily o Weekly o Monthly o Yearly 9. Specify any additional recurrence information. 10. To save the changes, close the form.

Procedure: Generate Recurring Free Text Invoices Use this procedure to generate invoices that are due and that have free text invoice templates assigned to them. 1. Click Accounts receivable > Periodic > Recurring invoices > Generate recurring invoices. 2. In the Invoice date field, enter the date to appear on the invoices. 3. Select the recurring template in the Template field. 4. Click OK A message will be displayed indicating that the invoice generation was successful.

Procedure: Post and Print Recurring Free Text Invoices After recurring invoices have been generated, use this procedure to post and print the invoices. You can send electronic invoices to the screen, to a file, or to email. 1. Click Accounts receivable > Periodic > Recurring invoices > Generate recurring invoices. 2. On the Action Pane, click Post. 3. Select the Posting check box and select the Print invoice check box. 4. Select the Use print management destination check box to print the invoice using the print settings that have been set up, or click Printer setup to specify the printer destinations for the invoice. Click OK. 5. In the Post free text invoice form, click OK. The invoice is posted to the ledger, and is sent to the printer destination specified. The total of the amounts on the invoice lines and any charges display on the invoice. NOTE: If the Post button is not available and your organization requires a review process for free text invoices, the invoice may not have been submitted or approved. If you have not submitted the invoice for approval, click Submit. To view the status of a submitted invoice, click Actions > View history

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Free Text Invoice - Edit Open Transactions Perform the following steps to edit open transactions on a free text invoice: 1. Open the Free text invoice form by clicking Accounts receivable, click Common, click Free text invoices, and then click All free text invoices. 2. On the Action Pane, click Edit to allow editing in the Free text invoice form. Use the open transaction editing function to change a free text invoice that you have not yet settled. You can only perform limited editing in this form, for example adjusting the cash discount. You cannot mark transactions when you use the open transaction editing functionality from a free text invoice.

Entering Corrections Enter corrections to modify a free text invoice that has been posted. When you correct an invoice that has been posted, a corrected invoice is created where you can modify the invoice and post it with the new values. When you post the corrected invoice, a canceling invoice is created, which brings the combined balance of the original invoice and the canceling invoice to a zero amount. For example, if you correct an original posted invoice that has a balance of 500.00, a corrected invoice will be created that has a balance of 500.00. You can change the information for the invoice, and then post it. When the corrected invoice is posted, a canceling invoice will be created that has a balance of 500.00. This brings the combined balance of the original and canceling invoices to 0.00.

Procedure: Entering Corrections To correct posted free text invoices perform the following steps: 1. Click Accounts receivable > Common > Free text invoices > All free text invoices. 2. Select a posted invoice. 3. On the Action Pane, click Correct invoice, and then enter the following information: o Reason code: enter or select the reason code that describes why the invoice is being corrected. o Comments: enter any additional comments about the invoice cancellation. o Canceling invoice date: enter or select the invoice date to assign to the canceling invoice. 4. Click Create corrected invoice. A corrected invoice is created. 5. Click Edit and make any necessary changes to the invoice.

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Chapter 12: Accounts Receivable Daily Procedures 6. If required by your organization, submit the corrected invoice for workflow review. When the corrected invoice has been approved, continue to the next step. 7. In the Free text invoice form, on the Action Pane, click Post and then click OK. The corrected invoice is posted, and a canceling invoice is automatically created. 8. Optional: In the Free text invoice list page in the Cancel group, click View, and then click Invoice corrections to view the invoice correction details. These details include the related invoices: o Original invoice: the invoice that includes the information that you are correcting. o Corrected invoice: the invoice that contains the corrected invoice information. o Canceling invoice: the system-generated credit invoice that was created to cancel the invoice that was most recently corrected. This invoice is created when the corrected invoice is posted.

Free Text Print Enhancements Several sections have a form tab that relates to Free text invoices: •

The Form setup form: to open, click Accounts receivable, then click Setup, click Forms, and finally click Form setup.

•

The Form sorting parameters form: to open, click Accounts receivable, then click Setup, click Forms, and then click Form sorting.

In addition, you can use two types of form notes specifically for Free text invoices: •

Customer free text invoice

•

Customer free text invoice credit note

To open these form notes, click Accounts receivable, then click Setup, click Forms, and then click Form notes. See the Print Management section of this for information on printing documents.

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Financials I in Microsoft Dynamics® AX 2012

Lab 12.1 - Create Free Text Invoices During this lab you create and post a free text invoice. Scenario Susan, the Order Processor at Contoso, has taken an order from Forest Wholesales for consulting design, which she invoices to the customer without creating a sales order. Your task is to help Susan complete the order by creating a free text invoice for the consulting, and then posting the invoice. Use the following information to create an invoice for the sale of the design services in Accounts Receivable. Customer Account

Forest Wholesales (1101)

Invoice Account

Forest Wholesales (1101)

Date

System date

Enter the line for the invoice. Use the following information to create line information: Description

Invoice for Consulting Design

Main account

401190

Sales tax group

Accept the default

Item sales tax group

Accept the default

Amount

1450.00 USD

Challenge Yourself! Use any of the methods described in this section to create and post the free text invoice.

Need a Little Help? 1. Create a free text invoice. 2. Post the invoice.

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Chapter 12: Accounts Receivable Daily Procedures Step by Step Perform the following steps to complete the exercise and set up the Accounts Receivable Free Text Invoice: 1. Open the Free text invoice form by clicking Accounts receivable, click Common, click Free text invoices, and then click All free text invoices. 2. On the Action Pane, click Free text invoice to open the Free text invoice form. 3. On the Free text invoice header FastTab, select the customer account. The default information for the customer account is displayed. 4. On the Customer Account field, click the drop down arrow, and select customer 1101 (Forest Wholesales). 5. In the Invoice Account field, enter 1101 (Forest Wholesales). 6. In the Date field, enter System date. 7. To enter the line for the invoice, go to the Invoice lines area. 8. In the Description field, enter Invoice for Consulting Design. 9. In the Main account field, enter 401190. 10. In the Sales tax group field, accept the default. 11. In the Item sales tax group field, accept the default. 12. In the Amount field, enter $1450.00. 13. To post the invoice, click Post on the Action Pane. 14. Click OK to post the invoice. 15. Close the Infolog form. 16. Close the Free text invoice form.

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Financials I in Microsoft Dynamics® AX 2012

Payment Journals After you register, approve, and post the invoice, the customer must pay for the invoice. When you receive a customer payment, use the payment journal to register it. For information on the Centralized payments functionality, refer to Financials II in Microsoft Dynamics AX . You can use payment journals to do the following: •

Enter and post payments.

