SDD_Bank_V1.0

Human Resource ManagementFinancial – Cash & Bank Management

Prepared forShahid Builders Private Limited

ProjectKey User Training - Handouts

Prepared byAbdul Ghaffar

ContributorsFawad Butt

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Change Record

Date Author Version Change reference

1.0

Reviewers

Name Version approved Position Date

1.0 Project manager

1.0 Project Manager

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Table of Contents

Solution Design Document....................................................................................................................1

Change Record.....................................................................................................................................2

Table of Contents.................................................................................................................................1

1 Executive Summary........................................................................................................................2

2 Introduction...................................................................................................................................3

3 Purpose..........................................................................................................................................4

4 SBL System Based Finance Process Flows........................................................................................54.1 Bank Management System Based Process Flow........................................................................................6

4.2 Bank Reconciliation System Based Process Flow.......................................................................................7

5 Functional Requirement.................................................................................................................8Requirement # BK-001: Check Printing...........................................................................................................8

Solution # BK-001: Check Printing..................................................................................................................8

Requirement # BK-002: Check Format............................................................................................................8

Solution # BK-002: Check Format...................................................................................................................8

Requirement # BK-003: Auto Check Number..................................................................................................8

Solution # BK-003: Auto Check Number.........................................................................................................8

Requirement # BK-004: Status of Cancelled Checks.......................................................................................12

Solution # BK-004: Status of Cancelled Checks.............................................................................................12

Requirement # BK-005: Bank Reconciliation.................................................................................................14

Solution # BK-005: Bank Reconciliation........................................................................................................14

Requirement # BK-006: Bank Account Creation............................................................................................19

Solution # BK-006: Bank Account Creation...................................................................................................19

Requirement # BK-007: Bank Transaction.....................................................................................................25

Solution # BK-007: Bank Transaction............................................................................................................25

Requirement # FM-008: Petty Cash..............................................................................................................42

Solution # FM-008: Petty Cash.....................................................................................................................42

6 Acknowledgment / Sign off..........................................................................................................50

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1 EXECUTIVE SUMMARY

The objective of this engagement was for Implementation Team to work with Shahid Builders Private Limited on defining the overall business/functional and technical level solution to the requirements of their envisioned ERP solution. The results from this engagement provide the inputs towards the overall solution and implementation approach of Microsoft Dynamics Axapta 2012. The key objectives and deliverables of this engagement include the following:

• Gain an improved understanding of Shahid Builders Private Limited’s overall business process In order to identify the appropriate fit and solution overview utilizing Microsoft Dynamics.

• Identifying business critical requirements and subsequently measure these against Microsoft Dynamics AX.

• Provide proof of proposed solution by SWAT analysis• Identify a vision statement that is a concise way set outline Shahid Builders Private Limited’s

expectation for the future.

As ORANET Training & Solutions worked with Shahid Builders Private Limited to determine their technical and functional requirements in an ERP system (Microsoft Dynamics AX), requirements qualified as ‘Key Implementation Success Factor’.

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2 INTRODUCTION

Solution Design Document defines ‘How’ the user requirement / needs going to be met. This SDD document contains;

System based Solution Design.

Furthermore, the document:

Identifies and documents of SHAHID BUILDERS PRIVATE LIMITED requirement’s Solution. Testing will be done during UAT session.

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3 PURPOSE

The purpose of the Solution Design Document is to communicate the essential elements of the overall solution so that business implication can be assessed and understood. The Solution Design is phase of the System Implementation Life Cycle. During later phases, the SDD will be used to:

Test that requirements are delivered correctly Measure the quality of the project deliverables and outcome User manuals will be based on this Solution Design Document Test Scripts Will be Based on this Solution Design Document

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4 SYSTEM BASED FINANCE PROCESS FLOWS

Following process flows have been created based on

SBL’s “AS IS” processes in Finance Department Tendered requirements.

These process flows are reflecting what is required by SBL for Finance department by catering all “AS IS” and “TO BE” functionality.

Every step in this process flow has been described in detail along with the required controls at each step.

Following symbolic conventions have been used to create the flows for understanding.

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4.1 Bank Management System Based Process Flow

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4.2 Bank Reconciliation System Based Process Flow

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5 FUNCTIONAL REQUIREMENT

Requirement # BK-001: Check Printing

Description: Payments are made through checks. Checks should be automatically printed from the system. SBL will use printed check’s stationery.

