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Understanding Collection Letters in Dynamics 365 Finance : An Overview
Introduction
Collection letters are those which are issued to a customer to obtain corresponding payment without any delay, when he does not pay his invoices within the terms which are initially granted. Basically, Collection letter remind the due dates and due amounts to customers. Collection letters in dynamics 365 work sequentially, which means the second collection letter cannot be printed for a customer unless the first collection letter has already been printed and validated for customer.
Set Up Collection Letters
Set up collection letter sequence
- Go to Credit and collections > Collection letter > Set up collection letter sequence.
- Click New, give collection letter sequence and description and Terms of payment.
- Under the overview tab Click add and add collection letters here.
- Here, in collection letters, we can add collection letter code, description, currency, if any fees need to be added we add here, main account for fees and add minimum overdue amount and enable Block check box for blocking customer.
- Fees:A fixed amount can be automatically charged to the customer while sending a collection letter. Then the amount, currency and corresponding main account must be filled in collection letter.
- Minimum overdue balance: It is possible to set up a minimum amount for the overdue transactions. In that case, the letters will be generated and sent to the customers only if this amount is reached.
- Days:Enter grace period as a number of days- the collection letters will be generated and sent to the customer at the following date.
- Block:select the Block box to stop the customer from further deliveries and invoicing after the corresponding collection letter has been created.
- Under the note tab we can add notes according to the collection letters respectively.
Link collection letter sequence in customer posting profile
- Go to Credit and collections (or) AR > Setup > customer posting profiles.
- Select posting profile and click edit.
- Under Collection letter sequence select one from the drop-down list.
- Under Table restrictions tab Collection letter field set to Yes.
Process
Create collection letters
- Go to Credit and collections > Collection letter > Create collection letters.
- Select the required parameters like collection letter date, and posting profile as show below Screen shot.
- Under Records to include section select a customer using filter.
- Select OK.
After clicking OK we get notification in action center as shown in below screenshot.
Review and process collection letters
- Go to Credit and collections > Collection letter > Review and process collection letters
Here, we can find all created collection letters with multiple statuses.
- Select a collection letter which has been created and review it.
- After review click on print, collection letter notes on top of the screen.
This is the print of collection letter.
- After print click send, the collection letter will be sent to customer as per print management setups with batch job.
- Posting process is required even when no fees are charged to customers along with their collection letters then only system can identify that a customer has already been through the previous collection letter process.
Click Post, the next pop-up window appears, click Records to include and click filter remove the defaulted customer account and collection letter click OK.
After posting we can see the status as a posted.
As per the above collection letters at the time of fourth collection letter additional fee has been added.
In the below screenshot go to Voucher and we can find the fee vouchers.
In customer master under credit and collection tab user can find the details of collection letter, code, date and validated collection letter. As per the final collection letter rule the customer has been blocked as shown in the below screenshot.
Summary
Collection letters in Dynamics 365 Finance help remind customers of overdue payments and ensure timely collections. This blog explains how to set up and process collection letters, including configuring letter sequences, linking them to customer profiles, and managing the review and sending process. These steps can improve your collection process and cash flow. For assistance with this feature or other Microsoft solutions, consult with Brightpoint Infotech, a dedicated Microsoft solution partner.
We hope this blog has offered valuable insights and practical advice for your professional journey. If you found it beneficial, please consider sharing it with your network. We welcome your feedback and thoughts, so don’t hesitate to leave a comment or contact us directly. Thank you for reading, and we look forward to engaging with you further!
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