DEC-AP-PAY-001 · Design decision

Should open vendor transactions be settled automatically when an unallocated payment is posted?

A decision a human must make between defensible options. The configuration records it governs cannot be completed until it is taken.

Partly verified

Options

AKeep automatic settlement off and mark the intended invoices manually, either in the payment proposal or on Settle transactions. This requires deliberate allocation work.

BEnable automatic settlement for payments not allocated before posting. Microsoft documents this as same-legal-entity settlement, with priority rules determining the order; the allocation outcome must be tested.

Recorded recommendation

Recommendation	Not recordedUnverified
Depends on	Whether payments can arrive or be posted without a reliable invoice reference Whether the AP team requires explicit invoice selection before posting Whether the settlement priority and exception review process are accepted
Owner	AP process owner and finance controller
FDD wording	Not recordedUnverified

Configuration it governs

AP-PAY-010

Set automatic vendor settlement behaviorParameter · Accounts payable > Setup > Accounts payable parameters > SettlementProcess: Manage supplier settlements in Dynamics 365 Finance

Partly verified

Verification

Verified by	Microsoft Learn settlement overview, read 2026-09-30; Test3 AP parameters navigation observed 2026-09-30
Environment	Test3 sandbox
Note	Microsoft Learn documents manual marking, payment-proposal marking and same-legal-entity automatic settlement. The live AP parameters page exposed an Automatic settlement switch. This is a design choice, not a claim that any setting was changed or any settlement was tested. Recommendation awaits process-owner criteria.
Still to check	Recommendation, Fdd_wording
Source	https://learn.microsoft.com/en-us/dynamics365/finance/cash-bank-management/settlement-overview

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