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Setup page · Accounts payable

Accounts payable parameters

The main setup page for Accounts payable in each legal entity.

Used by
Accounts payable manager, Auditor, Accounting manager and 2 more roles
Business process
Perform invoice matching in Dynamics 365 Finance
Menu item
VendParameters
Main table
PurchParameters
Data entity
PurchProcurementDocumentDefaultsEntity
Setup steps
7 on this page
Show what matters for

Everyone

1What it is and why

What it isThe main setup page for Accounts payable in each legal entity.
What you do hereUsed to set default settings that apply when no more specific setting exists, parameters for various Accounts payable functionality, and the Accounts payable number sequences.
ExampleFor example, a company that wants accrued costs recorded when goods are received, before the vendor invoice arrives, selects the Post product receipts to ledger option on this page.
Accounts payable parameters page in Dynamics 365
The page in a working Dynamics 365 system. page title tab to open what to set or check

Functional consultant · Solution architect

2Where it fits

Business processManage accounts payable › Process supplier invoices › Perform invoice matching in Dynamics 365 FinanceManage accounts payable › Issue and settle supplier payments › Manage supplier settlements in Dynamics 365 FinanceManage accounts payable › Process supplier invoices
Menu pathAccounts payable › Setup › Accounts payable parameters
Set up firstVendor posting profiles Microsoft Learn ↗Vendor write-off reason codes Microsoft Learn ↗Accounts payable workflows Microsoft Learn ↗Confirm procurement and AP number sequences existEnable invoice matching validationSet the default line matching policyEnable invoice matching validationDefine vendor posting profiles
Used next byMatching policy Microsoft Learn ↗Invoice totals tolerances Microsoft Learn ↗Enable invoice matching validationSet the default line matching policyConfigure price total matching and toleranceSet the posting rule for invoices with discrepanciesAssign matching-related duties to AP rolesDecide whether matching policy override is allowedDefine price tolerances by item, vendor or combinationDefine charges tolerances
Related pagesTerms of payment Microsoft Learn ↗Methods of payment Microsoft Learn ↗Vendor groups Microsoft Learn ↗Vendor posting profiles Microsoft Learn ↗Form setup Microsoft Learn ↗

End user · Functional consultant

3How to do it

Step by step, with screenshots

Confirm procurement and AP number sequences exist1 screen

  1. Screen 1

    Confirm the payables number sequences

    Go to Accounts payable > Setup > Accounts payable parameters, Number sequences tab

    1. Open the Number sequences tab
    2. Review each reference in the grid and its Number sequence code
    3. Assign a code to any reference that has none, then select Save
    1Vendor accountAcco_99
    2Payment voucherAcco_116
    3Internal product receiptAcco_128
    4Internal invoiceAcco_132

    Check Every reference in the grid, including Vendor account, Payment voucher, Internal product receipt and Internal invoice, shows a number sequence code.

    Confirm the payables number sequences
    page title tab to open what to set or check
Enable invoice matching validation1 screen

Turn on the control that compares vendor invoice lines against purchase order and receipt data before posting, so price and quantity discrepancies are caught at entry rather than at reconciliation.

  1. Screen 1

    Turn on invoice matching validation

    Go to Accounts payable > Setup > Accounts payable parameters, Invoice validation tab

    1. Open the Invoice validation tab
    2. In the Invoice validation section, turn on Enable invoice matching validation
    3. Select Save
    1Enable invoice matching validationYes
    Turn on invoice matching validation (zoomed on the outlined fields)
    Show the full screenTurn on invoice matching validation
    page title tab to open what to set or check
Set the default line matching policy1 screen

Establish whether invoice lines are validated against the PO only, or against the PO and the product receipt, as the organisation's default control level.

