Exercise - Set up credit and collections in Finance

  • 40 minutes

In this exercise, you will perform the following tasks to set up credit and collections in Finance.

  1. Set up collections parameters
  2. Set up a collection letter sequence on the posting profile
  3. Set up the customer to control collection letters at the customer level
  4. Create customer pools
  5. Create collection agents
  6. Create an aging period definition
  7. Create an interest code with a range
  8. Create a collection letter sequence

Before you begin

To get the most benefit from this and other exercises in this module, we recommend that you have the standard sample data available in Dynamics 365 Finance that is installed by using Lifecycle Services.

Set up collections parameters

  1. Go to Credit and Collections > Setup > Credit and collections parameters.
  2. Select the Collections tab.
  3. Expand or collapse the Collections defaults section.
  4. Select an aging period definition for the default aging snapshot that will be used in the Collections page.
  5. Select a team that collections agents are assigned to in the Collections agents page. Only teams that have a team type of collections are displayed in the list.
  6. Expand or collapse the Write-off section.
  7. Select the journal name, which is set up for daily ledger journals, to use when a transaction is written off by using the Collections page or related list pages.
  8. Select the default reason code to use when write-off transactions are created by using the Collections page or related list pages.
  9. Select Separate sales tax to create a separate journal line for sales tax amounts when write-off transactions are created by using the Collections page or related list pages. If you select this option, you can easily track the sales tax amounts that are involved in write-off transactions. You can track the sales tax amounts separately to help you more easily adjust your sales tax liability for the affected period.
  10. Expand or collapse the Email template section.
  11. Select the email template to use when you send an email message by using the E-mail > Transactions to contact action in the Collections page.
  12. Select the email template to use when you send a customer statement as an attachment to an email message by using the E-mail > Statement to contact action in the Collections page.
  13. Select the email template to use when you send an email message by using the E-mail > Transactions to salesperson action in the Collections page.

Set up a collection letter sequence on the posting profile

  1. Go to Credit and collections > Setup > Customer posting profiles.
  2. Select Edit.
  3. Select a collection letter sequence from the drop-down list. If you do not want to generate collection letters for transactions by using this posting profile, leave the field blank.
  4. Expand the Table restrictions tab to change the way that collection letters are processed. If this field is set to Yes, then collection letters will be created for this posting profile.

Set up the customer to control collection letters at the customer level

  1. Go to Credit and Collections > Setup > Credit and collections parameters and select the Collections tab.
  2. Change the value of Create collection letter per to Customer.
  3. Go to Credit and collections > Collection letter > Review and process collection letters. Only one collection letter will be generated for a customer with all the overdue transactions.

Create customer pools

  1. Go to Credit and collections > Setup > Customer pools. Use this page to set up customer pools, which are queries that define a group of customer accounts that can be displayed and managed for collections or aging processes. Use customer pools to filter information on the Collections list page and on related list pages. You can also use customer pools to filter the customer accounts that are included when aging snapshots are created.
  2. Click New.
  3. In the Pool ID field, type a value.
  4. In the Pool description field, type a value.
  5. Click Select pool criteria.
  6. In the Criteria field, type a value.
  7. Click OK.
  8. Click Preview customer pool.

Create collections agents

  1. Go to Credit and collections > Setup > Collections agents.
  2. Select New.
  3. Select Add.
  4. Select the users of your choice.
  5. Select Add.
  6. Under Collection agent pools, select Add.
  7. In the Pool ID field, select the drop-down button to open the lookup.
  8. In the list, find and select the desired record.
  9. Select or clear the Default pool check box. Select this option to include all customer pools in filter lists for the selected collection agent. If this option is not selected, only the customer pools that are assigned to the collection agent are available in filter lists.

