(BRA) Set up interest and fines for vendor payments

Article
11/29/2021

Important

This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2

You must set up accounts for financial interest and fines, default codes for interest and fines, and interest codes and fine codes for vendors and purchase orders. You must also define the holidays or non-business days in a financial year that are not considered when interest and fines are calculated.

Set up a payment calendar and payment calendar rules

Click Accounts payable > Setup > Payment > Payment calendar.
Click New.
In the Payment calendar field, enter the name of the payment calendar.
To create a calendar for a specific country or region, select the Location calendar check box. Then select the country or region in the Country/region field.
In the Standard business week field group, select the business days in a standard work week.
In the Display days for calendar year field, enter the fiscal year to create the payment calendar for.
To specify exception dates for the calendar year, click Add. In the Date field, select the date.
In the Type field, specify whether the exception date is a business day or a holiday. For more information, see Payment calendar (form).
To specify exception dates for a state or province, click State/province holidays, and then enter the information in the State/province holidays form.

Tip

To also specify exception dates for cities, click City holidays in the State/province holidays form.
Next, set up rules for the payment calendar. Click Accounts payable > Setup > Payment > Payment calendar configuration - vendors.
Click New.
In the Rule name field that is displayed, enter an identifier for the rule.
In the Rule type field, select one of the following types:
- Specific – Create a payment calendar rule for a specific combination of the method of payment and terms of payment. When you select this type of rule, the Method of payment and Terms of payment fields are displayed. You can use all combinations or a specific combination of the method of payment and terms of payment for the rule.
- Customer/vendor location – Create a payment calendar rule for a specific country or region. When you select this type of rule, the Vendor location field group is displayed. Location information is retrieved from the documents in the order in which you arrange the documents in the list that is displayed. You can click Move up and Move down to arrange the documents.
- Company location – Create a payment calendar rule for the primary address that is specified for the legal entity.
Click Create rule.
In the Define rules area, select Active to use the rule for the selected payment calendars. The rule becomes active when you close the form.
In the Prioritize rules area, select the rule, and then click Move up or Move down to move the rule up or down in the list.
If you are setting up a payment calendar rule for a country or region, in the Select calendars area, select the check box for each calendar to apply the rule to.

Set up accounts for financial interest and fines

Click Accounts payable > Setup > Vendor posting profiles.
Select a posting profile.
On the Setup FastTab, select the account code.
In the Financial interest and Fine fields, select the ledger accounts to post the interest and fine amounts to for the vendor account or the vendor group.

Set up interest codes for vendors

You can set up interest codes to automatically calculate interest on overdue payments that are made to vendors. The interest that is calculated for a vendor is based on the rates and terms that are defined for the interest code.

Click Accounts payable > Setup > Payment > Interest codes.
In the Interest code field, enter an identifier for the interest code.
On the Setup FastTab, enter information in the following fields:
- Interest % – Enter the interest percentage for the interest code.
- Interest calculation per – Enter the number of days or months that interest calculations are applied. The value in this field is based on the selection in the Day/Mth field.
- Day/Mth – Select the unit of time that interest calculations are applied.
- Days – Enter the number of grace days before the interest code is applied. The interest is calculated after the specified number of grace days from the payment due date.

Set up fine codes for vendors

You can set up fine codes to automatically calculate fines on delayed payments made to the vendors. A fine is calculated for a vendor, based on the rates and terms that are defined for the fine code.

Click Accounts payable > Setup > Payment > Fine codes.
In the Fine code field, enter an identifier for the fine code.
In the Days field, enter the number of grace days before the fine code is applied. The fine is calculated after the specified number of grace days from the payment due date.
In the Fine % field, enter the fine percentage.

Specify default codes for interest and fines for vendors

Click Accounts payable > Common > Vendors > All vendors. Select a vendor account. On the Action Pane, click Edit.
In the Vendors form, click the Payment FastTab. In the Interest code and Fine code fields, select the default codes for interest and fines for the vendor.

Specify interest codes and fine codes for purchase orders

Click Accounts payable > Common > Purchase orders > All purchase orders.
Select a purchase order. On the Action Pane, click Edit.
In the Purchase order form, click the Price and discount FastTab. In the Interest code and Fine code fields, select the codes for interest and fines. The interest and fines are calculated on the vendor invoice if the payment is delayed.