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This article describes how to use the deduction workbench to process customer payments that include deductions.
A customer who is owed a rebate can decide not to wait for a rebate payout. Instead, the customer can send a payment that includes a deduction for the amount of the rebate. To handle this type of transaction, you can use the deduction workbench to match deductions to open credit transactions, split deductions, deny deductions, and write off deductions.
Note
The deduction workbench has been part of the sales and marketing functionality in Microsoft Dynamics 365 Supply Chain Management for a long time. However, it has now been enhanced so that it also works with the newer Rebate management module. This article describes how to use both older features and Rebate management features of the deduction workbench.
You can use the deduction workbench together with the old deduction management capabilities of Supply Chain Management, even if you aren't using the Rebate management module. However, you must first prepare your system as described in this section.
Before you can use the deduction workbench, you must complete the setup tasks that are described in Set up deduction management. You should also have some type of rebate agreement set up for the customer: either a customer rebate, as described in Setting up and maintaining customer rebates, or a trade allowance rebate.
If you're applying a deduction to a customer rebate, you must complete these tasks:
If you're applying a deduction to a trade allowance rebate, you must complete these tasks:
The system records all deduction events in a claim journal. Therefore, your system must include a journal that can be used for this purpose. If you don't already have a claim journal, set it up now. This journal is required to create deductions directly on the deduction workbench, customer settlement, or customer page.
To set up a new claim journal for deductions, follow these steps.
Go to General ledger > Journal setup > Journal names.
Select New, and set the following fields for the new journal name:
Go to Accounts receivable > Setup > Accounts receivable parameters.
On the Deductions tab, on the General FastTab, set the Claim journal name field to the journal name that you just created.
On the Return order FastTab, set the following fields:
Create return order – Set this option to specify what the system should do when a quantity-based claim is approved:
Creation without attached invoice – Select a value to specify what the system should do when a quantity-based claim is approved but no invoice is attached:
Create return order prior to deduction approval – Set this option to Yes if return orders can be created before the claim is approved. This setting applies only to quantity-based claims where the Create return order option is set to Yes.
When the system creates a claim journal for a new deduction, it also creates two new customer transactions: one to offset the amount of the claim against the original invoice and one to register a customer's debt to the amount of the claim (because the claim hasn't yet been approved). Therefore, you must set up your system so that a single voucher can have multiple customer lines.
To enable a single voucher to have multiple customer lines, follow these steps.
The system requires that users specify a reason for each deduction that they enter directly on the deduction workbench, customer settlement, or customer page. The reason determines how the deduction is handled when it's approved.
Go to Sales and marketing > Trade allowances > Deductions > Deduction reasons.
Select New to add a row to the grid, and then set the following fields for it:
Claim reason – Enter a unique name for the reason.
Description – Enter a description of the reason to provide more information about how it should be used.
Claim basis – Select a claim basis for the claim reason:
Return reason code – Select a return reason code to apply as the Return reason code value for the return order.
Type – Select a deduction type. The Deduction offset value for the selected type will be used to set the Deduction offset field when a deduction or claim is created. Deduction types are defined on the Deduction types page (Sales and marketing > Trade allowances > Deductions > Deduction types).
Claim posting account – This field is available only when the Claim basis field is set to Price based. When a price-based claim is approved, the system assigns the ledger account that you select here as the Main account value for the draft free text credit note.
For deductions that are created by using the New deduction command on the deduction workbench, customer settlement, or customer page, you can set up the Settle approved deductions periodic task to automatically match deductions and credits that have matching Deduction ID values and amounts.
To schedule this task, go to Sales marketing > Periodic tasks > Settle approved deductions, and set up options, filters, and a schedule, just as for other types of periodic tasks.
Note
If the Automatic settlement option is set to Yes on the Settlement tab of the Accounts receivable parameters page (Account receivable > Setup > Accounts receivable parameters), the Settle approved deductions periodic task won't do anything, because the credit will automatically be settled.
To create a deduction journal entry, follow these steps.
The create a new deduction on the deduction workbench, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
On the Action Pane, select Maintain > New deduction.
In the New deduction dialog box, the Deduction ID field is set based on the Deduction ID number sequence that is defined on the Trade allowance management parameters page (Sales and marketing > Setup > Trade allowances > Trade allowance management parameters).
Set the following fields:
Customer account – Select the customer account that the deduction applies to.
External claim number – Enter the customer's claim reference.
Claim amount – Enter the tax-inclusive claim amount. The value must be positive.
Currency – Select the currency for the deduction. The default value is the currency that is set for the selected customer account.
Claim basis – Select the claim basis. The claim basis determines the type of credit transaction that is created after the deduction or claim is approved.
