Alternate Vendor Payment

Microsoft Dynamics AX provides functionality to support the payment of a vendor in lieu of another vendor. The invoice account field on the vendor master and the purchase order can be set to allow one vendor to make the purchase and another vendor to receive the payment for the purchase.
However in the event that the invoice account was not set properly and the payment is on the open transactions of the purchase vendor, let me outline the steps needed to handle the alternate vendor payment.
Assume in this scenario we have two vendors - Vendor A whose invoice has been processed and Vendor B whom we have been instructed to pay in lieu of Vendor A

• Create new method of payment called VEND

1. Accounts Payable - Set up - Payments - Methods of Payment
2. Click the new icon or CTRL +N
3. Enter the following:
4. Method of Payment - VEND
5. Period - Invoice
6. Description - Vendor Payment
7. Account Type - Vendor

• Process payment for Vendor A

1. Accounts Payable - Journals - Payments - Payment Journal
2. Create Payment Journal Header
3. Click Lines
4. Create new Line
5. Enter Vendor Account (in this case Vendor A)
6. Ensure that the method of payment is "VEND" (the new method of payment that was earlier created)
7. Ensure that the offset account on the payment journal is of type vendor
8. Select Vendor B in the offset account
9. Click on Functions - Settlement and mark the invoice for payment
10. NOTE: Do not generate payments as no check will print
11. Validate and Post Journal

• Perform review of Vendor B

1. Accounts Payable - Vendor details
2. Search for Vendor B
3. Click Functions - Open Transaction Editing
4. The outstanding payable from Vendor A now exists for Vendor B

• Process payment for Vendor B as you normally would

1. Accounts Payable - Journals - Payments - Payment journal
2. Create payment journal header
3. Click Lines
4. Create new line
5. Enter Vendor B in the vendor account field
6. Ensure the method of payment is Check or ACH etc.
7. Ensure that the offset account type and offset account on the payment journal is Bank
8. Click on functions - Settlement and mark invoice for payment
9. Click on functions - Generate payments to generate check
10. Validate and Post journal