Unlock the Features of the Deduction Workbench in D365 Finance and Operations
Deductions are an important part of any ledger. Accountants go through a lot of stress if the customers have short-paid or are missing track of the invoice. It helps them handle invoices with better accuracy.
Traditional accounting procedures struggle with client short payments, but the deduction workbench in D365 Finance and Operations allows you to streamline these situations and keep correct ledgers.
Here’s how it improves your receivables management:
- Effortless Short Pay Handling
- Enhanced Invoice Management
- Streamlined Research and Resolution
- Improved Cash Flow Visibility
What is the Deduction Workbench in D365 Finance and Operations?
Deductions are one of the most important features of Dynamics 365, especially for the organizations that sell to the big box retailers. It can be used to deal with any customer who owes money. Instead of leaving a balance on the invoice, the deduction can be used to help accountants better track when a customer has underpaid and whether or not it was right. This method allows the invoice to be closed and the deduction explored further without losing track of the short pay. If the Short Pay was correct, you can either write it off to a ledger account or refuse it and reestablish the balance on the client account under a new invoice number once the research is completed.
The deduction workbench in D365 Finance and Operations is a robust tool created exclusively for managing client short payments. It simplifies the process for firms, particularly those that work with large retailers who routinely use deductions.
Previously, processing short payments required leaving an open balance on the invoice, which could lead to confusion and inconsistencies in your financial records. This also made it difficult to determine the cause of the short payment and fix the problem effectively.
The Deduction Workbench to the Rescue:
The deduction workbench offers a centralized platform to manage all customer deductions.
Steps for using the deduction workbench d365
The deduction workbench in Dynamics 365 (D365) helps you manage situations where customers pay less than the full invoice amount. To start using it, you need to follow through the steps below:
Configuration
While creating deduction entries, it doesn’t require a specific configuration. You need to set it up to work better.
Deduction Types:
These are used to close out the invoice and transfer the amount to the workbench. Navigate to Sales and Marketing > Trade Allowances > Deductions > Deduction Types. Specify the reasons for deductions, such as cash discounts, defective products, or returns.
Deduction Write-Off Reasons:
These are used to determine whether the short pay was correct. It specifies which ledger account the short pay should be written off to. Go to Sales and Marketing > Trade Allowances > Deductions. Deduction write-off causes.
Define the reasons why a deduction can be completely written off, such as customer dispute settlement or bad debt. This facilitates the tracking and management of unsettled deductions.
Denial Reasons:
These are used when the low wage is not justified. No account is required because it will reverse the deduction type entry and recreate the short pay on the customer’s account. If relevant, establish justifications for refusing deductions. This can be accomplished through modification or based on your individual D365 version.
Journal Name:
Create a separate journal name for documenting deduction transactions. This contributes to a clear audit trail and simplifies reconciliation. You may usually customize this under the payment journal setup options.
Scenario
To help get more clarity on the usage of the deduction workbench in d365, we will walk you through the real-time scenario. This is an example of a customer who is short-paying, and by using a deduction in d365, we can tackle it efficiently. Check out the steps below for more details:
Step 2:
In a drop-down, you will find deduction types.
Setup as many deduction types as you want. Just remember that each type is tied to a general ledger and dimension string.
Now you can write the payment off. Check out the remittance you received from a customer. Add it in the deduction.
Step 3:
Now, go to the customer payment journal. Here you can create a new one by entering all the required details such as account and dates.
Step 4:
Settle the transactions for a particular account. Pick all the transactions you had in your remittance. It will show you the total amount once you press the okay and go back to customer payments. Check if it is correct; if not, you can change it from the credit field.
Step 5:
Click the deductions button; it will show the difference in the amount below.
Here start creating deductions and add all of them one by one. You will see the balance going short with each; it reaches zero.
Step 6:
After that, you will see the system will automatically pick up the track of transactions or deductions. And once you are done, you will be able to post the journal.
Summary
The deduction workbench in D365 provides a more efficient way to manage customer deductions. By following these procedures and successfully utilizing the setup choices, you can ensure that deductions are accurately recorded, categorized, and resolved inside your D365 finance and operations.
However, this is just the general way to look at the deductions and maintain a d365 deduction journal on your own. Once you start creating real customer payments and deductions, you will get clearer on it. Still, if you have questions about deductions in d365 finance and operations management, the DHRP team has the experts to help you. You can also ask our experts about types of deductions, write-off deductions, and deduction management.
