Customer Payment Settlement Process in Microsoft Dynamics AX 2012

Introduction

The customer settlement payment process in the accounts receivable module is a process to receive dues from customers and settle them against invoices, collection letters, interest notes, etc. Customer dues can be partially or fully settled depending upon the payment received.

Pre-Requisite/Setup Data

Following are the entities that need to be setup before payment processing can be completed successfully:

• Customers
  • Link: Accounts receivable /Common/Customers/All customers
  • Note: At least one customer needs to be setup.
• Charts of accounts
  • Link: General ledger/Setup/Chart of accounts/ Chart of accounts
• Customer payment journals
  • Link: General ledger/Setup/Journals/Journal names
  • Note: Journal type should be “customer payments”.
• Posting Profile
  • Link: Accounts receivable/Setup/Customer posting profiles
  • Posting profile needs to be set as default in Accounts receivable parameters. Go to Accounts receivable/Setup/Accounts receivable parameters à Ledger and then choose the “sales tax” tab à General group and set the default as Posting profile.

Process

• Payment settlement is the process to receive payments from customers and settle them against an invoice. When payment is received from customers, payment journals are used to enter the payment. After entering the necessary information, payment is posted against a pending invoice of the customer.
• 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.
• When a payment journal is posted, you must conduct the following actions:
  • Post the payments to the customer records.
  • Update the General Ledger with the voucher transactions.
  • Indicate the customer invoice transactions as settled.
• Below are the main steps that are needed to settle payment, including:
  • Creating a payment journal
  • Entering payment lines
  • Posting the journal

Steps

1. The first step is to create a payment journal. Go to Accounts receivable/Journals/Payment/Payment journal

Payment Journal Link
2. Create a new payment journal by clicking New in the action pane.
3. Select a journal name in the Name field.
   
   Payment Journal form
4. Enter information in the other fields where appropriate (e.g., the Description field). Some fields in the journal contain default values that the Journal name form assigns to the journal. These fields usually are not edited by the user.

Now payments can be entered in one of two ways:

1. Manually creating payment lines
   1. A payment can be manually entered and settled if the customer and invoice information is known.
   2. Click the Lines button to open the journal voucher form.
   
   Payment Journal form – Creating lines
   3. Lines are entered in the Overview tab of the form.
   4. By default, it creates a new blank line. If it is not created by default, create a new line by clicking New in the action pane.
   
   Journal voucher form – Create new line
   
   
   5. Following is the description of the fields:

   Field name	Description
   Date	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 select the account number of the customer for which the payment is to be made.
   Invoice	Enter or select the invoice number that relates to the payment. If multiple invoices are related to the payment, use the settlement method to select the invoices, instead.
   Description	Enter descriptive text about the transaction or enter the code for the standard journal text created in the Journal texts form.
   Debit	Enter a debit amount.
   Credit	Enter a credit amount. Enter customer payment amounts in this field.
   Use 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 select the account number for the offset account type that is selected in the Offset account type list.

   
   
   6. Now, either of the two scenarios can occur:
   • If the invoice number is known, enter or select the invoice in the Invoice field that you have received a payment for. Customer information displays automatically.
   • If the customer account is known or the customer intends to use the payment to settle multiple invoices, in the Account field, enter the customer account that you have received a payment for. In the Invoice field, open the “look up”. All open invoices for the customer will display. Select the invoice that you want in the Invoice field. You can also select multiple invoices.
   
   Journal voucher form – Fields description
   7. Repeat the process if multiple lines need to be added.
   8. When all lines are added, click the Post drop down menu, and then select Post to post the payment journal.
   
   Journal voucher form – Post
2. Customer payments form
   1. 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:
     • Open invoice
     • Credit note
     • Collection letter
   2. Click the Enter customer payments button to open the Enter customer payments form.
   
   Payment Journal form – Open Enter customer payments form
   
   
   3. Now, if;
   • Invoice, interest note, collection letter, or other transaction identifier is known, enter the identifier and click the lookup button in the Transaction identifier field. Select a document. All the information regarding customer account and payment will be automatically displayed. Also, the invoices or documents related to the identifier will be displayed in the Select to pay field group and are already marked.
   
   Enter customer payment form – Transaction identifier
   
   
   • Identifier is not known; enter the information about the payment in the Customer payment information field group. 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.
   
   Enter customer payment form – Customer
   
   
   4. In the Select to pay field group, select the invoices or other documents to settle with the payment, if not already selected by checking the Mark checkbox.
   5. Enter or modify the payment amount in the Amount field that was received or that needs to be settled.
   
   Enter customer payment form – Payment details
   
   
   6. To save the marked lines in the Payment journal and remain in the form, click the Save in journal button.
   7. 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.
   
   Enter customer payment form – Save in journal
   
   
   8. Click the Post drop own menu, and then select Post to post the payment journal.

Payment journal form – Post

Notes:

• 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: ‘The payment is not fully settled‘. In this case, adjust the marked transactions or amount accordingly. If you do transfer payment to the journal without adjustment, normal over payment or underpayment posting rules apply.
• To clear any transactions marked for payment in the Enter customer payments form, click the Clear button.
• To view the details of the selected customer transaction, click the Show document button.
• 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.