Microsoft Dynamics 365 Enterprise Edition - Financial Management - Third Edition

The vendor settlement mechanism in Microsoft Dynamics 365 for Finance and Operations

A vendor settlement in Microsoft Dynamics 365 for Finance and Operations is a transaction that occurs to settle vendor advance payments against vendor invoices, on a monthly basis.

Vendor settlements have the following effects:

• The first one is at the vendor level, which occurs when the vendor transaction closes
• The second is the financial entry, which occurs only if the posting profile of the advance payment and invoice are different

Here, I will illustrate the mechanism of vendor advance payment, invoices, and vendor settlement financial entries—the vendor advance payment posting profile is advanced, and the financial entry will be:

• Dr. Advances to vendor ...