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Improve Cash Flow with Collection Management Functionality in Microsoft Dynamics AX 2012

August 12th, 2012 Partha Chattopadhyay No comments

Managing and collecting for overdue transactions is a very important function in all organizations. Microsoft Dynamics AX 2012 has a new centralized collection management functionality which handles all collection activities of an organization.

To start the collections management feature, you must do the following:

  • Create Customer Pools
  • Create Collection Agents
  • Assigning Collection Agents to Customer Pools
  • Create some aging snapshots and aging periods to be used by the collection agents for reviewing the customer balances based on different criteria

Create Customer Pools

To create a customer pool, go to Accounts receivable > Setup > Collections > Customer
Pools. Click New to create a new record. Type a Pool ID and Description. Select a Pool type.
Click Select pool criteria to open the query form and select the query criteria, and then click OK.

Click Preview customer pool to preview the customers in the pool.

Customer pool created in Account Receivable setup

Fig 1: Customer pool created in Account Receivable setup

Creating and Assigning Collection Agents

You need to use a collections agent form to set up employees and contractors as collections agents, and optionally assign customer pools to them.

A collections agent is a person who works with customers to make sure that payments are collected in a timely manner. In Microsoft Dynamics AX, collections agents are employees and contractors that have a user relationship with a Microsoft Dynamics AX user (they must also belong to a collections team in the Human Resources module).

You can then assign a customer pool to a collection agent. Customer pools are used to filter the customers who each collection agent is responsible for. If you do not assign any customer pools to a collections agent, the collections agent has access to all customer information on the collections list pages.

To create a collection agent, you need to go to Accounts receivable > Setup > Collections > Collections agents. Use Add team members to create a new collection agent.

On the right pane of the form, you can select the Allow agent to view all customer pools check box.
Use the Add button to create a list of customer pools that the selected agent is responsible for.

Customer pool assigned to the created collection agent in the Account Receivable set up

Fig 2: Customer pool assigned to the created collection agent in the Account Receivable set up

Aging Period Definitions

You can then use the Aging period definitions form to analyze the maturity of customer accounts and vendor accounts, based on a date that you enter.

The date entered, together with the Unit and Interval information that you enter on the Periods tab in this form, is used to calculate a date interval for each Aging period (column header) in the Aging period definition form.

Each aging period that you set up for the aging period definition corresponds to a column on the list page or in the form or report when the analysis is performed. The aging periods are shown on the list page or in the form or report in the order in which you set them up in this form. You must use aging period definitions to create customer aging snapshots.

The aging snapshots are used to display information in the Collections form and in related list pages.

Aging period definitions in the Account Receivable setup

Fig 3: Aging period definitions in the Account Receivable setup

Aging Snapshots

An aging snapshot form contains the calculated aged balances for a group of customers at one point in time.

To open the aging snapshot form, click Accounts receivable > Periodic > Collections > Customer aging snapshot.

Aging snapshots provide quick access to aging information for collections personnel by using the Collections form and related list pages.

For each customer, an aging snapshot contains the following elements:

  • An aging snapshot header
  • One or more company aging snapshot headers
  • Detail records for each aging period in the aging period definition

The calculations for the company aging snapshot headers include all customer transactions for the companies that are selected. The calculation for the aging snapshot detail records contains only transactions with dates that are in the aging period.

View and Manage Collections

In Microsoft Dynamics AX, most collections functionality is centralized in the Collections form and on the following related list pages:

  • Collections
  • Collection cases
  • Collection activities

The Collections form can be used to perform many tasks, for example:

  • Create and track New Action, Task, Appointment and Event
  • Create cases and group transactions and activities
  • Mark different Collection status
  • Write off transactions
  • Process Non-Sufficient Funds (NSF)
  • Send email messages
  • Send an Email Message that has Selected Transactions
  • Send an Email Message that has an Attached Statement
  • View customer transactions
  • View customer balances
  • Calculate Interest
  • Print relevant customer documents
  • Drill down into details for Transactions, Cases, Activities

Please keep reading below to learn more about the different functions of Collection Management functionality in Microsoft Dynamics AX 2012.

