Cheque Printing Configuration 101 in Dynamics AX

Cheque Printing Configuration 101 in Microsoft Dynamics AX

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BDO
Header image via freeimages.com/John Siebert

 

Setting up cheque printing in Microsoft Dynamics AX 2012 has been noted to be a time consuming task. However, with the right setup instructions, getting cheque printing up and running can be a much more streamlined process.  Follow the steps below to configure your cheque printing in a more simplified and structured manner.

NOTE: The examples provided illustrate Canadian banks and vendors, and will only cover two currencies, Canadian dollar (CAD) and US dollar (USD). Additional setup may be required if you are not configuring under these conditions.  We are assuming that your bank account(s) have been preconfigured in Dynamics AX.

Step 1: Create your Payment Journal

The Payment journal is required to post the cheque payment transactions to the general ledger and related payment accounts.  This is a normal journal name setup.

In Dynamics AX navigate to: General ledger > Setup > Journals to create your payment journal.

Step 2: Create your Method of Payment

Method of payment options needs to be set up for each cheque type/bank account (CAD, USD, other).

In Dynamics AX navigate to:

  1. Accounts payable > Setup > Methods of payment to create your cheque(s) method of payment or
  2. directly from your Bank Account (Cash and bank management > Common > Bank accounts) use the Action Pane’s Setup tab and select from either of the Customer or Vendor options in the Methods of payment group.

The screen shot below highlights mandatory fields for setup.

Mandatory fields for setup in Dynamics AX

Within the Method of payment screen you will need to configure two additional items:

  • Export format: The Export format dictates the file format type for the method of payment. Initially, the drop down menu is blank. Click the SETUP button on the Methods of payment form as highlighted to add the export format to the selection.

 

  • Bank information: Enter the bank account information that will be issuing this type of cheque. NOTE: Ensure your Bank account record includes an address for your bank – country code is the minimum requirement. Excluding address detail may otherwise result in an error when issuing a cheque.

 

Free download: Microsoft Dynamics AX Road Map
New to Microsoft Dynamics AX? Download the free road map here.

 

Step 3: Create your Cheque Layout

The cheque layout is the most time consuming of the steps in configuring cheque printing in Dynamics AX. However, it can be easier when you have the appropriate tools on hand to assist in configuration.

  • Bank Cheque Specification: Every bank issues a cheque specification that can be obtained from your local bank branch. This document will provide instruction for elements such as transit number, branch number and account number that may differ from bank to bank due to format or length.
  • MICR Line Gauge: Another element that requires a closer look is the MICR line. There is a limit on MICR line space, so you will need to know how many characters will be on the MICR line, and the correct format based on the specification document. Failure to pay attention to these details will result in your layout being rejected by the bank.

Another key document that can assist you is a MICR gauge sheet. MICR gauge sheets are available through many online retailers, and can allow you to confirm the cheque layout against the gauge before bank testing.Buy a MICR gauge sheet

Configuring your Cheque Layout 

Cheque layout configuration can be accessed through your Bank account screen. Navigate to Cash and Bank management > Common > Bank accounts and select the bank account issuing the cheque. Using the Action Pane, navigate to the Setup tab, in the Layout group, click CHECK.

General Tab

For basic configuration you can follow our example below. However, it is a good idea to have an AP setup manual in hand to follow the entries should you have questions about each field.

Cheque number method: Free vs. Fixed?

If you have a pre-printed cheque with a cheque number, use FIXED.  If you use AX to generate each cheque number before it is printed, use FREE. In practice, I have found using Free is easier, because there is no need to create a bunch of cheques in the system first.

Basic cheque configuration in Dynamics AX

Codes Tab 

The MICR line is set up on the Codes tab. Although this field is straight forward, it can be troublesome. My recommendation is to have the bank issued cheque specification and a MICR line gauge handy as described earlier.  Both are essential to have the MICR setup correctly.

Unfortunately, the account details are not inputted from your bank account record – cheque number, bank branch and bank code, and bank account number with special MICR codes inserted will need to be manually entered. Again, refer to your own bank’s cheque specification to confirm the format requirement. Here is my example:

Key: Position 1 = Branch transit | Position 2 = Bank code | Positions 3 & 4 = Account number

Key: Position 1 = Branch transit | Position 2 = Bank code | Positions 3 & 4 = Account number

Important Notes:

  •  MICR Codes – Watch for position of special MICR codes, the requirement may be different in your case.
  • Cheque Number Length – Based on my experience, a 4 to 6-digit cheque number is ideal. AX allows you to set a cheque number length of 9-digits, but it may result in some characters being pushed outside of the printing area. Less is better for the cheque number.
  • Adjusting text position – I couldn’t control which digit should show where from the front end interface. If you need to adjust physical position by moving a whole line up or down, or left or right, you have to do so in AOT. When using AOT, you should always consult a developer for assistance.
  • MICR Transaction Code 45 for USD – If you have a USD account in a Canadian financial institution, you need to add Transaction Code 45 at the end of MICR line. The code helps prevent items being cleared in the wrong currency. This code needs to be at MICR position 14-17. You can add some spaces between the bank account and trans code 45 to place it in this position, or consult your developer.

 

• MICR Transaction Code 45 for USD

MICR line

Company Logo and Address Configuration

If a corporate logo is required on the cheque, click COMPANY LOGO on the menu bar in the Check layout form to upload it.  AX will not use the logo linked to the legal entity.

The corporate address for the cheque, is another story.  The corporate address used on the cheque is the one entered as the legal entity’s address as entered in the organizational setup.

Bank Branch Address Configuration

Bank branch address information is cheque requirement, so make sure you have the right address setup for your own branch. As shown below, this is entered on the Bank account record.

Bank branch address configuration

After all the above steps have been completed, it is time to print a test cheque. You can get a preview of the cheque layout by using the PRINT TEST feature; however you still need to confirm the actual layout by printing a physical cheque from a MICR printer.

Important Note:  Some MICR printers are not Dynamics AX-compatible. Please confirm the model of the printer with AX specifications.  Dynamics AX uses the font IDAutomationMICR.TFF for MICR coding.

Step 4: Setup Printing on your Specific Equipment (Computer & Printer)

Due to variances in printers and printer drivers, text alignment print results could differ when printing a cheque using different hardware technology. Therefore, it is best to select your ‘cheque printer’ and use your accounting personnel’s computer during the print test phase.  This will help to avoid surprises or unnecessary changes.  Continue to perfect the cheque using this same equipment.

Remittance Address Printing Note:

If a vendor has multiple address, you can pick the address you need before you generate a cheque in the payment journal.

Remittance Address

Step 5: Bank Test

Once the cheque layout is completed to your satisfaction, you can print out up to ten (10) cheques per bank account and send them to your bank for testing. The wait time for processing normally ranges from 3 to 10 business days dependent upon the bank. In our most recent experience, our wait time was up to the full 10 business days. Ensure that you leave enough time ahead of your cheque printing requirement to allow for this testing, as the time required for review will be out of your control.

Compared with my previous experiences using other ERP software, Dynamics AX cheque printing is fairly simple, but it can still take weeks to complete the configuration due to bank testing. Review your cheques thoroughly before submission, as many factors could lead to a failed bank test which could result in weeks of delays.  I hope these steps will reduce your time in cheque printing configuration and help you avoid some of the pitfalls.

 

 

Shuheng is a Solutions Consultant who has devoted his career to implementing and supporting Dynamics AX. Shuheng has expertise in large-scale enterprise implementations in Finance, Projects, and Trade and Logistics modules.

 

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