  1. Screen 1

    Set the line matching policy

    Go to Accounts payable > Setup > Accounts payable parameters, Invoice validation tab

    1. Expand the Price and quantity matching section
    2. Set Line matching policy
    3. Select Save
    1Line matching policyThree-way matching
    Set the line matching policy (zoomed on the outlined fields)
    Show the full screenSet the line matching policy
    page title tab to open what to set or check
Decide whether matching policy override is allowed1 screen

  1. Screen 1

    Allow a stricter policy override

    Go to Accounts payable > Setup > Accounts payable parameters, Invoice validation tab

    1. Expand the Price and quantity matching section
    2. Set Allow matching policy override
    3. Select Save
    1Allow matching policy overrideHigher than company policy
    Allow a stricter policy override (zoomed on the outlined fields)
    Show the full screenAllow a stricter policy override
    page title tab to open what to set or check
Configure price total matching and tolerance1 screen

  1. Screen 1

    Set price total matching and its tolerances

    Go to Accounts payable > Setup > Accounts payable parameters, Invoice validation tab

    1. Expand the Price and quantity matching section
    2. Set Match price totals
    3. Check the two purchase price total tolerance fields
    4. Select Save
    1Match price totalsNone
    2Purchase price total tolerance percent0.00
    3Purchase price total tolerance0.00
    Set price total matching and its tolerances (zoomed on the outlined fields)
    Show the full screenSet price total matching and its tolerances
    page title tab to open what to set or check
Set automatic vendor settlement behavior1 screen

Control whether an unallocated vendor payment is matched to open transactions automatically after posting.

  1. Screen 1

    Set automatic settlement and settlement limits

    Go to Accounts payable > Setup > Accounts payable parameters, Settlement tab

    1. Open the Settlement tab
    2. Set Automatic settlement
    3. Enter Maximum penny difference and Maximum overpayment or underpayment
    4. Select Save
    1Automatic settlementNo
    2Maximum penny difference0.00
    3Maximum overpayment or underpayment0.00
    Set automatic settlement and settlement limits (zoomed on the outlined fields)
    Show the full screenSet automatic settlement and settlement limits
    page title tab to open what to set or check
Set the default vendor posting profile1 screen

Apply the approved AP posting profile to new vendor documents unless a more specific choice is made.

  1. Screen 1

    Set the default vendor posting profile

    Go to Accounts payable > Setup > Accounts payable parameters, Ledger and sales tax tab

    1. Open the Ledger and sales tax tab
    2. In the Posting section, select the posting profile
    3. Select Save
    1Posting profileBEAT
    Set the default vendor posting profile (zoomed on the outlined fields)
    Show the full screenSet the default vendor posting profile
    page title tab to open what to set or check

Microsoft's steps

  1. Go to Accounts payable > Setup > Accounts payable parameters.
  2. Select the Invoice validation tab.
  3. Select or clear Enable invoice matching validation.
  4. In Post invoice with discrepancies, choose whether invoices with matching discrepancies need approval or can post with a warning.
  5. In Automatically update invoice header match status, choose whether matching runs automatically during invoice entry.
  6. For invoice totals matching, select Match invoice totals and enter the Invoice totals tolerance percentage.
  7. Select the Line matching policy and, if needed, a value in Allow matching policy override.
  8. Set Match price totals and its tolerance, and select Match charges to match charges against the purchase order.

Source: Microsoft Learn ↗

Field guide

FieldWhat it meansWorked exampleTable column
Enable invoice matching validationTurns on invoice matching checks for vendor invoices in this legal entity.Microsoft Learn ↗Yes—
Post invoice with discrepanciesWhether an invoice with matching discrepancies must be approved first or can be posted with a warning.Microsoft Learn ↗——
Automatically update invoice header match statusWhether matching runs automatically while the invoice is being entered.Microsoft Learn ↗——
Invoice totals tolerance percentageThe company-wide allowed variance for invoice totals, which vendors can override.Microsoft Learn ↗——
Line matching policyThe default line matching for the legal entity: not required, two-way or three-way.Microsoft Learn ↗Three-way matching—
Allow matching policy overrideWhether a different matching level can be set for an item, vendor, or purchase order line.Microsoft Learn ↗Higher than company policy—
Match price totalsCompares the running net amount of all invoices for a purchase order line with the order line amount.Microsoft Learn ↗None—
Match chargesCompares charges on the invoice with the charges expected from the purchase order.Microsoft Learn ↗——
Cash-discount administrationWhere the difference goes when a payment doesn't match the discounted amount; Specific posts it to the vendor cash discount account.Microsoft Learn ↗——
Enable vendor approvalsSends changes to selected vendor fields through an approval workflow.Microsoft Learn ↗——
Enable settle remainderLets the remaining amount after settlement go to a ledger account or another vendor.Microsoft Learn ↗——
Automatically submit imported invoices to workflowSends imported vendor invoices to workflow without manual steps.Microsoft Learn ↗——
Vendor account—Acco_99AgreementAccountKey_RU
Payment voucher—Acco_116—
Internal product receipt—Acco_128—
Internal invoice—Acco_132—
Purchase price total tolerance percent—0.00—
Purchase price total tolerance—0.00—
Automatic settlement—No—
Maximum penny difference—0.00—
Maximum overpayment or underpayment—0.00—
Posting profile—BEAT—