Claim date – Select the date of the claim. The default value is the current date.
Claim reason – Select the reason code that applies to the current deduction. The claim basis that you selected affects the options that apply. For more information about how to create and configure the claim reasons that are available for selection here, see the Create deduction reasons section earlier in this article.
Notes – Add any notes that apply. When the claim is approved, the approver will be able to edit or add to the claim's notes.
Create claim journal – Set this option to specify whether the claim journal should be created when the claim or deduction is created:
Select OK.
A new deduction is created. If you set the Create claim journal option to Yes, the following transactions are posted:
The process of creating a deduction from a customer settlement resembles the process of creating a deduction via the deduction workbench. However, the customer and invoice currency are automatically set, and the invoice is attached. You don't have to select Maintain > Attach invoice on the Action Pane when you create a claim or deduction via the customer settlement page.
Go to Accounts receivable > Customers > All customers.
Select the customer to create a deduction for.
On the Action Pane, on the Collect tab, in the Settle group, select Settle transactions.
In the Setting transactions dialog box, on the Overview tab, select the invoice to create the deduction against.
On the toolbar, select Deductions > New deduction.
In the New deduction dialog box, the Deduction ID field is set based on the Deduction ID number sequence that is defined on the Trade allowance management parameters page (Sales and marketing > Setup > Trade allowances > Trade allowance management parameters). The Customer account field is set to the customer account that the deduction applies to.
Set the following fields:
External claim number – Enter the customer's claim reference.
Claim amount – Enter the tax-inclusive claim amount. The value must be positive.
Currency – Select the currency for the deduction. The default value is the currency that is set for the selected customer account.
Claim basis – Select the claim basis. The claim basis determines the type of credit transaction that is created after the deduction or claim is approved.
Claim date – Select the date of the claim. The default value is the current date.
Claim reason – Select the reason code that applies to the current deduction. The claim basis that you selected affects the options that apply. For more information about how to create and configure the claim reasons that are available for selection here, see the Create deduction reasons section earlier in this article.
Notes – Add any notes that apply. When the claim is approved, the approver will be able to edit or add to the claim's notes.
Create claim journal – Set this option to specify whether the claim journal should be created when the claim or deduction is created:
Select OK.
A new deduction is created. If you set the Create claim journal option to Yes, the following transactions are posted:
You're returned to the Settle transactions page, which now shows the selected invoice as marked. The Post button is available only if you set the Create claim journal option to Yes. If it's available, select Post to reduce the balance on the invoice by the Claim amount value.
The process of creating a deduction from a customer page resembles the process of creating a deduction via the deduction workbench. However, the customer is automatically set.
Go to Accounts receivable > Customers > All customers.
Select the customer to create a deduction for.
On the Action Pane, on the Collect tab, in the Deductions group, select Create deductions.
In the New deduction dialog box, the Deduction ID field is set based on the Deduction ID number sequence that is defined on the Trade allowance management parameters page (Sales and marketing > Setup > Trade allowances > Trade allowance management parameters). The Customer account field is set to the customer account that the deduction applies to.
Set the following fields:
External claim number – Enter the customer's claim reference.
Claim amount – Enter the tax-inclusive claim amount. The value must be positive.
Currency – Select the currency for the deduction. The default value is the currency that is set for the selected customer account.
Claim basis – Select the claim basis. The claim basis determines the type of credit transaction that is created after the deduction or claim is approved.
Claim date – Select the date of the claim. The default value is the current date.
Claim reason – Select the reason code that applies to the current deduction. The claim basis that you selected affects the options that apply. For more information about how to create and configure the claim reasons that are available for selection here, see the Create deduction reasons section earlier in this article.
Notes – Add any notes that apply. When the claim is approved, the approver will be able to edit or add to the claim's notes.
Create claim journal – Set this option to specify whether the claim journal should be created when the claim or deduction is created:
Select OK.
A new deduction is created. If you set the Create claim journal option to Yes, the following transactions are posted:
After an approved rebate exists for a customer, you can create a credit note on the customer's account to represent the rebate, as required. The credit then appears on the deduction workbench, where it can be matched to a deduction.
To create a credit note, follow these steps.
On the deduction workbench, you can match deductions to open credit transactions, split deductions, deny deductions, and write off deductions.
Depending on how you want to process a deduction, complete one or more of the procedures in the following subsections. You can combine the procedures as required. For example, you can split a deduction into two parts, and then match one part to a credit but leave the remaining part on the workbench so that it be matched to another credit later. You can also match a deduction to a credit that is smaller than the deduction amount, and then deny or write off the remaining balance of the deduction.
To match a deduction to a credit, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox for the deduction to process.
