Cash flow management in Microsoft Dynamics AX 2012: Configuring Accounts Payable

[Editor's Note: The following article is adapted from the chapter Functioning of Cash Flow Management from Mohamed Aaamer's new book Microsoft Dynamics AX 2012 Financial Management. Other chapters include Working with Cost Management and Exploring Financial Dimensions.]

Cash flow management is a tool that predicts a company's future cash needs in the future. Cash flow management mainly covers the cash out and cash in events. Cash out is generated from the company's expenditure against the goods/services purchased, whereas cash in is generated from the company's revenue against the sale of goods/services. It gives the company's management visibility of the cash position in order to efficiently manage vendor payments in a specific period, and also the customer collections during the same period, to protect the company's cash situation.

Cash flow forecast configuration

The cash flow forecast configuration and setup of Microsoft Dynamics AX 2012  is combined with the integrated modules of cash flow management. The following figure explains the cash flow forecast configuration in detail:

The main configuration and setup of a cash flow forecast is performed through Accounts payable, Accounts receivable, and General Ledger. Other modules involved in cash flow forecast management include procurement and sourcing, sales and marketing, budgeting, and cash flow forecast.

In this article we will take a closer look ...