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Electronic Banking – Managing Customer Payments and Vendor Remittances in Dynamics AX

September 14th, 2010 Akshay Ramgopal No comments

BACK IN THE DAY…….

I remember the time when I was working in accounting, our team spent significant hours to prepare and get the checks approved for approval and released to various suppliers. It was even more inconvenient when check preparations fell on month end close that our financial accountant needed to spend overtime to get these done. We were using Microsoft Dynamics AX version 3.0 back then but we had not automated our manual process of cutting checks – which just didn't make any sense. As an Accountant, it is not fun of managing vendor payments because the process is straightforward and repetitive – and easily automated with an electronic interface to a bank.

INNOVATING PAYMENTS THRU ELECTRONIC PAYMENT EXCHANGES

Banks have evolved from financial institutions into service bureaus. In the internet age, they redefined the medium of exchange thru electronic payment exchanges to serve their customers faster and introduce their product offerings. They are innovating the service by doing not only the payment exchange service but also helping their customers in recording their payments.

HOW ELECTRONIC PAYMENTS WORK IN DYNAMICS AX

Microsoft Dynamics AX, a robust ERP platform for the midmarket and enterprise customers, added electronic banking management to the bank management module as a solution to managing vendor and customer payments. The concept of electronic banking in Dynamics AX is managing the customer and vendor payments thru payment remittance with the bank. Electronic Banking in Microsoft Dynamics AX supports the import and export of payment files from and to financial institutions in several countries.

Recording Customer Payments

Microsoft Dynamics AX provides the capability to import payments from customers. A remittance file sent by the bank is used to import payments and is ready to apply against outstanding invoices from the customer.

Recording Customer Payments

Paying Vendors Electronically

Microsoft Dynamics AX provides functionality to record payments to vendors by sending payment information electronically to the bank

Paying Vendors Electronically

Bank Reports for Remittances made.

Microsoft Dynamics AX provides summary and detailed level reporting of remittance made electronically

Bank Reports for Remittances

Bank Account Inquiry for Remittance files.

Bank Account Inquiry for Remittance

THE BENEFITS OF USING ELECTRONIC BANKING MANAGEMENT

  1. Improve Efficiency: Eliminate time-consuming manual processes.
    The amount of time to process checks until it is paid to vendor and apply to the outstanding invoices takes time. Dynamics AX supports the export and import formats for handling electronic payments. By handling incoming and outgoing payments electronically, it is easier to manage customer and vendor payments.
a.     Increase Accuracy: Reduce the chance of human error by automation.
When an outside entity is doing payment processing, there’s implied check and balance and guaranty for error fix when banks commit errors.

 

Akshay Ramgopal is an Assistant Manager  in the Microsoft Dynamics AX practice at Ignify. Ignify is a Global Microsoft Dynamics Inner Circle Partner with offices in Los Angeles, Silicon Valley California, Phoenix Arizona specializing in Dynamics AX for Retail, Distribution, Manufacturing, Sea Port and Chemicals verticals. For help on Microsoft Dynamics ERP email us at dynamics@ignify.com