In the Open transactions section, select the Mark checkbox for the credit to match to the deduction. If multiple credits are listed, you can select more than one credit to match to the deduction. If you want the system to automatically select credits that match the amount of the deduction, on the toolbar, select an appropriate option on Select deduction amount menu.
On the Action Pane, select Maintain > Match. The system matches the deduction to the credit. If a balance remains in the deduction, it's shown in the Remaining amount field on the Deductions tab.
Note
For deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page, the Maintain > Match command is available only if the Claim status field is set to Accepted. This command can be used to manually match the price-based or quantity-based transaction to the associated credit in the Open transactions section. This credit is created either when the deduction is approved (by using the Maintain > Approve deduction command), or when it's attached to an existing credit as described in the Credits created outside the approve deduction process section later in this article. The Settle approved deductions periodic task (Sales marketing > Periodic tasks > Settle approved deductions) can also be used to automatically match deductions and credits that have matching Deduction ID values and amounts.
To split a deduction, follow these steps.
You can attach an invoice to a deduction if the deduction was created by using the New deduction command on the deduction workbench, customer settlement, or customer page, and if no invoice is currently attached to it (that is, the Invoice column is blank).
To attach an invoice to a deduction, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox for the deduction to process.
On the Action Pane, select Maintain > Attach invoice.
In the Attach invoice dialog box, select an invoice, and then select OK.
In the Settle transactions dialog box, follow one of these steps, depending on whether a claim journal was posted when the deduction was created:
You can detach an invoice from a deduction if the deduction was created by using the New deduction command on the deduction workbench, customer settlement, or customer page, if an invoice is currently attached to it (that is, the Invoice column shows an invoice number), and if the Claim status field is set to Open. You might complete this task because an incorrect invoice was attached. The invoice is removed from the deduction, and its remaining balance is updated if it was reduced when the invoice was attached.
To detach an invoice, follow these steps.
You can approve deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page. However, you can approve only deductions where the Claim status field is set to Open.
To approve a deduction, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox for the deduction to process.
On the Action Pane, select Maintain > Approve deduction.
In the Approve deduction dialog box, edit or add information to the Note value as required.
If the deduction is price-based, and an invoice hasn't been attached to it, select an item sales tax group. Typically, the tax item group is set on the invoice. Therefore, the tax item code must be specified when it isn't attached to an invoice.
Select OK.
At this point, no further changes can be made to the deduction. If the Create claim journal option was set to No when the deduction was created, the claim journal is created and posted when the deduction is approved. After the deduction is approved, the credit is automatically created and opened. The type depends on the deduction's Claim basis value:
Price based – If the deduction is price-based, a free text invoice is created for the customer account. You can add a description and post the credit. The following fields are filled in by the deduction when the draft is created:
Quantity based – If the deduction is quantity-based, an open sales order or return order is created. The Create return order setting on the Accounts receivable parameters page determines whether a sales order or a return order is created when the deduction is approved. The Copy orders page appears and is filtered to show rows where the Invoice account field is set to the deduction's customer account. Follow these steps:
On the Invoices FastTab, the Headers section shows sales invoices where the Invoice account value matches the deduction's customer account. Select an applicable sales invoice.
The Lines section shows lines from the selected sales invoice. Select the Select checkbox for each line that you want to copy. Alternatively, in the Headers section, select the Select all checkbox for the sales order to select all its lines.
Adjust the Quantity value for one or more lines as required.
All the lines that you've selected so far are listed on the Selected lines or header to be copied FastTab.
Repeat the previous two steps as required until all the required lines are listed on the Selected lines or header to be copied FastTab.
Select OK.
The new return order is opened, and the following fields are automatically set:
After the credit is invoiced, it appears in the Open transactions section of the deduction workbench against the applicable Deduction ID value, and its Claim type field is set to Other credits. The credit will be available until it's settled with the deduction in one of the following ways:
To view the credit that is created when the deduction is approved, you can also use the Open credit button in the Open transactions section of the deduction workbench.
You can create a return order for deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page. However, all the following conditions must be met:
To create a return order, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox for the deduction to process.
On the Action Pane, select Maintain > Create return order.
In the Approve deduction dialog box, edit or add information to the existing Notes value as required, and then select OK.
In the Copy orders dialog box, on the Invoices FastTab, the Headers section shows sales invoices where the Invoice account value matches the deduction's customer account. Select an applicable sales invoice.
The Lines section shows lines from the selected sales invoice. Select the Select checkbox for each line you want to copy. Alternatively, in the Headers section, select the Select all checkbox for the sales order to select all its lines.
Adjust the Quantity value for one or more lines as required.