Create and track New Action, Task, Appointment and Event

You can manage and organize collections information for a customer in the Collections form

To create a new activity, Click Accounts receivable > Common > Collections > Collections and double-click a customer.

Customer account opened in Collection form

Fig 4: Customer account opened in Collection form

To create an action, click Action (an action is a unit of work that is completed).

Create an Action

Fig 5: Create an Action

Select action type from the dropdown. Enter Purpose and Notes and click create action button to create an action.

Entering Action Type, Purpose & Notes

Fig 6: Entering Action Type, Purpose & Notes

You can view the activity by clicking Activities.

View created activity

Fig 7: View created activity

View created activity in detail

Fig 8: View created activity in detail

To create a task, click Task (a task is a unit of work that is to be done in the future).

Create a Task

Fig 9: Create a Task

Select task type from the dropdown. Enter Purpose and Notes and click create action button to create a task.

Entering Task Type, Purpose & Notes

Fig 10: Entering Task Type, Purpose & Notes

You can view the task by clicking Activities

View created task

Fig 11: View created task

View created task in detail

Fig 12: View created task in detail

To create an appointment, click Appointment (an appointment is a scheduled meeting).

Create an Appointment

Fig 13: Create an Appointment

Select an appointment type from the dropdown. Enter Purpose and Notes and click create action button to create an appointment.

Entering Appointment Type, Purpose & Notes

Fig 14: Entering Appointment Type, Purpose & Notes

You can view the Appointment by clicking Activities

View the created appointment

Fig 15: View the created appointment

View the created appointment in detail

Fig 16: View the created appointment in detail

To create an event, click Event (an event is something that has already occurred).

Create an Event

Fig 17: Create an Event

Select an event type from the dropdown. Enter Purpose and Notes and click create action button to create an event.

Entering Event Type, Purpose & Notes

Fig 18: Entering Event Type, Purpose & Notes

You can view the Event by clicking Activities.

View the created Event

Fig 19: View the created Event

View the created event in detail

Fig 20: View the created event in detail

You can view the activities from Accounts receivable > Common > Collections > Collections activities

View created activities in Collection activities details page

Fig 21: View created activities in Collection activities details page

Create cases and group transactions and activities

You can use cases to organize collection activities and transactions. For example, if you have to collect for three transactions, you can add them to a case, and then manage activities that are related to your collections and work on those three transactions together.

When transactions or activities are grouped into a case, use the Case ID filter on the top pane to filter the list to only transactions and activities for a specified case. In addition, you can use the Collections cases list page to view a list of all cases. Drill down into the details by double-clicking a case in the list page.

To add transactions or activities to a case, Click Accounts receivable > Collections > Collections, Double-click to open the required customer.

To add transactions to a case, select the check box next to the transaction on the top pane, and then click Assign to case.

Multiple transactions assigned to a case

Fig 22: Multiple transactions assigned to a case

Select a New case, or select Existing case from radio button options and then select a case ID. In this scenario, we will use New case.

Selection of case type; New case or Existing case

Fig 23: Selection of case type; New case or Existing case

Enter a Case Description and select a case Category from dropdown. A Case ID will be assigned automatically.

Click Assign to case.

Entering a case description and case category of the case

Fig 24: Entering a case description and case category of the case

To add activities to a case, select the check box next to the Activity on the bottom pane, and then click Assign to case.

Assigning activities to a case

Fig 25: Assigning activities to a case

Select the Existing case ID from the drop down in which activities are to be assigned. You can create a new case as well.

Assigning cases to selected activities: Existing case or New case

Fig 26: Assigning cases to selected activities: Existing case or New case

You can view all the activities attached to a case by clicking “Case”

View all activities assigned to a case

Fig 27: View all activities assigned to a case

You can see the details of the activities assigned to a case well.

View all activities assigned to a case in detail

Fig 28: View all activities assigned to a case in detail

You can mark any activity and click “Remove from case” to remove it from the case

Removing activities from a case

Fig 29: Removing activities from a case

Select the case ID from the dropdown to see the case and the related activities.

