CONTENTS 

 0. OVERVIEW PROCESS ACCOUNTS PAYABLE IN AX-DISCRETE MANUFACT
URING 1.0 PURCHASE ORDER UPDATE 1.1 Post Vendor Invoices from Purchase Order 1.2 Post 
Purchase Order Invoices Based on Packing Slips 1.3 Save Vendor Invoices and Match to Packing Slips 
1.4 Match Vendor Invoices Against Received Quantities 2.0 VENDOR INVOICE PROCESSING 2.1 
Update Vendor Record 2.2 Enter Non-Accrued Invoices 2.3 Enter Accrued Invoices 3.0 VENDOR PAY
MENTS 4.0 INQUIRIES 5.0 PERIODIC 5.1 Exchange Adjustment 5.2 Reconcile Accounts Payable 
5.3 Vendor Settlement for 1099 6.0 REPORTS 
0. OVERVIEW ACCOUNTS PAYABLE PROCESS IN AX-DISCRETE MANUFACTURING NAME
Microsoft Dynamics AX includes Accounts payable features that help you track vendor invoices and
outgoing expenditures. You can enter vendor invoices manually or receive them electronically through
a service. Vendors can also enter invoices by using a ven- dor portal in Enterprise Portal for Microsoft
Dynamics AX. After in- voices are entered or received, you can review and approve them. You can use
invoice matching, vendor invoice policies, and work- flow to automate the review process so that
invoices that meet cer- tain criteria are automatically approved, and the remaining invoices are flagged
for review by an authorized user. 

1. PUCHASE ORDER UPDATE

1.1 Post Vendor Invoices from Purchase Order 
Vendor invoices are requests for payment for products and services that were received. Vendor
invoices can represent a bill for ongoing services, or they can be based on purchase orders for
specific items and services.  A vendor invoice from a purchase order is an invoice that is pro- duced
when products or services are received according to a pur- chase order that was placed with a vendor.
The vendor invoice con- tains a header, and one or more lines for items or services. A ven- dor invoice
completes the cycle from purchase order to product re- ceipt to vendor invoice.  Although some
vendor invoices are connected to a purchase order, vendor invoices can also contain lines that don't
correspond to purchase order lines. You can also create vendor invoices that aren't associated with
any purchase order. These vendor invoices might represent ongoing services, such as a utility bill, and
you don't have to reference a purchase order when you add them.  
There are several ways to enter a vendor invoice:  
•The vendor invoice register lets you quickly enter invoices 
that don't reference a purchase order, so that you can accrue the expense. By using the vendor invoice
approval journal, you can select those invoices and post them to the vendor balance to reverse the
accrual. 
•The vendor invoice journal lets you quickly enter invoices that 
don't reference a purchase order, in a single step. 
•Together with the vendor invoice pool, the vendor invoice 
register lets you quickly enter invoices to accrue the expense. You can open the associated purchase
orders later to post the invoice against the expense account. 

1.2 Post Purchase Order Invoices Based on Packing Slips 

You can enter and save information for vendor invoices, and you can match invoice lines to product
receipt lines. You can also match partial quantities for a line. You can create a vendor invoice that is
based on the product receipt line items that have been re- ceived to date, even if all the items for a
particular purchase order haven't yet been received. For example, you might use this option if a vendor
sends one invoice per month that covers all the deliveries that the vendor shipped during that month.
Each product receipt represents a partial or complete delivery of the items on the pur- chase order. 
When you post the invoice, the Invoice remainder quantity for each item is updated with the total of
the received quantities
from the selected product receipts. If both the Invoice remainder quan- tity and the Deliver remainde
r quantity for all items on the purchase order are 0 (zero), the status of the purchase order
is changed to Invoiced. If the Invoice remainder quantity isn't 0, the status of the purchase order
remains unchanged, and additional in- voices can be entered for it.  
1.3 Save Vendor Invoices and Match to Packing Slips 
This option assumes that at least one product receipt has been posted for the purchase order. The
vendor invoice is based on these product receipts and reflects the quantities from them. The financial
information for the invoice is based on the information that is entered when you post the invoice.
  1.4 Match Vendor Invoices Against Received Quantities 
When you receive an invoice from a vendor for goods or services on a purchase order, the business
processes might require that the goods or services be received before the invoice can be approved for
payment. Before you begin, make sure that the Invoice matching configuration key is selected.  In the
Accounts payable parameters page, ensure that the Enable invoice matching validation option is
selected, the Post invoice with discrepancies field is set to Require approval, and the Line matching
policy field is set to Three-way matching. 
2.0 VENDOR INVOICE PROCESSING 

