purchase order process
sales order process
Showing posts with label accounts receivable. Show all posts
Showing posts with label accounts receivable. Show all posts
Wednesday, 13 July 2016
Tuesday, 1 December 2015
Prepayments in AX 2012
Today we are going to talk about prepayments in AX 2012.
Prepayment function is used to record a receipt from a client into A/R that doesn't have an invoice yet. This prepayment function is used to offset the cash on a prepaid A/R account instead of the regular Accounts Receivable account.
Once the invoice is created and settled against the prepayment, the system will automatically post a customer settlement transaction to offset the A/R prepaid account with regular A/R and ensure the balances are closed. Below are the steps and the result of this process:
Before creating your payment journal, you need to define a new posting profile for prepayment. This will ensure the payment is recorded in prepaid A/R instead of regular A/R. The new posting profile is then selected in AR > Setup > Parameters > Ledger and sales tax > Prepayment journal voucher fields group.
Select the new posting profile in the "Posting profile with prepayment journal voucher" field. Also, check the "Sales tax on prepayment journal voucher" if you want sales tax to be deducted from the payment received. Sales tax will be adjusted when the invoice is created and settled against the prepayment only if the amount o the invoice is more than the prepayment itself.
Go to Accounts Receivable > Journals > Payments > Payment journal. Create a new payment journal like you would usually do when receiving a receipt however since you don't have an invoice yet, do not select the invoice, the invoice field will remain blank.
Prepayment function is used to record a receipt from a client into A/R that doesn't have an invoice yet. This prepayment function is used to offset the cash on a prepaid A/R account instead of the regular Accounts Receivable account.
Once the invoice is created and settled against the prepayment, the system will automatically post a customer settlement transaction to offset the A/R prepaid account with regular A/R and ensure the balances are closed. Below are the steps and the result of this process:
Before creating your payment journal, you need to define a new posting profile for prepayment. This will ensure the payment is recorded in prepaid A/R instead of regular A/R. The new posting profile is then selected in AR > Setup > Parameters > Ledger and sales tax > Prepayment journal voucher fields group.
Select the new posting profile in the "Posting profile with prepayment journal voucher" field. Also, check the "Sales tax on prepayment journal voucher" if you want sales tax to be deducted from the payment received. Sales tax will be adjusted when the invoice is created and settled against the prepayment only if the amount o the invoice is more than the prepayment itself.
Before posting the journal make sure to flag the payment as prepayment. For that, on the journal go to the "Payment" tab and mark the check box "Prepayment journal voucher". By marking this check box, the posting profile will automatically be changed to the prepayment posting profile previously selected in the parameters.
Once all the information related to the receipt (amount, receipt number, date...) are entered, post the journal and verify the voucher. The result should be DB to cash and CR to A/R prepayment account selected on the new posting profile.
Once you are ready to invoice the customer, create a new invoice as a free text or sales order invoice and post. Validate that the voucher is DB A/R and CR revenue.
At that point A/R and A/R prepayment do have open balances and the invoice and the payment transactions are open.
To close both transactions and zero out A/R and A/R prepayment, go to AR > All customers > search for your customer and click on Collect > Settled open transactions
You will see the invoice and the prepayment transactions, mark them both and click on Update button.
The result of the settlement is a new posted voucher with DB A/R prepayment and CR A/R. Both A/R are zeroed out and invoice and payment transactions are settled and closed.
Monday, 21 September 2015
How to cancel Posted Packing Slip for Sales Order in Ax 2012
To cancel the packing slip, click on the above mentioned highlighted menu ‘Packing slip’. System opens the following form;
Click on Cancel;
Once ‘Cancel’ is clicked, system throws the following info message;
Click ‘Yes’ & system cancel the packing slip.
System also enabled back ‘Packing slip’ menu button. See the following screen;
To reconfirm if packing slip is cancelled and quantity is not delivered, refer the following navigation;
Accounts receivables-> Common -> Sales orders -> All sales orders -> Select related sales order -> Click on General menu -> Click on ‘Line quantity’ menu button
See the highlighted field where system shows deliver remainder is 1 i.e. packing slip is successfully cancelled.
P.S. Once order is invoiced, you can not use this functionality.
Monday, 2 December 2013
Who's the Bank?
Distributors as Bankers?
High interest rates must be on a lot of peoples’ minds these days. During the past month I have received several emails asking my opinion on the distributor’s role as the extender of credit; the organization providing some of the funds necessary for their customers’ operating capital.
Let’s look at the current situation: customers who expect extended terms seem to be multiplying like cockroaches in a roadside diner. In the good ole days, customers paid their local supply house distributor at the end of the next month. Some of us even offered special discounts for those who paid by the 10th of the month.
Somewhere in the late 1990s, a number of large companies (reportedly led by GE) unilaterally made the decision to pay their local distributors in 60 days rather than the normal 30 days. The conversation went something like this:
“The time and effort required to process your invoices takes us longer than 30 days. So, we’re going to start paying in 60 days. If you want our continued business, you’ll accept this policy.”