Filter Open transaction with a created Case ID and check the related  transactions & activities

Fig 30: Filter Open transaction with a created Case ID and check the related transactions & activities

You can view the activities from Accounts receivable > Common > Collections > Collections cases.

View created cases in the Collection Cases details page

Fig 31: View created cases in the Collection Cases details page

Mark different Collection status

You can mark collection status of different transactions. The default collection status is “Not Disputed”. You can change any status from the dropdown. The available are as below:

  • Not disputed
  • Disputed
  • Proposed to Pay
  • Resolved

You can select the status from the dropdown, select a Reason code, and then Click “Change status” to set the collection status of a transaction. Check or uncheck the “Create action” checkbox as per the requirement of the action creation.

Different statuses are available to be marked

Fig 32: Different statuses are available to be marked

Select the required status from the dropdown. Select the reason code and create an action check box (optional)

Selection of collection status, and Reason Code

Fig 33: Selection of collection status, and Reason Code

The selected status can be seen in the Collection form, open transactions, and the Collection status field.

Collection status of different transactions

Fig 34: Collection status of different transactions

Write off transactions

You can write-off one or more transactions by selecting them and clicking Write off.

Selection of Write-off to write off a transaction

Fig 35: Selection of Write-off to write off a transaction

On the open form, select the Write-off date; the Reason code will be WRITE OFF by default. Click OK to write-off.

Selection of Write-off date

Fig 36: Selection of Write-off date

An Infolog form will open and display the General journal number that was created by the process.

An Infolog form will open and display the General journal number that was  created by the process

Fig 37: An Infolog form will open and display the General journal number that was created by the process

Click Close to exit the Infolog form. Close the Collections form. Go to General ledger > Journals > General journal, and select the journal created by the process.

Write-off Journal header created automatically by write-off process

Fig 38: Write-off Journal header created automatically by write-off process

Go to lines to check the write-off transactions.

Write-off Journal lines created automatically by write-off process

Fig 39: Write-off Journal lines created automatically by write-off process

After you check the write-off transactions, click Post > Post the general journal.

Infolog showing General journal is posted

Fig 40: Infolog showing General journal is posted

After the write-off transaction is posted, you can check the transaction. The transaction is not available in open transaction form.

The Write-off journal disappears from Open transactions of Collection form

Fig 41: The Write-off journal disappears from Open transactions of Collection form

You can check the transaction in Transaction > Closed Transaction editing.

The Write-off transactions in closed transactions

Fig 42: The Write-off transactions in closed transactions

Process Non-Sufficient Funds (NSF)

You can also process non-sufficient funds (NSF) in the Collection form. To process a non-sufficient fund transaction, Go to Accounts receivable > Common > Collections > Collections, and Double-click a customer account.

On the Open transactions or All transactions tab, select a payment transaction (which is a Not Sufficient fund transaction), and then click NSF payment. The payment is cancelled.

If an NSF fee applies for the customer, a charges transaction is created in a payment journal. The fee amount is based on the settings for the automatic charges.

Mark transaction and make it a Non-Sufficient Fund  transaction

Fig 43: Mark transaction and make it a Non-Sufficient Fund transaction

You can check the NSF transaction on Customer transaction form from the Collection page.

The Non-Sufficient Fund (NSF) transaction is cancelled

Fig 44: The Non-Sufficient Fund (NSF) transaction is cancelled

Non-Sufficient Fund transaction showing reason as  Non-sufficient funds

Fig 45: Non-Sufficient Fund transaction showing reason as Non-sufficient funds

Send email messages

From the Collections form, you can send an email message through Office Outlook. You can also automatically attach information about selected transactions or customer statements as a Microsoft Office Excel attachment.

Click Accounts receivable > Collections > Collections, and double-click a customer. To send an email message to the contact for the customer, click the icon next to the E-mail field in the Contact fact box. If no icon appears, the contact record does not have an email address.