Solution # BK-001: Check Printing

Role Responsible:

Description: SBL Printed Format

Requirement # BK-002: Check Format

Description: The Special format will be used for check as per SBL

Check Number (Dynamic)

Solution # BK-002: Check Format

Role Responsible:

Description: SBL Printed Format

Requirement # BK-003: Auto Check Number

Description: System should generate auto Check Number at the time of payment.

Solution # BK-003: Auto Check Number

Role Responsible:

Description: System will automatically generate the Check number at the time of Payment. Below is the process for creating the checks against the any Bank.

Create Checks Book

In Microsoft Dynamics AX, the Check form provides access to view existing check transactions and to create new checks.

Procedure: Create Checks

Perform the following steps to create checks:

1. Click Cash and bank management, click Common, and then click Bank accounts.

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2. Double-click on the Bank account from which the checks will be written.

3. On the Action Pane, click the Setup tab.

4. Click the Check numbers button. This option is only available if the Check number method is set to Fixed in the Check layout form. If the method is set to Free, the check numbers option is not available. To verify, click the Check button on the Action Pane.

5. In the Creation of check form, the selected bank account is displayed in the Bank account field.

6. In the From field, enter the check number for the first check to be created.

7. In the Quantity field, enter the number of checks to be created.

8. Click OK.

EXAMPLE: To create a total number of 1250 checks starting with check number 2000, in the From field, type 2000, and in the Quantity field, type 1250. This will create checks numbered 2000 to 3249.

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Requirement # BK-004: Status of Cancelled Checks

Description: System should maintain the history of void and cancel checks.

Solution # BK-004: Status of Cancelled Checks

Role Responsible:

Description: System will enable to void the checks. Following is the procedure

Void un-posted checks

You might be unable to use checks that you previously printed or tried to print. Some unused checks must be voided, such as checks that were damaged during or after printing. Use this procedure to void checks.

1. Open the appropriate payment journal, and then click Lines.2. Select the lines that you printed checks for.3. Click Payment status > Rejected. The check numbers are no longer

displayed in the journal.4. Click Cash and bank management > Common > Bank accounts. Select the

appropriate bank account, and then click Checks.5. Verify that checks have been voided correctly. Checks that have been

voided a value of Void in the Status field.

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In Addition you can reuse a check number

You can reuse check numbers if you enabled the functionality when you set up bank parameters. For example, if a check is damaged while it is being printed, you can print the same check number on a new check. The original information is voided and replaced with the reprinted check information.

1. Click Accounts payable > Journals > Payments > Payment journal.

–or–

Click Accounts receivable > Journals > Payments > Payment journal.

2. Select a journal, and then click Lines.

3. Click Payment status > Set status of the payment to None for vendor payment journal. The payment status is changed to None.

4. To reprint the check, in the Journal voucher form, click Functions > Generate payments.

5. In the Method of payment field, select a method of payment with Check as the export format.

6. Select the Show format dialog check box, and then click OK to open the Payment by check form.

Note

You can verify that the check number is the same check number that was on the original check.

7. Click OK. The check is printed again with the same check number that was used previously.

Close the forms to save your changes.

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Requirement # BK-005: Bank Reconciliation

Description: Bank transactions that exist in the system should be reconciled with the bank statements.

Solution # BK-005: Bank Reconciliation

Role Responsible:

Description: System will facilitate in reconciliation of bank statement. Following is the procedure

Bank Reconciliation

Bank Reconciliation is an important component of the Microsoft Dynamics AX financial management system. Bank Reconciliation contains the features that provide the following functions:

Enter additional transactions that affect balances

Automate the reconciliation process

Procedure: Bank Account reconciliation

1. Click Cash and bank management, click Common, and then click Bank accounts. 2. Select the bank account for which to reconcile the bank account statement. 3. Click the Account reconciliation button on the Action Pane and enter information as

appropriate. 4. In the Bank statement date field, enter the date from the bank account statement. 5. In the Bank statement field, enter the number of the bank account statement. 6. In the Currency field, verify that the application inserts the correct currency for the

selected bank account. 7. In the Ending Balance field, enter the total ending balance on the bank account

statement.

