Mailmerge

I cannot find a way to move past the first step in mailmerge.

I have created a mailmerge template and have selected my merge fields and inserted them into my mailmerge template but the system will not let me "finish and Merge". I want to move to the next step of selecting the data and testing the merge.

I have also set up the same template as an email template and cannot find a way to link that to merged data either?

Any ideas?

Thanks

Marilyn Martin