AX40 ENUS FSI 07-Accounts Payable Setup

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Chapter 7: Accounts Payable Setup

CHAPTER 7: ACCOUNTS PAYABLE SETUP Objectives

The objectives are:

• Create a Payment Schedule • Create Terms of Payment • Create a Payment Day • Set up 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 chapter describes the different Accounts Payable setup options in Microsoft Dynamics™ AX. It shows setup procedures and defaults used throughout the Accounts Payable module. This chapter covers topics such as payment options, vendor setup and posting profiles. Microsoft Dynamics AX 4.0 offers extensive functionality to set up different vendor payment options. The payment options are global and are used in both the Accounts Payable and Accounts Receivable modules, and includes:

• Payment schedules • Payment days • Terms of Payment • Cash discounts • Methods of payment • Payment fees

The vendor setup is also covered to enable fast and efficient handling of vendors and vendor transactions.

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Microsoft Dynamics AX 4.0 Financials I

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 is recorded. It is paid at $2,000 each month until it is paid off and during this period the invoice is not considered past due as long as the scheduled payments are made on time. This is also known as a finance plan, or contract payments.

Procedure − Create a Payment Schedule Follow these steps to create a payment schedule.

1. In ACCOUNTS PAYABLE→SETUP→PAYMENT→PAYMENT SCHEDULES on the Overview tab, enter a code and a description in the Description field to be used as identification of the payment schedule.

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ACCOUNTS PAYABLE→SETUP→PAYMENT→PAYMENT SCHEDULES→GENERAL TAB

FIGURE 7−1: THE PAYMENT SCHEDULES FORM

2. On the General tab in the Allocation list, select an allocation

method:

– Total − Total amount outstanding on the invoice due. – Fixed amount − A specific, fixed amount is due for each

payment on the specified payment dates. – Fixed quantity − Payment of the total amount is divided into a

fixed quantity of payments. – Specified − A specified amount is due on each of the specified

payment dates. If Specified is selected, the payment schedules and amounts must be defined on the Payment lines tab.

NOTE: Depending on the value selected in the Allocation list, different fields are enabled on the General tab. For example, if Total is selected in the Allocation list, no other fields are enabled on the General tab.

3. In the Payment per list, select the date interval in Days, Months, or Years. The system uses this when calculating the due date of each installment.

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4. In the Change field, enter the number of units related to the Payment per list between the due dates of each installment. This field is available if Fixed amount or Fixed quantity is selected in the Allocation list.

5. If the Fixed quantity option in Payment schedules is chosen, specify the fixed number of installments in the Number of payments field.

6. If the Fixed amount option in the Allocation field is chosen, specify the fixed amount in the Amount currency field..

7. In the Minimum field, specify the minimum installment. Minimum amounts override calculated payment amounts.

NOTE: Use the Sales tax allocation list to distribute the sales tax amount on a bill of exchange to the payment schedule installments.

8. Click the Lines tab to define the line information for the payment

schedule, for how many different payments there should be and how much of the total should be paid in each payment.

9. In the Quantity field, enter the time interval for each installment.

10. 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 chosen.

11. In the Percentage/Amount list, select if the value entered is a percentage or an absolute amount.

12. Apply the payment schedule to vendors or purchase orders. For example, click ACCOUNTS PAYABLE→PURCHASE ORDER. On the Price/discount tab, select a payment schedule in the Payment schedule list. To change the payment schedule setup on, for example, a purchase order, click ACCOUNTS PAYABLE→SETUP→PAYMENT SHCEDULE. The payment plan is expanded into a worksheet for the purchase order, where the amount per payment, the number of payments, or the specific payments can be changed. Any rounding is included in the last payment on the post schedule.

Payment schedules can also be attached to terms of payment. The terms of payment determine the due date of the first installment. The due date of the following installments is calculated based on the information set up in the Payment schedules form.

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Terms of Payment Use the Terms of payment form to define all the terms of payment used by a company and the vendors. Use a term of payment for calculation of a due date based on the date of the invoice. Specify terms of payment for each:

• 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 − Using Terms of Payment The Global Trade & Manufacturing Company has a standard vendor payment term of Net 30 days. If an invoice for items ships September 15, and the invoice is dated "as of November 15" payment is due December 15 with a Net 30 payment term. With a Net 30 Days settlement, the Global Trade & Manufacturing Company 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 X% per month may be added to the invoice plus other services charges.