As soon as you have entered information about the bank reconciliation, you can review the transactions in the bank account instead of the transactions on the bank statement. Perform the following steps to review transactions:

1. From the Bank statement form, click the Transactions button. 2. Select the transactions to include in the reconciliation by selecting the Cleared check box. 3. To select a check interval to clear for reconciliation, click the Mark check interval button.

In the Mark check interval for reconciliation form, enter the range of cleared check numbers in the From and To fields.

Sometimes, transactions that have not been recorded in the system appear on the bank statement. Perform the following steps to create transactions that have not been recorded in the account:

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1. Click the New button.2. Select the correct transaction type in the Bank Transaction Type list.3. Enter the date of the transaction in the Date field.4. If you used a check for the transaction, enter the check number in the Check number

field. Click the Checks button to view a list of the checks for this account.5. In the Deposit Slip field, enter the number for the deposit slip that a payment should be

associated with, if applicable to the transaction. Click the Deposit Slips button to view a list of the deposits for this account.

6. In the Amount in transaction currency field, enter the transaction amount in the specified currency.

7. In the Main Account field, indicate which ledger account the system should offset when you create the new transactions during reconciliation. The corrections post when you update the reconciliation.

8. In the Description field, enter information that describes the transaction.

On the Financial dimensions tab, enter any required dimensions for the transaction.

1. Select the address SBL -> Cash and bank management from the Address bar by clicking the navigation path arrows.

2. Click Area Page node: Cash and bank management -> Common -> Bank accounts.

Form name: Bank accounts

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3. Make sure the selection is changed in table Bank accounts to:

Bank account

Name Bank groups

Routing number

Bank account number

IBAN SWIFT code

Main account

Currency

4. Click the Bank account -> Reconcile -> Account reconciliation button.

Form name: Bank statement

5. Change Bank statement date from '' to '00/00/0000'.

6. Change Bank statement from '' to '1'.

7. Change Ending balance from '0.00' to 'XXXXXXXX'.

8. Click the Transactions button.

Form name: Account reconciliation

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1. Change Cleared from 'No' to 'Yes'.

10. Make sure the selection is changed in table Bank transactions to:

11. Click the Close button.

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Requirement # BK-006: Bank Account Creation

Description: System should allow creation of new bank account and also having a functionality to attach the new GL account.

Solution # BK-006: Bank Account Creation

Role Responsible:

Description: System Allow creating the banks and having a Standard functionality to attach the new GL Account for the financial impact.

Bank Accounts

Enter and maintain all information for the company bank accounts in the Bank accounts form. Use the options on the form to view the details for each bank account, such as transactions, current balance, and checks that have been created.

Procedure: Create Bank Accounts - General

Perform the following to create general information for a new bank account:

To access the Bank accounts form, click Cash and bank management, click Common, and then click Bank accounts.

Click the New - Bank account button to create a new record.

Select the kind of bank account routing number from the Routing number type field. If your company makes international payments, you may be required to make a selection in this field.

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In the Bank account field, enter a unique ID number to identify the bank account.

You cannot modify the bank account value for existing bank accounts.

Use the Bank account number field to enter the account number specified by your bank. It is an alphanumeric string up to 34 characters.

Select the group to which this bank belongs, if applicable, from the Bank groups list. If a Bank group is selected, the Routing number field will be populated automatically based on the bank group setup.

Procedure: Create Bank Accounts - General Descriptions

Perform the following to create descriptions for a new bank account:

In the Name field, enter a name that is used to identify this account on printed reports and other areas.

Use the Company statement name to enter the company name as you want it to appear on your bank statement.

NOTE: Name accounts so that they can be easily identified. In Microsoft Dynamics AX, bank

accounts are identified by name and account number.

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Use the Active fields to enter specific dates when the bank account becomes active.

The following two fields are optional and available if the Bank account status field is set to Active for all transactions:

Active from: enter the date when the bank account will become active and be available for new transactions. If you do not enter a date, the bank account is immediately available for new transactions.

Active to: enter the date when the bank account will no longer be active for new transactions. Any existing transactions that are not completed by this date, such as pending payments, will still occur as they were originally scheduled. If you do not enter a date, the bank account remains active indefinitely.

