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Chapter 3: Journal Setup

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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.

Financials I in Microsoft Dynamics® AX 2012

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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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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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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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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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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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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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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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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 <All> is displayed, there are no posting restrictions by account type for the journal.


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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 <All>

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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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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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:

• 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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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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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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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

Rent Journal Name of Journal PerRent

Description Rent Journal

Journal Type Periodic

Voucher Series Acco_23

Account Type Ledger

Company Account ceu

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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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. From the Journal names form, click the New button to add a line. 2. In the Name field, enter PerRent. 3. In the Description field, enter Rent Journal. 4. In the Journal type field, use the arrow to select Periodic. 5. In the Voucher series field, use the arrow to select the first

Acco_23. 6. In the Account type field, verify Ledger is populated automatically. 7. Click the Journal control button. 8. Click the Add button in the Which account types can be posted? 9. In the Company accounts field, click the arrow to select CEU. 10. Close the Journal control form. 11. 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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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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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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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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Documents

80219A_03