Procedure − Create Terms of Payment Follow these steps to create a term of payment. ACCOUNTS PAYABLE→SETUP→PAYMENT→TERMS OF PAYMENT

FIGURE 7−2: THE TERMS OF PAYMENT FORM

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1. In the Terms of payment field, enter a code or a short name for the

term of payment, and enter a descriptive name for the current terms of payment in the Description field.

2. In the Payment method list on the Setup tab, select the method used to calculate the due date. The box listed displays all the available methods. For example, select Net and enter 20 in the Days field to pay a vendor 20 days after the invoice date. Or, to pay the vendor invoice during the month of the invoice date, select Curr. Mth. To extend the period, if it is necessary, add days to the Curr. Mth.

NOTE: If C.O.D.(Cash on delivery) is chosen as the delivery method, select the Cash payment check box to indicate if payments can be made in cash and, or check. In the Cash list, select a ledger account for settlement of invoices that will be used for cash payment.

3. In the Months field, enter the number of months to add to the payment method to calculate the due date.

4. In the Days field, enter the number of days to add to the payment method to calculate the due date.

5. In the Payment schedule list, 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.

BEYOND THE BASICS: 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 list, select a payment day used for calculation of due date. Refer to the procedure about Payment days to learn how to create payments days.

NOTE: Use the Language text option 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 set up with French as the language.

7. Attach the terms of payment, for example, to purchase orders or vendors. For example, click ACCOUNTS PAYABLE→PURCHASE ORDERS. On the Price/discount tab, select the terms of payment in the Terms of payment list.

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Payment Days Use payment days to define the Payment day used for calculation of due date. The due date is always rounded up to the nearest specified date. Payment day can be specified:

• For a specific day in the week • For a specific day in the month

Procedure − Create a Payment Day Follow these steps to create a payment day. ACCOUNTS PAYABLE→SETUP→PAYMENT→PAYMENT DAYS

FIGURE 7−3: THE PAYMENT DAYS FORM

1. In the Payment day field, enter a short identification of payment day(s) and enter a description of the payment day identification in the Description field, on the Overview tab.

2. On the Payment day lines tab, select between Week and Month in the Week/Month list. If Week is chosen, select a weekday from the list, and if Month is chosen, enter a day between 1 and 31.

Set up the payment day in the Terms of Payment form on the Setup tab to define the payment date used for calculation of the due date.

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Lab 7.1 − Terms of Payment Scenario: As the new accounting clerk at Global Trade & Manufacturing Company, you have been asked to set up a new Term of payment for a vendor we have been slow in paying. The vendor, Tailspin Toys Inc., will now have payments due in 15 days. After creating the new Term of payment, assign it to the vendor.

Challenge yourself! Remember to assign the new Term of payment to the vendor.

Need a little help?

1. Set up the Term of payment.

2. Attach the new Term of payment to the vendor.

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Cash Discount Use of cash discounts:

• Cash discounts are earned if a company meets the vendor payment terms on time, or are given to customers when they pay their invoices within a specified period of time.

• Cash discounts are linked to the Customer, and Vendor tables. They are applied to sales, and purchase orders.

• If an invoice is settled on time to obtain a cash discount, the system automatically posts the cash discount to the ledger account specified for the cash discount.

Scenario − Using Cash Discounts The Global Trade & Manufacturing Company obtains a cash discount if they pay vendors invoices due within certain dates. The following codes are set up by the Global Trade & Manufacturing Company:

• A code called 5D10% − Cash discount of 10% when the amount is paid within 5 days.



• 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, for the 14D2% the code is left blank.

The three cash discounts follow each other as the payment comes closer to the cash discount date, however, only one cash discount is granted.

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Procedure − Set Up Cash Discounts Follow these steps to set up cash discounts. ACCOUNTS PAYABLE→SETUP→PAYMENT→CASH DISCOUNTS

FIGURE 7−4: THE CASH DISCOUNTS FORM

1. Enter in the Cash discount field, an alphanumeric code for the cash discount. For example, 7D4 to indicate the company receives a four percent discount if payment is made seven days before the due date.

2. Enter in the Description field, a brief description for the cash discount, for example, 7 days – 4% Discount for the discount code 7D4.

3. Select in the Next discount code list, the cash discount code used when the criteria for obtaining the current cash discount is exceeded. This makes it possible to define a set of cash discounts, which follow each other.

