Recent ISC Software Webinar: Prepayments and Accruals

In our most recent webinar, we took a look at Prepayments & Accruals in Microsoft Dynamics GP and how both can be processed using standard functionality, before then taking a look at some of the ways in which accruals can be automated. If you want to catch up on this, or any other, webinar, you can do so here.

There are three main parts to the webinar (plus the references):

1. Prepayments
2. Accruals
3. Automating Accruals
4. Add-ons referenced in the webinar

Prepayments

There is a module available in Dynamics GP as standard which allows you to enter prepayments into Microsoft Dynamics GP; this module is Revenue/Expense Deferrals (RED), but if you look for it on the menu, you may not find it. This is because it has to be installed as an extra feature when the Dynamics GP client is installed; it is, however, part of the Starter Pack so everyone will have a licence for it and can install and use it.

Deferrals, as Dynamics GP refers to them, can be entered against invoices with the value of the invoice spread across a number of accounting periods; “profiles” which define the spread can be created, although users can choose not to use a profile and instead choose the spread range and amounts as the transaction is being entered`. In the settings, you can choose whether RED can post the deferrals into future closed periods (allowing you to keep the period closed, so journals or other transactions can’t be accidentally posted, or closed history periods (my advice is to make sure this latter option is disabled).

Deferrals can span financial years (all years included in the deferral need to exist in Dynamics GP as a Financial Calendar) and can be broken down across several different nominal distributions (allowing for multi-line invoices to be deferred).

Deferrals cab be used in the following modules:

• Payables Management
• Purchase Order Processing
• Receivables Management`
• Sales Order Processing
• General Ledger

Accruals

Beyond the ability to enter a reversing journal on the General Ledger there is not a specific accrual process in Dynamics GP. largely because accruals are done in different ways by different organisations. However, we can use a tool like SmartList Designer to extract information for us to use in putting together the accruals journal. SmartList Designer allows the creation of new SmartList objects meaning we can create one at payables transaction distribution level.

The SmartList object can be created by joining PM Transaction WORK File (PM10000) to PM Distribution WORK OPEN (PM10100) to get the distributions; however, I often take the option of creating a SQL view as I can then do more tailoring to the client needs.

I’ve previously created a SQL view which returns the distributions of unposted invoices along with the accrual transaction and reversing dates and also a total line; in fact, I’ve created various versions across the years (I’ll post one of these views soon).

This one is fairly generic output of payables accruals, but I have also created ones which incorporated information from the prepayments, included invoices where there were no lines or released purchase orders (as standard GRNs in POP post to the accrual account, but there is no entry for purchase orders themselves).

If you have added SmartList Builder to Dynamics GP then you can also create drill downs on the new SmartList object which will make it easier for people to review the transactions returned by the SmartList in case any amendments are required.

The simplest way of getting the accruals into the General Ledger is to use the copy and paste function in Transaction Entry; using this method, you manually populate the header fields of the journal, including the transaction and reversing dates, before copying and pasting the Distribution Reference, Account, Debit and Credit columns into the lines.

If you have Integration Manager, a first party integration tool available for Dynamics GP, or third party integration tool such as SmartConnect, you can create an integration which will read the exported SmartList and create the journals for you.

With Integration Manager, you’d need to save the file down as a CSV or tab delimited text file before integrating, but SmartConnect can integrate Excel files.

Automating Accruals

The above process will generally work well and allow accruals to be created and processed; however, once the process has been proven, people look to take accruals processing to the next level by automating the process.

This can be done in stages depending on the elements which are automated. The key elements of the accruals process are:

• Exporting
• Reviewing – this step will always be a manual one
• Importing
• Export/Import
• Approval
• Posting

Exporting

While users can run the SmartList and export the output to Excel, this does require someone to be taking an action. If you have a tool like SmartConnect, you can create an export which runs on a schedule to output the accruals to a file, such as an Excel workbook.

Reviewing

Reviewing will always be a manual process, but delays can be avoided by automating the export as mentioned above.

