Financial I

COURSE: 80219
FINANCIALS I IN
MICROSOFT DYNAMICS AX 2012
Last Revision: August 2011

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property of their respective owners.
This course content is designed for Microsoft Dynamics AX 2012.
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
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
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
Solutions ........................................................................................................... 3-21
Chapter 4: General Ledger Daily Procedures
4-1
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
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
ii
Table of Contents
Lab 5.8 - EU 115 Sales Tax Directive .............................................................. 5-63
Withholding Sales Tax ...................................................................................... 5-66
Summary .......................................................................................................... 5-69
Solutions ........................................................................................................... 5-74
Chapter 6: Financial Features
6-1
Objectives ........................................................................................................... 6-1

Introduction ......................................................................................................... 6-1
Financial Reason Codes .................................................................................... 6-2
Fill Utility ............................................................................................................. 6-7
Summary ............................................................................................................ 6-8
Test Your Knowledge ......................................................................................... 6-9
Solutions ........................................................................................................... 6-11
Chapter 7: Cash and Bank Management Setup
7-1
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
Solutions ........................................................................................................... 7-28
Chapter 8: Cash And Bank Management Daily Procedures
8-1
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
iii

Solutions ........................................................................................................... 8-24
Chapter 9: Accounts Payable Setup
9-1
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
Solutions ........................................................................................................... 9-46
Chapter 10: Accounts Payable Daily Procedures
10-1
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
iv
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
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
Solutions ......................................................................................................... 12-51
vi
Introduction
INTRODUCTION
Welcome
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0-1
Microsoft Dynamics Courseware Contents

Test Your Skills
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0-2
Introduction
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0-3
Student Objectives
What do you hope to learn by participating in this course?
List three main objectives below.
1.
2.
3.
0-4
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 companys 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.
1-1
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.
1-2

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.
1-3

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.
1-4

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.
1-5

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.
1-6

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.
1-7

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
1-8

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.
1-9

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
1-10

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.
1-11
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:
Currencies.
2. Highlight the Currency ZAR.
1-12

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:
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.
Perform the following steps to set up the exchange rate. Every currency requires
one exchange rate entry with a blank date.
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.
1-13
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.
1-14

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.
1-15

Example:
Length of period
entered in setup
Unit entered in
setup
Number of Periods
Created
Days
367
Months
14
Year
FIGURE 1.7 FISCAL CALENDAR YEAR FORM
Review New Periods

When you create a new fiscal year, the system creates the following:
1-16
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

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.
1-17
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.
1-18
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.
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.
1-19

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

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
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
+/-
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
1-21

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.
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.
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.
1-22
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.
1-23

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:
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.
2. Select the Reason Code to be deleted.
1-24

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.
1-25

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.
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.
1-26

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.
1-27

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.
1-28
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.

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.
1-29

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

service transaction in Cost accounting for this financial
dimension.
Blocked for
distribution

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:
1-30
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.

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.
1-31
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.
1-32
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.
1-33

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.
1-34

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.
1-35

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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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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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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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.
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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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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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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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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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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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:
1-44
Currencies and exchange rates
Fiscal calendars
Financial dimensions and financial dimension sets
Period allocations
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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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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Take a moment and write down three key points you have learned from this
chapter
1.
2.
3.
1-47
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
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
1-48
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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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
companys 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.
3. Enter a unique name for the Main account category and a
Description.
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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.
2-3

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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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
2-5

Procedure: Create a Chart of Accounts
Use the Chart of accounts form to create, manage, and view the organizations
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.
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.
2-6

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.
2-7
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.
2-8

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.
2-9

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.
2-10

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.
2-11

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.
2-12

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.
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.
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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.
2-14

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.
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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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.
2-16
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.
2-17

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 WMGs 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
2-18

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.
2-19

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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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.
2-21
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.
2-22
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.
2-23
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
2-24

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.
2-25

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:
2-26
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.