•

Make and enter payments according to the terms of payment established with the customers. In the Payment journal, you can select the customer invoices to which payments will be recorded by creating the journal's payment lines: o

o o

Use a Payment proposal to search for invoice lines that meet selected search criteria. For example, you must generate payment lines based on payment due dates. Use the Settlements option to select the specific invoice lines to settle, and to which to record payments. Create a Payment journal line manually to enter the payment details manually.

Payment Proposal When customers make payments, you must create and post them in a payment journal, both to record the payments to the customer's accounts, and also to ensure that you can reconcile the Accounts Receivable information with General Ledger information. Use a payment proposal as an effective way to select the payment records and create the payment journal. The payment proposal does the following: •

Searches for payment lines that either are due or have a maximum date for receiving a cash discount.

•

Checks open and approved customer transactions.

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

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Create a Payment Proposal - General Process Perform the following steps to create a payment proposal:

FIGURE 12.2 PAYMENT PROPOSAL

1. Open the Payment proposal form by clicking Accounts receivable in the Navigation pane, and then clicking Journals. Then click Payments and click Payment journal. After the basic journal information is created, click the Lines button. Finally, click the Payment proposal button, and then click Create payment proposal. 2. In the Customer payment proposal form, select the type of payment proposal to create in the Proposal type field. Create the proposal by due date, cash discount date, or by both due date and cash discount date. a. Select Per due date to transfer the set of customer payments that are due by the specified date. b. Select By cash discount to transfer the set of customer payments that fulfills the criteria for obtaining a cash discount. c. Select Due date and cash discount to transfer the set of customer payments that fulfills the criteria for obtaining a cash discount and are due on or before the due date.

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Financials I in Microsoft Dynamics® AX 2012 3. Click the Select button to select specific customers or a range of customers. 4. Select the Generate check box to indicate that you want to generate the payment proposal transactions.

Procedure: Create a Payment Proposal - Refining Selections and Creating the Proposal Perform the following steps to further refine the criteria for selecting the transactions that appear in the Payment proposal: 1. Enter the total amount to be selected for payment in the Amount limit field. 2. Enter the maximum lines to be paid in the Transaction limit field. 3. Enter the period for the customer transactions to be included in the payment proposal in the From date and To date fields. 4. If the customer transaction has a Method of payment whose period is set to the Total type, the payment proposal uses the date entered in the Total payment date field to aggregate the transactions. Enter the payment date that you want to use in the Total payment date field. 5. Add other criteria as appropriate in the other fields on the Customer payment proposal selection form, and then click OK. This will open a Customer payment proposal edit form, which has the following panes: a. The Open transactions pane of the form shows the open invoice transactions for the selected payment proposal line. b. The Payment proposal pane of the form shows the payment proposal lines, which includes transactions from all customers based upon the criteria selected.

Procedure: Working With Open Transactions in Payment Proposals Follow this procedure to modify the Payment proposal lines in the edit form. 1. Inspect each proposal line and the associated open transactions to ensure that they are ready for settlement. For example, you can review if you want to delete one or more of the open invoice transactions from the Open transactions lines in the Open transactions pane, if payment of these items is unacceptable or unwanted. 2. Highlight a line and click Delete to delete a line record. 3. To change certain fields on several lines in one operation, select the lines, click the Multiple change button, and enter the values to implement.

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Chapter 12: Accounts Receivable Daily Procedures HINT: Select the Link check box to synchronize the two parts of the form. When selected, the Open transactions pane shows only transactions related to the selected Payment proposal pane line. The open transactions displayed are updated when they move between Payment proposal pane lines.

Procedure: Create a Payment Proposal - Move Selected Lines into Payment Journal and Post Follow this procedure to transfer the selected lines from the Payment proposal into the Payment journal. 1. Continue in the Customer payment proposal form to edit the lines if necessary. 2. Verify the balances of company bank accounts to ensure that you can make the payments. To view the balances, click the Balance control button. 3. Click Transfer to move the proposal lines to the Payment journal after you have reviewed them and made any changes. 4. Click Validate to validate the payment lines. 5. Click the Post button, and then click Post to post the payment journal. These actions post the payments to the customer records, update the General Ledger with the voucher transactions, and indicate the customer invoice transactions as settled. NOTE: Occasionally, the customer allows the company to withdraw the payment directly from their bank accounts. In such a case, click the Functions button, then click Generate payments. You must do this before you post. NOTE: You can use workflow with payment journals. Some buttons in the form are unavailable when a journal has been submitted for workflow journal approval.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Create a Payment Proposal - Mark for Settlements Method You can use the Settlement option to select invoice lines to pay instead of using the payment proposal option. Perform the following steps to create a payment proposal for a marked settlement: 1. Open the Payment journal form by clicking Accounts receivable in the Navigation pane, and then clicking Journals. Then click Payments, click Payment journal. After you create the basic journal information, click the Lines button. 2. Select a customer account in the Account field. 3. Click the Functions button, then click Settlement to open the Open transaction editing form.

FIGURE 12.3 OPEN TRANSACTION EDITING FORM- SETTLEMENTS

4. Select the Mark check box to select the invoices to mark it for payment. Mark one or several invoices for settlement. NOTE: A red mark shows in the Is marked field if a transaction is already marked for settlement. NOTE: You must enter a Customer account and Currency to use the Settlements option.

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Transfer Marked Settlements to Payment Proposal and Payment Journal Perform the following steps to transfer the marked settlements to the Payment proposal and Payment journal: 1. Select the Payment proposal check box and close the form when the invoices are marked for payment. When you close the Open transaction editing form, the Customer payment proposal form opens and shows the payment proposal and the open transactions. 2. Modify the transactions in the Customer payment proposal form. Click Transfer to move the payment suggestions to the payment journal lines to make the payment. A confirmation form opens. Click OK to confirm and continue. 3. Verify that the information is correct in the Journal voucher form. 4. Optionally validate the journal lines by clicking the Validate button and clicking Validate. 5. Click the Post button, and then click Post to post the payment journal. These actions post the payments to the customer records, update the General Ledger with the voucher transactions, and indicate the customer invoice transactions as settled. NOTE: Occasionally, the customer allows the company to withdraw the payment directly from their bank accounts. In such a case, click the Functions button, then click Generate payments. You must do this before you post.

Procedure: Manually Create a Payment Journal - Create the Journal You also can create a Payment journal manually by entering the invoice information into the journal. Perform the following steps to manually create a Payment journal: 1. Open Accounts receivable, and then click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. 3. Select a payment journal in the Name field. 4. Enter information in other fields, such as the Description field, as appropriate and then click Lines. NOTE: Some fields in the journal contain default values that the Journal names form assigns to the journal. These fields usually are not edited by the user.

