Payment Reconciliation Journals

Use this page to reconcile your bank, receivables, and payables accounts by applying payments recorded in the bank to their related open (unpaid) invoices and credit memos or other open entries. For more information, see the Microsoft Dynamics 365 Business Central documentation.

The data on this page is updated from a bank feed form or statement file, and then applied to reconcile based on matching transaction. The entity assigned is based on the entity of the bank account being reconciled.

Reconcile Bank Account

To reconcile a bank account, follow the steps within the Microsoft Dynamics 365 Business Central documentation, and incorporate these steps: 

  1. When you manually apply a payment, you can select any open transaction to which to apply the payment. The lines already have entities assigned.

Centralized and Decentralized Processing

Centralized and decentralized processing can be used for the payment reconciliation journal.

  • A positive amount in the payment reconciliation journal indicates a deposit. Centralized and decentralized receivables are for setting deposits.
  • A negative amount in the payment reconciliation journal indicates a withdrawal. Centralized and decentralized payables are for setting withdrawals.

Review the following for information on using centralized and decentralized processing with the payment reconciliation journal.

The option to use centralized or decentralized processing is on the Sales & Receivables or Purchase & Payables FastTab of the Multi-Entity Management Setup.

Centralized Processing

When processing a payment reconciliation journal, follow the steps in the Microsoft Dynamics 365 Business Central documentation and incorporate the following: 

  1. Determine whether the line is a deposit (positive amount) or withdrawal (negative amount).
  2. For the payment reconciliation line, the default entity is the Bank entity, which can be changed as needed.
  3. Select to apply the payment automatically or manually.
    1. If you select to apply the payment manually (Manual Application > Apply Manually), use the Payment Application dialog to review and apply multiple invoices from any entity to the payment reconciliation journal line.
    2. If you select to apply the payment automatically (Process > Apply Automatically), use the standard Microsoft Dynamics 365 Business Central matching functionality to match the first invoice that satisfies the matching condition.

When the posting journal is created, the header entity is from the reconciled bank owner.

  • If no invoice is applied, the accounts payables or accounts receivables takes the entity from the reconciliation journal line.
  • If an invoice is applied, the accounts payables or accounts receivables takes the entity from the invoice.

Due From and Due To entries are created as needed.

  • If the Account Type is G/L Account, Due From and Due entries are created when the line entity and the reconciled bank entity are different.
  • If the Account Type is Bank Account, and the selected bank and reconciled bank have different entities, Due From and Due entries are created. If the entities are the same, no Due From and Due entries are created.

Decentralized Processing

When processing a payment reconciliation journal, follow the steps in the Microsoft Dynamics 365 Business Central documentation and incorporate the following: 

  1. Determine whether the line is a deposit (positive amount) or withdrawal (negative amount).
  2. For the payment reconciliation line, the default entity is the Bank entity. The entity cannot be changed. The Account No. can be changed. If the Account Type is Bank Account, the owner entity of the bank must be the same entity as the owner entity of the reconciled bank.
  3. Select to apply the payment automatically or manually.
    1. If you select to apply the payment manually (Manual Application > Apply Manually), use the Payment Application dialog to review and apply multiple invoices from the entity that is the same as the bank to the payment reconciliation journal line.
    2. If you select to apply the payment automatically (Process > Apply Automatically), use the standard Microsoft Dynamics 365 Business Central matching functionality to match the first invoice that has the same entity as the bank entity.
  4. Post the reconciliation journal. No Due From or Due To entries are created.

Payment Bank Accounts

From the Payment Reconciliation Journal page, you can open the Payment Bank Account List and Payment Bank Account Card pages. When you open a Payment Bank Account Card page, you can see details about that bank account, including the type of payment processing method used by that bank account.

Fields

This Payment Application dialog dialog contains the following fields: 

Field Description
Entity Code

Displays the entity for the transaction.

The Payment Reconciliation Journal page contains the following fields: 

Field Description
Decentralized AP

Displays the type of payment processing method used by the payment bank account and only visible if you have turned on Centralized/Decentralized AP on the Fly in your Multi-Entity Management SetupDecentralized is locked and cannot be changed in this page. Its value is determined by how you set up your payment bank account.

  • On: Decentralized payment processing method is used.
  • Off: Centralized payment processing method is used.

For more information, see Using Centralized/Decentralized Processing on the Fly.

Decentralized AR

Displays the type of payment processing method used by the payment bank account and only visible if you have turned on Centralized/Decentralized AR on the Fly in your Multi-Entity Management SetupDecentralized is locked and cannot be changed in this page. Its value is determined by how you set up your payment bank account.

  • On: Decentralized payment processing method is used.
  • Off: Centralized payment processing method is used.

For more information, see Using Centralized/Decentralized Processing on the Fly.

The Payment Bank Account List and Payment Bank Account Card pages contains the following fields: 

Field Description
Payment Processing Method

Select the type of processing method you want to use for the payment bank account.

  • From MEM Setup: The payment processing method you select in your Multi-Entity Management Setup is used. For example, if you have turned on Decentralized for Purchases & Payables, then that processing method is used in the journal template.
  • Decentralized: Use the decentralized payment processing method.
  • Centralized: Use the centralized payment processing method.