Click the icon next to the E-mail field in the Contact fact box

Fig 46: Click the icon next to the E-mail field in the Contact fact box

Note: To send an email message to the salesperson for the sales group that is associated with the customer, click the icon next to the Salesperson field. If no icon appears, the salesperson's contact record does not have an email address.

In this scenario, we will send an e-mail to Contacts. To send an email message to the contact for the customer, click the icon next to the E-mail field in the Contact fact box. A new email message is created in Office Outlook with the Customer contact as the recipient.

A new email message is created in Office Outlook with Customer contact as  recipient

Fig 47: A new email message is created in Office Outlook with Customer contact as recipient.

Compose the message, and then click Send.

 Compose the message, and then click send to send the e-mail

Fig 48: Compose the message, and then click send to send the e-mail

Send an Email Message that has Selected Transactions

To send an email with an attachment including selected transactions to a customer contact or salesperson, Click Accounts receivable > Collections > Collections, and double-click a customer.

Select one or more transactions by selecting the check box to the left of each desired gridline. On the Action Pane, click the Communicate tab.

To send an email message to the contact for the customer, click Transactions to contact.

To send an email message to the salesperson that is associated with the sales group for the customer, click Transactions to salesperson.

To select one or more transactions, click Transactions to contact on the Communicate  tab

Fig 49: To select one or more transactions, click Transactions to contact on the Communicate tab

A new email message is created in Office Outlook with Customer contact as the recipient. Information about the transactions is included in an attachment in Office Excel format. After you compose the message, then click Send.

A new email message is created in Office Outlook.  Information about the transactions is included in an attachment in Office Excel  format

Fig 50: A new email message is created in Office Outlook. Information about the transactions is included in an attachment in Office Excel format.

Send an Email Message that has an Attached Statement

To send an account statement to a customer contact or salesperson, Click Accounts receivable > Collections > Collections, and double-click a customer. On the Action Pane, click the Communicate tab. Click Statements to contact.

Click Statements to contact on Communicate tab to send  statement to contacts

Fig 51: Click Statements to contact on Communicate tab to send statement to contacts

Select criteria and type the Aging date for the range of transactions to include on the statement.

Optionally, select the Include settled transactions check box to include both open and settled transactions, and then enter a starting date for the settled transactions. Click OK. A new email message is created in Office Outlook.

Select criteria and type the Aging date for the range of  transactions to include on the statement

Fig 52: Select criteria and type the Aging date for the range of transactions to include on the statement.

Information about the transactions is included in an attachment in Office Excel format. The statement includes transactions for the same set of companies that are displayed in the Collections form. The statement address is used, if one is specified for the customer. After you compose the message, then click Send.

A new email message is created in Office Outlook.  Statement of transactions is included in an attachment in Office Excel format

Fig 53: A new email message is created in Office Outlook. Statement of transactions is included in an attachment in Office Excel format.

View customer transactions

Click Accounts receivable > Collections > Collections. Double-click to open a customer.

You will find an Open transaction of the customer with information of the Date, Amount and Collection status, and other relevant information.

Customer transactions as viewed in the Collection form

Fig 54: Customer transactions as viewed in the Collection form

View customer balances

You can check the Balance of the Customer in the fact box by selecting the Customer. The following information is available:

  • Credit limit (in default currency)
  • Amount due balance
  • Packing slip subtotal amount
  • Open order subtotal amount
  • Credit available

Collection form fact box showing Different Customer  Balances. Credit limit and Available credit can be viewed

Fig 55: Collection form fact box showing Different Customer Balances. Credit limit and Available credit can be viewed.

Calculate Interest

You can calculate interest amount for the Customer by select a Customer and clicking Calculate interest.

Calculate interest for a Customer in the Collection form

Fig 56: Calculate interest for a Customer in the Collection form

Select the relevant parameters and click OK.

Select the relevant parameters and click OK to calculate interest

Fig 57: Select the relevant parameters and click OK to calculate interest

To check the interest, click Interest Journal.

Check Interest journal for total interest and interest  transactions

Fig 58: Check Interest journal for total interest and interest transactions

You can check the Total interest in the overview tab Total field.