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.
2-27
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.
2-28
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?
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
2-29

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
2-30

chapter
1.
2.
3.
2-31
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
() Create accounts
() Set standard parameters
() Access transactions
() View a company's financial state
2-32
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.
3-1
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.
3-2

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.
3-3

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.
3-4

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.
3-5

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:
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.
3-6

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:
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.
3-7

Procedure: Create Journal Names - Sales Tax
Perform the following steps to define journal sales tax options:
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.
3-8

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.
3-9

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.
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.
3-10

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.
3-11

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.
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:
3-12
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

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.
3-13

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
3-14
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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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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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.
3-17
Test Your Knowledge

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

( ) Daily
( ) Periodic
( ) Approval
( ) Annual
3. What is the purpose of using Balance Control Accounts?
3-18

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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chapter
1.
2.
3.
3-20
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
() 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.
: 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
3-21
3-22
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.
4-1
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.
4-2

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.
4-3
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

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.
4-5

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.
4-6
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.
4-7

Step by Step
Create the Journal:
1. On the Navigation Pane, click General ledger, click Journals,
click General journal.
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.
4-8
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.
4. In the Journal batch number field, accept the system default.
5. In the Description field, enter Electricity.
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.
4-9

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.
4-10
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.
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.
4-11

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.
4-12
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.
4-13

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.
4-14

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.
4-15

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
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.
4-16
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
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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Solution: Data Required
The completed tables are as follows:
Request to Link Users to Groups
User ID
AFE
User Group
Admin
User ID
ASR
User Group
Finance; Admin
Request to Enable Journal Approval
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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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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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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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.
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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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.
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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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
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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Step by Step
Set up the Journal name:
1. On the Navigation Pane, click General ledger, click Setup, click
Journals, then click Journal names.
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.
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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Post the entry for June:
1. On the Navigation Pane, click General ledger, click Journals, then
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.
14. Close the Journal form.
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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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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:
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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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.
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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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.

accounts.
2. Select a main account.
3. Clicked on the Posted button on the tool bar.
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.
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
Credit amount
50 USD
When the actual transaction for payment of interest is entered on October 15, the
following transaction occurs:
Account
Debit amount
100 USD
Cash
Credit amount
100 USD
The overall balance for the interest expense for October is a debit of 50.00 USD.
4-31

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:
4-32
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.

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.
4-33

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.
4-34
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
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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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
4-36

chapter
1.
2.
3.
4-37
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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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
( ) 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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4-40
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.
5-1
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.

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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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.
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.
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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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*
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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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)**
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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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***
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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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.
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.
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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Set up the ledger posting group:
1. Click General ledger, then click Setup, then click Sales Tax, and
then click Ledger posting groups.
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.
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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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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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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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.
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
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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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:
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.
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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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:
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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Procedure: Specify Period length
Perform the following steps to set up period intervals for the 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:
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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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.
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:
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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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:
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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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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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 Fsicaspersonal 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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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:
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.
5-27

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:
5-28
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.

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:
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:
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
5-29

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
5-30
Duty 1
10%
Duty 2
20%
Formula
Setup 2
Calculation
Formula
Calculation

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%
5-31
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.
5-32

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.
5-33

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.
5-34

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
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.
5-35
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%
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:
then click Sales tax, and then click Sales tax codes.
2. Locate the line for AV_FLST.
3. Click the Values button.
5-36

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

Click the New button to add a line.
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:

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.
5-37
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:
5-38
Customers
Vendors
Ledger accounts

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:
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:
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.
5-39

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.
5-40
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.

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.
5-41

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.
5-42
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.
5-43

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.
5-44
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)
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.
5-45

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.
5-46
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
5-47

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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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.
12. In the Terms of payment field, use the arrow to select N030.
USAUSD_CHK.
14. Close the window.
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Set up the Arkansas Department of Revenue as a vendor:
1. On the Navigation Pane, click Accounts payable, click 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.
7. In the Terms of payment field, use the arrow to select M15.
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.
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.
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:
Sales tax, then click Ledger posting groups.
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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Set up a sales tax authority for Arkansas:
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:
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:
Sales tax, then click Sales tax codes.
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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8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.