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Financials I in Microsoft Dynamics® AX 2012 Payment Journal Fields After you click the Lines button, the following fields display in the Journal voucher form:

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Field name

Description

Date

View or enter the posting date. The system date (today's date) is entered automatically, but you can select another date as appropriate.

Company accounts

Select the company to associate with the customer for this transaction.

Account

Enter or view the account number for the account type that is selected in the Account type field.

Invoice

Enter or select the invoice number that relates to the payment. For example, if you received a payment receipt from your bank, enter the invoice number. Information about the customer also displays. If multiple invoices are related to the payment, use the Open transaction editing form to select the invoices, instead. An asterisk (*) displays if multiple invoices have been selected in the Settlement form.

Description

Enter descriptive text about the transaction. Alternatively, enter the code for the standard journal text created in the Journal texts form.

Debit

Enter a debit amount in the currency selected for the journal line. This could be, for example, used for a fee of some sort.

Credit

Enter a credit amount in the currency selected for the journal line. Users typically (but not always) enter customer payment amounts in this field.

Use a deposit slip

Select this check box to indicate that the amount must be deposited with a deposit slip.

Offset account type

Select the account type for the offset transaction to the customer payment. This is typically the bank account type for customer payment journal lines.

Offset account

Enter or view the account number for the offset account type that is selected in the Offset account type list.

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Payment Journal Lines - Invoice Number Known After you create the Payment journal and click the Lines button, use this procedure if you know which invoice number correlates with the payment. Perform the following steps to create a payment journal line with a known invoice number: 1. In the Invoice field, enter or select the invoice that you have received a payment for. Customer information displays automatically. 2. Click Validate to validate the payment line, and then click Post, and click Post again.

Procedure: Payment Journal Lines - Customer Known or Multiple Invoices After you create the Payment journal and click the Lines button, use this procedure in the Journal voucher form. This procedure can be used if you know which customer account the payment is for, or if you intend to use the payment to settle multiple invoices. Perform the following steps to create a payment journal line for multiple invoices: 1. In the Account field, enter the customer account that you have received a payment for. 2. Move to the Invoice field and click the arrow. All open invoices for the customer will display. If centralized payments are used, two tabs show. One tab for the current company and one for all companies in the centralized payments boundaries. 3. For a known customer and a single invoice, select the invoice that you want. You can also select multiple invoices. 4. Click Validate to validate the payment line or lines, and then click Post, and click Post again.

Payment Journal - Notes on Generating Payments Sometimes, customers allow the company to withdraw the payment directly from their bank accounts. In this case, use the generate payment functionality to withdraw the payment from the account. In these cases, when you create the payment journal, it is ready to be paid. The procedure on how to generate payments is the same for payment proposals, settlements, and manual payment journals.

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Financials I in Microsoft Dynamics® AX 2012 Enter Customer Payments Form An alternative to manual creation of Payment journal lines is the use of the Enter customer payments functionality. Use this form to enter, settle, and save customer payments. You can select Transactions based on the following fields: •

Customer account information

•

Customer invoice information, including: o o o

Open invoice Credit note Collection letter

You also may view customer transaction records across multiple companies and define other aspects of the payment line, such as Method of payment, Offset account type, etc.

Procedure: Enter Customer Payments Form Perform the following steps to enter customer payments using the Enter customer payments form: 1. Click on Accounts Receivable, then click Journals, and click Payment journal. 2. Create a new Payment journal by clicking New, or alternatively use an existing Payment journal. 3. Click the Enter customer payments button. 4. If you know the invoice, interest note, collection letter, or other transaction identifier, enter the identifier and click the lookup button in the Search for customer transactions field group. Select a document and skip to step 6. 5. If you do not know the identifier, enter the information about the payment in the Customer payment information field group. 6. In the Select to pay field group, select the invoices or other documents to settle with the payment. 7. Click Save in journal. 8. Repeat steps 3 through 6 for the remaining payments. 9. Click Close. 10. In the Journal form, click Validate to validate the payment line or lines, and then click Post, and click Post again.

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Enter Customer Payments Form - Select by Customer Perform the following steps to view and select transactions for a specific customer: 1. Select the company, and then select the customer in the Customer field. In the Select to pay pane of the form, all open transactions for the selected customer will display. 2. Select the Mark check box next to each transaction that you want to settle against this payment. 3. To save the marked lines in the Payment journal and remain in the form, click the Save in journal button. 4. To save the marked lines in the Payment journal and close the form, click the Close button. The form will close, and the Journal form will display. You may then continue working in the Payment journal.

Enter Customer Payments Form - Notes and Hints If the amount in the Amount field of the Enter customer payment form does not equal the total of the marked transactions, then the form will display the warning that The payment is not fully settled. Adjust the marked transactions or amount accordingly. If you do transfer payment to the journal without adjustment, normal overpayment or underpayment posting rules apply. NOTE: To clear any transactions marked for payment in the Enter customer payments form, click the Clear button. HINT: To view the details of the selected customer transaction, click the Show document button. NOTE: If the selected transaction is not an invoice transaction or credit note transaction, an asterisk will appear in the Invoice field of the created payment line.

Procedure: Edit Customer Payments Perform the following steps to edit customer payments: 1. Click on Accounts receivable, then click Journals, click Payments, and then click Payment journal. 2. Select or create the payment journal record, and then click the Lines button. You also can use the Enter customer payments function prior to clicking Lines.

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Financials I in Microsoft Dynamics® AX 2012 3. If you have not used the Enter customer payments function to create the payment line, create the payment line manually. If the Enter customer payments function was used, the created lines display in the journal. 4. Select the line to edit, and click the Edit customer payments button. This button is inactive unless you have created and saved a payment line, although you do not have to specify all fields in that line. 5. If you entered either a customer transaction or a customer account on the payment journal line, then all open invoices for the entered customer will appear in the Select to pay pane of the Edit customer payments form. The Mark check box for the transaction selected in the payment line already will be selected. You can continue to mark other customer transactions by clicking Mark. If you entered neither an invoice or customer payment on the payment line, the edit form will not show transactions, and you may proceed to select a customer and mark transactions. 6. To select additional customer transactions, repeat steps 1 to 6. 7. Click the Close button to exit the form and return to the Payment journal. Post the journal as you normally would.

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Chapter 12: Accounts Receivable Daily Procedures

Lab 12.2 - Settlements - Entering an Accounts Receivable Payment Journal (Cash Receipt) During this lab you will create a payment journal. Scenario Contoso has received a payment from Sunflower Shopping Mall. Use the following information to create a payment journal in Accounts Receivable. Date

Use the system date

Account

Sunflower Shopping Mall

Credit

2,499.00 USD

Offset Account

USA OPER

Challenge Yourself! 1. Create a payment journal. 2. Post the payment journal.