Check Total Interest calculated for the Customer

Fig 59: Check Total Interest calculated for the Customer

Details of the interest can be seen in the Lines tab.

Check details of Interest calculated for the Customer in  line tab

Fig 60: Check details of Interest calculated for the Customer in line tab

Print relevant customer documents

You can create different Customer Documents from Collection form > Communicate. The Documents include:

  • Statements
  • New Collection letter
  • Print/Post letters
  • Print/Post Interest notes

You can click the option fill relevant information and Click OK to print the Documents

Options to print Customer documents e.g. Statements, New  collection letter, Print/Post letters, Print/Post Notes

Fig 61: Options to print Customer documents e.g. Statements, New collection letter, Print/Post letters, Print/Post Notes.

Go to Collections form > Communicate and click Statement. Enter the details for Statement printing.

Selection for Customer Statement printing

Fig 62: Selection for Customer Statement printing

The Statement will be printed as below.

Customer statement printed from the  Collection form

 Fig 63:  Customer statement printed from the Collection form

To create a Collection letter, click Create Collection letter.

Selection for creating a collection letter

Fig 64: Selection for creating a collection letter

To view the Collection letter overview, click Print > Collection letter overview.

Print the Collection letter overview

Fig 65: Print the Collection letter overview

Select the Collection letter overview parameters and click OK.

Collection letter overview print parameters

Fig 66: Collection letter overview print parameters

The Collection letter overview will be printed as below.

Collection letter overview print

Fig 67: Collection letter overview print

To view the Collection letter notes click Print > Collection letter notes.

Print Collection letter notes

Fig 68: Print Collection letter notes

Select the Collection letter note print parameters and click OK.

Collection letter note print parameters

Fig 69: Collection letter note print parameters

Collection letter notes will be printed as below.

Collection letter note print

Fig 70: Collection letter note print

Drill down into details for Transactions, Cases, and Activities

You can see the details of transaction cases and activities. To check the transaction, click Accounts receivable > Collections > Collections, and double-click to open the required customer. Click Transaction to check the transactions.

Checking Customer transactions

Fig 71: Checking Customer transactions

Click Transaction to check the transactions.

Checking Customer transaction details

Fig 72: Checking Customer transaction details

To check the activities, click Accounts receivable > Collections > Collections, and double-click to open the required customer. Click Activities to check the Activities

Checking Customer  Activities

Fig 73: Checking Customer Activities

Filter the transactions with a Case ID and click Activities to view the related activities.

Checking Customer Activity Details

Fig 74: Checking Customer Activity Details

To check the Cases, click Accounts receivable > Collections > Collections, and double-click to open the required customer. Click Cases to check the cases.

Checking Customer Cases

Fig 75: Checking Customer Cases

Click Cases to view the cases and the activities related to them.

Checking Customer Cases Details

Fig 76: Checking Customer Cases Details

Conclusion

The new Microsoft Dynamics AX 2012 centralized Collection Management functionality is able to handle all collection activities of an organization efficiently. It helps to organize, track, and take appropriate actions on collections, such as send email reminders of payments with attached statements. The Collection Management functionality also has the ability to handle non-sufficient funds and write-offs. With cash flow being such a critical factor in any business, collections management in Microsoft Dynamics AX 2012 helps consolidate your collection process and control your accounts receivable. If you have any questions about collections management in Dynamics AX 2012, email us at dynamics@ignify.com.

Partha Chattopadhyay is a Manager in the Microsoft Dynamics AX practice at Ignify. Ignify is a leading provider of Microsoft Dynamics ERP solutions to mid-market and Enterprise businesses. Ignify has been ranked as Microsoft Partner of the Year Winner in 2012, 2011 and 2010, and in the Microsoft Dynamics Inner Circle, Microsoft Dynamics Presidents Club in 2009. Ignify has offices and team members in Southern California, Northern California, Arizona, Tennessee, Illinois, Washington, Canada, Singapore, Malaysia, India, Philippines, and Jakarta.