Functional consultant

4Setup decisions

Setup stepRecommended value and whyDecision · common mistake · test
Confirm procurement and AP number sequences exist · Number sequences tab——
Enable invoice matching validationYesWithout this, the matching policy, tolerance and discrepancy settings downstream have no effect. Every subsequent step in this process is inert until it is on — which is why it sequences before them rather than alongside.—Enabled in one legal entity during a pilot and never replicated to the others, so matching silently does nothing in the entities that went live later. It is per-legal-entity, and there is no cross-entity warning.Test: Matching validation test pack
Set the default line matching policyThree-way matching for stocked items; two-way where no receipt is recorded (services, some indirect spend)Three-way matching is the control auditors expect for goods, but it fails operationally wherever receipting isn't actually performed — it will block invoices that have no receipt to match against. Do not set three-way globally unless receipting discipline is confirmed in the to-be process.What level of invoice matching control applies, and does it vary by spend category?Set to three-way in design workshops on the strength of an aspiration to receipt everything, then relaxed under go-live pressure. Decide against the actual receipting process, not the intended one.
Decide whether matching policy override is allowed——
Configure price total matching and tolerance——
Set automatic vendor settlement behavior · Settlement tab—Should open vendor transactions be settled automatically when an unallocated payment is posted?Assuming automatic settlement can clear payments across legal entities. Microsoft's settlement overview limits this setting to the same legal entity.Test: Automatic versus explicitly marked vendor settlement
Set the default vendor posting profile · Ledger and sales tax tab—Which vendors need different AP summary accounts or posting treatment?Treating the default profile as the final posting result even when the document profile is changed or General ledger posting definitions apply.Test: AP baseline defaults flow from setup to invoice and payment

Solution architect

5Design impact

Shared or per companyPer company: each legal entity has its own records. Microsoft data model ↗
Can it be undone—
Feature or country—
If you change it laterSome settings don't change existing records on their own. For example, when you turn on Show due date and allow edit, you choose whether to update all existing vendor transactions now or fill the new fields only for new transactions. Microsoft Learn ↗

Technical architect

6Technical

Menu itemVendParameters Checked in Dynamics 365
FormVendParameters Checked in Dynamics 365
TablePurchParametersShown as “Purchase parameters” in Record infoChecked in Dynamics 365
Data entitiesPurchProcurementDocumentDefaultsEntityProcurement type document default values Microsoft data model ↗PurchProcurementDocumentEntryPolicyEntityProcurement type document entry policies Microsoft data model ↗PurchProcurementDocumentProcessingPolicyEntityProcurement type document processing policies Microsoft data model ↗
Who can open itPrivilegesMaintain accounts payable parameters VendParametersMaintainView accounts payable parameters VendParametersViewDutiesEnable purchasing process ProcPurchasingProcessEnableInquire into purchase order to invoice policies PurchOrderToInvoicePoliciesInquireEnable purchase order to invoice process PurchOrderToInvoiceProcessEnableInquire into invoice and payment policies VendInvoiceInvoicePaymentPoliciesInquirEnable invoice and payment process VendInvoiceInvoicePaymentProcessEnable
5 security rolesAuditor AuditPolicyManagerAccounting manager LedgerAccountingManagerAccounting supervisor LedgerAccountingSupervisorPurchasing manager TradePurchasingManagerAccounts payable manager VendInvoiceAccountsPayableManager
Checked in Dynamics 365
Actions on the page—

Developer

7Developer

Open it directlyhttps://<your-environment>/?mi=VendParameters
Integrate withPurchProcurementDocumentDefaultsEntity data entity Microsoft data model ↗
Table definitionPurchParameters columns and relations Microsoft data model ↗

Everyone

8Sources and checks