Monday, August 4, 2014

Details to consider before turning on Advanced Bank Reconciliation in AX 2012

Advanced bank reconciliation in AX 2012 is a new feature to help automate and accelerate the bank reconciliation. It helps users to match transactions with the bank statement which is automatically imported in AX. Rules can be created based on user defined parameters to mass match transactions and reduce the amount of manual work and errors.
However, before using this great new feature, you might need to consider few details and test it:

1. No going back - The first obvious and most important detail to consider is that once the advanced bank reconciliation feature is turned on, then you CANNOT turn it off!!
Make sure you test it first for few months before being sure to use it in Production, there is no going back.
I strongly advise to test full months and not just few days of the month to ensure the ending balance is correct and match your bank statement.
An option is to pick a bank account with limited activity and let the user manually create the bank statement in AX so you can still use the matching rules to practice. This limit the number of examples and potential issues you might have though.

2. Bank Integration - The standard format to exchange bank statements between AX and the bank is called BAI2. BAI file format is a file format for performing electronic cash management balance reporting and exchange data. Each bank will have its own version of this format and you will need to customize AX to ensure you can read and import the statement in AX. AIF services are provided in standard AX and can be modified to match your bank requirements.
Also, if you have several companies in AX that are using advanced bank reconciliation function, you will need to most likely split your BAI2 file to import in each company. Certain bank are sending one file with all the bank accounts that are turned on and AX doesn't make the distinction between bank accounts so it will import the entire file in one entity. By splitting the file you will be able to import each statement in the correct entity.
Finally, consider to create an automatic import of the statements in AX as certain bank will send daily statements. This will prevent your users to have to import 30 files a months especially if the file needs to be re-formatted before the import.

3. Auto Matching - When it's time to create the matching rules keep in mind to create rules with at least a few defined matching attributes. Try to refrain from creating rules that are matching only on the amount for example.
Make sure to create different rules for different type of transactions: receipts, outgoing checks, outgoing wires, GL entries... Each scenario can be treated with different attributes.
Also, the order of the execution of the rules is important as you want to match the most specific transactions first and then for the few remaining you can be more confident that matching on the date and amount for example will not clear the wrong transactions.
Rules are not set in stone and can be updated and improved as you learn about the process.

4. Reporting - The standard bank statement report provided in the advanced bank reconciliation doesn't have the list of outstanding transactions for the reconciled period. It is most likely that you will be asked to add this to the report as this will be used to match your bank balance with your GL balance.
The report do show cleared transactions and doesn't have an option to not show them which for accounts that have a lot of activity can end up being too much. Be prepared to be asked to have an option to hide those on the report as it's not necessary useful to have this :)

5. User adoption varies! The excitement at first, being able to use matching rules, having the bank statement imported in AX, this is all very exciting for a user. But once they start to use it, obviously they have to learn and learning curve can take some time. Make sure they understand that the rules can be modified and improved. Emphasize the communication with your users to understand what takes time for them, what are the type of transactions that are hard to match.

I hope this will help you and let me know if you want more information, I would be more than happy to share details :)

3 comments:

  1. I do not understand the "No Going Back" issue. Once this is turned on, it can't be turned off? So, if a company ever changes to a bank without electronic files, they can no longer use AX to do bank rec? Or is it account by account "no going back"?

    If the latter, what if the file is corrupted and you just want to manually do it this month, instead of wading through IT queues? This is not an option?

    Finally, I haven't found anywhere in the MS documentation where this is mentioned, which is not necessarily a surprise, but what did they say about this? Are they resolving it in a future release, or do they recommend this process? And if so, did they release a white paper or blogpost about it?

    Thanks!

    chris

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    1. Hi, it's an account by account limitation. you will be able to create new bank accounts and use the standard functionnality.
      Also, you can import the 'corrupted file' and either bring changes to those lines, or you can create manually the file, line by line. Which is not recommanded. But once the file is imported, it's very felxible to improve it, bring changes to it. Youc can delete it and reimport a new corrected one. But all this before clicking the Validation button.

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  2. Hi Chris,
    The setup is bank account specific so most likely you won't need to turn it off. If you change bank then you will have to setup a new bank account in AX.
    If the file is corrupted, you can manually create the bank statement in AX, very manual but possible. So you won't get stuck.
    The white paper might not give that detail but you will see a message in AX when you turn that feature on on one account that you cannot turning it off.
    I hope that helps!
    Caroline.

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