A post dated check is a check on which the issuer has stated a date later than the current date. A post dated check is used in the following situations:

• Deliberate payment delay. The issuer does this in order to delay payment to the recipient, while the recipient may accept it simply because the check represents a firm date on which it will be able to deposit the check. This situation represents a risk to the check recipient, since the passage of time may result in there being no cash left in the issuer’s bank account to be used to pay the amount listed on the check when it is eventually presented to the bank for payment.
• Collection method. The recipient may require the issuer to hand over a set of post dated checks to cover a series of future payments, which the recipient agrees to cash on the specified dates. This approach is used to improve the odds of being paid, especially when the issuer has little credit.

Accounting Treatment

PDC Issued is a CURRENT LIABILITY & PDC received is CURRENT ASSET.

when company issued a Post dated cheque to a Party.

• Party A\C Dr & PDC issued A|C Cr

and on the cheque date

• PDC A/C Dr. & Bank A\C Cr………(same goes to PDC received)

Automatic Bank Reconciliation in AX 2012

One of the most interesting new features of Dynamics AX 2012 r2, and one which was crucially missing in previous versions, is the ability to import then automatically reconcile bank statements.

Bank Reconciliation, when done manually, can be an extremely long and tedious process. Some studies show that automating this process can reduce time spent on it by 70%.So, when you do the math, the return on investment can be very quick !

You must first of all set up the file format you want to import. For this you need to set up a Service /  AIF Inbound port, and link it to a bank format resource. AX 2012 comes with 3 standard formats : MT940, BA12 and ISO20022 (SEPA). All banks / countries using a specific format has been one of the key issues in the past, but the introduction of the common SEPA format inside the Euro-zone in 2014 should make this easier, for Europe at least. Of course, more formats can easily be developed and added to this list of resources.

Once your format is set up, you simply import the file received from your bank as a Bank Statement :

The detail of your bank statement is then read from your file and imported as a bank statement in AX :

Now create a Bank reconciliation journal for this bank account, you will see that AX displays a screen with 3 sections :

1. Shows the Transactions from your bank statement.
2. Shows the Unreconciled Transactions on your bank account.
3. Shows the Transactions matched.

No transactions are matched so far, but you can now run matching rules, either one by one or in a pre-defined order (Matching rule set). These rules can be defined like this :

So, for example, the first rule can try to match transactions where amounts are identical AND Document Number in the statement = Payment Reference in AX, then the second rule can try to match only when amounts are equal. Tolerance can also be set on amounts, dates etc…

Once you run these rules, AX matches the transactions together. Here 2 transactions have been matched, and reconciled :

Your reconciliation was automatically performed. It can be amended manually if some transactions could not be reconciled automatically, then your reconciliation can be posted.

So AX 2012 now offers a highly efficient and flexible way to automate your bank reconciliation.

I would like to explain, how to do the Bank Reconciliation.

I’m taking an example of Bank Account whose currency is “USD” and also, my company currency is “USD”. Below is the list of Transactions in my Bank Account.

Now, How to start reconciling..?

Assuming that we got a statement from Bank on 30th June-2012 which is listing the transaction of USD 10,000, USD -500 and USD -1500 and also some charges levied of USD -50.

The closing balance that may appear in the bank statement shall be USD 7950.

Click the button Account reconciliation to start the reconciliation. In the “Bank statement form” that is opened, enter the Bank Statement date, Bank statement identification and the Ending balance(In this case 7950).

Click the Transactions button which will list all the un-reconciled transactions of the corresponding Bank. In the below screen, there are three highlighted fields which need to be understood to solve the Reconciliation problems.

Opening Balance – It always shows you the previous statement’s ending balance. As this is the first Reconciliation entered in the system, the opening balance shows “0”.

Ending Balance – The ending balance that is entered by the user in the current statement .

Un reconciled – The Amount of Transaction that can be included. In the other way, the sum of the transactions that are being included in the current statement should match this value.

Note: If the “Un reconciled” field shows the value “0” then only the button “Reconcile Account” will be enabled and allows you to complete the reconciliation.

In our Bank trans and the Statement that is sent by the bank, we have 3 common transactions i.e., 10000,-1500,-500. The charges that are levied by bank -50 is not appearing in bank Trans currently as we will get to know the charges only after we get the statement. So, we need to include a transaction of -50 which is not appearing in Bank Trans.

Few Transactions like Interest, Check Fees, other Fees Transactions can be directly entered during the reconciliation. Clicking the new button allows you to do that.

In the above image, highlighted in yellow is the Transaction that is newly entered by seeing the Bank statement and the offset account also can be specified which can be seen the yellow highlighted box. Highlighted in red is the total transactions that are included in the current statement which sums up to USD  7950.

Now, you can observe the Un reconciled field shows “0” and the “Reconcile Account” button enabled.

Clicking the “Reconcile Account” will reconcile the transactions that are included in the statement.

