Accounts receivable

 

Updated: November 1, 2016

Applies To: Dynamics Marketing

System_CAPS_importantImportant

Microsoft Dynamics Marketing is scheduled to be retired on May 15, 2018. After that date the service will no longer be available. Please plan accordingly. For details, see the blog post Microsoft Dynamics Marketing service will be discontinued, and learn what’s coming next.

The Accounts Receivable list and maintenance pages enable you to receive payments from clients for invoices that have balances due.

  • To work with accounts receivable, you must have Edit/View Accounts Receivable privileges. More information: Work with user accounts and staff contacts.

  • Microsoft Dynamics Marketing must have at least one 'active' Accounts Receivable general ledger account for the Accounts Receivable page to operate.

The Default Accounts Receivable Account

Microsoft Dynamics Marketing has a 'default' general ledger account for Accounts Receivable named 'Accounts Receivable.' This general ledger account needs to be activated if you want to use it.

  1. Go to Budgeting > Settings > Chart of Accounts.

  2. Choose the Show All button Show All/Active Only button.

  3. Choose the Accounts Receivable account.

  4. Select its Active check box Check box symbol.

  5. Choose Submit. More information: Chart of accounts

To set up additional Accounts Receivable accounts:

  1. Go to Budgeting > Settings > Chart of Accounts.

  2. Choose the New button New button.

  3. Enter the information.

  4. Choose Submit. More information: Chart of accounts

To view invoices that need to be paid:

  • Choose Accounts Receivable.

    Microsoft Dynamics Marketing displays the invoices that are due.

To receive and post a payment:

  1. Enter the Microsoft Dynamics Marketing invoice # from the payee's check or voucher.

  2. Select the AR Account that contains the receivables you want to work with. (Optional.)

  3. Enter the information.

  4. Choose Go.

    Microsoft Dynamics Marketing displays the invoice(s) to be paid.

    Or,

  1. Select Company or Contact from the Receive Payment From pull-down menu.

  2. Type the client’s name into the Received From field.

  3. Select the Client from the pull-down menu.

    Microsoft Dynamics Marketing displays all outstanding invoices with balances:

  4. Enter the payment # or check #. (An entry is not required but it is very helpful to have this value.)

  5. Enter a description of the payment in the memo. (An entry is not required.)

  6. Enter the Payment Date.

  7. Select a Payment Method.

  8. Select the Deposit To Bank Account.

    Microsoft Dynamics Marketing displays bank and payment holding accounts. More information: Banking

If you are deducting withholding tax from the payment:

  1. Enter the Withholding Tax amount for each invoice in the Withholding Tax field on the invoice's row in the grid.

  2. Choose Submit. More information: Manage taxes

If you are using multiple currencies:

  1. Select a Currency.

  2. Enter the amount of the payment.

  3. Select the check boxes of the invoices you want to pay.

    Microsoft Dynamics Marketing sets the amount to the balance due. You can change the amount. More information: View exchange rates and convert currency. Microsoft Dynamics Marketing creates a record of the payment for each invoice.  When an invoice is paid in full, it willll no longer appear on the Accounts Receivable page.

  4. Choose Submit.

Microsoft Dynamics Marketing enables users to adjust payments made by clients. For example, a client may remit a payment of $10,000 via a wire transfer. The bank may deduct a wire transfer fee of $25 from the wire transfer, making the net amount received $9,975. A payment credit can be applied to facilitate posting the bank transfer fee to the general ledger without necessitating the creating of a journal entry. Payment credits have the following characteristics:

  • They are associated with both the payment and invoices.

  • Payment credits are posted to the general ledger on the same date as the payment itself.

  • Payment credits can be associated with items/services or general ledger accounts. More information: Track items and services, Chart of accounts

To create a payment discount:

  1. Choose the Discount button next to the invoice you want to apply the discount to.

    Microsoft Dynamics Marketing adds a row to the Payment Discounts grid.