Importing

As with the exports, a tool like SmartConnect can be used to automate the import of accruals. The way I usually do this, is to set up the import using a folder data source looking for an Excel workbook containing the accruals to import; SmartConnect polls this folder on a schedule and imports any file matching the correct format for accruals and integrates this as a reversing journal into Dynamics GP.

Export/Import

An export/import of accruals in one integration is possible, if it has been decided that the accruals do not need to be reviewed before the accrual journal is created in Dynamics GP. As SmartConnect can both export and import from/to Dynamics GP, one integration can be configured to do both.

I’ve done this before for clients, where the data source is configured as Dynamics GP to extract the data and the destination configured as the Dynamics GP General Ledger so a reversing journal can be imported; this approach removes the human from the import/export process. I’ve also used this approach for intercompany processing before in other parts of Dynamics GP; for example, extract purchase orders from one company and create sales in another; then extract a payment from the first company and create an applied cash receipt in the second company.

Approval

Once the accrual journals have been imported into Dynamics GP, the batch can be submitted for approval using the standard Dynamics GP Workflow module; it is also possible to extend SmartConnect to submit the journal into workflow for approval to reduce this manual step. Once in the workflow, the workflow process setup will take over and route the accruals for approval by the relevant people.

Posting

After the batch has been approved, or after import if workflow approvals aren’t being used, the batch can be posted. While this can be done by users in Dynamics GP through one of several windows (the General Ledger Batches window or navigation list, Series Post or Master Posting) there are also several add-ons which can be used to automate the posting.

The one I recommend is Post Master Enterprise from Envisage Software Solutions. Post Master can be configured to poll looking for batches to post in Dynamics GP tand can be configured to select only those batches with a Workflow Status of Final Approved.

If the one-step export/import and PostMaster is used, you can fully automate the process of creating and posting accruals onto the General Ledger, but many people will take a less fully-automated route of having the export – review – import – approve – post steps with the review being the manual step and everything else automated.

Add-ons referenced in the webinar

Smartist Builder is the add-on with which I have the most and longest experience. Created by eOne Solutions, it allows for the creation of new SmartList objects to meet needs not covered by the out-of-the-box SmartList objects; this often covers reports such as vendors with email and EFT details or Payables Distributions. It also supports the creation of SmartList objects using SQL views such as Budgets By Month or Sales By Customer By Fiscal Year.

While you can also do this using the SmartList Designer, which comes as a standard part of Microsoft Dynamics GP, SmartList Builder is much more flexible and easy to use and has a lot more functionality; I have a blog from May 2019 covering the differnces between SmartList Builder and SmartList Designer.

I have previously blogged about implementing SmartList Builder.

Integration Manager

Integration Manager is part of the Customisation Pack and allows you to integrate data into many parts of Dynamics GP. It is typically used during implementations for the takeon of data, but can continue being used after implementation to bring new master records (such as new GL accounts) or transactions into Dynamics GP.

It does have limitations, such as integrations need to be started by a user and it can only use simple file formats such as CSV or text files rather than Excel workbooks.

SmartConnect

SmartConnect from eOne Solutions is an integration tool which can be used to integrate data into or out of Dynamics GP. Integrations can be run manually by users, run on a schedule or occur in real-time when an event happens.

SmartConnect can also be used to integrate many more types of data than Integration Manager and it can also be extended quite easily to do third party, custom data or standard data where there is not a node already available.

I have previously blogged about installing and configuring and creating an integration with SmartConnect.

PostMaster Enterprise

PostMaster Enterprise from Envisage Software is one of my favourite add-ons for Dynamics GP. It allows for auto-posting of batches based on rules without requiring a running client and can be schedule to only post during certain hours; most batch types in Dynamics GP can be included in auto-posting.

It is easily extensible via SQL stored procedure allowing batches approved via workflow to be automatically posted, which is actually one of the most common use-cases; a user enters a batch and submits for approval, users approve so the batch is final approved and PostMaster Enterprise automatically posts this batch without requiring any further action from users.

I will be blogging about implementing PostMaster Enterprise in the near future.