Following on from the previous post on payment terms, it seemed logical to next cover reminders in Business Central. Reminders give users the ability to issue messages to customers with overdue payments and add additional fees and interest. We will cover the different ways you can create reminders in Business Central, explain their utility and showcase some examples. We will also delve into the different types of fee calculations, namely Fixed fees, Single and Accumulated Dynamic.
Customer Card setup
On each Customer Card you wish to send reminders to, in the Payments tab, establish a Reminder Terms Code value. If you’ve not set up any Reminder Terms records, follow the steps in the next section.
If you wish to apply interest to the reminders you issue, set a value in the Fin. Charge Terms Code field, also found in the Payments tab. We will cover interest on reminders in more detail later on.
The Reminder Terms page in Business Central
To get started, go to the Reminder Terms page. Here you can configure different reminder terms and specifically the messages to send to customers for overdue payments. You can configure multiple reminders, dependant on how overdue the payment is. This means for each lateness threshold the customer passes, the messages can get increasingly more challenging.
To demonstrate, I have set up a new record, ‘Standard Domestic Reminder Process’. I have set a Max. No. of Reminders value of ‘3’. This means that the the most pressing reminder will be the third the customer receives, in relation to a singular invoice.
On a Reminder Terms record, you can drill into ‘Levels’. Regardless of how many posted records are in a Reminder record, or how different the Posting Date values are between those posted documents, a Reminder record will always start at the first level. Until that first reminder has been issued, you won’t be able to issue a second or third level. So, a reminder level is a stage in the process. Ideally you don’t want it to pass the first level.
For each level, you can define bits of information for the reminders you issue. As we will see, this includes Beginning and Ending Text, as well as Currencies.
Beginning and Ending Text
To define the message a Reminder record has, click on the line you wish to specify it for and then click ‘More Options’, ‘Related’, ‘Level’ and then either ‘Beginning’ or ‘Ending Text’.
The reason why there’s a Beginning and an Ending Text is because they are separated by the invoice details. Below you can see how my example Beginning Text looks:
Below is the Ending Text:
Remember, you’d have to define these texts for each reminder level you have. Whilst that message may be appropriate for an opening level reminder, a final message may say something like “If you don’t pay within 30 days, we are going to initiate legal proceedings”…
Placeholders on your Beginning and Ending Text
Below is a table from Microsoft’s guide on reminders:
|%1||Content of the Document Date field on the reminder header|
|%2||Content of the Due Date field on the reminder header|
|%3||Content of the Interest Rate field on the related finance charge terms|
|%4||Content of the Remaining Amount field on the reminder header|
|%5||Content of the Interest Amount field on the reminder header|
|%6||Content of the Additional Fee field on the reminder header|
|%7||The total amount of the reminder|
|%8||Content of the Reminder Level field on the reminder header|
|%9||Content of the Currency Code field on the reminder header|
|%10||Content of the Posting Date field on the reminder header|
|%11||The company name|
|%12||Content of the Add. Fee per Line field on the reminder header|
Taken from the previously linked Microsoft document, this table provides the data users can use to formulate their Beginning and Ending Text scripts. Using Microsoft’s example, if you were to write ‘you owe %9 %7 due on %2’, the message will populate using live data from the reminder. To give an example, if the relevant currency was sterling, the amount was £100 and the Due Date value was 15/12/22, the message would automatically pull through that data. So the %9, %7 and %2 characters would be replaced by the values to which they refer.
Defining the currency on a Reminder Terms record in Business Central
You can define the Currency Code for each Reminder Terms record you create. To do so, on a record, click either ‘…’ or ‘Related’, it depends on the width of your window. Next click ‘Level’ and ‘Currencies’.
When you create reminders in a foreign currency, the foreign currency conditions that you set up here will be used to create reminders. If there’s no conditions for the foreign currency, it will instead apply local currency conditions. By following the steps in the image above, you can reach the Currencies subpage, where you can define different currency conditions to Reminder Levels. Below I’ve attached a couple of couple of different currencies to a Reminder Level:
The Grace Period and Due Date fields
Technically, you don’t need to employ a Due Date Calculation value. Instead, you can just use a Grace Period value. A Grace Period is the period in-between the reminder terms levels. So having a 10D Grace Period on level 2 means 10 days after level 2, level 3 starts. The Grace Period is an extension to the specified Due Date.