Need a Little Help? Create a payment journal and use open transaction editing to apply this payment to the correct invoice:

Step by Step Perform the following steps to create a payment journal and use open transaction editing to apply this payment to the correct invoice: Create the Payment journal: 1. Click Accounts receivable, then click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. 3. Select ARPay in the Name field. 4. Click the Lines button and enter the information specified in the example for the payment. o Use customer number 2112, Sunflower Shopping Mall in the Account field. o Enter the amount of 2,499 in the Credit field. o Use offset account USA OPER.

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Financials I in Microsoft Dynamics® AX 2012 5. 6. 7. 8. 9.

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Click the Post button. Click Post to post the invoice. Close the Infolog form. Close the Payment journal form. Close the Journal form.

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Chapter 12: Accounts Receivable Daily Procedures

Edit Open Transactions Use the Settle open transactions form to make changes in transactions for customers. Only unapplied transactions are available for editing. The following procedures explain how to: •

Settle invoices and payments

•

Specify a cross rate between invoices and payments

•

Reorganize transactions with new due dates

Settling Invoices and Payments You can settle invoices and payments in the Settle open transaction form, if, for example, the invoice and payment are not settled when you create the payment. The following information is relevant to settling invoices and payments. If

Then

The amount paid is more than the amount due

The system settles the invoice and the payment transaction remains open for the amount by which the payment exceeded the amount due. NOTE: If the over/underpayment feature is being used it can force them to be equal and close the transaction.

The payment amount is less than the amount due

The system subtracts the payment from the amount due and the invoice remains open

The amount paid equals the amount due

The system generates a payment transaction for the payment amount, and then closes the transaction

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Settle Invoices and Payments Perform the following steps to settle invoices against payments or make corrections to open transactions:

FIGURE 12.4 SETTLE OPEN TRANSACTIONS FORM

1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the customer. 2. Click the Collect tab, and then click Settle open transactions. 3. Select the Mark check box for both the payment and the invoice and then click the Update button to apply the payment to the invoice. 4. Close the Settle open transactions form. 5. Close the Customers form. 6. Select the relevant postings to settle by selecting the Mark check box or click the Mark payment button, if this transaction is to be the Primary payment. The purpose of a primary payment is to obtain a more accurate history (since all the other transactions marked for settlement will then be settled against the primary payment), or to select the basis currency used for cross rate calculation. 7. Click Update. The selected vouchers offset one another. If you do not settle a voucher in full, the system records it with a status of Open. NOTE: A red icon shows in the Is marked check box if a transaction already is selected for settlement. When the transactions settle, they disappear from this form and transfer to Closed-transaction editing.

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Chapter 12: Accounts Receivable Daily Procedures To enable automatic settlements, click Accounts receivable, then click Setup, then click Customer posting profiles. Select the relevant customer posting profile, and on the Table restriction FastTab select the Settlement check box. In some cases, it is convenient to allow for an automatic settlement of invoices and payments. For example, if a company has to handle numerous small customers who have few payments, such as subscribers to magazines, this can be an efficient solution to posting payments.

Procedure: Specify the Cross Rate in Open Transaction Editing You can use a cross rate when you settle a payment with an invoice, and the payment and invoice lines are in different currencies. When you select an invoice and a primary payment, you can enter a cross rate for the invoice line. The cross rate is the exchange rate between the currencies for those transactions as of the settlement date. Follow these procedures. 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the customer. 2. Click the Collect tab, and then click Settle open transactions. 3. Select the transaction that is the primary payment, and click the Mark payment button. The check box in the Mark column is selected, and an information icon is shown in Primary payment column. 4. In the Cross rate field, enter the exchange rate multiplier between the invoice currency and the payment currency, as of the settlement date.

Reorganizing Open Transactions You or a customer might pay one invoice on multiple dates or use multiple payment methods, such as a check and cash. When this happens, you can reorganize an invoice into several parts and assign a separate payment method to each part. After reorganizing the invoice, you can settle each new invoice line with a separate payment. Consider the following information to reorganize customer transactions in accounts receivable journals and vendor transactions in accounts payable journals. NOTE: You can also reorganize transactions in the general journal and in payment journals.

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Financials I in Microsoft Dynamics® AX 2012 Procedure: Reorganizing Open Transactions Perform the following steps to reorganize payments: 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the customer. 2. Click the Collect tab, and then click Settle open transactions. 3. On the Overview tab, select the Mark check box for an invoice. 4. Click Transaction reorganizing. 5. Select whether to reorganize the transaction by percentage or by amount. 6. On the Overview tab, create a new line for each new due date. For each due date, enter the percentage or amount of the original transaction that is due on that date. 7. To reorganize the original transaction by method of payment, you can enter the same due date for each line. You will select the method of payment in step 12. 8. Verify that the percentage or amount shown in the Remainder field is 0. 9. Click Accept to transfer the reorganized transactions to the Open transaction editing form. 10. Select a new transaction. 11. Select the Payment tab and select a method of payment and a payment specification. 12. Repeat steps 11 and 12 for the remaining new transactions. NOTE: Alternatively, you can reorganize the due dates by using a payment schedule. Click the Payment schedule button, select a payment schedule and a starting point, and click OK. The Payment schedule configuration key must be selected to reorganize transactions according to a payment schedule.

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Chapter 12: Accounts Receivable Daily Procedures

Lab 12.3 - Edit Open Transactions During this lab you can edit open transactions. Scenario You are an Accounts Receivable Coordinator at Contoso. Whale Wholesales (Customer account 1301) has purchased some design consultancy from Contoso. You need to create a free text invoice because the sale is not an inventory transaction. The price agreed on for consulting 99.00 USD plus tax. Two weeks later, a check for 108.90 USD arrives from the customer, so you need to create a payment journal and post it for this amount. As part of the week ending process, you now must check the Open transactions for all customers. When you check the Whale Wholesales account, you notice that some transactions are open. Mark them for payment and update the account. To ensure that you have done this correctly, check the Closed transactions for Whale Wholesales and verify the transactions in the Closed transactions form.

Challenge Yourself! 1. Create the Free Text Invoice. Use main account 401200. 2. Record the payment and apply the payment to the correct invoice by using the Settle open transactions form.

Need a Little Help? 1. Create a Free text invoice. 2. Create and post a Payment journal. 3. Use the Open transactions editing functionality to mark the transactions. 4. Use the Closed transactions editing functionality to view the transactions.

