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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Purchase Ledger Profor...
Microsoft Dynamics AX (Archived)

Purchase Ledger Proforma Invoice (prepaid) matching after go-live

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Posted on by Community Member

Hi all,

We have vendors/suppliers where we need to make prepayments against a proforma invoice

We have recently started using AX having changed from another system.

Normal processing would have us apply a prepayment when the VAT (tax) Vendor Invoice arrives, but we have an issue where the prepayment was made in our old system, against an open PO which was migrated across, but the VAT invoice has arrived now we are processing in AX.

The VAT invoice has been loaded, but obviously we don’t want to pay them – as this has already happened.

Payment proposals keep suggesting we pay it, but we need to get rid of the balance

Can anyone suggest a mechanism to resolve this, so that we still have the invoice record in the system, but do not update the Bank or Ledger accounts

Thank you,

Sofia

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  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hello Dan,

    Good to hear that you could fix your issue.

    Would you mind verifying your solution so that others who run into a similar problem might also easily find and know?

    Many thanks,

    Ludwig

  • Verified answer
    Community Member Profile Picture
    Community Member on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hi Ludwig, sorry for delay - some access issues

    we have created a payment journal against the VAT invoice using the offset account of Proforma Payments (which included the balance paid in our previous system to this supplier). This has cleared the payment and marked the invoice as paid, while still recording the VAT amount correctly. As it is offset against Ledger, the Bank remains correct.

    so thank you for your help and inspiration in getting us through this

    Regards

    Dan

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hi DanJoseph,

    Just wondering if you have been able to make some progress in regards to your pre-payment issue? Would be great if you keep us updated. Many thanks and best regards,

    Ludwig

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hello DanJoseph,

    Can you identify the balance that you recorded on the pre-payment account during go live and for which vendors those prepayments were recorded?

    In my opinion the following steps should be able to get this fixed - please test this first in a demo Environment!

    a) Generate a posting in a GL journal where you basically reverse the transactions that have been recorded on your prepayment account during go-live. Try to find a bridging or transfer account in your COA that you can use for that purpose. The transaction should look something like:

    DEBIT: Bridging account

    CREDIT: Prepayment account

    AMOUNT: You Need to identify

    b) Make sure that you have a prepayment vendor posting profile setup in AP. This vendor posting profile should include your prepayment account in the field "summary" account. If you do not have this vendor posting profile then you need to set it up.

    c) Create another GL Journal that you use to bring back the prepayments that were corrected under a) back in. The Journal should include lines as follows

    DEBIT: Select your vendor accounts for which you made the prepayment

    CREDIT: The same bridging account from a)

    AMOUNT: The same amount from a) separated by the different prepayments that you made.

    Important!!! In this journal you need to select the vendor prepayment posting profile => see b)

    With step c) you created a "negative" open position that you can use for settlement in the AP payment journal.

    As I said, please test this procedure first in detail. I believe that this should fix your issue and allow you to pay only the remaining tax amount.

    Would be great if you could keep us updated here how things are going.

    Thanks,

    Ludwig

  • Community Member Profile Picture
    Community Member on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hi Ludvig

    I think that could be it!

    We do have an account for pre-payments which matched at Go Live, so somewhere in the balance should be the amounts we spent in our old system that relates to these invoices. I'm thinking if we create a payment journal to settle the invoice we can then use the pre-payment account as the offset  which will clear the line against the Invoice (but still show the VAT) and will reduce the pre-payment account down, without affecting our Bank or Ledger Bank accounts as the money was spent months ago. Does that sound right?

    Thanks so much

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hi DanJoseph,

    I see.

    Even though you did not migrate the prepayments that have been made directly against your vendor account(s) you must have recorded something on the prepayment ledger account in GL, right?

    Otherwise, your Trial Balance should not have matched.

    What offset account did you use as the offset account to bring in the prepayments that you have made into GL? Was it the data Migration account that is now locked off?

    Ludwig

  • Community Member Profile Picture
    Community Member on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hi Ludvig

    The issue is that our consultants didn't advise us of the need to migrate pre-payment balances, so this was not done at Go-Live. We have reconciled our Data Migration account and so this account is now locked off / suspended. If we try to migrate anything against it now it will create a new balance that will never be reconciled.

    Purchase Leger have loaded the VAT invoice in full onto the system when they received it - So we need a method to adjust the invoice so that the amount payable only registers the VAT on the invoice, but without the payment proposal picking up the line amount payable to the Vendor

    Hope that makes sense!

    Many Thanks

  • Community Member Profile Picture
    Community Member on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Thank you Ludwig,

    Our finance guy is looking at your response (as this is his question) as soon as he gets back to me I'll let you know.

    Kind Regards,

    Sofia

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Hi Sofia,

    I am not absolutely sure how all of your vendor/ledger balances have been transferred but here some hints how I might have done this based on the Information you provided. (In my case I assume 19% VAT as it applies in my home country)

    2016_2D00_06_2D00_20-10_5F00_19_5F00_20_2D00_Mappe1-_2D00_-Excel.png

    With the first transaction you migrated your open vendor invoices. I assume that you posted this against a vendor account and AX did the corresponding posting on the Accounts Payable account through the setup of your vendor posting profiles (red color). The offset is a GL transfer account that you also used for transferring other balances to your new system.

    The second transaction is the transfer of the prepayment balance that is also made against the vendor account. In order to let AX post the amount on a different ledger account you have to specify a different "prepayment" vendor posting profile when recording this transaction.

    The third transaction is your payment proposal. As you have the open vendor invoice and the offsetting prepayment posted on the vendor account, both offset each other and the only thing that you need to pay is the tax - in my case 190 EUR.

    In my opinion, the crucial thing is the second transfer step of the prepayment that has been made in your prior system.

    Can you follow this procedure and what I mentioned above? Does it make sense in your case or did I overlook/miss something?

    Would be great hearing back from you.

    Best regards,

    Ludwig

     

  • Community Member Profile Picture
    Community Member on at
    RE: Purchase Ledger Proforma Invoice (prepaid) matching after go-live

    Yes, however we don't pre-pay the VAT just the net amount.

    Thank you!

    Sofia

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