4. Select in the Net/Current list, on the Setup tab, the method applicable for the cash discount. The method specified, together with the value given in the Days field and or Months field, is used to calculate the last date that payment can be made to receive any cash discount available.

5. Enter in the Months field, the number of days during the period of time when the cash discount is applicable.

6. Enter in the Days field, the number of days during the period of time when the cash discount is applicable.

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7. Enter in the Discount pct. field, the cash discount as a percentage of the invoiced amount.

NOTE: In the General ledger parameters form on the Sales tax tab, select the check box for the Vendor Cash Discount:Cash discount is calculated on amount incl. sales tax field to specify that the cash discount is calculated based on the amount plus sales tax.

8. Select in the Account received list, the ledger account for posting cash discounts received from vendors.

9. Specify in the Cash-discount administration list, on the Settlement tab, in ACCOUNTS PAYABLE→SETUP→PARAMETERS, whether an obtainable cash discount should be regarded as a payment on account if the cash discount is not deducted correctly when the invoice is settled. EXAMPLE: Invoice total = $105.00 Obtainable cash discount = $10.50 Amount to be paid considering the cash discount = $94.50 Amount actually paid to the vendor = $95.00. If the Cash Discount administration parameter is set to Unspecific, the invoice is settled, and the difference of 0.50 is automatically posted to the ledger account specified for cash discount differences. If this parameter is set to Specific, the invoice is settled, and the difference of 0.50 is automatically posted in the Purchase ledger as a payment on account.

10. Set up the cash discount in the Vendors form, in journals or purchase orders.

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Payment Fee Use payment fees to:

• Specify if there are any extra charges added to the vendor invoice. For example, with regard to promissory notes a vendor might add a fee for issuing a promissory note or a company can be charged a Vendor bank remittance fee.

• Define fee identifications and specify bank relations and how to generate fees.

Scenario − Using Payment Fees The Global Trade & Manufacturing Company electronically transfers vendor due invoice amounts to their bank and the bank then transfers the money directly into a vendor's designated banking account. After the invoice amount is transferred, a paper remittance advice is automatically sent to each vendor detailing the specific account the payment is posted to, and also the amount of the payment issued. To handle the payment fees from the bank, the Global Trade & Manufacturing Company decides to set up payment fees for vendor invoices.

Procedure − Create a Payment Fee Follow these steps to create a payment fee.

ACCOUNTS PAYABLE→SETUP→PAYMENT→PAYMENT FEE

FIGURE 7−5: THE PAYMENT FEE FORM

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1. Enter in the Fee ID field, an identification for the fee, and enter a brief description in the Description field.

2. Enter in the Transaction text field, a text that is used in reports and inquiries.

3. Select in the Charge list, whether to charge the Vendor or Ledger to use a financial cost for the fee. If Ledger is selected, select an account number in the Ledger account list for posting in ledger.

4. Select in the Journal type form, on the General tab, the journal type for which the fee is valid. This is typically Vendor bank remittance.

5. Click Payment fee setup to create the needed set up lines per fee used for different banks, methods of payment, remittance types, payment specifications, currencies, time periods, and amount intervals. The system selects the relevant fee(s) based on the chosen conditions.

ACCOUNTS PAYABLE→SETUP→PAYMENT→PAYMENT FEE→PAYMENT FEE SETUP

FIGURE 7−6: THE PAYMENT FEE SETUP FORM

6. Select in the Grouping list, what kind of bank information is that is

required to start the fee:

– Table − The fee is valid for the bank account selected in the field Bank relation.

– Group − The fee is valid for the bank group selected in Bank relation.

– All − The fee is valid for all the bank accounts.

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7. Select in the Bank relation field:

– A bank account if Table is selected in the Grouping list. – Bank groups if Group is selected in the Grouping list. – Skip if All is selected in the Grouping list.

8. Select in the Method of payment list, a method of payment used for

the actual payment fee.

NOTE: If the company agrees with the bank to specify the payment, select the payment specifications in the Payment specification list.

9. Select in the Currency list, the currency that activates the fee. Only transactions with this currency can activate the fee. If blank, all currencies activate the fee.