Before I finish on Reminder Terms, you can also apply fees and interest to any Reminder records you create. I cover this after demonstrating how to create and issue reminders.
Creating reminders in Business Central
There are two ways to create Reminders in Business Central. The first way is by doing it manually. To do this, go to the Reminders page. Click the ‘+ New’ action and then specify the Customer No. value.
In the Lines section, you can specify the Type and from there begin filtering your results by other fields like Document Type and Document No.
When you’re happy, you can do a test report to see if the Reminder record appears as it should. To do so, click ‘More Options’, ‘Actions’, ‘Issuing’ and ‘Test Report’:
However, typically, users will create reminders as a batch. Let’s take a look at how to do that next.
Reminders batch job
You can instead create a batch job for reminders. This way you’re not having to select specific invoices. To do this, on the Reminders list page, click ‘Process’ and ‘Create Reminders’. This will generate this screen:
The Posting and Document Date fields at the top allow you to dictate the values for the reminder documents. They aren’t a filter for posted document.
Before I continue, it is possible to get this message when you go to create reminders using the batch job:
This seems to occur when you already have reminders for the customers in question. If you click ‘Yes’ on the above option, it will show you which customers you can’t create another batch of reminders for:
However, to get around this, simply create the reminders for those customers manually. Doing it this way will allow you to create multiple reminders for the same customer. Alternatively, you could delete the batch for the customer and create a new one, encompassing all of the subsequent records that the system wouldn’t let you have in a Reminder record.
As a sidenote, it can become complex when there’s multiple invoices the customer’s payment is overdue for. There may be a situation in which multiple reminder records are created for the same customer, applying to different invoices, each with potentially different messages depending on how overdue each is.
Returning back to the Create Reminders batch job filter screen, there are three checkmark fields in the Options tab in the Options tab. Let’s cover those.
Only Entries with Overdue Amounts
This field, when enabled, will generate results for open entries with overdue payments. It will bring in records with a Due Date value earlier than the Reminder record Document Date, which is the field above on this screen.
Include Entries On Hold
Enabling this field allows users to create reminders for entries set as ‘on hold’.
Use Header Level
Thirdly, the Use Header Level field allows you to specify whether the details on the reminder header will pass through onto all the lines.
Whichever fields you enable or choose to filter by, running the batch job will create records within the parameters set.
An example of a Reminder record in Business Central
I posted four sales invoices for the same customer. Each was for the same item and quantity. The only difference between the records was the Posting Date. Posted Sales Invoice record 103331 has a Due Date in the future (at the time of writing!) whilst the others are either present or in the past. Note, my Work Date value for all of these postings was 13/12/22.
Four posted sales invoice entries. All same item, same value, only posting dates differ. Note I accidentally posted two with the same posting date hence why I’ve blacked one of the entries out. Now when I go to generate reminders, there are only three relevant records:
The one posted invoice record that doesn’t feature in the reminder record is sales invoice 102251, which from the posted sales invoice record, we can see is associated with the posted sales invoice record 103331. The reason why this was to be expected is that the Due Date value for this record is January 1, 2023. As that’s the case, it’s too early to be reminding the customer about late payments.
After creating a Reminder record, the next step is to ‘issue’ the record. This is similar to posting a financial record. To do so, click ‘Process’ and ‘Issue’. Issuing a reminder will delete the record, with an associated Issued Reminder record being generated in its place. Like other posted documents, this record will be unamendable.
Issuing reminders in Business Central
To issue a Reminder record manually, click into the record and then press ‘Process’ and ‘Issue’. If you want to see the result of doing so before committing, you can instead click ‘More Options’, ‘Actions’, ‘Issuing’ and ‘Test Report’.
Once you have issued a reminder, the record will be deleted. There will now be a resulting record on the Issued Reminders page. If the required setup is complete for interest to be posted, this will happen at this point too. Any other additional fees you’ve configured on the Reminder Terms record will also be posted.
To see or print a report of all your issued reminders, you can run Report ID 126.
Reminder report layouts
One thing to note is that there are two separate report layouts for reminders:
- Reminder (Report ID 117)
- Reminder – Test (Report ID 122)
This means when it comes to configuring how your reminders look, be sure to amend the correct report. Report ID 122’s layout is applied when you run a test report on a Reminder record. Report ID 117’s layout is applied to reminders when you issue them.