Use the Bank account status to select the status to use for the bank account.

Active for all transactions - the bank account is active and available for all transactions.

Inactive for new transactions - no new transactions can be scheduled for this bank account. Existing transactions that have not yet been completed, such as pending payments, will still occur as they were originally scheduled.

Inactive for all transactions - no transactions, either new or existing, can be scheduled or processed for this bank account.

Credit Limit

If the bank uses credit limits for this account, use the Credit limit field to enter the amount that the bank offers for this account.

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Follow these steps to enter additional details on the bank account:

From the Bank accounts form, click the Additional identification FastTab.

In the SWIFT code field, enter the Society for Worldwide Interbank Financial Telecommunication code, also known as the Bank Identifier Code (BIC).

In the IBAN field, enter the International Bank Account Number (IBAN).

Enter the bank or postal identification of the company in the Company ID field.

Enter the Post, Telegraph, and Telephone (PTT) account number in the Post account field. It is used when transferring money to a PTT bank account.

Enter the code stated by the Banks Automated Clearing System (BACS) in the Sort code field. This code is used for electronic bank payments for BACS.

Use the Debit Direct ID field to enter the customer number of the company for debit direct.

Use the Clearing field to enter the control code of the bank.

Perform the following to enter more information about Currency management for the bank account:

Click the Currency management FastTab.

Select a Main account to which all bank account transactions are automatically posted.

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Corrections, which are entered during the reconciliation of the bank account with the bank account statement, are posted to the main account when the statement reconciliation is complete and posted.

Select the More currencies check box to enable posting in more than one currency for this bank account. When you generate deposit slips, one deposit slip is generated for each currency.

Select the currency code from the Currency list.

Enter a maximum number of days for the bank to return a payment-related message in the Days field. The value determines the date in the Deadline field on the Open transaction editing form.

Select the Keep check box to keep the bank account number of the payment transaction if the transaction is removed from a remittance batch.

Enter the bank suffix in the Suffix field.

Enter the bank-issued drawer code in the Drawer field.

In the Discounting maximum field, enter an amount for the maximum remittance for discount amount granted for the current bank. The amount is displayed in the Remittance journal.

Perform the following to complete the remaining bank account setup:

From the Bank accounts form, click the Negotiable instrument FastTab.

Select the journal to hold the generated remittance fees from the Fee journal list.

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Enter any additional information about fees and the ledger accounts to which the application posts the fees as required by the company in the remaining fields on the Negotiable instrument FastTab.

Click the Address FastTab and enter the address for the bank.

Click the Contact information FastTab and enter the information for the bank group's contact person.

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Requirement # BK-007: Bank Transaction

Role Responsible:

Description: System should allow bank transaction to be processed through;

1. Bank to Bank funds Transfer2. Payment through Bank (Check, Cash)3. Bank Charges4. Check Reversal5. Bank Adjustment

Solution # BK-007: Bank Transaction

Role Responsible:

Description: System allows the following transactions.

Bank to Bank funds Transfer

For the fund Transfer, following is the procedure

GL>>Journals

Create the New Journal for the Transactions.

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Click on Lines

Select the banks for the fund transactions and amount.

On the upper side Click on the POST button for the fund transfer transaction

Payment through Bank (Check, Cash)

Payment Journal

Procedure: Create Payment journal

After you register, post the invoice, it is time to pay the invoice. Payment journals have the following characteristics:

You can create payments through the payment journal.

Use the payment journal to enter and post payments. Make payments and enter them according to the terms of payment established with the vendors. In the payment journal there are several ways to create payment lines:

Click Payment proposal.

Click Functions and select Settlement.

Create a journal line and enter the payment details manually.

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There are two methods for selecting the invoices to pay through the payment journal.

The Payment proposal option searches for invoice lines that meet selected search criteria.

Use the Settlements option to select the specific invoice lines to pay.

After you create all the payment lines, use the Generate payments command on the Functions button to generate the payment. This is the selected method of payment and the setup of controls if the system should, for example, print checks or creates a payment file.

Procedure: Mark Settlement

Use the settlement option as a second option for selecting invoice lines to pay.

1. Click Area Page node: Accounts payable -> Journals -> Payments -> Payment journal.

Form name: Journal

2. Click the New button.

3. Create a new record in the Journal form.

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4. Click the Lines button.