10. Select in the Percentage/Amount list, the calculation method. Select among Amount, Percent, and Interval.

11. Enter in the Fee amount field, the size of the fee in the percent of the payment or the amount for one payment.

12. Select in the Currency list, the currency code for the fee.

13. Set up additional information on the General tab:

– Minimum − Enter the minimum transaction amount to activate the fee.

– Maximum − Enter the maximum transaction amount to activate the fee.

– From date − Enter the From date for date interval for fee calculation.

– To date − Enter the To date for date interval for fee calculation. – Minimum fee − Do not apply the fee if it is calculated to an

amount less than the minimum fee. – Sales tax group − If a financial cost is selected, a sales tax group

and an item sales tax group can be selected to generate the relevant taxes.

– Item sales tax group − If a financial cost is selected, a sales tax group and an item sales tax group can be selected 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 on a sales tax account.

14. For the selected payment fee setup line, enter fees that are dependent on the interval between the remittance and due dates on the Interval tab:

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– Days − Enter the number of days between the posting date

(discounting date) of the remittance and the due date of the promissory note.

– Percentage/Amount − Select if the specification is a percentage or an absolute amount.

– Fee amount − Size of the fee in percent of the payment or amount for one payment.

15. Set up the payment fee in the Methods of payment form. Refer to the

topic about Methods of Payment to learn how to use methods of payment.

Methods of Payment Many companies offer several methods to pay invoices due, such as:

• 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 pay its vendors. For each method of payment, enter information that tells the system how payments should be summarized and posted.

Procedure − Create a Method of Payment Follow these steps to create a method of payment.

ACCOUNTS PAYABLE→SETUP→PAYMENT→METHODS OF PAYMENT

FIGURE 7−7: THE METHOD OF PAYMENT FORM

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1. Press CTRL+N to create a new record, and enter in the Method of payment field, a name for the new method of payment.

2. Select in the Period list, if Microsoft Dynamics AX 4.0 should total the invoices in an automatic payment proposal. Select from the following options:

– Invoice creates one payment transfer for each invoice. – Date combines all invoices for vendors with the same due date. – Week combines all invoices for vendors with a due date within

the same week. – Total combines all invoices from vendors for the same payment.

3. Enter in the Description field a description of the method of

payment.

4. Enter in the Days of grace field, the number of days the vendor gives to make the payment after the specified method of discount, and still give a cash discount.

5. Select in the Payment status list, the payment status required to post a payment with this method of payment.

6. Select in the Account type list, the type of offset account that is used for payments.

NOTE: The most common account type is Bank.

7. Select in the Payment account list, the liquidity account for payment.

8. Enter in the Bank transaction type list, the transaction type for a bank account. The transaction type is marked on every transaction generated in the payment proposal.

NOTE: This field is only active when the account type is Bank.

9. Select the ledger account used for fees in the Fee account list if there are fees included in the method of payment.

10. Specify on the File format tab, the file formats to use with this Method of Payment. Use the following table to complete the File formats tab:

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Format Action Export format Specify the format to export payment, for example, a

promissory note or a check format. The export format tells Microsoft Dynamics AX 4.0 how to communicate with the bank. Typically, the bank format is sent by the bank, and the format is entered into Microsoft Dynamics AX 4.0. It is a tool that translates files between various systems.

Return format Format to return a message from the export format, if the bank supports an electronic return file.

NOTE: If the format list is empty, click the Setup button and select from the available formats.

10. Select the validation for the method of payment on the Payments control tab. Validation is executed in the journals upon posting when the payment method is used. Select one of the following validation methods:

– Payment reference − Checks that a payment reference is filled in. – Bank transaction type − Checks that a bank transaction type is

selected. – Offset account has the type bank − Checks that the offset account

type selected is Bank. – Check number − Checks that the check number is filled in. – Payment specification − Checks that the payment method's

specification is filled in. – Payment − Checks that a payment identification is filled in. – Note − Checks that a note follows the payment.

11. If a method of payment is created for promissory notes, specify on

the Promissory note tab whether the promissory note should be drawn when a Purchase Order is posted by selecting the Draw promissory note check box. If selected, a promissory note is automatically drawn when a purchase order invoice is posted.

12. Set up the method of payment in the Vendors form, in journals or purchase orders.

The set up of methods of payment is global. This means the setup of payments can be used in both Accounts Payable and Accounts Receivable.