From Bank Accounts form > Click the Transactions button to see the transaction those are reconciled. The transactions that are reconciled in the statement have the checkbox “Reconciled” marked. Also, the tab “Bank Reconciliation” shows the corresponding “Bank statement” and “Statement date” . Now the Bank Reconciliation is done.

Comparing the closing balance of the Bank and the balance of the control account:

Bank Closing balance on the statement date:

To see the closing balance, click Print> bank reconciliation button from “bank Statement” form.

The closing balance that shows in the report is the sum of the Reconciled and Un reconciled  transactions till the Statement date.

Ledger Balance till the particular statement date:

From Main Accounts form, Click parameters button, remove the fiscal year and specify the “To date” as the Bank statement date that you are comparing.

Both the “Ledger Balance and Bank closing balance” should read the same value.

Accounting concept

A Bank reconciliation is a process that explains the difference between the bank balance shown in an organization’s bank statement, as supplied by the bank, and the corresponding amount shown in the organization’s own [accounting] records at a particular point in time.

Bank Reconciliation Statement is a statement prepared to reconcile the balances of cash book maintained by the concern and pass book maintained by the bank at periodical intervals. At the end of every month entries in the cash book are compared with the entries in the pass book. The causes of differences in balances of both the books are scrutinized and then reconciliation statement is prepared. This statement is prepared for a special purpose and once in a month. It is prepared with a view to indicate items which cause difference between the balances as per the bank columns of the cash book and the bank pass book at a particular date.

The Main reasons which cause Pass Book of the bank and your Bank Book not Tally are

Cheques deposited into the bank but not yet collected.

Cheques issued but not yet presented for payment.

Bank charges.

Amount collected by bank on standing instructions of the concern.

Amount paid by the bank on standing instructions of the concern.

Interest debited by the bank.

Interest credited by the bank.

Direct payment by customers into the bank account.

Dishonour of cheques.

Clerical errors.

AP is the amount due by an organization to its vendors for products and/or services procured on credit. AP is classified as a liability account.

Example: To supply auto parts to General Motors (GM), Delphi procured some goods worth $50,000 from ABC Corp. Delphi made a payment worth $30,000 through a check to ABC Corp. The remaining payment of $20,000 is to be paid to ABC Corp. after a month. The $20,000 is owed by Delphi for the goods supplied by ABC Corp., this amount will reflect as payables in the books of accounts of Delphi.

Not only does the AP process have an impact on the financial liability and credibility of the organization, it also has an impact on the working capital of the organization.

For any organization, the significance of every overdue payment can be greatly magnified.

For this reason, it is essential for all organizations to deal with the AP side of the business ledger in an effective manner. Bills that are unpaid or not addressed on time can snowball into major credit problems, which can easily cripple a business’s ability to function.

By making informed projections and sensible provisions in advance, the business can head off many credit problems before they get too big. Therefore, we see that the process of AP is very important to the financial health of any organization.

Account Payable

IMPORTANCE OF ACCOUNTS PAYABLE MODULE

Ensures accurate & timely payment to the correct vendor

Provides inputs for General Ledger reconciliation and closing of accounts / Finance books, on monthly & quarterly basis.

Earns discount for the business if we pay the invoice within the discount term.

Contributes to Current assets and Current liabilities in the Balance sheet.

Prevents immediate cash outflow from the business  as the purchase is on credit.

Microsoft dynamics AX 2012 Installation need following prerequisites :

1. Dynamics AX installation files : which can be downloaded through Microsoft partner account.
   1.1 installation files of Dynamics AX 2012 (Click here)
   1.2 Virtual Machine with the installed AX and all required applications (Click here)
   
2. Setup Domain user , local user : Using Local user of your laptop (not under any domain ) is not possible , We can install Dynamics AX in our local PC or laptop only if that is under a Domain with AD User . To check this Go to Control panel --> Systems info OR My Computer --> right click then property
   
   

   

   System is in Domain

   
   

   

   System is not in Domain

   OR You can install windows server and setup your own domain controller , Active directory and user and use this user
   
3. SQL Server (Not Express edition) : To  install Dynamics AX , SQL server is required .
   Express Edition will not work as Dynamics AX 2012 reports use SQL Server Reporting Services (SSRS). and it doesnt work properlly in Express Edition.
   For Step by Step SQL Server installation for Dynamics AX 2012 (Click Here).
   
4. Configure SSRS :
   1.1 Run Reporting Services Configuration Manager as administrator.
   1.2 Connect to the installed instance.
   

   

   Connect to installed instance

   1.3 In Database --> change database
   

   

   Click change database

   and select the Create a new report server database option and click Next.
   
   

   

   select create new report server database

   1.4 specify the Server name, SQL instance name in database server Tab and Test connection
   

   

   Test Connection

   1.5 Enter the log on credentials. Again I have chosen Service Credentials but would  recommend a Domain User account for a production environment;
   
   

   

   
   

   1.6 After configuring