MB-310 Implement Accounts Receivable, Credit, Collections, and Subscription Billing — 10 Questions

Question 1

A subscription billing company wants to bill customers monthly in advance for a service that starts on the 15th of the month. They need to prorate the first invoice for the partial month. Which subscription billing feature should they use to ensure the first invoice reflects only the days from the 15th to the end of the month?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Proration method on the subscription. To prorate the first invoice for a partial month, the subscription must have a proration method configured. This method calculates the daily rate and applies it to the number of days in the partial period. Setting the subscription start date to the 15th triggers the proration based on the method, ensuring the first invoice covers only the remainder of the month.

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Billing schedule with a custom interval

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Charge setup with a specific start date

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Billing cycle with a start date of the 15th

Question 2

A company uses Dynamics 365 Finance to manage customer payments. They need to automatically apply customer payments to the oldest outstanding invoices first, but also allow manual adjustment when necessary. Which configuration should the Accounts Receivable functional consultant set up?

Accepted Answer

Configure a payment specification with a settlement priority of 'Oldest first'.. Payment specifications in Accounts Receivable define the rules for automatic payment application. By configuring a payment specification with a settlement priority of 'Oldest first', the system automatically applies customer payments to the oldest outstanding invoices. This allows for efficient and consistent payment processing while still permitting manual adjustments when needed. The other options do not provide this functionality.

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Enable 'Automatic settlement' on the customer posting profile.

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Use a collection letter sequence to apply payments to the oldest invoices.

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Set up a settlement priority on the Accounts receivable parameters.

Question 3

A legal entity must automatically place a customer on credit hold when the customer's credit limit is exceeded. The customer's balance is currently calculated using the 'Balance due' credit limit type, and the credit limit is 50,000. A sales order is entered for 55,000, but the customer's existing balance is 10,000. You need to ensure the order is blocked and the customer's credit status is updated to 'Credit hold' without manual intervention. What should you configure?

Accepted Answer

Create a credit limit rule with a rule type of 'Credit limit' and set the action to 'Credit hold'.. Credit management uses rules to automate credit decisions. A credit limit rule of type 'Credit limit' compares the customer's credit limit to the calculated balance (based on the credit limit type). When the condition is met, the specified action, such as 'Credit hold', is applied automatically. This enforces the credit policy without manual intervention, blocking sales orders and updating the customer's credit status.

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Set the customer's credit rating to 'Poor' and enable the 'Credit limit' check in the Customer detail form.

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Configure a credit limit of 50,000, set the credit limit type to 'Balance due', and enable the 'Credit hold' checkbox in the Accounts receivable parameters.

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Set the credit limit type to 'Balance due with packing slip' and enable the 'Mandatory credit limit' parameter.

Question 4

A Dynamics 365 Finance consultant is setting up credit management for a company that wants to automatically place customers on credit hold based on specific conditions. The consultant needs to define credit hold rules. Which two actions must the consultant perform to enable automatic credit hold? (Choose two.)

Accepted Answer

Assign the credit hold rule to a credit management group and associate customers with that group.. To enable automatic credit hold, you must create a credit hold rule that defines the conditions for placing a customer on hold, and then assign that rule to a credit management group that includes the relevant customers. Enabling the feature and configuring parameters is a prerequisite, but the core actions are creating the rule and associating it with customers via the group.

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Enable the Credit management feature in Feature management and configure credit management parameters.

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Configure aging period definitions and link them to the credit hold rule.

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Set up collection letter sequences and assign them to the credit management group.

Question 5

A company has a customer with an outstanding balance of $12,000 that is 90 days past due. The credit manager wants to automatically place a credit hold on this customer's account when the overdue balance exceeds $10,000, preventing new sales orders from being confirmed. The company uses Dynamics 365 Finance. What should you configure to achieve this?

Accepted Answer

Define an aging period definition for 90 days, then in Credit and collections parameters, set the 'Place on hold' option for that aging period with a threshold of $10,000.. The requirement is to automatically hold a customer when their overdue balance exceeds $10,000. Dynamics 365 Finance provides this capability through aging period definitions combined with credit and collections parameters. You define an aging period (e.g., 90 days) and then set a threshold in the parameters that triggers a hold. This ensures that sales orders cannot be confirmed for customers with significant overdue balances, enforcing credit policy automatically.

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Configure a credit management rule of type 'Credit limit' with a threshold of $10,000 and set the action to 'Place on hold'.

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Set up a collection letter sequence with a condition that places the customer on hold when the overdue balance exceeds $10,000.

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Create a credit limit rule that sets the credit limit to $10,000 and enable the 'Mandatory credit limit' parameter.

Question 6

A company uses subscription billing in Dynamics 365 Finance. They need to bill a customer monthly for a service that started on January 15. The billing frequency is monthly, and the subscription is set to bill in advance. The company wants the first invoice to cover the period from January 15 to February 14, and subsequent invoices to cover full calendar months. Which billing schedule configuration should you use?