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Lab 7.2 − Method of Payment, Terms of Payment and Cash Discount

Scenario: You are the new accounts payable clerk at Global Trade & Manufacturing Co., and have been asked to set up a new method of payment called SCD (special cash discount). The impetus for the new method of payment is a vendor with whom Global Trade & Manufacturing Co. collaborates, Blue Yonder Airlines, who has asked Global Trade & Manufacturing Co. to pay cash with a special discount, for the next few months to help them with some accounts receivables shortfalls. Blue Yonder is offering good terms: net 14 days; and a 2% cash discount within 5 days. After setting up the method of payment, create a purchase order for 7 CL-100-B (Ceiling lamp-brushed), invoice it, and let your manager know what the discount will be if paid within 5 days. These are the other details: Field Value Period Invoice Days of grace 0 Payment status None Account type Bank Payment account EURBANK Bank transaction type 02 Fee account 403150 Export Format 1 (Test) Return Retur. Format 1 pr. payment Invoice number INV123

Challenge Yourself! The key is to attach the appropriate Terms of payment and Cash discount to the vendor.

Need a Little Help?

1. Create the Method of Payment.

2. Attach the Terms of payment and Cash discount to the vendor.

3. Create and invoice the purchase order.

4. View the transactions on the posted purchase order.

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Vendor Groups Using vendor groups:

• Use vendor groups to set up certain information that always defaults when entering a new vendor.

For example, use the vendor group to set up automatic posting to General Ledger accounts for consumption generated by vendor transactions.

• Also, set up ledger accounts for the automatic transactions generated for receipt and issues of inventory. However, refer to the training material on Trade and Logistics to learn about automatic posting for inventory related transactions.

• In the Vendor group form, set up any number of vendor groups. At least one vendor group must be set up, because a vendor group must be specified when setting up a new vendor.

Scenario − Using Vendor Groups The Global Trade & Manufacturing Company has many vendors to keep track of. To simplify the handling of vendors, the Global Trade & Manufacturing Company has set up several vendor groups to:

• Specify ledger posting per customer group. For each vendor group, it is possible to 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. Find additional information about how to set up ledger accounts per vendor group in Posting Profiles and Posting.

• Record sales budgets per vendor group. Find additional information about how to set up budgets per vendor group in Financials II training material.

• Generate trade statistics per vendor group. For example, to generate sales statistics that shows monthly consumption per vendor group.

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Procedure − Create a New Vendor Group Follow these steps to create a new vendor group. ACCOUNTS PAYABLE→SETUP→VENDOR GROUPS

FIGURE 7−8: THE VENDOR GROUPS FORM

1. Enter a short name for the vendor group in the Vendor group field. Use this name for the vendor group anywhere in Microsoft Dynamics AX 4.0, whenever required to specify a vendor group.

2. Enter in the Description field, the full name of the vendor group. 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 in which vendor group is shown point the mouse at the vendor group and wait until the name is displayed. Alternatively, select the list box from the field.

3. Specify in the Terms of payment list, a payment term that corresponds to the default time interval between the purchase of an item and the invoice due date. Use the Terms of payment list for cash flow forecasting. For example, the payment term is used for coverage of vendor payments based on one purchase budget per vendor group.

EXAMPLE: A purchase budget is set up for vendor group X and then a purchase of $10,000.00 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 the budgeted item price of $10,000.00 is due for payment on July 30.

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4. Specify in the Settle period list, a term of payment that corresponds to the default interval between the due date and the actual payment time. Use the payment terms with coverage of vendor payments based on one purchase budget for each vendor group. Use the Settle period list in cash flow calculations.

5. Click SETUP→INVENTORY POSTING to set up the automatic postings to General Ledger accounts.

6. Set up in the Inventory posting form, general posting rules for all items, accounts, and sales-tax codes. In the Item code field, the option exists to select from Table, Group, or All. This field is discussed furher in the Trade and Logistics course.

– The Table option is the highest in the hierarchy. By selecting Table, the posting in ledger only applies to a specific Item number.

– If Group is selected, the posting in the ledger only applies to a particular Item group.

– If All is chosen, each of the transactions is posted for all Item numbers in the same account in the ledger. The first matching account is used for posting. 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.

7. Select the primary posting of sales, consumption and discount

posting in the Posting area on the Ledger and sales tax tab, in ACCOUNTS PAYABLE→SETUP→PARAMETERS.

