Using Deductions Management To Manage Customer Short Pays

There is nothing worse than when a customer short pays on their invoice and you don’t quite know if they just didn’t get the right invoice, or if they are deducting amounts off the invoice for some specific (but currently unknown) reason. In the past you have probably had to either set the payment aside so that you can investigate it after you get through the other stack of checks that you need to enter into the system, or entered in the payment short and then remember that there is a balance on the invoices that you then need to investigate. It throws a spanner into your whole day.

Don’t fret though – with the R3 release there is a new Deductions Management feature within Dynamics AX that allows you to record that there was a deduction and then have all of the short pays go to a special Deductions Management Workbench that either you (or someone else) can then work through and decide if the deductions are valid or not.

If your customers act like the Amish Mafia then at least you can track it.

How To Do It…

  1. Before you can use the Deductions Management area there is a little setup that you need to do. The first task is to set up a few Deduction Types. To do that, click on the Deduction Types menu item within the Deductions folder of the Setup group within the Trade Allowance Management area page.
  2. When the Deduction Types maintenance form, set up all of the different classifications of deductions that you initially want to track. Also, make sure that you specify a Deduction Offset account that you want to post the deduction amount to.
  3. Next we will want to set up some Deduction Denial Reasons by clicking on that menu item within the Deductions folder of the Setup group within the Trade Allowance Management area page.
  4. When the Deduction Denial Reasons maintenance form is displayed, set up a few records for tracking the reasons for returning the deduction back to the customers account when you deny the deduction.
  5. Finally, click on the Deduction Write-Off Reasons menu item within the Deductions folder of the Setup group within the Trade Allowance Management area page to set up some write off codes.
  6. When the Deduction Write-Off Reasons maintenance form is displayed, add a few reason codes for why you are allowing the deductions to be written off (accepted) and also specify the Main Account that you want to post the real adjustment to.
  7. Once you have set up all of the codes, there is one final step that is required, and that is to configure some of the parameters for the deductions. In order to do that, click on the Trade Allowance Management Parameters menu item within the Setup group of the Trade Allowance Management area page.
  8. When the Trade Allowance Management Parameters maintenance form is displayed, make sure that you specify a Deduction Journal Name for all of the deduction transactions.
  9. Now you can start tracking the deductions. Start off by entering in an invoice payment for the customer.
  10. When the customer short pays, just change the Credit amount to the actual payment and accept the warning notice.
  11. To enter in the short pay, click on the Deductions menu item within the menu bar.
  12. This will open up a new Deductions maintenance form.
  13. Click on the New button in the menu bar to create a Deductions record and then select the Deduction Type that you want to initially classify the deduction as.
  14. Then enter in the Deduction Amount.
  15. You can keep on adding additional Deductions if you like if you know that there were multiple amounts that were taken off the invoice, and when you are done, just click on the Close button.
  16. Now when you return to the Journal Voucher your will see that there are multiple lines for the invoice payment.
  17. All you need to do is now click on the Post menu item to complete the journal voucher.
  18. After the journal has been posted, you can keep on trucking and enter in all of the other invoice payments.
  19. When you want to start investigating the deductions, click on the Deduction Workbench menu item within the Common group of the Trade Allowance Management area page.
  20. When the Deduction Workbench maintenance form is displayed, you will see all of the deductions that have been recorded. From here you can Split the deduction, Deny the deduction and return it to the customer account, or Write-Off the deduction as a valid deduction.
  21. To write off the amount, just click on the Write-Off button within the Maintain group of the Deduction ribbon bar.
  22. All you need to do is specify the actual Reason Code for the Write-Off.
  23. Then click on the OK button.

This will close out the Deduction and you can move onto the next deduction.

View the complete post here:
http://www.dynamicsaxcompanions.com/Tips-And-Tricks/Tips-Tricks-Archive/Using-Deductions-Management-To-Manage-Customer-Short-Pays

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2 comments
  1. Julia Fitsimones said:

    Murray, have you thought about how to handle applying short pays against multiple invoices? I tried this – I selected 3 invoices and then short paid the entire voucher by $50 (this is easiest to using Enter Customer Payments form). I then entered 1 Deduction line for $50. Even if I specify the Invoice on the Deduction form, it always applies the short pay to the lowest INV-###, I can see this when I go to Customer Transactions and view the History. If I don’t specify the Invoice, it behaves the same way. I guess I was hoping for a better allocation of the short pay. Would be interested in your thoughts/tests.

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