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 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:

Sales tax, then click Sales tax groups.
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.
Sales tax, and then click Item sales tax groups.
13. In the left hand Navigation pane, click the ALL line.
16. In the Sales tax code field, use the arrow to select ALL_ARST.
18. In the Sales tax code field, use the arrow to select ALL_LRCITY.
19. Close the form.
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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.
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.
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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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.
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.
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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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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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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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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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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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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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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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:
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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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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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.
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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Step by Step
Follow these steps:
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.
Sales tax, then click Sales tax codes.
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.
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.
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.
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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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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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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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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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.
5-69
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
5-70

7. Sales tax settlement periods specify at what intervals the company reports
taxes.
( ) True
( ) False
( ) True
( ) False
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
5-71

13. When the sales tax groups are created, attach the sales tax group to ______.
( ) 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.
5-72

chapter
1.
2.
3.
5-73
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 _____ ?
( ) A client
( ) An employee
() A vendor
() A sales tax authority
() True
( ) False
5-74

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 ______.
( ) Company
() Customers
() Ledger accounts
() Vendors
5-75

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.
5-76
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.
6-1
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.
6-2

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
6-3

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:
reasons
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.
6-4

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:
reasons
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
6-5

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.
6-6
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.
6-7

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.
6-8
Test Your Knowledge

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.
6-9

chapter
1.
2.
3.
6-10
Solutions
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.
6-11
6-12
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
7-1

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.
3. Enter a unique code in the Bank transaction type field.
4. Enter the name of the transaction type in the Name field.
7-2

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
7-3
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.
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.
7-4
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.
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.
Bank transaction groups.
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.
7-5

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.
7-6
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.
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.
7-7

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
7-8

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.
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.
7-9

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.
Bank groups.
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.
7-10

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.
7-11

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.
7-12

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.
7-13

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.
7-14

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.
7-15
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.
4. In the Name field, enter Bank Account CNY.
5. Click the General FastTab and select Balance sheet in the Main
account type field.
7-16

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.
Bank groups.
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.
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.
7-17
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.
7-18

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.
7-19

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
7-20

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.
7-21

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.
7-22
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.
7-23

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.
7-24
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.
7-25
Test Your Knowledge

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
7-26

chapter
1.
2.
3.
7-27
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
7-28
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.
8-1

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.
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.
8-2
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.
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.
8-3
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.
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.
8-4

Delete the final three checks.
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.
8-5
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.
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.
8-6

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.
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.
8-7

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.
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.
8-8
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:
then click Payment journal.
3. Select ARPay in the Name list.
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.
8-9

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.
Verify that the system canceled the deposit slip:
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.
8-10
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.
8-11

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.
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.
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.
8-12
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.
3. In the Name field, select ARPay.
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.
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.
8-13
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.
then click Remittance.
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.
8-14

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.
8-15

Procedure: Reverse a Payment
Perform the following steps to reverse a posted check.
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.
8-16
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.
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.
8-17

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.
8-18

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.
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.
8-19

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.
8-20
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
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.
8-21

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.
8-22

chapter
1.
2.
3.
8-23
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 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.
: Post the payment journal.
2 : Modify the method of payment to Check Refund on the negative payment

journal line.
3
8-24
: Generate the refund check.

