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.

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

Create a Payment Schedule

  • Click Accounts payable, click Setup, click Payment, and then click Payment schedules.
  • Click the New button to enter a new record.
  • Enter a name to be used as identification of the payment schedule in the Payment schedule field.
  • Enter a description in the Description field.
  • Click the General FastTab.
  • 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 specified payment date. If Specified is selected, the payment schedules and amounts must be defined on the Payment lines FastTab.

Depending on the value selected in the Allocation list, different fields are enabled on the General and Payment lines FastTabs.

 

Create a Total Payment Schedule

If Total is selected in the Allocation list, no other fields are enabled on the General FastTab.

Create a Specified Payment Schedule

If the Specified option is selected in the Allocation list, perform the following to complete the payment schedule setup:

  • 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.
  • Use the Sales tax allocation list to distribute the sales tax amount to the payment schedule installments.
  • 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.
  • Enter the time interval for each installment in the Quantity field.
  • 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.
  • Select whether the value entered is a percent or an absolute amount in the Percentage/Amount list

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.

  • 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.
  • In the Change field, enter the number of units related to the payment per value between the due dates of each installment.
  • If the Allocation field is set to fixed quantity, enter the fixed number of installments in the Number of payments field.
  • If the Allocation field is set to fixed amount, enter the fixed amount in the Amount currency field.
  • 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.

Create Terms of Payment

  • Click Accounts payable, click Setup, click Payment, and then click Terms of payment.
  • Click the New button to create a new record.
  • In the Terms of payment field, enter a code or a short name for the term of payment.
  • Enter a descriptive name for the current terms of payment in the Description field.

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

Create a Payment Day

  • Click Accounts payable, click Setup, click Payment, and then click Payment days.
  • Click the New button to create a new record.
  • 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.
  • On the Payment day lines FastTab, click the Add button to add a new line to the payment day.
  • 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.

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.

Set Up Cash Discounts

  • Click Accounts payable, click Setup, click Payment, and then click Cash discounts.
  • Click the New button.
  • 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.
  • Enter a brief description for the cash discount in the Description field. For example, enter 7 days – 4% Discount for the discount code 7D4.
  • 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 lets you to define a set of cash discounts that are sequential.

Set Up Cash Discounts – Setup

  • From the Cash discounts form click the Setup FastTab.
  • 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.
  • Enter the number of months during the period when the cash discount is applicable in the Months field.
  • Enter the number of days during the period when the cash discount is applicable in the Days field.
  • Enter the cash discount as a percentage of the invoiced amount in the Discount percentage field.
  • Select the Main account for customer discounts and the Main account for vendor discounts.

 

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.

 

Create a Vendor Group

  • Click Accounts payable, click Setup, click Vendors, and then click Vendor groups.
  • Click the New button to create a new record.
  • Enter a short name for the vendor group in the Vendor group field This name is used throughout the system.
  • 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.
  • 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.
  • 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.
  • Enter or select the default tax group for the selected vendor group in the Default tax group field.

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.

 

Create a Posting Profile

  • Click Accounts payable, click Setup, and then click Posting profiles.
  • Click the New button to create a new record.
  • Enter a code or a short name for the posting profile in the Posting profile field.
  • Enter a description of the posting profile in the Description field.
  • Click the Table restrictions FastTab.
  • 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.
  • Select the Cancel check box to indicate whether you want to be able to cancel transactions created that have this posting profile.
  • 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.