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Supplier Invoice Journals


Supplier Invoice Journals provide the core baseline purchase ledger capability for recording and posting purchase invoice (and credit note) transactions to a supplier’s purchase ledger account.

Invoice Journal entry is based on the cross-ledger financial journal model used extensively throughout all of Dynamics 365 Finance financial ledgers.

To make the most effective use of the Supplier Invoice Journal capability it is important to identify and define each of the supplier invoicing transaction types and scenarios that your organisation processes. This enables setup in the form of Journal Names, to profile and align the behaviour of the supplier invoice journal function to the particular nature of the transaction.

To illustrate, the table below provides several examples of possible supplier invoice transaction types and scenarios with suggested journal names and journal descriptions.

Transaction Type or ScenarioJournal NameJournal Description
Regular Third-Party Supplier InvoicesAPInvAP Supplier Invoices
Employee Expense ClaimsAPExpClaimAP Employee Expense Claims
Customer RebatesAPRebateAP Customer Rebates
Royalty ClaimsAPRoyaltiesAP Royalty Claims

Journal Names and Settings

When creating a new Supplier Invoice Journal, the first journal creation step is to select the Journal Name appropriate to the transactions that are to be recorded and posted.

The Journal Names available for selection within the drop-down are primarily based on those with the ‘Journal Type’ setting that aligns with the financial journal function that it relates to e.g. journal type ‘supplier invoice recording’ for invoice journal entry.

Journal Name settings include Private for user-group, Journal control, Approval, Posting restrictions and Voucher series amongst others, as highlighted in the screenshot below. These determine both key invoice journal entry behaviour and resulting GL voucher posting properties.

Those settings and how they influence the behaviour of the invoice journal functions are covered in the accordions below.

Journal Name Settings

As outlined in the previous accordion Journal Name setup contains a range of settings that when configured provide the necessary controls and profiling to align with the particular nature of the transaction type that the journal name is set up to support.

A number of key settings and the control and behaviour that they provide are outlined below for further insight.

Private for User Group

Defines which users are provided with the option to select and create supplier invoice journals using the specified Journal Name.

Those users that are to be provided with the ability to select and use the specified Journal Name need to be specified within a User Group which can be setup and maintained from within System Manager.

Journal Control

Defines which account types can be selected and posted to and for the ‘ledger’ account type also provides the option to define which general ledger main account and/or financial dimension values (by financial dimension) can be selected for posting, thus providing a mechanism to steer and restrict postings from invoice journals with the specified journal name that align to the nature of the transactions that the journal name represents.

To illustrate, the example below shows a Journal Name setup for Supplier Invoice Journal to support the entry and posting of employee expense claims to employee purchase ledger accounts. Here, journal control has been set up to restrict postings to account types supplier (i.e. purchase ledger) and ledger (i.e. general ledger) with ledger postings limited to the general ledger main accounts that support expense claim distributions.

Journal Control rules are then checked by the journal validation and posting processes with any errors presented in line with the example shown in the screenshot below.

Approval or Approval Workflow

Each Journal Name can optionally be set up to apply either an Approval (basic journal approval) control or an Approval Workflow (more functionally rich approval) control, should your organisation require that the transactions that will be entered and posted using the specified journal name be subjected to review and approval prior to posting.

Approval (basic journal approval) allows for the specification of a User Group whose members can mark the journal batch as approved once the journal batch is updated as ‘report as ready’. For segregation of duty purposes, the user group assigned to the journal name for approval permissions should be different to those assigned ‘posting restriction’ permissions.

Approval Workflow (more functionally rich approval) allows for the definition of a more sophisticated approval process e.g. where dual approval is needed. Workflow approval also provides capabilities such as email-based assignment and update notifications, delegations, escalations etc.

Posting Restrictions

Posting Restrictions provide the mechanism to specify which users have the authority to post approved (if approval is enabled) supplier invoice journals, by journal name.

When combined with the journal approval capabilities outlined above, this control provides support for the segregation of duties between those users who can approve transactions and those who can subsequently post them, if that level of control is a requirement for your organisation

Voucher Series

Voucher Series determines the unique reference that is assigned to all of the general ledger transactions that form the balancing entries resulting from a financial transaction posting e.g. supplier invoice, payment etc.

Individual voucher series can be configured and assigned to individual financial transaction types, which in the case of financial journals and specifically supplier invoice journals means that different voucher series can be associated with each journal name setup.

Good practice when defining and configuring Voucher Series, number sequences is to build in a 3 or 4-character prefix that identifies the nature of the transactional posting to aid subsequent transactional analysis. For example, voucher series for regular supplier invoices might be prefixed ‘SIN’, employee expense claims might be prefixed ‘EXP, customer rebates might be prefixed ‘REB’, and Royalty Claims might be prefixed ‘ROY’.

Learning with Microsoft

Provided below are links to Microsoft Learn and Training resources that give more detail on the topics covered by this extended help page, together with a video that covers the supplier invoice journal entry process for further familiarisation

Ledger journal types – Finance | Dynamics 365 | Microsoft Learn

Understand invoice types in Accounts payable – Training | Microsoft Learn

Create advanced rules for journals – Finance | Dynamics 365 | Microsoft Learn

Record a vendor invoice in the invoice journal – Finance | Dynamics 365 | Microsoft Learn