The accounts payable process or function is immensely important since it involves nearly all of a
company's payments outside of pay- roll. The accounts payable process might be carried out by an
ac- counts payable department in a large corporation, by a small staff in a medium-sized company, or
by a bookkeeper or perhaps the owner in a small business.  Regardless of the company's size, the
mission of accounts
payable is to pay only the company's bills and invoices that are legitimate and accurate. This means 
that before a vendor's invoice is entered 
into the accounting records and scheduled for payment, the invoice must reflect:  
•what the company had ordered 
•what the company has received 
•the proper unit costs, calculations, totals, terms, etc. 
 To safeguard a company's cash and other assets, the
accounts payable process should have internal controls. A few reasons for internal controls are to:  
•prevent paying a fraudulent invoice 
•prevent paying an inaccurate invoice 
•prevent paying a vendor invoice twice 
•be certain that all vendor invoices are accounted for 
 Periodically companies should seek professional assistance to im- prove its internal controls.  The
accounts payable process must also be efficient and accurate in order for the company's financial
statements to be accurate and complete. Because of double-entry accounting an omission of a vendor
invoice will actually cause two accounts to report incorrect amounts. For example, if a repair expense
is not recorded in a time- ly manner:  
1.the liability will be omitted from the balance sheet, and 
2.the repair expense will be omitted from the income state- 
ment.  If the vendor invoice for a repair is recorded twice, there will be two problems as well:  
1.the liabilities will be overstated, and 
2.repairs expense will be overstated. 
 In other words, without the accounts payable process being up-to- date and well run, the company's
management and other users of the financial statements will be receiving inaccurate feedback on 
the company's performance and financial position.  A poorly run accounts payable process can also
mean missing a discount for paying some bills early. If vendor invoices are not paid when they become
due, supplier relationships could be strained. This may lead to some vendors demanding cash on
delivery. If that were to occur it could have extreme consequences for a cash- strapped company.  Just
as delays in paying bills can cause problems, so could paying bills too soon. If vendor invoices are paid
earlier than necessary, there may not be cash available to pay some other bills by their due dates. 
2.1 Update Vendor Record Use this procedure to create accounts for the vendors that you
do business with. The role that you are assigned to must have permis- sion to create and modify
vendor accounts. When you create a ven- dor account, you enter information about the vendor that is
used to populate documents automatically and to track activity with the vendor. For example, you can
enter the following information for a vendor:  
•Assign a vendor group. Every vendor must be assigned to a 
vendor group. Vendors in a vendor group have parameters in common. For example, they may have
the same terms of pay- ment. 
•Place a vendor on a hold status. By default, no transaction 
types are on hold for the vendor. For more information. 
•Allow an existing vendor to do business with another legal en- 
tity in your organization. 
•Set up banking information for the vendor, so that you can 
send payments electronically. 
•Create an opening balance for the vendor. 
•Configure the vendor for catalog import. The vendor can cre- 
ate and update a catalog of the items and services that your workers can order from the vendor. 
•Assign the vendor to procurement categories. 
•Set up tax, delivery, invoice, and payment information for the 
vendor. By default, these settings are copied to new docu- ments that you create for the vendor. 
•Set up default financial dimensions that are used to automat- 
ically post transactions with the vendor to financial accounts. 

2.2 Enter Non-Accrued Invoices 

2.3 Enter Accrued Invoices 
3.0 VENDOR PAYMENTS 
The Payment process following steps :  
•Find what invoices should be paid on basis of due dates or 
cash discount dates. 
•Create payments in the payment journal. 
•Generate a payment document: a check, a file for electronic 
payment, a promissory note, etc. 
•Send the payment document to the vendor. 
•Receive an answer from the vendor. 
•Record in the system that the company has to pay to the ven- 
dor, i.e. to post the payment. 
In the accounts payable module of Dynamics AX . There are several options to do the
payment flow:  
•Option 1 – payment journal and settlement function: to create 
payments for one vendor 
•Option 2 – payment journal and payment proposal: to create 
payments for several vendors in one journal. 

3.1.1 Payment Proposal The payment proposal that you can create in a vendor payment journal
simply selects those invoices that you want to have paid - based on the search criteria that you entered
when creating the pro- posal such as for example, due date, currency, etc. When you create a payment
proposal, the invoices that are selected for payment are marked for settlement. 
You can check which invoices were selected for payment and settle- ment by opening the settlement
form simply by selecting function- settlement functionality and saying that the selected settled
trans- actions shall not be removed. The 'mark' checkbox indicates which invoices are selected for
settlement. If you want to do the settle- ment manually you can also do that later on. Simply create a
man- ual vendor payment. Later on when the payment is made you can then do the settlement
manually from the vendor record by making use of the open vendor transaction form. If you select the
invoice and the payment made and select 'update', then Settlement occurs, which can of course also
be reversed if required. When you generate pay statements, all worker deductions and em- ployer
contributions for benefits and taxes are calculated, benefit accruals are processed, and the worker’s
net pay is determined. When user generate pay statements, the recommend that you use the batch
processing mode to improve performance. 
4. INQUIRIES
Inquiries - you see them in almost every module of AX along with the headers Common, Journals,
Periodic, Setup, and Reports. If you have ever opened something that was listed under Inquiries, you
may have gotten something that kind of reminds you of a re- port, or a query screen, or even a
completely new form. Inquiries in AX are kind of like live reports, without being a report. Inquiries are
a way for end users to see an accumulation of data in the system in a way that they can't currently see
it within other modules. The way I understand Inquiries, they were created using filters and queries to
show live data in AX forms. They can often be exported to Excel or have the data manipulated from
within the In- quiries screen.  

The actual word inquiry means "an act of asking for information" with the synonyms of query and
question. It only makes sense that an Inquiry in AX would help an end user solve a problem that
they are having or present an answer to their burning questions in a readable format. 
 5.0 PERIODIC 
Periodic journals are sometimes called recurring journals because the amount, text, and other
information are repeated each time that the periodic journal is retrieved. When you create the periodic
jour- nal, you specify the period interval for the recurrence, such as days or months. This task guide
will create a periodic journal with a monthly recurrence. 
5.1 Exchange Adjustment 
5.2 Reconcile Accounts Payable 

5.3 Vendor Settlement for 1099 
6. REPORTS