Step by Step Create the invoice: 1. Open the Free text invoice form by clicking Accounts receivable, click Common, click Free text invoices, and then click All free text invoices. 2. Click Free text invoice on the Action pane. 3. In the Customer account field, type 1301. 4. Click the Invoice lines tab. 5. In the Invoice line area type Design consultancy in the Description field..

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Financials I in Microsoft Dynamics® AX 2012 6. 7. 8. 9. 10. 11.

Click the Main account arrow, and then click 401200. Move to the Amount field, and type 99.00. Click the Post button on the Action pane, Click OK in the Post free text invoice form. Close the Infolog form. Close the Free text invoice form.

Create and post the Payment journal: 1. Click Accounts receivable, then click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. 3. In the Name field, select ArPay. 4. Click Lines. 5. In the Account field, type 1301. 6. Click the Description text arrow, select Payment, and move to the next field. 7. In the Credit field, type 108.90. 8. Click the Post button, and then click Post. 9. Click Close to close the Infolog dialog box. 10. Close the form. Settle the invoice: 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the Customer account 1301. 2. Click the Collect tab, and then click Settle open transactions. 3. Select the Mark check box for the invoice line just created. 4. Select the Mark check box for the payment line just created. 5. Click Update. 6. Close the form. Verify the settlement: 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the Customer account 1301. 2. Click the Collect tab, and then click Closed transaction editing. 3. View the transactions in this form. 4. Close all the forms.

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Chapter 12: Accounts Receivable Daily Procedures

Placing an Accounts Receivable Transaction on Hold To make data entry more flexible, you can enter a transaction on one date, and then put it on hold to prevent users from posting it until a specified date. This functionality is useful if you have an agreement with a customer about when a transaction can be posted. To prevent a transaction from being posted until a specified date, enter a release date. The transaction is on hold until the release date occurs. You can edit and save transactions that are on hold, but you cannot post them unless you first remove the hold.

Procedure: Place an Accounts Receivable Transaction on Hold You can place an accounts receivable transaction on hold by using one of the following paths: •

Click Accounts receivable, click Common, click Free text invoices, then click All Free Text Invoice Details

•

Click Accounts receivable, then click Journals, click Payments, click Payment journal, and then click Lines

•

Click Accounts receivable, click Journals, click Payments, and then click Payment transfers

•

Click Accounts receivable, click Journals, and then click Bill of exchange. Open any Bill of Exchange journal, and then click Lines

Perform the following steps to place an accounts receivable transaction on hold: 1. In the Release date field, enter the date when the transaction is no longer on hold and becomes available for posting. 2. To remove a hold on a transaction, you can clear the entry in this field. Any user can clear the release date, regardless of who initially entered it.

About Release Date for On Hold Transactions in Different Time Zones If your organization includes users who work across different time zones, the date and time when a transaction is released from a hold is based on the time zone of the user who most recently modified the Release date value. Because the transactions release at midnight on the specified date in that user's time zone, the actual date and time of the release adjust accordingly for users in other time zones. For example, on December 31 in New York, a user puts a transaction on hold at noon Eastern Time, and enters a release date of January 1 (the next day). The user sets up the transaction to be on hold until midnight Eastern Time, so the user must wait 12 hours for the transaction to be released.

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Financials I in Microsoft Dynamics® AX 2012 Users in London, which is five hours ahead of New York, also must wait 12 hours. However, because the transaction was put on hold at 17:00 Greenwich Mean Time on December 31, the transaction will not be released until 05:00 Greenwich Mean Time on January 1. For users in Seattle, which is three hours behind New York, the transaction was put on hold at 09:00 Pacific Time on December 31. When the transaction is released 12 hours later (at 21:00 Pacific Time), it will still be December 31 for these users.

Reverse Settlements When you work with reverse settlements: •

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

•

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

•

An unsettled invoice is considered unpaid and is handled together with collection letters.

Scenario At Contoso, the Accounting Manager reviews and approves the Accounts Receivable transactions. The Accounting Manager realizes that a customer payment is settled with the wrong invoice and wants to reverse the settlement.

Procedure: Reverse Settlements Perform the following steps to reverse a closed transaction: 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the Customer account. 2. Click the Collect tab, and then click Closed transaction editing. 3. Put the cursor on the line that contains the settlement to reverse.

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Chapter 12: Accounts Receivable Daily Procedures 4. Select the Mark field to reverse the invoice or payment to associate with the settlement. The Mark field of the transaction that offsets the transaction marked is selected automatically. 5. Click Reverse.

FIGURE 12.5 CLOSED TRANSACTION EDITING FORM

As soon as the changes that you want are made, the system changes the settlement amount, makes the corrections, and changes the status. View the history by clicking the Inquiries button, then clicking History. The History form displays an overview of settlements for the current voucher.

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Lab 12.4 - Reverse a Settlement During this lab you reverse a settlement. Scenario You are the Accounts Payable Coordinator at Contoso. You just realized that the settlement posted to Whale Wholesales should have posted to customer account 1203- Pelican Wholesales, and you now must reverse the settlement to Customer account 1301.

Challenge Yourself! Use the Closed transactions editing function to reverse this settlement.

Need a Little Help? 1. Open the customer account. 2. Click the Collect tab, and then click Closed open transactions., to reverse the payment posting error.

Step by Step 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the Customer account 1301. 2. Click the Collect tab, and then click Closed transaction editing. 3. Click the transaction line that recorded a payment for 108.90. 4. Select the Mark check box. 5. Click the Reverse button. 6. Close all the forms.

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Reimburse a Customer Consider the following when you work with the reimbursement feature: •

Use it to repay customers who have credit amounts because of overpayment or credit notes.

•

It transfers the balance to a vendor account. The vendor account is assigned in the Customer form, otherwise a one-time vendor account is created automatically.

•

The Accounts Payable Coordinator can create an ordinary payment when the balance amount transfers to a vendor account.

Scenario Contoso has a compensation policy that guarantees customers are reimbursed if Contoso does not meet the service level described in customer agreements. For example, if there is product damage or a delay in delivery, Contoso reimburses the customer five percent of the invoice amount.