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.
8-25
8-26
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.
9-1
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.
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.
9-2

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.
9-3

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
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.
9-4

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.
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.
9-5

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.
9-6
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.
Payment days.
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.
9-7
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.
Terms of payment.
3. In the Terms of payment field, type N012.
4. In the Description field, type Net 12 days.
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
2. Double- click the record for vendor 8004 (Southbridge Insurance
Co.).
3. Click the Edit button on the Action Pane.
5. In the Terms of payment list, select the newly created term of
payment N012.
6. Close the form.
9-8
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.
Cash discounts.
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.
9-9

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.
9-10

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.
9-11

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.
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
9-12

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
9-13
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.
Payment fee.
3. Enter an identification in the Fee ID field.
4. Enter a brief description in the Description field.
9-14

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
9-15

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.
9-16

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
9-17

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

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.
Methods of payment.
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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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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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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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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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.
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.
9-24

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.
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.
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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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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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
All
Account
relation
Main
account
510100
50
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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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
9-29
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.
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.
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.
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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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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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.
6. Verify the Settlement check box is selected.
7. Verify the Cancel check box is selected.
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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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.
9-35
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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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.
9-37

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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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.
9-39

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.
9-40

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.
9-41
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.
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.
9. Click the Method of Payment arrow, and then click
USAUSD_CHK.
11. Close the form.
9-42
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.
9-43
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. 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
9-44

chapter
1.
2.
3.
9-45
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:
9-46
: Access the Terms of payment form in Accounts Payable.
: Specify the days (or other time unit).
: Enter a description.
: Enter a terms of payment identifier.
: Create a new record.
: Select the payment method.

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
9-47
9-48
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.
10-1
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.
10-2

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
10-3

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.
10-4

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.
10-5

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.
10-6

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.
10-7

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
10-8

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.
10-9

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.
10-10

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.
10-11

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.
10-12

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.
10-13

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.
10-14

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
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.
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.
10-15
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.
10-16

Step by Step
Perform the following steps to pre-register the invoice and transfer it to an
invoice pool:
2. Click New to create a new register.
3. Click the Name arrow, and then click APInvReg.
5. Click the Account arrow, and then click 3002.
6. In the Invoice field, type INV123.
7. In the Description field, enter Invoice.
9. Click the Approved by arrow, click Brooke Drynan, and then
Select.
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:
2. Click the New button to create a new invoice approval journal.
3. Click the Name arrow, and then click APInvApp.
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.
10-17

8. Click the OK button.
9. In the Journal voucher form, click the Account arrow, and then
click 601500.
11. Click Close to close the Infolog.
10-18
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.
10-19

Procedure: Create Vendor Invoice Pool Excluding Posting
Details
Perform the following steps to create an invoice without posting it:
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.
10-20
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.
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
click Vendor invoice pool excluding posting details.
2. Click File - New to create a new journal.
3. In the Date field, type todays date.
4. Click the Vendor account arrow, and then click 3002.
5. Click the Description arrow, and then click invoice.
8. Click the History tab.
9. Click the Approved by arrow, click Phyllis Harris, and then click
Select.
10. Close the form.
10-21

click Invoice 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.
23. Click Close to close the Infolog.
10-22
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:
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
10-23

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.
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
2. Press CTRL+N or click the New button to create a new journal.
3. Click the Name arrow, and then click APInv.
5. Click the Account arrow, and then click 3002.
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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11.
12.
13.
14.
10-26
Click Close to close the Infolog.

Click the Post button, and then click Post.
Click Close to close the Infolog.
Close all forms.
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.
10-27

Procedure: Create a Voucher Template
Perform the following steps to create a voucher template:
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:
2. Click New to create a new journal. Refer to the Invoice Journal
lesson for more field information.
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.
10-28
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.
10-29

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.
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
10-30
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.
10-31

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.
10-32

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:
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.
10-33

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:
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.
10-34

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
10-35

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.
10-36

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).
10-37

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.
10-38
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.
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.
10-39

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.
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.
13. In the Infolog click the Close button.
Hotel Invoice:
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.
10-40

Perform the following steps to use the invoice approval journal.
3. Click the Name arrow, and then click APInvApp.
6. Select the Airfare line and click Select. Then click OK.
7. Enter 601500 in the Account field.
11. Select the Hotel line and click Select. Then click OK.
12. Enter 601500 in the Account field.
17. Close the forms.
Perform the following steps to make payments for the invoices:
3. Click the Name arrow, and then click APPay.
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.
14. Select the Method of Payment of USAUSD_CHK,
15. In the Bank account field select USA OPER
10-41