All the lines that you've selected so far are listed on the Selected lines or header to be copied FastTab.
Repeat the previous two steps as required until all the required lines are listed on the Selected lines or header to be copied FastTab.
Select OK.
The new return order is opened, and the following fields are automatically set:
To deny a deduction, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox for the deduction to process.
On the Action Pane, select Maintain > Deny.
In the Deny dialog box, select the reason code for the denial, and then select OK.
In the Show field below the Action Pane, select Closed.
The Deductions tab shows the denied deduction, and the Remaining amount field for the deduction is set to 0.00.
For deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page, the following events occur:
To reverse a denial, follow these steps.
On the Deductions tab, select a denied deduction.
On the Action Pane, select Reverse denial.
For deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page, the following events occur:
To write off a deduction, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox for the deduction to process.
On the Action Pane, select Maintain > Write-off.
In the Write-off dialog box, select the reason code for the write-off, and then select OK.
In the Show field, select Closed.
The Deductions tab shows the written-off deduction, and the Remaining amount field for the deduction is set to 0.00.
For deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page, the following events occur:
To reverse a write-off, follow these steps.
On the Deductions tab, select a denied deduction.
On the Action Pane, select Reverse write-off.
For deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page, the following events occur:
This section applies only to deductions that were created by using the New deduction command on the deduction workbench, customer settlement, or customer page.
Different users might already have created a free text invoice, return order, or negative sales order for a customer's claim outside the Approve deduction process. When the existing deduction is approved on the deduction workbench, the system automatically creates another free text invoice, return order, or negative sales order. This section describes how to attach existing credits to a deduction before the deduction is approved, to help prevent duplicate credits.
This section describes how you can attach a credit to a deduction from the credit.
After a credit is attached to the deduction, you can view it by using the Open credit button on the toolbar in the Open transactions section of the deduction workbench.
After a credit is invoiced, and the deduction is approved, the credit appears in the Open transactions section of the deduction workbench against the applicable Deduction ID value, and its Claim type field is set to Other credits.
To attach a free text invoice to a deduction, follow these steps.
To attach a return order to a deduction, follow these steps.
To attach a sales order to a deduction, follow these steps.
If the incorrect deduction has been attached, you can detach it from the credit. However, all the following conditions must be met:
To detach a deduction from a credit, follow one of these steps, depending on the credit type:
This section describes how you can attach a deduction to a credit from the deduction.
To attach a deduction to a free text, return order, or sales order credit, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the applicable open deduction.
On the Action Pane, select Maintain > Attach deduction to credit. This button is available only if the Claim status field is set to Open.
On the Attach credit page, you can select one credit. The type of credits that is shown depends on the deduction's Claim basis value:
Price based – The page shows free text invoices for the customer account where the Deduction ID field is blank. Customer requisitions are also shown because the free text invoice might be unposted. Therefore, it might not have a number that can be referenced.
Quantity based – The type of credits that is shown depends on the setting of the Create return order option on the Accounts receivable parameters page:
Select OK. The Deduction ID field is set on the credit's header.
After a credit is attached to the deduction, you can view it by using the Open credit button on the toolbar in the Open transactions section of the deduction workbench.
After a credit is invoiced, and the deduction is approved, the credit appears in the Open transactions section of the deduction workbench against the applicable Deduction ID value, and its Claim type field is set to Other credits.
If the incorrect credit has been attached, you can detach it from the deduction. On the Action Pane, in the Maintain group, select Detach deduction from credit. The Deduction ID value is removed from the credit.
The Detach deduction from credit button is available only if the following conditions are met:
Sometimes, you might not have an approved rebate that you can match to a deduction. In this case, you can use the one-time promotion feature to match the deduction to a trade allowance that is associated with the customer. The one-time promotion feature creates a new trade allowance agreement and a lump sum merchandising event. It then matches the lump sum to the deduction and makes the postings that are required to close the deduction.
This feature is useful if you use trade allowances. For more information about trade allowances, see Trade allowance management.
First, you must set up a template that can be used to create the new trade allowance agreement. To set up a template, follow these steps.
Next, you can create a one-time promotion on the deduction workbench. To create a one-time promotion, follow these steps.
Go to Sales and marketing > Trade allowances > Deductions > Deduction workbench.
Select the Mark checkbox next to the deduction to process.
On the Action Pane, select Maintain > Settle deduction as one-time promotion.
In the One-time promotion dialog box, follow these steps to associate the deduction with one or more funds:
Select OK. The system creates a new trade allowance agreement that has a lump sum merchandising event and matches the lump sum to the deduction.
If you must make the same change to multiple deductions, you can select those deductions and do a mass update of their fields.
To do a mass update, follow these steps.
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