Create an aging period definition

  1. Go to Credit and collections > Setup > Aging period definitions.
  2. Select New.
  3. In the Aging period definition field, type a value.
  4. In the Description field, type a value.
  5. Specify the period name, unit, interval, and aging indicator for each aging period to include in the aging period definition. The line that has 0 (zero) in the Unit field represents the date that the analysis is run. Lines before zero will have -1, and lines after zero will have 1 as a default entry in the Unit field, but can be changed. Select the Up and Down buttons to rearrange the lines. The 0 (zero) line cannot be moved.
  6. Place the pointer where you want to insert a new line and then Select Add above or Add below.
  7. Select an indicator to represent the aging period in the Collections page and Collections list page. For example, you might select a green indicator for a current period, a yellow indicator for a 30-days-past period, and a red indicator for a 90-days-past period.
  8. Select the printing direction for the aging period definition. This selection determines the order in which the columns appear on the Customer aging report or the Vendor aging report.
    • Forward – Print columns in the same order in which the headings appear in the table, starting with the top row.
    • Backward – Print columns in the reverse order in which the headings appear in the table, starting with the bottom row.

Create an interest code with a range

  1. Go to Credit and collections > Setup > Set up interest codes.
  2. Click New.
  3. In the Interest code field, enter 3M-9%.
  4. In the Description field, enter 9% after 3 months.
  5. Expand the Earnings section.
  6. In the Ledger posting account field, specify 130500.
  7. In the Interest by range field, select Months.
  8. Expand the Earnings by currency section.
  9. Select Add.
  10. In the Description field, enter US dollar.
  11. Select Save.
  12. Select Ranges.
  13. Select New.
  14. Enter the From value as 0 and then enter the interest percent per month that will be used to calculate the interest. For our example, it is 1.5.
  15. Select New.
  16. Enter the next From value as 3, which is the first month that you will be calculating a new interest amount.
  17. Enter the interest percent per month that will be used to calculate the interest starting in month 3. For this example, it is 2.5.
  18. Select New.
  19. Enter the next From value as 6, which is the next month that you will be calculating a new interest amount.
  20. Enter the interest percent per month that will be used to calculate the interest starting in month 7. For this example, it is 5.
  21. Select Close.

Create a collection letter sequence

  1. Go to Credit and collections > Setup > Set up collection letter sequence.
  2. Select New.
  3. In the Collection letter sequence field, enter a sequence ID that will represent the sequence. It will be used when you set up a posting profile.
  4. In the Description field, type a value.
  5. The Terms of payment is optional. If you enter a value here, the collection letter fee invoice will use these terms of payment instead of the terms of payment stored with the customer.
  6. In the Collection letter code field, select the code for the first collection letter that you want to send.
  7. The first collection letter is created according to the due date on the invoice, the value that you enter for the grace period in the Days field on this line, and other information that you enter on this line.
  8. In the Description field, type a value.
  9. The Currency for the fee defaults to the customer currency. This Currency code can be different than the invoice currency.
  10. Select Add to add the next collection letter that will be sent in the sequence.
  11. In many cases, the first collection letter is just a warning. You can add fees if needed.
  12. In the Collection letter code field, select the next collection letter that will be sent in the sequence.
  13. In the Description field, type a value.
  14. In the Main account field, select the revenue account that will be used for fees.
  15. Enter the fee that will be charged when this collection letter is posted.
  16. In the Item sales tax group field, select the drop-down button to open the lookup.
  17. Select an item sales tax group if sales taxes must be calculated on the fee.
  18. In the list, click the link in the selected row.
  19. Enter the minimum overdue balance required before a collection letter is sent.
  20. Enter the number of grace days that you will allow. This is the number of days after the due date that a collection letter can be generated.
  21. Select Add to add the last collection letter in the sequence. You can add up to five collection letter codes for a collection letter sequence. In the Collection letter code field, select the next collection letter that will be sent in the sequence.
  22. In the Description field, type a value.
  23. In the Main account field, specify the desired values.
  24. In the Fee in currency field, enter a number.
  25. In the Item sales tax group field, click the drop-down button to open the lookup.
  26. In the list, click the link in the selected row.
  27. In the Minimum overdue balance field, enter a number.
  28. In the Days field, enter a number.
  29. Select the Block check box to stop the customer from additional deliveries and invoicing.
  30. To unblock the account, select No in the Invoicing and delivery on hold field in the Customers page.
  31. Expand the Note FastTab.
  32. Enter the text to appear on the collection letter for the selected collection letter code.
  33. You can translate this text into multiple languages by using the Translations menu above the note box.