Procedure: Reimburse a Customer Perform the following steps to reimburse a customer: 1. Click Accounts receivable, click Setup, and then click Accounts receivable parameters. 2. Click General. 3. In the Minimum reimbursement field, enter a minimum amount for reimbursement of customer overpayments. If the reimbursement amount is equal to or greater than the value in the Minimum reimbursement field, the balance transfers to the vendor account. 4. Close the Accounts receivable parameters form. 5. Click Accounts receivable, click Periodic, and then click Reimbursement. 6. Click Select to reimburse specific customer accounts, and to specify the customer accounts in the CustOverPayment query form. To reimburse all customer accounts, click OK. 7. The credit amounts transfer to the vendor accounts of the customers and are processed automatically as ordinary payments. NOTE: If a customer does not have a vendor account, the system automatically creates a one-time vendor account for the customer. You can set up vendor accounts for customers by opening the clicking Customers form and entering information in the Vendor account field. 8. Click Accounts receivable, then click Reports, click Transactions, click Payments, and then click Reimbursement to view the reimbursement transactions created.

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Lab 12.5 - Reimburse a Customer During this lab you use customer reimbursements. Scenario Whale Wholesales purchases additional design consultancy services with the same price as before - 99.00 USD, plus tax. As the Accounts Receivable Administrator, you create a free text invoice for this order. The Accounts Payable Coordinator at Whale Wholesales sends a check for 120.00 USD immediately because he could not remember the exact amount of the consulting order, but thought that the last order was for about 120.00 USD. You receive the payment, and then create and post a payment journal. Again, as part of the week-ending process, you edit open transactions, including the open transactions for Whale Wholesales. You notice the overpayment, so after you edit the open transactions, you generate reimbursements so that you can reimburse your customers, including Whale Wholesales, for their overpayments.

Challenge Yourself! 1. Create the invoice for Whale Wholesales. 2. Post the payment to Whale Wholesales. 3. Generate the reimbursement for the overpayment.

Need a Little Help? 1. Change the Minimum reimbursement field for Accounts receivable parameters to 5.00. 2. Create and post a Free text invoice for the sale. Use main account 401200. 3. Create and post a Payment journal for the payment. 4. Edit the open transactions. 5. Generate the reimbursements.

Step by Step Set the Minimum reimbursement value: 1. From the Navigation pane, click Accounts receivable, click Setup, and then click Accounts receivable parameters. 2. In the Minimum reimbursement field, type 5.00. 3. Close the form.

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Chapter 12: Accounts Receivable Daily Procedures Create the Free text invoice: 1. Open the Free text invoice form by clicking Accounts receivable, click Common, click Free text invoices, and then click All free text invoices. 2. Click Free text invoice on the Action pane. 3. In the Customer account field, type 1301. 4. In the Description field, in the Invoice lines section, type Consulting. 5. Click the Main account arrow, and then type 401200. 6. Move to the Amount field, and then type 99.00. 7. Click the Post button. 8. Click OK. 9. Click Close to close the Infolog form. 10. Close all other forms. Create and post the Payment journal: 1. Click Accounts receivable, then click Journals, click Payments, and then click Payment journal. 2. Click New to create a new journal. 3. In the Name field, type ARPay. 4. Click the Lines button. 5. In the Account field, type 1301. 6. Click the Description arrow, select Payment, and then move to the next field. 7. In the Credit field, type 120. 8. Click the Post button, then click Post. 9. Click Close to close the Infolog box. 10. Close all the forms. Settle the invoice and the payment: 1. Click Accounts receivable, then click Common, click Customers, click All customers, and then double-click on the Customer account 1301. 2. Click the Collect tab, and then click Settle open transactions. 3. Select the Mark check box for the invoice line just created. 4. Select the Mark check box for the payment line just created. 5. Click Update. 6. Close the form.

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Financials I in Microsoft Dynamics® AX 2012 Record the reimbursement: 1. Click Accounts receivable, click Periodic, and then click Reimbursement. 2. Click the Select button. 3. In the Criteria field on the Customer account line, type 1301. 4. Click OK and click OK again. 5. Click Close to close the Infolog box. 6. Close all the forms.

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Reason Codes Reason codes are standard codes that you can use in various transaction types or changes to field values to provide background data about the transaction. For example, auditors or managers frequently want to see reasons recorded for various transactions. Using standard reason codes instead of transaction text gives users guidelines on what codes to select from, and provides management and auditors the ability to analyze transaction history by specific reason. Reason codes can be used with: •

Fixed assets

•

General ledger

•

Accounts payable

•

Accounts receivable

•

Bank

Require Reason Codes in Accounts Receivable In Accounts receivable, you can set up parameters to require reason codes when transactions are reversed or canceled, or when return orders are posted. You can view historical reasons in the Customer transactions and Voucher transactions forms. To require reason codes for receivable transactions, select the check boxes next to one or more of the following Reason code requirements settings in the Accounts receivable parameters form (Accounts receivable > Setup > Accounts receivable parameters > General > Reason code requirements): •

Require reasons for payment cancellations

•

Require reasons for return orders

•

Require reasons for transaction reversals

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Financials I in Microsoft Dynamics® AX 2012 Reason Codes in Accounts Receivable Transactions After you have created reason codes, select reasons for transactions or other entries in the following forms in the Accounts receivable module: •

Cancel payment form

•

Free text invoice form

•

Transaction reversal form

Reason Comments Enter a reason comment in the same forms where you select reason codes. Reason comments are optional, and although you can set up default reason comments for each reason code, no setup is required. If you select a reason code for a transaction, the default comment that is set up in the Reasons form displays in the Reason comment field. You can change the default reason comment. If you type a reason comment first and then select a reason code, the typed reason comment is not replaced.

Print Management Print management works with Accounts Receivable and Accounts Payable. You can define print management original records, copy records, and conditional settings at the module, account, or transaction level, so that you can control various activities that include the following: •

Number of copies to produce

•

Multilingual document footer text

•

Print destination

•

Select report format

How Print Management Works When you print documents such as invoices or packing lists, use defined settings for the original or copy records in print management. The effective records are the records established in Print management that control the printed output of original and copy records. An original or copy record contains the information that print management uses to print the document. The record that is used to print a document determines the footer text for the document, which printer to use, and the number of copies to print. For example, to print three copies of the sales order packing slip, each with different footer text, set up an original record and two copy records.

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Chapter 12: Accounts Receivable Daily Procedures The print management setup information for each document type is defined in a hierarchical list that consists of modules, accounts, and transactions. At each level of the hierarchy, define print management original records, copy records, and settings for any of the available document types. When you generate a document, it prints according to the effective original record and effective copy records. An effective record can be inherited from a higher level in the hierarchy or created as a new record for the current level in the hierarchy, or it can override an inherited record that has the same name. You can set up a default setting for each original record or copy record that specifies the footer text, printer destination, and number of identical copies to print. If you select the Default setting check box in the Print management setup form, a document prints according to the specifications for the default setting. If you do not select this field, a document prints only if a query for an associated conditional setting successfully returns results. Each original record or copy record can have up to 19 conditional settings associated with it. Each conditional setting has a related query. For example, you can create a query to print footer text in a different language for a specific customer. When you generate the document during posting, the queries that are associated with the conditional settings are evaluated automatically in the order in which the settings appear in the Print Management setup form. The setting that is associated with the first successful query is used to print the document.

