Receiving Cash Payments on a Sales Order in Dynamics AX

by | Updated August 15, 2016 | Dynamics AX, Financials

Part 1 – Method of Payment in Dynamics AX

I recently had a situation during a customer implementation that made me scratch my head. It was concerning receiving cash payments on a sales order in Dynamics AX. Our desire was to have a customer payment journal created automatically when we posted the sales order. We had a method for doing this for credit card payments (we were using Red Maple Advanced Credit Cards), but no way to do this for cash (or check) payments. One of my colleagues pointed out an option on the Method of Payment that was new to me (and in another life, I was the Program Manager in charge of the Accounts Receivable module on the AX development team at Microsoft!).

Receiving Cash Payments on a Sales Order in Dynamics AX 

On the AR method of payment form (Accounts receivable > Setup > Payment > Methods of payment), on the File formats FastTab, there is a checkbox called “Create and post draw journal automatically when posting invoice.”  The “draw journal” is what threw me, as that is normally used for Bills of Exchange, which is typically only used in Europe, mostly in France. Even the Dynamics AX online help says that this “allows the posting of draw bill of exchange journal lines automatically when an invoice is posted.” If you mark this checkbox, you will need to select a destination customer payment journal to be used. If this checkbox is marked, when a sales order is invoiced & this method of payment is used, a payment journal for the amount of the invoice will automatically be created, and applied to that particular invoice, thereby saving you the trouble of entering the payment journal to record the cash payment. The payment journal will credit the customer’s AR & debit the bank account assigned to the method of payment. You will have to go to the customer payment journal form to post the journal. One negative is that an entirely separate payment journal will be created for each invoice.

 

Part 2 – Terms of Payment in Dynamics AX

There is an alternate method to accepting cash, and this has been documented elsewhere by Microsoft. You can set up a Terms of payment (Accounts receivable > Setup > Payment > Terms of payment) that has a Payment method of COD and has the Cash payment checkbox marked, which you can then assign to the header of the Sales order. When the sales order is invoiced, an entry in Accounts receivable (transaction type of Customer) will automatically be created. This differs from the above scenario in that it does not create a payment journal.  Instead, the payment is created directly & you do not have the option to review or edit the payment prior to posting. You may view this as either a negative or positive, as you won’t have the extra task of posting the payment, but you lose the ability to review and edit it. One other difference is that because it doesn’t create the payment journal, it will not hit the Cash & Bank module and therefore, won’t hit that sub-ledger, so you may end up with a reconciliation issue.

 

Terms of Payment in Dynamics AX

So in summary, there are several options for tracking cash (or check) payments on a sales order in Dynamics AX. Which option you choose will depend on your situation.

 

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