For example, set up the Primary sales posting list to prioritize the items. If selling some of item type B-R14 to vendor 3000 that is a part of vendor group 50 Microsoft Dynamics AX 4.0 posts the transaction to account number 510100, because the item relation is more specific than the account relation. Item code Item

relation Account code

Account relation

Account number

All All 510100 All Group 50 510800 Table B-R14 All 510120

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If however, the posting is set up as illustrated in the following table, and the Primary sales posting list is set to vendor, and some of item type B-R14 is sold to vendor 3000, the transaction is posted to account number 510100 because of the Accounts Payable parameter setup. Item code Item

relation Account code

Account relation

Account number

All Table 3000 510100 Table B-R14 All 510120

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Lab 7.3 − Vendor Groups Scenario: The accounting manager has asked you to create a new vendor group. The vendor group will be used to group vendors who require the Global Trade & Manufacturing Company to pay cash on delivery. The new group should be called 13, and the description should be Cash vendor group. After creating the Vendor group, set up automatic posting of Receipts to General ledger accounts. The posting should have the Account relation of 60 (other vendors), and post to Account number 211300.

Challenge Yourself! The key to this lab is setting up automatic posting.

Need a Little Help?

1. Create the Vendor group in Accounts payable.

2. Set up automatic posting in Inventory posting.

3. Set up the Primary sales posting in Parameters.

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Accounts Payable Posting Profiles Posting Profiles are common throughout all modules in Microsoft Dynamics AX 4.0. 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:

• All vendors • Groups of vendors • Single vendor

When posting a vendor transaction automatically, the system searches for the ledger accounts shown in the previous order.

• If, for example, there is a posting profile line for the vendor, this line is used.

• If no posting profile line exists for the vendor, the line specified for the vendor group that the customer is attached to is used.

If neither of these exists, the posting profile line for all vendors is used.

• If a posting profile line for all customers is not specified, the system uses the summary accounts that were created in System accounts GENERAL LEDGER→SETUP→POSTING→SYSTEM ACCOUNTS.

In the Vendor posting profiles dialog box, set up any number of vendor posting profiles. If all vendor transactions are processed together, set up only one posting profile for all vendors. ACCOUNTS PAYABLE→SETUP→POSTING PROFILES

FIGURE 7−9: THE VENDOR POSTING PROFILES FORM

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Procedure − Enter a Posting Profile Follow these steps to post a profile.

1. Enter in the Posting profile field, a code or a short name for the posting profile and a description of the posting profile in the Description field, on the Overview tab.

2. On the Table restrictions tab, select the Settlement check box to indicate whether entries should be created by using this posting profile for automatic settlement or whether the settlement must be manual using open-transaction editing.

3. Select the Cancel check box to indicate whether to cancel transactions created by using this posting profile.

4. Select in the Close list, 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.

5. Click the Setup tab to set up the ledger accounts posted to when posting transactions in Accounts Payable.

6. Select in the Account code list, whether the posting profile applies to a specific vendor, a group of vendors, or all vendors.

7. Specify in the Account/Group number list, what vendors belong to the current posting profile.

– If Table is specified in the Account code field, enter the account number of the vendor to whom the posting profile relates.

– If Group is specified in the Account code field, enter the vendor group to which the posting profile relates.

– If All is specified in the Account code field, do not fill in the field.

8. Select in the Summary account list, 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. If an invoice register and invoice approval journal are used, 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 the company does not use an invoice register and invoice approval journal, all vendor invoices are updated directly in the vendor summary account.

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9. Select in the Settle account list, the liquidity ledger account that is used for cash flow forecast. Cash flow forecast is covered in the Microsoft Dynamics AX 4.0 Financials II course.

10. Select in the Arrival list, a ledger account number that is used to make temporary postings of unapproved vendor invoices that are updated through Invoice register. Use Invoice register for central and non-critical recording of received vendor invoices. When updating Invoice register, the yet unapproved invoices are entered in the account for arrivals and set off in the arrivals offset account. When the invoices are approved, the debt is transferred from the arrivals account to the vendor summary account.

NOTE: When the unapproved invoices are registered in the arrivals account, the vat can be lifted off the invoice and settled − even if the due date is in the next tax settlement period. As long as the invoice is registered it is possible to obtain the tax refund from the tax authorities.

11. Select in the Offset account list, the ledger account number that is

used for offsetting unapproved vendor invoices that are updated through the Invoice register. The offset account acts as the offset account for Arrival and therefore contains yet unapproved vendor purchases.