16. Click OK.
17. You will receive a print stop error if printers are not set up properly.
Clear and Close the Infolog form.
10-42
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.
10-43

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
10-44

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 >
3. Search for the desired purchase order.
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.
12. Close the Payment journal form.
10-45

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.
10-46
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:
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.
10-47

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.
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.
6. Search and open the purchase order created in the Create a
Purchase Order with a Prepayment step.
8. Click Prepayment invoice to create an invoice.
9. Enter a unique invoice number into the Number field.
box is selected.
11. Click Post on the Action pane, and then click the Post button.
10-48

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.
10-49
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.
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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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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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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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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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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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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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:
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.
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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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.

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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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:
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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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:
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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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
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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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.
10-63
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.
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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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.
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.
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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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
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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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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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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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.
10-71

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.
10-72

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.
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.
10-73

needed, you can override an inherited record, copy an inherited
record, create a new record, or create a new conditional setting.
Override. The icon changes to display a red X to indicate that the
record is now an override record.
A copy is displayed in the list. You must give the copy a new
name.
in the list and select New. A new record is displayed in the list.
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.
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.
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.
10-74

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.
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.
10-75
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.
10-76
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
( ) 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
10-77

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
10-78

chapter
1.
2.
3.
10-79
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
( ) 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
10-80

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
( ) 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?
() Page orientation
( ) 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
10-81
10-82
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.
11-1
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.
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.
11-2

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
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.
11-3

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
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.
11-4

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.
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.
11-5

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.
11-6

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
11-7

Procedure: Create a Payment Day
Perform the following steps to create a payment day:
click Payment days.
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
11-8
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:
click Terms of payment.
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.
11-9
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:
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.
11-10

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.
11-11

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.
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.
Unspecific, the invoice is settled and the difference of 0.50 is
posted to the ledger account specified for cash discount
differences automatically.
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.
11-12

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:
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.
11-13

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.
11-14

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
11-15

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.
11-16

`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.
11-17
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:
click Methods of payment.
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.
11-18

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 todays 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.
11-19

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:
11-20
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.

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
11-21

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
11-22
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
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.
11-23
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.
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.
11-24

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
11-25

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
11-26

Procedure: Set Parameter Values
Perform the following steps to define parameter values:
Accounts receivable, click Setup, and then click Accounts
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
401130
11-27
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.
11-28
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.
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.
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.
11-29

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.
11-30

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:
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.
11-31
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
11-32

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.
11-33
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:
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.
11-34

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.
11-35

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
11-36

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
11-37

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.
11-38

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
11-39

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.
11-40
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.
11-41

12.
13.
14.
15.
16.
17.
11-42
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.
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
11-43
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?
( ) 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
11-44

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
11-45

chapter
1.
2.
3.
11-46
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?
() 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
11-47

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
11-48
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.
12-1
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.
12-2

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.
12-3

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.
12-4

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.
12-5

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.
12-6

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
12-7

Procedure: Free Text Invoice - Edit Open Transactions
Perform the following steps to edit open transactions on a free text invoice:
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.
12-8

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.
12-9
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.
12-10

Step by Step
Perform the following steps to complete the exercise and set up the Accounts
Receivable Free Text Invoice:
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.
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.
16. Close the Free text invoice form.
12-11
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.
12-12

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.
12-13

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.
12-14

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.
12-15

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.
12-16

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.
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.
12-17

Payment Journal Fields
After you click the Lines button, the following fields display in the Journal
voucher form:
12-18
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.

