Hello Folks, hope you are doing well and staying safe at home!!!

This week I have thought to write about a hidden feature which many of us are not aware which has been introduced by Microsoft in 8.1 Release.

Many of times we have scenario where while settling vendor/customer invoices we receive/Pay less payment and that remaining amount is not going to be paid/Received by vendor/Customer or may has to be paid/Received by some other vendor/customer which can be sister company of original vendor/customer.

Now, generally to tackle this situation, most of us enable “Over/Under Payment” and post the differential amount in cash discount ledger. Now issue with this is you cannot select the ledger account of user’s choice or can not not transfer to other vendor customer.

Now this problem can be solved using settle Reminder feature of D365.

Settle Reminder: When we receive/pay the sort payment against any open transaction for vendor/customer, remaining amount by which payment is sort called as “remainder” and settling this amount with a specific reason code or transfer this amount to any other vendor/customer and settle original transaction completely/closed is done using settle remainder feature.

Advantages:

1. Account sort payments in different ledger codes as per business scenarios to get more visibility in financials
2. Transfer remaining balance from one vendor/customer to another vendor/customer

So, let’s start with this:

Note: Please perform same steps for Customer

Step-1: Create Reason codes master which can be used for accounting remainder amount based on different business scenario

Account Payables > Setup > Reason code

Specify reason code with Ledger mapping, we can have multiple reason codes

Step-2: Enable Settle Remainder

Account Payables > Setup > Parameters > Settlement > Settle Remainder

Enable parameter and specify the journal name which will be used to post the entry for remaining balance.

Scenario: let’s say we have one invoice of amount 293,725.77 and we have paid a payment of amount 66,727.91, now vendor has said that the remaining balance 226,997.86 should be paid to its sister company or not going to be paid to vendor at all. Now company has two options to close this invoice completely:

1. Write-off or account this remaining amount in any ledger code with a reason
2. Transfer to another vendor because this invoice was wrongly accounted with more amount or may be another sister vendor will receive the remaining payment

Expected Accounting entry for remainder balance:

Step-3: Select invoice for settlement

All vendors > Select Vendor > Transaction > Select open transaction > Select invoice to settle > Click on settlement

Step-4: Mark Invoice and sort payment > Click on Settle Remainder

Note: This can be done during payment journal as well.

Note: Settle Remainder is enabled only when you have sort payment

Now, if we see there is a balance which is remaining now, we want to transfer this to ledger or another vendor using a specific reason code

Step-5: Select applicable reason code or vendor code as per business need

Step-6: View original Invoice and Voucher entry

Navigate to Vendor > Transactions > Filter Closed > Select Invoice

Now, if we see original invoice is marked as closed and remaining balance has been transferred to ledger code based on selected reason code.

Step-7: View Transferred balance to another vendor and voucher entry

Navigate to another vendor which has been selected during process > Transactions > Open Transactions

So, now if we see all the entries are per our expected entries in scenario, now this balance can be set-off against payment received from other vendor.

That’s It for this blog. I will be back next week with some more new feature from Dynamics 365, till then keep reading and sharing with your network.

Thank You!!!