Accepted Answer

Set up a billing schedule with a billing frequency of 'Monthly', a billing start date of January 15, and a billing period start date of the first of the month, and enable proration for the first period.. Subscription billing supports proration and flexible billing period start dates. By setting the billing start date to the subscription start date and the billing period start date to the first of the month, the system prorates the first period and then bills on full calendar months. This automates the billing process and ensures accurate revenue recognition for the partial first period.

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Set the billing schedule to 'Monthly' with a billing start date of January 15 and a proration method of 'Daily'.

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Create a billing schedule with a billing frequency of 'Monthly' and a billing period start date of January 15, and set the 'Align billing periods' option to 'Calendar month'.

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Use a billing schedule of 'Monthly' with a billing start date of February 1 and manually create a separate invoice for January 15 to January 31.

Question 7

A company uses subscription billing in Dynamics 365 Finance. A customer has a subscription that bills quarterly in advance. In the middle of a quarter, the customer requests to change the quantity of the service from 10 to 15 units. The company wants to bill the difference for the remainder of the quarter and adjust future billing schedules. Which action should the functional consultant take?

Accepted Answer

Modify the quantity on the existing subscription sales order line and use the Update billing schedule function to regenerate future billing lines.. In subscription billing, you can change the quantity on an existing subscription line and then run the Update billing schedule function. This regenerates future billing lines to reflect the new quantity and creates a catch-up line for the difference in the current period. This is the standard way to handle mid-term quantity changes while maintaining the subscription and its revenue recognition schedule.

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Create a new sales order for the additional 5 units with a start date of the change date and a billing schedule that covers the remainder of the quarter.

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Cancel the existing subscription and create a new subscription with the new quantity starting from the change date.

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Create a credit memo for the unused portion of the original quantity and a new invoice for the new quantity for the remainder of the quarter.

Question 8

A subscription billing company needs to set up a billing schedule for a customer who will be invoiced quarterly for a service contract that starts on January 1, 2025, and ends on December 31, 2025. The invoice amount is $3,000 per quarter. Which configuration should you use to automatically generate the invoices?

Accepted Answer

Create a billing schedule with a frequency of 'Quarterly' and set the start date to January 1, 2025, and end date to December 31, 2025.. Subscription billing in Dynamics 365 Finance uses billing schedules to automate the creation of invoices for recurring contracts. By defining a billing schedule with a quarterly frequency and the contract period, the system generates invoices for each quarter. This eliminates manual invoice creation and ensures accurate billing. The billing schedule is linked to the subscription contract or sales order, and the system handles the rest.

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Set up a recurring sales order with a recurrence pattern of every 3 months and an end date of December 31, 2025.

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Configure a collection letter sequence that sends invoices quarterly based on the contract start date.

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Create a free text invoice template with a quarterly recurrence and assign it to the customer.

Question 9

A company uses Dynamics 365 Finance and has a customer who is also a vendor. The customer has an outstanding invoice of $8,000, and the vendor has an outstanding bill of $5,000. The company wants to offset these amounts to settle both balances. Which functionality should you use to accomplish this?

Accepted Answer

Use the 'Vendor netting' feature in Accounts payable to offset the customer invoice against the vendor bill.. When a customer is also a vendor, you can offset their open transactions using the vendor netting feature in Accounts payable. This allows you to select the customer invoice and the vendor bill and settle them against each other, reducing both balances. The system generates the appropriate accounting entries to reflect the netting. This is more accurate and controlled than a manual journal entry, as it properly closes the original transactions.

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Use the 'Settle transactions' form in Accounts receivable to apply the vendor bill against the customer invoice.

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Configure a credit limit rule that allows offsetting between customer and vendor balances.

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Create a journal entry to debit Accounts payable and credit Accounts receivable for $5,000.

Question 10

A company issues a credit note to a customer for returned goods. The credit note must be applied automatically against the customer's oldest outstanding invoice during the next payment run. The Accounts Receivable parameters already have 'Settle automatically' enabled. Which additional configuration is required to ensure the credit note is prioritized for automatic settlement?

Accepted Answer

Enable 'Automatic settlement' on the credit note's posting profile and set the 'Settlement priority' to 'Credit note first'.. Credit notes are applied automatically only when the posting profile associated with the credit note has 'Automatic settlement' enabled and the settlement priority is configured to apply credit notes first. The Accounts Receivable parameter 'Settle automatically' alone does not determine the matching order. Therefore, the posting profile configuration is required to ensure the credit note is prioritized against the oldest invoice.

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Specify a default 'Offset account' for automatic settlement in the Accounts receivable parameters.

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Set the credit note's 'Collection letter code' to 'Settle' in the Free text invoice form.

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Configure the customer's 'Settlement priority' to 'Oldest first' on the Customer form.