Dynamics 365 Business Central – Take Payment Discount on a Payables Invoice that was posted without payment discount

Introduction

When posting a payables invoice in Dynamics 365 Business Central you can specify payment discount that can be taken if the invoice is paid early. You define this using the option below

Please note this can also be defaulted for you onto the purchase invoice from the payment terms on the vendor.

However what happens if the “Payment Discount %” wasn’t entered onto the invoice when it was posted? How can you take payment discount?

Scenario

Lets say I’ve posted an invoice as per below for £100.00 and I wish to take 5%, or £5.00, as a payment discount. (Therefore I should only pay £95.00 and take the £5.00 as discount). However at the time of posting the invoice I didn’t specify a “Payment Discount %’

First create the payment journal selecting the Vendor as per below and click “Apply Entries”. (no need to enter an amount at this point)

Once in the “Apply Entries” window click into “Remaining Pmt. Disc. Possible” and enter £-5.00. Also click into the “Pmt. Discount Date” and change the date to a date after the date of the payment. In my case I’ll change this to 01/11/2020, as my payment date is 31/10/2020

Now when I click “Process > Set Applies-to ID” although it appears to show the full amount being applied, if you look at the foot of page the Payment discount is showing £5.00 and the Applied Amount shows £-95.00

If I click OK this shows the payment amount of £95.00

After I post the payment and check the ledger entries I can see a payment for £95.00 has cleared the full amount of the invoice

Also, drilling down on the “Remaining Amount” of the Payment you can see the additional “Detailed Ledger Entry” for the discount:

So the key things to note are, when applying the invoice ensure you enter the amount of discount you wish to take in the “Remaining Pmt. Disc. Possible” and also change the “Pmt. Discount Date” so its after the date of the payment.

Thanks for reading!

Dynamics 365 Business Central – Posting a Payment Journal with VAT

I came across a situation where a user needed to post a credit card payment via a payment journal with a VAT element so I thought I’d document on my blog 🙂

In order to do this first create a Payment Journal batch with the relevant balancing account, in my case a credit card, and also select the highlighted VAT options below:

** Please note you may have to go to the General Journal Template for Payments and tick these ON before you can select them for the batch.

With the option “Copy VAT Setup to Jnl. Lines” selected, the VAT posting groups will be copied from the GL code and VAT will be calculated.

With the option “Allow VAT Difference” selected, changes can be made to the calculated VAT amounts.

If you only have one G/L expense code to record VAT its fairly simple. You can pickup the relevant G/L code, which should default the “VAT Bus Posting Group” and “VAT Prod. Posting Group”, and the system will calculate the VAT for you. You can then just leave the “Bal Account No.” as the bank account.

Now when you post the entry you will get VAT entries as well as G/L and Bank Account Ledger Entries:

If you wish to record VAT for more than one G/L code you can list the expense codes and blank off the “Bal. Account No” on each line and then have the final line entry as the balancing credit card bank account as per below. (again the VAT posting groups have defaulted from the G/L code)

Now when you post the batch you’ll get the relevant VAT entries as well as G/L and Bank Account Ledger Entries:

If you have the “VAT Difference” option ticked on the batch you can change the “VAT Amount” at any time if this differs from the actual VAT you need to post.

I hope you find this useful if you ever need to post payments with VAT.

Thanks for reading!

Dynamics GP – How to Unapply a Payables Invoice in HISTORY that’s applied to a OPEN Credit Document

Scenario

I often see this request via support so thought I’d document it on my blog. The question varies however it usually goes something like this:

“I’ve accidentally applied an invoice to a Payment and now I need to unapply this however when I select the Payment in the “Transactions > Purchasing > Apply Payables Document” window the Invoice isn’t available to unapply? How can I unapply the invoice?”

The issue here is the “Apply Payables Document” window only shows OPEN documents and as the invoice has been fully applied its now in HISTORY. Therefore you can’t unapply it via this window.

Please note if both documents were in OPEN you could use the “Transactions > Purchasing > Apply Payables Documents” window to unapply it.

The solution in summary

Unfortunately there’s no easy way to unapply the invoice in this situation.

The fix I often suggest is to apply a dummy transaction to the payment so that it’s also transferred to HISTORY. You can then void the payment, which will unapply the Invoice.

Therefore, in summary, the steps would be:

  1. Post a dummy invoice (or debit note) for the amount remaining on the payment.
  2. Apply the dummy invoice to the payment which will send the payment to HISTORY.
  3. Void the payment via “Transactions > Purchasing > Void Historical Transactions”. This will unapply the Invoice.
  4. Void the dummy invoice via “Transactions > Purchasing > Void Open Transactions”
  5. Post the voided Payment back onto the system.

Detailed solution with an example

I’ve also described the scenario and solution in detail below.

Invoice INV123 has been accidentally applied to Payment 20069 when it should have been applied to Payment 20070. As a consequence Invoice INV123 is in HISTORY but Payment 20069 is still in OPEN meaning the invoice can’t be easily unapplied

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To fix this we first post a dummy invoice for $80.00 (the remaining amount of payment 20069):

Next we apply this to the Payment via “Transactions > Purchasing > Apply Payables Documents”:

Now the Payment and invoices all show in History:

Next we void the payment via “Transactions > Purchasing > Void Historical Transactions”

Invoice INV123 is now showing as unapplied (as is the dummy invoice):

We now void the dummy invoice via “Transactions > Purchasing > Void Open Transactions”

And finally post the payment back onto the system

Once this has been done you can go ahead and apply invoice INV123 to the correct payment.

Conclusion

Although there are many steps to unapply the invoice using this process, it does provide a way of unapplying the invoice.

I hope this helps someone in the future.

Thanks for reading!