AX 2012: Charges Codes

Before you plan to add manual or automatic charges when you create a sales or purchase order, you must setup Charges Codes. They are used to define the kind of charge and how the charge is going to be debited or credited. You can setup charges by navigating to Setup → Charges → Charges codes in the following 3 modules:

1. Accounts Receivable
2. Accounts Payable
3. Procurement and Sourcing

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Fields on the Charges codes form are described below:

1. Charges code: Unique code for the charge
2. Description: Brief description about the charge
3. Item sales tax group: An item sales tax group that can be used for calculating taxes on the charge
4. Maximum amount: Maximum amount allowed for the charge

Posting FastTab

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This is where the actual game happens. In this posting fastTab we define how to automatically debit and credit the charge. Both debit and credit sections have the following fields:

1. Type – Defines the entity which will be billed for the charge. Following are the available options:

  • Item – Charge is added to the item cost
  • Ledger Account – Charge is billed internally to the ledger account
  • Customer/Vendor – Charge is billed to the customer/vendor

2. Posting – Free text field to give the description which will be used while posting the charge to journals

3. Account – Defines the ledger account which must be debited/credited when Type is set to Ledger Account

 

So far we have understood what is the purpose of different parameters used to configure charges codes. Let us now create charges codes for sales and purchases. In both cases the parameters discussed will be set differently to cater to different needs of sales and purchases.

Charges Codes for Sales

For sales, you can configure charges in 2 different ways:

1. Customer

Charge is billed to the customer and is added to the sales order totals. Follow the steps below to achieve this functionality:

1. Open Accounts receivable > Setup > Charges > Charges code.
2. Click New to add a new code.
3. In the Charges code field, type a unique identifier for this charge.
4. In the Description field, type a short description of the charge.
5. Click the Item sales tax group arrow and select the sales tax group.
6. Click the Posting tab.
7. Setup the debit/credit fields as follows:

Debit Type Customer/Vender
Posting N/A
Account N/A
Credit Type Ledger Account
Posting Specify
Account Specify

 

2. Ledger Account (Internal)

Charge is billed to an internal ledger account and does not show up on sales transactions. Follow the steps below to achieve this functionality:

1. Open Accounts receivable > Setup > Charges > Charges code.
2. Click New to add a new code.
3. In the Charges code field, type a unique identifier for this charge.
4. In the Description field, type a short description of the charge.
5. Click the Item sales tax group arrow and select the sales tax group.
6. Click the Posting tab.
7. Setup the debit/credit fields as follows:

Debit Type Ledger Account
Posting Specify
Account Specify
Credit Type Ledger Account
Posting Specify
Account Specify

 

 Charges Codes for Purchases

For purchases you can configure charges in 4 different ways. Repeat the following basic steps for all of the 4 different configurations then we’ll see how to setup the Posting fastTab:

1. Open Accounts payable > Setup > Charges > Charges code.
2. Click New to add a new code.
3. In the Charges code field, type a unique identifier for this charge.
4. In the Description field, type a short description of the charge.
5. Click the Item sales tax group arrow and select the sales tax group.
6. Click the Posting tab.

Here are the 4 different configurations for the posting fastTab

1. Paying to Creditor – Billing to Item

Setup the debit/credit fields as follows:

Debit Type Item
Posting N/A
Account N/A
Credit Type Customer/Vendor
Posting N/A
Account N/A

 

2. Paying Internally – Billing to Item

Setup the debit/credit fields as follows:

Debit Type Item
Posting N/A
Account N/A
Credit Type Ledger Account
Posting Specify
Account Specify

 

3. Paying to Creditor – Billing Internally

Debit Type Ledger Account
Posting Specify
Account Specify
Credit Type Customer/Vendor
Posting N/A
Account N/A

 

4. Paying Internally – Billing Internally

Debit Type Ledger Account
Posting Specify
Account Specify
Credit Type Ledger Account
Posting Specify
Account Specify

 

That’s all about the configuration of charges codes. Hope you would like. Thanks for reading 🙂

 

 

 

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5 thoughts on “AX 2012: Charges Codes

  1. Hi Muhammed – Thanks for the great post! Please could you answer a question for me? If you have a charge on a purchase which is set to debit the item, it adds the charge to the value of the item at invoicing. If you have set the item model group to post to the ledger at Physical Stock, should it also add the value of the charge to the stock at this point? I think it should (although I can’t get it to work in 2012. I have a memory of it working in 2009). My colleagues think it doesn’t do this as standard. Would be great if you or another reader could settle our argument!

    Thanks, Jackie

    1. Hi Jackie, thanks for reading and appreciating the effort! Regarding your question, if you want the charges to be considered as part of the stock price and included in the calculations of inventory value and margins then you should be specifying a fixed charge on the “Released Products” form for that particular product.

      Hope this answers your question.

      1. Hi Muhammed
        Aha – that is not how I thought it should work – but that does match with my testing results! Just for clarity, what is the purpose of setting the charge to debit the item? Doesn’t that have some effect on the value of the stock of the item?

        I am trying to use these charges to calculate the landed cost of an item.

        Thanks again,

        Jackie

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