Set Up Print Management at the Module Level You can define print management settings for each module, account, transaction, or any combination of these three. You can create up to 99 original or copy records for every document type. You can create up to 19 conditional settings for each original or copy record, in addition to the default setting. Setting up print management at the module level requires the least amount of setup and minimizes the maintenance work when settings change, such as installation of a new printer. However, if business needs require, settings for specific accounts or individual transactions can override module settings. NOTE: You can use print management settings when you reprint documents. Select Preview/Print > Use print management to reprint a document that uses the effective print management settings.

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Financials I in Microsoft Dynamics® AX 2012 Scenario Simon, the System Implementer, has collected information about the printing of sales invoices. Contoso uses the same invoice for all types of customer orders. Therefore, Simon specifies that the setup applies not only to the Sales order invoice, but also to the free text invoice and project invoice. Contoso requires five copies. Simon enters the footer information for each copy, which is as follows: •

"Customer" for the first and second copy

•

"Remittance Copy" for the third copy

•

"Customer File" for the fourth copy, which is filed by Customer name

•

"Numeric File" for the fifth copy, which is filed in a numeric invoice file

For each copy, Simon specifies the intended audience so that each document prints in the appropriate language. For the Customer and Remittance Copy, Simon enters the footer text for multiple languages so that all the text on the invoice prints with the language appropriate to the customer. Arnie in Accounts Receivable prints all the copies; thus, Simon specifies that copies 1, 3, 4, and 5 must print to Arnie's printer. He sets up copy 2 to print to the Archive. Simon finishes setting up all the documents for Contoso and then begins setting up Contoso Europe. For this company, the customer invoice documents are unique. Simon sets up the footer text, printing order, sort order, and printer destination for each document. Simon sets up the Sales order Packing Slip document next. Because Contoso Europe has several warehouses, he must set up copies for each warehouse. For Warehouse A1, he specifies three copies, footer text, printing order, sort order, and printer destination. For Warehouse A2, he specifies four copies, footer text, order in which the copies print, sort order, and printer destination. The appropriate document and copies print automatically based on the warehouse location for each Sales order line. When Simon finishes setting up the documents for all the companies, he sends an e-mail to the implementation team stating that the setup is complete and requesting that each member verify the document setup for his or her particular department. Prakash, the Project Manager at Contoso, receives Simon's e-mail and verifies the print setup. He reviews the setup for all the documents and is satisfied that Simon set them up correctly.

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Set Up Print Management Perform the following steps to set up print management at the module level: 1. Click Accounts Receivable, click Setup, click Forms, click Form Setup, and then click the Print management button. The hierarchical list in the left pane displays the module, documents, original or copy records, and conditional settings. The fields in the right pane display the options that you can specify for each type of record. The displayed fields vary, depending on the selected record. When you expand the hierarchy list, a plus (+) icon in front of the document type indicates that a setup record exists. 2. To create a new record, right-click a document name and select New. A new original or copy record is created and is displayed in the list automatically. 3. In the right pane in the Original/copy field, make a selection to create either an original or copy record. You can create only one original record for each document, but you can create multiple copy records for each document. 4. If you are creating a copy, enter a name in the Name field. 5. To set up the original or copy so that it does not print, select the Do not print check box. If there is an override of an original or copy record from a higher level in the print management hierarchy, use this option to stop a document from printing instead of only changing the destination, number of copies, or footer text. This is a continuation of setting up Print management. Perform the following steps to continue: 1. Click Accounts Receivable, click Setup, click Forms, click Form Setup, and click Print management button. 2. If the Default setting check box is selected, the original or copy prints even if the queries for any applicable conditional settings do not return any results. The original or copy is denoted in the hierarchical list by the word Default. 3. By default, the document prints at the specified printer destination when you click Printer setup from the posting form for the document. To change the printer destination, click the Destination field's lookup button and then click Printer setup to select a destination. After you make changes, click OK to return to the Print management setup form. 4. In the Number of copies field, enter the number of identical copies to print, up to 99 copies. 5. In the Footer text field, enter up to 50 characters to include at the bottom of the document. To print footer text in other languages, click the Footer text lookup button and set up footer text for the additional languages.

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Financials I in Microsoft Dynamics® AX 2012 Scenario Arnie, the Accounts Receivable Coordinator, is entering a sales order for a new customer. Because this is the first time he is selling to the customer, the terms are cash on delivery. He must enter the order with the customer's payment terms so that the material will be sold and delivered on time. To speed up establishing an open account with the customer, Arnie sets up a document copy for the sales order. He enters "New Customer- need credit established" as the footer and sets the print destination to the printer that belongs to Connie, the Credit and Collections Manager. He also enters a note that will print on Connie's copy that explains how much business they plan to conduct with the customer. This information will help Connie determine how much credit to grant to the customer. Arnie posts and prints the sales order, which prints a copy to Connie's printer.

Procedure: Set Up Print Management for an Account Perform the following steps to set up print management for a specific customer, prospect, or vendor account: 1. Click Accounts receivable, click Common, click Customers, and click All customers. 2. Select an account. 3. Click Setup and then click Print management. 4. In the left pane, expand the list for a document that is listed under the customer or vendor account. Any original or copy records are displayed. An icon with a blue arrow indicates that the original or copy record is inherited from the module level of the hierarchy. This is the print management information to use for the customer or vendor, unless you perform an override to make changes at the account level.

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Chapter 12: Accounts Receivable Daily Procedures 5. Review the original or copy record information. If changes are necessary, override the inherited record, copy an inherited record, create a new record, or create a new setting. o To override, right-click an original or copy record and select Override. The icon changes to display a red X to indicate that the record is now an override record. o To copy, right-click an original or copy record and select Copy. A copy is displayed in the list. Give the copy a new name. o To create a new original or copy record, right-click a document type in the list and select New. A new record displays in the list. o To create a new conditional setting, right-click an original or copy record and select New. A new conditional setting displays in the list. The conditional setting must have a description, and you must select query information. 6. Refer to "Set up Print Management" for more information about the fields available in the Print Management setup form.

