Vendor payments in D365 F&O

In the previous versions of D365 F&O, the usual approach to processing payments for a vendor involves creating a payment journal, and then processing a payment proposal. To provide more automation capabilities, a new feature for payment processing has been introduced lately.

You can create a predefined schedule with a combination of payment proposal criteria to be able to create payment journals automatically.

In our case, I would like to share the preliminary steps before being able to pay vendors and show the standard process to generate a payment file. That post details a little bit more the partnership between Microsoft and Kyriba as well.

Payment methods need to be set up first by selecting the electronic format to be used.

  • Methods of payment

Navigate to Accounts Payable > Payment set up > Methods of payment

The method of payment SEPA credit transfer is configured as follow:  

Those fields drive the creation of the electronic payment file. 

Field Value Type
Method of payment SEPA String 
Payment status Sent Enum
Payment typeElectronic payment Enum
Category purposeSUPP – Supplier payment Drop down list
Charge bearerSLEV – Following service levelDrop down list
Local instrument NA Drop down list
Service level SEPA Drop down list

The checkbox Generic electronic Export format needs to be marked to be able to select a file format. Then, in the Export format configuration field, select the format “ISO20022 Credit transfer (FR)” for France. That electronic reporting format is often adjusted to fit the bank requirements. Don’t forget to take those adjustments into accounts in your deployment project.

The method of payment SEPA intercompany credit transfer is configured as follow:  

Those fields drive the creation of the electronic payment file. 

Field Value Type
Method of payment SEPA INTRA String 
Payment status Sent Enum
Payment typeElectronic payment Enum
Category purposeINTC – Intra company payment  Drop down list
Charge bearerSLEV – Following service levelDrop down list
Local instrument NA Drop down list
Service level SEPA Drop down list

The checkbox Generic electronic Export format needs to be marked to be able to select a file format. Then, in the Export format configuration field, select the format “ISO20022 Credit transfer (FR)” for France.

The method of payment International transfers (Non urgent) is configured as follow:  

Those fields drive the creation of the electronic payment file. 


Field 
Value Type
Method of payment SWIFT NURG String 
Payment status Sent Enum
Payment typeElectronic payment Enum
Category purposeSUPP – Supplier payment Drop down list
Charge bearerSLEV – Following service levelDrop down list
Local instrument IN – Cross border paymentDrop down list
Service level NURG – Non urgent Drop down list

The checkbox Generic electronic Export format needs to be marked to be able to select a file format. Then, in the Export format configuration field, select the format “ISO20022 Credit transfer (FR)” for France.

  • File name in Electronic reporting 

Navigate to the workspace Electronic Reporting, then select Reporting configuration 

Select ISO20022 Credit transfer (FR) for the French format

Click Designer 

Select XMLHeader, then in the Mapping tab, edit the File name 

In the formula, insert “DebtorBankName”-“DateTime”-“JournalNumber” or use the CONATENATE function.

  • Generate a vendor payment in D365 F&O

Navigate to Accounts Payable > Payments > Vendor payment journal, then click New to create a payment journal.    

Select the Journal Name 

Go to Lines > Payment proposal, then click Create payment proposal. 

Select the criteria of the payment proposal 

Review the proposal, then select Create payments

Payment transactions are transferred to the payment journal.

The method of payment is inherited from the invoice transactions by default.

The status of each payment transaction is “None” as no electronic payment file has been generated. 

The user clicks on the Generate payments button on the action pane 

Select the Bank account and the Method of payment 

Note: only one bank account can be selected

Click OK

The Electronic report parameters form pops up  

Mark Print covering letter to generate the remittance advice

Click OK 

The electronic payment file “ISO20022 Credit transfer” is generated by the Electronic reporting feature. The name and the destination of the file need to be setup as previously in this post.

  • Interface with Kyriba

Microsoft and Kyriba, one of the world leader in Treasury Management Systems (TMS) announced a cooperation last year.

It is now a reality and the seamless integration is a time acceleration.

Four interfaces will be built and provided out of the box : 

  • Payments 
  • Cash management
  • GL reconciliation 
  • Risk management 

Payments orders will be transferred and integrated to Kyriba through configuration (Kyriba extension). Digital signatures will still occur in Kyriba.

The technical architecture is based on APIs.

Connect to the Microsoft App source and contact Kyriba for more information.

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