12. Set up in ACCOUNTS PAYABLE→SETUP→PARAMETERS on the Ledger and Sales tax tab, default values for posting. In the Posting profile list, select a standard vendor posting profile. Use the standard posting profile if no other posting profile is specified. A posting profile must be specified for every update of a vendor transaction. The standard posting profile must be created in the Vendor posting profile form.

Use the Vendor posting profiles form to set up the posting profiles that control the posting of vendor transactions to the General Ledger. When a vendor transaction is recorded, select a posting profile that differs from and takes precedence over the posting profiles set up for transactions in this form.

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Lab 7.4 − Vendor Posting Profile Scenario: The accounting manager has asked you to set up a new posting profile for a group of vendors to be paid from a different cash account than other vendors. The accounting manager explained the profile should be selected for automatic settlement and allow for cancellation, and also gave you these details: Field Value Posting Profile COD Description Cash on Delivery Profile Account Code Group Account/Group Number 60 - Other Vendors Summary Account 211100 Settle Account 110110 Arrival 211310 Offset Account 211320

Challenge Yourself! Automatic settlement and Cancel are check boxes on the Table restrictions tab.

Need a Little Help? Vendor posting profiles are a setup option in Accounts payable.

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Accounts Payable Vendors Vendors are the individuals or business a company does business with. Each Accounts Payable transaction must be associated with a vendor. Use the Vendors window to create, maintain and inquire about vendors. Enter as much data as possible in advance, because the data is used throughout Microsoft Dynamics AX 4.0 for:

• Invoicing • Payments • Reports

The base data automatically appears as the default for all transactions involving the vendor. Default information can always be changed.

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Procedure − Create a New Vendor Follow these steps to create a new vendor.

ACCOUNTS PAYABLE→VENDORS→OVERVIEW TAB

FIGURE 7−10: THE VENDORS FORM

1. Enter a Vendor ID using up to 10 characters in the Vendor Account field, and a vendor name using up to 30 characters in the Name field.

The Vendor account is automatically generated by the system if the Vendor account number sequence is specified in ACCOUNTS PAYABLE→SETUP→PARAMETERS on the Number sequences tab. Some companies prefer to enter the number sequences manually. To do this, select the Manual check box on the General tab in the Number sequences form. Be careful with using numbers that can be changed, such as telephone numbers.

2. Enter in the Search name field, the name to use when searching for the vendor; if not entered, the system uses the Name field by default.

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3. Select in the Invoice account list, a vendor account for invoicing, for example: if linking several Vendors to one invoice account, if there is more than one vendor with the same payment address, or if the Vendor is paid through a third-party. The invoice account is where the invoice amount is credited.

If left blank, the system uses the Vendor account number by default.

4. Select in the Group list, the Vendor group to which the Vendor belongs.

5. Select in the Currency list, the currency used for vendor invoices. For a list of options, click the square arrow.

NOTE: Currency codes and exchange rates are created and maintained in Exchange rates. The vendor's invoice currency can be changed in the invoice header before entering purchase order lines. For more information about Currency, refer to Exchange rates.

6. Select in the Language list, on the General tab, the language that is

used for all external documents such as purchase orders. The language code is mandatory and automatically copied from Parameters when a new vendor is created. This is a very strong feature that makes it possible to set up the terms of payment in another language other than the company language to accommodate the vendor or customer.

7. Enter in the Credit rating field, the credit rating of the vendor. It is used only for statistical purposes.

8. Enter in the Credit limit field, the maximum outstanding amount allowed in the balance of the vendor's account. This amount is always stated in the default currency. As part of updating purchase orders or invoices, configure the system to check whether an account is over its credit limit in ACCOUNTS PAYABLE→SETUP→PARAMETERS→CREDIT RATING TAB. If an account is found to be beyond the credit limit specified, the update is stopped.

NOTE: The system does not validate credit limit if the field is entered with zero value.

9. Block a vendor account manually in the Stopped list, by selecting

one of the following:

– No − No blocking. All forms of transaction are possible. – Invoice − The account is blocked for invoice postings. – All − All transactions are blocked.

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10. Select the One-time supplier check box to indicate the vendor is a one-time supplier. If the One-time supplier check box is selected when a purchase order is created, it is indicated here. The one-time supplier status can be removed, or selected using this check box.