  2. Specify the Item/Service (optional), general ledger account (required), description and amount.

  3. Choose Submit.

    Microsoft Dynamics Marketing posts the payment and discounts.  

For example, a client remits $100 to pay an invoice by wire transfer. The bank deducts a $12 wire transfer fee from the payment. The amount received by the vendor is $88.

Account

Debit

Credit

AR

$100

Bank

$88

Wire Transfer Fees

$12

Total

$100

$100

To delete a payment credit:

  1. Choose the check box next to the item you want to delete.

  2. Choose the Delete button.

    Microsoft Dynamics Marketing permanently deletes the payment credit.

If the payment is less than the sum of amounts due, you can apply the payment to the invoices you choose. Unpaid invoices will remain in Receivables until payments are received in full.

Clients sometimes overpay, creating a credit in their accounts. According to generally accepted accounting practices (GAAP), overpayments are short-term liabilities. According to GAAP, since work hasn't been done, the overpayment isn't revenue until work is done and invoiced. Once the client is invoiced, the liability is reduced and the revenue can be taken.

If the payment exceeds the sum of the amounts due, a credit memo can be created for the client that can be applied to other invoices, or a refund can be created

  1. Specify the client to credit in the Apply Credit To field.

  2. Choose the Credit Memo/Refund button if you need to create a credit memo or refund for a client.

Unused credits can be applied to invoices that are unpaid. If the client has unused credits, they will be listed in a panel on the bottom of the page:

  1. Select the credit you want to use.

  2. Select the invoices you want to apply the credit towards.

  3. Choose Submit. More information: Client credit memos and refunds

On the Accounts Receivable page, if a payment exceeds the price of all the invoices it has been applied to, then Microsoft Dynamics Marketing will create a credit invoice for the client. If  a client has a credit balance in the Overpayment Liability account, it is displayed on the  Accounts Receivable page. You can select the over-payment and use it to pay an invoice.

Transaction

Revenue

Accounts Receivable

Bank

Overpayment
Liability

1. Client invoiced $80

+$80

+$80

2. Client pays $100

-$80

+$100

+$20

3. Client invoiced $60

+$60

+$60

4. Overpayment is applied to invoice

-$20

-$20

5. Ending Balances

+$140

+$40

+$100

$0

To support accurate accounting of over-payments and credits, Microsoft Dynamics Marketing includes the following items:

  • Default overpayment liability account

  • Default overpayment credit item

  1. Go to Budgeting > Settings > Chart of Accounts

  2. Choose the Show All button Show All/Active Only button.

  3. Choose the Overpayment liability account.

  4. Choose the Active check box to make the account visible at all times. You can rename the account, if you want to.

  5. Choose Submit.

  1. Go to Budgeting > Settings > Items/Services

  2. Choose the Show All button Show All/Active Only button.

  3. Choose the Overpayment credit item.

  4. Select the Active check box to make the account visible at all times. You can rename the item, if you want to.

  5. Choose Submit.

When an over-payment is voided, Microsoft Dynamics Marketing doesn't automatically void the credit memo corresponding to the overpayment. Be sure to void the credit memo, too.

Microsoft Dynamics Marketing displays the payment cycle on the invoices and media invoices dashboards and tabs. A quick glance at the payment cycle for recent invoices can give you the information you need about a client's payment history. To view the payment cycle:

  1. On an Invoices tab, display the complete list of columns.

  2. Choose the Payment Cycle column.

  3. Choose OK.

    Microsoft Dynamics Marketing displays the payment cycle for each invoice. The payment cycle is the number of days between the invoice date and the date of the last payment, credit memo or refund.

Financial and general ledger accounts are designed for marketing budget management only. Financial features are restricted to the limits stated in the Security and Financial Disclaimer. Microsoft Dynamics Marketing is not designed to comply with country/region-specific laws, regulations, or common business practices.

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