It’s possible to apply fees to reminders in Business Central. By navigating to a Reminder Level from the Reminder Terms page, you can specify how a Customer should be charged for reminders. For both Single Dynamic and Accumulated Dynamic, you have access to the Additional Fee action in the top menu. That’s where you will specify their fee conditions. Fixed fees are done using the fields on the Reminder Levels screen. You can add a description for any additional fees you choose to add.
The most simple type of fee to add is a ‘Fixed’ fee. There are two types. The first is an Additional Fee, which is a flat figure, added to the total of the posted records making up a Reminder record. The second type is an additional fee per line. This adds on a flat figure for each line on the reminder. Each line reflects a posted document. As you can see below, the first reminder level has an additional fee value of £100 and a £5 per line fee:
If you are planning on using fees per line, make sure you have a value in the ‘Add. Fee per Line Account’ in the Customer Posting Group associated with the customer receiving the reminder:
By issuing a reminder to a customer with this Reminder Terms Code, they will receive an additional £205 fee. The £105 is made up of the 21 lines. These fees are irrespective of the total value of the Reminder record. Note, in the next image, I’ve not included all the lines on the reminder. See below:
As I mentioned before, for both Single and Accumulated Dynamic, click the ‘Additional Fee’ action at the top of the Reminder Levels screen. Note, you can still add fixed fees if you use this option.
Below, you can see my reminder amount thresholds:
After running a test report, for a Reminder with a Remaining Amount value of £21,170, the additional fee comes out at £2117. This is 10% of the reminder amount. So, Single Dynamic bypasses the conditions set for amounts which don’t apply. As the total exceeds £10000, it only applies the second threshold Additional Fee %. See below:
To test the Accumulated Dynamic, I kept the Additional Fee Setup identical to before. The only thing I changed was making the reminder level Accumulated Dynamic instead of Single Dynamic. As a result of deleting the reminder and creating it again, the Additional Fee value on the reminder comes out to £1317:
Instead of working out 10% of the total figure, it’s instead calculated 2% of £10000 i.e. £200 and 10% of £11,170 i.e. £1170. So by adding these two figures together, we get £1317. Given the name is ‘Accumulated’, it makes sense it would incorporate all the variables listed.
Note, the Finance Charge Terms Code set against the Customer Card doesn’t factor. It’s overridden by the Dynamic fees.
How to calculate interest on reminders in Business Central
To enable a customer to have interest calculated and posted against their account when issuing reminders, there’s a bit of setup to complete. Like I mentioned earlier, make sure the Fin. Charge Terms Code in the Payments tab on the Customer Card has a value. This defines the interest rates to apply on reminder records for that customer. Here’s a screenshot of the default Finance Charge Terms records:
Moving to the Reminder Term record, if you drill into a specific Reminder Level, you can tick ‘Calculate Interest’. This displays the amount of interest, defined by the Fin. Charge Terms Code, applied to Reminder records.
As well as this, on the Reminder Terms page, by ticking the ‘Post Interest’ field, it will post the interest to the general ledger and to the customer accounts.
Any Additional Fee value established on a Reminder Terms record takes precedence over Finance Charge Terms data.
On Reminders batch job, the ‘Use Header Level’ field is only useful for determining whether to post interest on all the lines that have the Calculate Interest action enabled.
Where do posted interest entries go?
To see where entries are posted to, I refer again to Microsoft’s documentation on the topic.
“If the Post Interest or the Post Additional Fee check boxes are selected in the Reminder Terms window, then the following entries are also created:
- One entry in the Cust. Ledger Entries window
- One receivables entry in the relevant G/L account
- One interest and/or one additional fee entry in the relevant G/L account
In addition, issuing the reminder may result in VAT entries.
- Choose the icon, enter Reminders, and then choose the related link.
- Select the relevant reminder, and then choose the Issue action.
- In the Issue Reminders window, fill in the fields as necessary.
- Choose the OK button
The reminder is either printed for sent to an specified email as a PDF attachment.”Microsoft – Set Up Reminder Terms and Levels, 09/19/2022
Thanks for taking the time to read this! Reminders in Business Central are as complex as you want them to be. The flexibility you have to create reminders per invoice or as a batch, determine message templates and apply fees and interest for late paying customers is invaluable. If there’s anything you’re unsure of, or think we missed, make sure to get in contact with us! To keep up to date with when we post, why not follow us on LinkedIn.