NOTE: If using one-time suppliers you must set up a number sequence for one-time suppliers in the Accounts payable parameters form on the Number sequence tab. On the General tab in 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 creating a one-time supplier in the Vendors form. Microsoft Dynamics AX 4.0 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 table. If there is no use of one-time suppliers, leave the Default vendor number blank.

11. Select in the Buyer group list, a buyer group to create links between

vendors, employees, and items/planned orders when purchases and productions are created. 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 area of responsibility.

12. Select in the Customer account list, a customer account number if vendor is also a customer and the function is used.

13. Select in the Number sequence group list, a number sequence for internal numbers on purchase invoice and purchase order credit note. If the field is empty the purchase order number is used.

14. Select in the Account type list, the account type where you offset the vendor transactions. In the Offset account list depending on the value in the Account type, select the account where to post the transaction.

15. Specify in the Sales tax group list, whether tax should be calculated on the invoice. Select the Prices incl. sales tax check box to include sales tax when informing vendors about purchase prices.

16. Enter on the Address and Contact info tabs, the vendor address and contact details. If a vendor has more than one address, such as invoice, delivery, purchase, alternative delivery address, or SWIFT, enter additional addresses by clicking SETUP→ALT. ADDRESS in the Vendors form. Additionally, enter address, contact information, and parameters for access from the Internet for external contact persons associated with customers, vendors, and projects by clicking SETUP→CONTACT PERSON in the Vendors form.

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NOTE: If alternative delivery addresses are in different states or countries, make sure to enter the appropriate tax group for each alternative address. Tax groups must be associated with a delivery address.

17. Enter in the Vendors form, on the Payment tab, information that

determines how payments are handled on the invoices entered in Accounts Payable.

18. Set up specific dimensions for a vendor on the Dimensions tab. Throughout Microsoft Dynamics AX 4.0, dimensions are an excellent method to group data in different ways. If dimensions are designated for a vendor, those dimensions automatically default for transactions made using that vendor. These defaulted values can be changed when the transaction is being entered. Refer to the chapter about General Ledger Setup for more information about Dimensions.

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Lab 7.5 − Vendors Scenario: Global Trade & Manufacturing Company has begun doing work with a new vendor, Dakota Travel. As the accounts payable clerk, your task is to set up this new vendor. These are the details for this new vendor: Field Value Vendor group 60 – other vendors Credit limit 10,000 Method of payment Check payment USD Cash discount 7D4% Terms of payment 15D

NOTE: Lab 7.1 must be completed before starting this lab.

Challenge Yourself! Create a new vendor.

Need a Little Help? Vendors are set up in Accounts payable.

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Conclusion Payment options in Microsoft Dynamics AX 4.0 are flexible to accommodate different business processes:

• Terms are defined based on the number of months and, or days, or on a current period (for example, current month or current quarter), and with or without additional months or days.

• Terms of payment can be set up for cash payment where the payment posts automatically when the invoice is issued.

• Advanced payment schedules can also be set up and used as terms of payment based on a variety of factors including: – Percentage allocation of the actual invoice amount. – Allocation based on a fixed number of installments. – Combining amounts and percentages of the invoice amount.

• Similar to the terms of payment, cash discounts can be set up based

on a: – Current period – Number of net days

• If it is required, the cash discounts can be set up as mulHINTle (for

example, 10 days 3% and 30 days 1%). The user decides if special ledger accounts are needed for posting.

• Microsoft Dynamics AX 4.0 can be set up to handle the cash discount with or without sales tax to comply with the tax legislation in various countries.

Grouping vendors is a method to categorize information so that it is meaningful.

• Set up automatic posting rules for vendor transactions to make sure the transactions hit the correct accounts.

• To become aware of situations and trends more quickly group vendors with a common identifier to view and analyze financial causes more detail. For example, group vendors by the types of products purchased from them or by the dollar volume of purchases.

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Test Your Knowledge − Accounts Payable Setup

1. The set up of Methods of payment is global. What does that mean?

2. Outline the steps to setting up a Term of payment.

3. Outline the steps to setting up a Vendor group.

4. What elements must be defined to create a Payment schedule?

5. What are the two options for Payment days?

6. Name four Methods of payment a company might use.

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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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Documents

AX40 ENUS FSI 07-Accounts Payable Setup