Set Up Print Management for a Transaction Set up print management original or copy records and conditional settings for a transaction, such as a sales order. This may be necessary if you use a different printer for a specific transaction. Refer to the following table for the path that gives access to the print management setup. Module

Documents

Path

Accounts receivable

Free text invoice

Accounts receivable > Common > Free text invoices > All free text invoices > Print management

1. In the left pane of the Print management setup form, expand the list of documents. Any original or copy records display. 2. Review the original or copy record information. If changes are necessary, override an inherited record, copy an inherited record, create a new record, or create a new conditional setting. o To override, right-click an original or copy record and select Override. The icon changes to display a red X to indicate that the record is now an override record. o To copy, right-click an original or copy record and select Copy. A copy displays in the list. The copy must have a new name.

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Financials I in Microsoft Dynamics® AX 2012 o o

To create a new original or copy record, right-click a document in the list and select New. A new record displays in the list. To create a new conditional setting, right-click an original or copy record in the list and select New. A new conditional setting displays in the list. You must enter a description for the conditional setting and you must select query information.

3. Refer to "Set up Print Management" for more information about the fields available in the Print Management setup form.

Example: Conditional Print Management Settings You can customize the document output by using conditional settings that apply based on the results of a query. For example, one copy might be sufficient for most customers, but an extra customer copy may be necessary for a certain set of customers. Set up an additional copy record and a conditional setting with an associated query for the customer accounts that must have the additional copy printed, such as customer accounts 1101 through 1103, and then define "Customer copy 2" as the footer text for the extra copy. If you post sales orders for customer accounts 1102 and 1104 with the original or copy records and defined conditional setting, the following results will occur. Customer

Documents that print

Customer 1102

Original Customer copy Customer copy 2 (because the customer account falls within the query results for the setting) Warehouse copy

Customer 1104

Original Customer copy Warehouse copy

NOTE: Although conditional settings and queries provide flexibility in the print management settings, complex queries or numerous conditional settings can affect posting performance.

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Chapter 12: Accounts Receivable Daily Procedures Procedure: Set Up Conditional Print Management Settings Perform the following steps to create a conditional print management setting: 1. In the left pane of the Print management setup form, right-click an original or copy record and select New. 2. Enter a Description for a conditional setting. 3. Click the Select button. 4. In the Query - Setting form, enter query information in the Criteria field. 5. When the query is complete, click OK. 6. Refer to "Set up Print Management" for more information about available fields in the Print Management setup form.

Summary Accounts Receivable offers many advanced options including: •

Extensive options for credit assessment and credit control

•

Flexible terms of payment and cash discount

You can give each customer a unique credit limit. Apply the credit limits to only customer balances or to include uninvoiced, delivered items, or even sales orders. Decide whether the credit limit applies on the total of the sales order or if you need to control each sales order line separately. You can set up the system to stop delivery when you reach the credit limit or set up an automatic warning that you can overrule. You also can stop the customer account automatically at any step during the collection procedure. Accounts Receivable offers extensive options for editing open transactions, reopening closed transactions, and entering renegotiated payment schedules directly into the system. You can view the customer invoice and print a copy of it directly from the customer account.

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Test Your Knowledge Test your knowledge with the following questions. 1. You can create inventory transactions that use item quantities by using Free text invoices. ( ) True ( ) False 2. A ordinary invoice typically consists of which of the following? (Select all that apply) ( ) The company’s bank accounts ( ) A ledger account for the sale is indicated on each order line, and the customer balance is posted for each customer group, unless specified otherwise ( ) A sales order that makes the inventory transactions ( ) The item number that specifies and posts in the ledger 3. When the invoice is registered and approved, the customer must pay for the invoice. ( ) True ( ) False 4. What does the payment proposal function do? (Select all that apply) ( ) Searches for due payment lines ( ) Searches for vendors ( ) Searches for payment lines with a maximum date for receiving a cash discount ( ) Checks open and approved customer transactions 5. In settling open transactions, you can do which of the following? (Select all that apply) ( ) Create a payment proposal ( ) Edit unapplied transactions ( ) Create a free text invoice ( ) Make changes in transactions for customers 6. What is the purpose of cross rate functionality? ( ) When the payment and the invoices are in different currencies ( ) When the payment and the invoices are in the same currencies ( ) When the customer and the invoices are in the same currencies ( ) When the customer needs to be reimbursed

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Chapter 12: Accounts Receivable Daily Procedures 7. If the invoice and payment are not settled when you create the payment, where can these be settled? ( ) Free text invoice ( ) Payment proposals ( ) In the Settle open transactions form ( ) In the Reverse settlements function 8. Is it possible to split open transactions? ( ) Yes ( ) No 9. Can a settlement be reversed if the bank does not honor a payment and it has been closed? ( ) Yes ( ) No 10. How are print management settings defined? ( ) For each module ( ) For each account ( ) For each transaction ( ) For each module, account, transaction, or any combination of these three 11. Which of the following activities can not be controlled with print management settings? ( ) Number of copies to produce ( ) Page orientation ( ) Multilingual document footer text ( ) Print destination

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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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Chapter 12: Accounts Receivable Daily Procedures

Solutions Test Your Knowledge 1. You can create inventory transactions that use item quantities by using Free text invoices. (•) True ( ) False 2. A ordinary invoice typically consists of which of the following? (Select all that apply) ( ) The company’s bank accounts ( ) A ledger account for the sale is indicated on each order line, and the customer balance is posted for each customer group, unless specified otherwise (√) A sales order that makes the inventory transactions (√) The item number that specifies and posts in the ledger 3. When the invoice is registered and approved, the customer must pay for the invoice. ( ) True (•) False 4. What does the payment proposal function do? (Select all that apply) (√) Searches for due payment lines ( ) Searches for vendors (√) Searches for payment lines with a maximum date for receiving a cash discount (√) Checks open and approved customer transactions 5. In settling open transactions, you can do which of the following? (Select all that apply) ( ) Create a payment proposal (√) Edit unapplied transactions ( ) Create a free text invoice (√) Make changes in transactions for customers

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Financials I in Microsoft Dynamics® AX 2012 6. What is the purpose of cross rate functionality? (•) When the payment and the invoices are in different currencies ( ) When the payment and the invoices are in the same currencies ( ) When the customer and the invoices are in the same currencies ( ) When the customer needs to be reimbursed 7. If the invoice and payment are not settled when you create the payment, where can these be settled? ( ) Free text invoice ( ) Payment proposals (•) In the Settle open transactions form ( ) In the Reverse settlements function 8. Is it possible to split open transactions? (•) Yes ( ) No 9. Can a settlement be reversed if the bank does not honor a payment and it has been closed? (•) Yes ( ) No 10. How are print management settings defined? ( ) For each module ( ) For each account ( ) For each transaction (•) For each module, account, transaction, or any combination of these three 11. Which of the following activities can not be controlled with print management settings? ( ) Number of copies to produce (•) Page orientation ( ) Multilingual document footer text ( ) Print destination

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