What’s a distributor to do? This big company represents important revenue; the interest rates were/are relatively low, what the heck- why not just absorb the cost of the extra days?
Fast forward through a decade and a half, and we find the typical distributor’s A/R portfolio contains dozens of companies paying in 60 days and a few who pay in 90 or even 120 days.
(For those of you shaking your heads on the 120 day thing… there are whole industries where 120-day payment is standard.)
Regular readers know I am a big fan of Abe Walking Bear Sanchez, who promotes credit as a business attractant. Mr. Sanchez suggests credit costs are just part of doing business.
I agree, however, I see a shift going on.
More and more customer organizations are coming up with excuses to pay under extended terms. The list of excuses is long but here are a few we have heard:
“Our projects take several months to finish so we don’t pay until the project is complete.”
“We pay our suppliers when we get paid from our customers.”
“All of our A/P work is done at our headquarters location, so it takes us extra time to handle your invoices.”
“Our company only does business with 60 day terms.”
At the same time, distributor supply partners require straight 30 day payment. As customers continue to push for longer payment terms, distributors lose what my dad’s generation used to call “the inventory float”. This was the time he had to sell product before he had to pay his supplier. He often made large purchases and sold them on a cash basis within days of receiving the inventory. The margins generated helped cover the cost of the inventory.
Today we see this “float” going away.
As long as interest rates remain low, the costs of supporting the inventory costs for an extra 30 or 60 days are relatively insignificant. However, an uptick in interest rates could create a negative impact on the distributor business model. And, the impact affects not only stock sales but sales made directly from supplier to customer.
As we move forward (and watch interest rates available to distributors) it may be time to examine the following:
• Is it time for lending institutions to take a new look at how they value distributor A/R numbers? Many currently seriously discount any accounts over 60 days. In a world where large companies are dragging out their payment days, is there any magic in the 30 day number?
• Should suppliers change the terms on products sold to distributors? Does it make sense for distributors to finance the manufacturer’s gross margin? Do supply partners realize how this spread in payment might impact a distributor’s ability to finance growth?
Your thoughts?
High interest rates must be on a lot of peoples’ minds these days. During the past month I have received several emails asking my opinion on the distributor’s role as the extender of credit; the organization providing some of the funds necessary for their customers’ operating capital.
Let’s look at the current situation: customers who expect extended terms seem to be multiplying like cockroaches in a roadside diner. In the good ole days, customers paid their local supply house distributor at the end of the next month. Some of us even offered special discounts for those who paid by the 10th of the month.
Somewhere in the late 1990s, a number of large companies (reportedly led by GE) unilaterally made the decision to pay their local distributors in 60 days rather than the normal 30 days. The conversation went something like this:
“The time and effort required to process your invoices takes us longer than 30 days. So, we’re going to start paying in 60 days. If you want our continued business, you’ll accept this policy.”
What’s a distributor to do? This big company represents important revenue; the interest rates were/are relatively low, what the heck- why not just absorb the cost of the extra days?
Fast forward through a decade and a half, and we find the typical distributor’s A/R portfolio contains dozens of companies paying in 60 days and a few who pay in 90 or even 120 days.
(For those of you shaking your heads on the 120 day thing… there are whole industries where 120-day payment is standard.)
Regular readers know I am a big fan of Abe Walking Bear Sanchez, who promotes credit as a business attractant. Mr. Sanchez suggests credit costs are just part of doing business.
I agree, however, I see a shift going on.
More and more customer organizations are coming up with excuses to pay under extended terms. The list of excuses is long but here are a few we have heard:
“Our projects take several months to finish so we don’t pay until the project is complete.”
“We pay our suppliers when we get paid from our customers.”
“All of our A/P work is done at our headquarters location, so it takes us extra time to handle your invoices.”
“Our company only does business with 60 day terms.”
At the same time, distributor supply partners require straight 30 day payment. As customers continue to push for longer payment terms, distributors lose what my dad’s generation used to call “the inventory float”. This was the time he had to sell product before he had to pay his supplier. He often made large purchases and sold them on a cash basis within days of receiving the inventory. The margins generated helped cover the cost of the inventory.
Today we see this “float” going away.
As long as interest rates remain low, the costs of supporting the inventory costs for an extra 30 or 60 days are relatively insignificant. However, an uptick in interest rates could create a negative impact on the distributor business model. And, the impact affects not only stock sales but sales made directly from supplier to customer.
As we move forward (and watch interest rates available to distributors) it may be time to examine the following:
• Is it time for lending institutions to take a new look at how they value distributor A/R numbers? Many currently seriously discount any accounts over 60 days. In a world where large companies are dragging out their payment days, is there any magic in the 30 day number?
• Should suppliers change the terms on products sold to distributors? Does it make sense for distributors to finance the manufacturer’s gross margin? Do supply partners realize how this spread in payment might impact a distributor’s ability to finance growth?
Your thoughts?
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