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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Petty cash payments no...
Finance | Project Operations, Human Resources, ...
Suggested Answer

Petty cash payments not getting settled via vendor payment journal

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Posted on by M Saravanan 244
Dear Members,
 
It would be a great help if you can throw some clarifications and solution to the problem referred below.
 
I am making a petty cash payment entry in general journal and vendor payment journal with the terms of payment as "Petty Cash". It makes me weird, that the entry posted via general journal is getting auto settled where as the entry posted via the vendor payment journal is not getting auto settled. In the terms of payment also, the account to be settled is given by default. I had made multiple entries of the same kind to ensure it if I am missing something, but it still remains the same..! 
 
I am not able to figure it out why this happens..? Is there anything that I am missing, which prevents me from auto settling the amount when posted from vendor payment journal?
 
Please do help me out by guiding or provide the solution to me how to resolve the issue which I am facing right now ?
 
 
 
Thanks,
M Saravanan
Categories:
Dynamics 365 Finance
I have the same question (0)
  • Suggested answer
    Saif Ali Sabri Profile Picture
    Saif Ali Sabri 2,351 Super User 2025 Season 2 on at

    Root Cause:

    1. Settlement Behavior Differences:

      • In the General Journal, auto-settlement works seamlessly for transactions because the system typically recognizes the customer/vendor account and matches the transaction with open balances based on the settlement settings in Accounts Payable parameters or Accounts Receivable parameters.
      • In the Vendor Payment Journal, the system expects specific configurations or explicit linking of the payment to the invoice to settle the transactions. Without these configurations, it doesn't perform auto-settlement.

    2. Terms of Payment Setup:

      • While the Terms of Payment may dictate default settlement rules (e.g., account to settle against), this does not necessarily guarantee that the system will apply those terms in the Vendor Payment Journal without additional setup or intervention.

    3. Auto Settlement Configuration:

      • Auto settlement is driven by settings in Accounts Payable parameters. If these are not enabled or if certain conditions are not met (e.g., missing links between the payment and the open transaction), auto settlement does not occur.

    4. Manual Matching:

      • The Vendor Payment Journal often requires manual intervention to link payments to specific invoices unless automation is explicitly configured.

    Solutions:

    1. Enable Auto Settlement in Accounts Payable Parameters:

    • Go to Accounts Payable > Setup > Accounts Payable Parameters.
    • Under the Settlement tab, ensure the Automatic settlement option is turned on.
    • This setting allows the system to automatically match and settle payments to open invoices wherever possible.

    2. Review Terms of Payment:

    • Ensure that the Terms of Payment you are using for these transactions are correctly set up and that the default account and payment conditions align with the petty cash process.
    • Go to Accounts Payable > Payment Setup > Terms of Payment and verify the setup.

    3. Use Settlement Functionality in Vendor Payment Journal:

    • When posting a payment via the Vendor Payment Journal, explicitly link the payment to the relevant open transactions using the Settle transactions feature:

      1. Open the Vendor Payment Journal and enter the payment line.
      2. Before posting, click Settle transactions from the journal line.
      3. Manually select the open invoice to settle against the payment.
      4. Post the journal.

    • This ensures the payment is directly settled with the intended transaction.

    4. Check Petty Cash Setup:

    • Confirm that the Petty Cash account is set up as a vendor account (if you are treating petty cash as a vendor). If it's not treated as a vendor account, the Vendor Payment Journal won't trigger settlement in the same way as the General Journal.

    5. Testing and Verification:

    • To verify if the settlement works as intended:
      • Post a petty cash transaction in the General Journal and confirm auto-settlement.
      • Post the same in the Vendor Payment Journal, using the Settle transactions option.
      • Check the Vendor Transactions page to ensure the settlement has been recorded.

    6. Use Custom Workflows or Automations:

    • If your business process involves frequent petty cash payments and the manual linking in the Vendor Payment Journal is cumbersome, consider implementing a custom workflow or automation to settle such transactions automatically.

    Final Thoughts:

    The discrepancy between the General Journal and Vendor Payment Journal in your case arises because the General Journal follows simpler logic for settlement compared to the Vendor Payment Journal, which requires explicit linking or configuration. By enabling auto settlement, reviewing your terms of payment, and using the Settle transactions feature in the Vendor Payment Journal,

  • M Saravanan Profile Picture
    M Saravanan 244 on at
    Dear Saif Ali Sabri,
     
    Thanks a bunch for your response. I tried all the ways you have mentioned in the reply, but nothing worked out. All my setups are correctly done. I shall attach a screenshot from the transaction screen of the vendor, which will help you out to have a clear insight on the issue which I am mentioning about.
    The Transaction history marked in green color is done via general journal and the one marked in red is done using vendor payment journal. As you can see, the transaction done using the general journal get's knocked off, where as the transaction done using the vendor payment journal has the balance. Both have the same offset account and the terms of payment as "petty cash".
     
    Please let me know if there are any other ways to meet my requirement and solve the issue.
     
     
    Thanks in advance,
    M Saravanan
  • Suggested answer
    Saif Ali Sabri Profile Picture
    Saif Ali Sabri 2,351 Super User 2025 Season 2 on at

    1. Verify the Settlement Priority in Accounts Payable Parameters

    • Go to Accounts Payable > Setup > Accounts Payable Parameters.
    • Under the Settlement tab, check if there are specific rules affecting how transactions are settled.
    • Try setting the Settlement priority to ensure vendor payments apply to open invoices first.

    2. Check the Vendor Transactions for Unlinked Payments

    • Navigate to Accounts Payable > Vendors > All Vendors and open the vendor’s transaction history.
    • Look for unapplied or partially settled transactions.
    • If the vendor payment is not applied, manually settle it via Settle transactions under the Vendor record.

    3. Ensure the Correct Posting Profile is Used

    • Go to Accounts Payable > Setup > Vendor Posting Profiles.
    • Verify that the Petty Cash vendor account is correctly mapped to the required ledger accounts.

    4. Review Journal Name Setup

    • Go to General Ledger > Journal Setup > Journal Names.
    • Check the vendor payment journal setup and ensure "Settlement" is enabled.

    5. Use the "Settle Open Transactions" Function Manually

    • Open Accounts Payable > Vendors > Select Vendor > Transactions.
    • Click Settle open transactions and manually apply the petty cash payment to the invoice.
    • If the invoice doesn’t appear, check if the amounts and currencies match exactly.

    6. Run a Database Consistency Check (Technical Step)

    • If the issue persists, ask your system administrator to run a database consistency check from System Administration > Periodic Tasks > Database Consistency Check for vendor transactions.

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