Form name: Journal voucher

5. Change Account from '' to 'Vendor Account'.

6. Change Offset account from '' to 'Bank '.

7. Click the Functions -> Settlement menu button.

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Form name: Settle open transactions

8. Make sure the selection is changed in table Open vendor transactions to:

9. Click the Close toolbar button.

10. Change Mark from 'No' to 'Yes'.

11. Close the Settle open transactions form.

12. Click the Validate -> Validate menu button.

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Form name: Infolog


14. Click the Functions -> Generate payments menu button.

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Form name: Microsoft Dynamics AX

15. Click the OK button.

16. Click the Post -> Post menu button.

Bank Charges

System has a functionality to cater the bank charges in the payment process and either in reconciliation process. (As shown Above)

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You can select Ledger account, Customer or Vendor to Charger the Fees/charges against the payment.

Check Reversal

Click Area Page node: Accounts payable -> Journals -> Payments -> Payment journal.

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Form name: Journal

4. Change Show from 'Open' to 'Posted'.

5. Make sure the selection is changed in table Ledger journal table to:

Name Journal batch number

Description Posted Log In use


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7. Click the Inquiries -> Voucher menu button.

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Form name: Voucher transactions

8. Make sure the selection is changed in table General journal entry to:

Journal number

Date Year closed

Ledger account

Currency Amount in transaction currency

Amount Amount in reporting currency

Posting layer

9. Close the Voucher transactions form.

10. Close the Account and financial dimension details form.

11. Close the Journal voucher form.

12. Close the Journal form.

13. Select the address SBL -> Cash and bank management from the Address bar by clicking the navigation path arrows.

14. Click Area Page node: Cash and bank management -> Common -> Checks.

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Form name: Checks

15. Click the Payment reversal button.

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Form name: Payment reversal

16. Change Reason code from '' to 'AAA'.

17. Change Reconcile from 'true' to 'false'.

18. Change Journal name from '' to 'Bank reversal'.

19. Click the OK button.

20. Click Area Page node: Cash and bank management -> Journals -> Check reversals.

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21. Make sure the selection is changed in table Ledger journal table to:

Name Journal batch number

Description Posted Log In use

Bank reversal Bank Check Reversal

No false


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23. Click the Validate -> Validate menu button.

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Form name: Infolog


25. Click the Post -> Post menu button.

Form name: Infolog


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Bank Adjustment

System allows the bank adjustment Through General Ledger Vouchers.

Requirement # FM-008: Petty Cash

Description: System should handle the petty cash functionality for instant transaction.

Solution # FM-008: Petty Cash

Role Responsible:

Description: For petty cash, we will use the Banks functionality. Create the Bank Account (As mentioned) and name as PETTY CASH BANK ACCOUNT and attach the Petty cash GL account with this bank. Use this Petty Cash bank account for instant transactions.

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SBL Required Reports

Bank Account Statement

Report Path: Cash and Bank Management>> Reports>> Bank Account Statement

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Bank Reconciliation Statement

Report Path: Click Cash and bank management > Common > Bank accounts. On the Action Pane, on the Bank

account tab, click Account reconciliation. Click Print > Bank reconciliation.

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Payment Summary by date

Report Path: Click Cash and bank management > Report > Statistic> Payment Summary by Date.

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Deposit Summary by date

Report Path: Click Cash and bank management > Report > Statistic> Deposit Summary by Date.

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Bank payment summary by vendor

Report Path: Click Cash and bank management > Report > Statistic> Bank Payment Summary by Vendor.

Bank Account Balance Report

Report Path: Click Cash and bank management > Report > Statistic> Bank Account Balance.

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Unreconciled Bank transactions Report

Report Path: Click Cash and bank management > Report > Reconcile> Un- reconciled Bank Transaction.

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6 ACKNOWLEDGMENT / SIGN OFF

I hereby verify that the document contains accurate information of our process as described.

Approved By (ORANET Training & Solutions) Approved By (SBL) Reviewed By (SBL)

Project Manager

Prepared By Reviewed By

Abdul GhaffarFunctional ConsultantORANET Training & Solutions

Fawad ButtFunctional ConsultantORANET Training & Solutions

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Documents

SDD_Bank_V1.0