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.
12-19

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.
12-20

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,
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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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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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,
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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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.
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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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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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.
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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Procedure: Reorganizing Open Transactions
Perform the following steps to reorganize payments:
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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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:
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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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:

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.
9. Click Close to close the Infolog dialog box.
10. Close the form.
Settle the invoice:
click All customers, and then double-click on the Customer
account 1301.
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:
account 1301.
2. Click the Collect tab, and then click Closed transaction editing.
3. View the transactions in this form.
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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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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:
account.
3. Put the cursor on the line that contains the settlement to reverse.
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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
account 1301.
3. Click the transaction line that recorded a payment for 108.90.
4. Select the Mark check box.
5. Click the Reverse button.
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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
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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Create the Free text invoice:
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:
3. In the Name field, type ARPay.
5. In the Account field, type 1301.
6. Click the Description arrow, select Payment, and then move to the
next field.
8. Click the Post button, then click Post.
9. Click Close to close the Infolog box.
Settle the invoice and the payment:
account 1301.
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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Record the reimbursement:
1. Click Accounts receivable, click Periodic, and then click
Reimbursement.
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.
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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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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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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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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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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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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:
click All customers.
2. Select an account.
3. Click Setup and then click Print management.
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.
12-44

necessary, override the inherited record, copy an inherited record,
create a new record, or create a new setting.
A copy is displayed in the list. Give the copy a new name.
type in the list and select New. A new record displays in the list.
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.
necessary, override an inherited record, copy an inherited record,
create a new record, or create a new conditional setting.
A copy displays in the list. The copy must have a new name.
12-45

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.
12-46

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.
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.
12-47
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 companys 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
12-48

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
( ) 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?
( ) Page orientation
12-49

chapter
1.
2.
3.
12-50
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 companys 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
12-51

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
( ) 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?
() Page orientation
12-52

Financial I

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Last Revision: August 2011

Welcome ............................................................................................................ 0-1

Chapter 1: General Ledger Setup

Objectives ........................................................................................................... 1-1

Chapter 2: Chart of Accounts Setup

Objectives ........................................................................................................... 2-1

Chapter 3: Journal Setup

Objectives ........................................................................................................... 3-1

Financials I in Microsoft Dynamics AX 2012

Chapter 4: General Ledger Daily Procedures

Objectives ........................................................................................................... 4-1

Chapter 5: Sales Tax Setup

Objectives ........................................................................................................... 5-1

Chapter 6: Financial Features

Objectives ........................................................................................................... 6-1

Chapter 7: Cash and Bank Management Setup

Objectives ........................................................................................................... 7-1

Chapter 8: Cash And Bank Management Daily Procedures

Objectives ........................................................................................................... 8-1

Financials I in Microsoft Dynamics AX 2012

Chapter 9: Accounts Payable Setup

Objectives ........................................................................................................... 9-1

Chapter 10: Accounts Payable Daily Procedures

Objectives ......................................................................................................... 10-1

Chapter 11: Accounts Receivable Setup

Objectives ......................................................................................................... 11-1

Chapter 12: Accounts Receivable Daily Procedures

Objectives ......................................................................................................... 12-1

Financials I in Microsoft Dynamics AX 2012

Microsoft Dynamics Courseware

Financials I in Microsoft Dynamics AX 2012

Microsoft Dynamics Courseware Contents

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Quick Interaction: Lessons Learned

Financials I in Microsoft Dynamics AX 2012

Chapter 1: General Ledger Setup

CHAPTER 1: GENERAL LEDGER SETUP

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.

Financials I in Microsoft Dynamics AX 2012

Currency and Exchange Rate Setup

FIGURE 1.1 CURRENCIES FORM

Chapter 1: General Ledger Setup

CAD - Canadian dollar

A description of the currency. This is typically printed

Typically used on reports

The standard code of the currency as defined by the

Accounting and Reporting Currencies

Accounting Currency: The customary monetary unit of measure

Reporting Currency: The monetary unit of measure used to record

Financials I in Microsoft Dynamics AX 2012

Procedure: Enable a Currency for Currency Conversion

Changing the Display Currency

Chapter 1: General Ledger Setup

Procedure: Set Rounding Options

Normal round up numbers 5 and higher and round down numbers 4

Downward round down all numbers.