Bank & Payment Reconciliation in Microsoft Dynamics 365 Business Central

In any organization, reconciling bank and payment data is critical to maintaining accurate financial records and cash visibility. Microsoft Dynamics 365 Business Central offers robust tools for Bank Reconciliation and Payment Reconciliation Journals, helping businesses match bank statements with ledger entries, identify discrepancies, and streamline financial audits.

In this article, I outline how I learned to perform these reconciliations efficiently using Business Central.

Perform a Bank Reconciliation in Business Central

Bank Reconciliation ensures that transactions recorded in the bank ledger match those on the actual bank statement.

Steps:

1. Navigate to Bank Account Reconciliations.
2. Select New or open an existing reconciliation.
3. Choose:
   • >Bank Account
   • >Statement Date
   • >Statement Ending Balance
4. Use the Import Bank Statement option (CSV, XML, or direct feed via bank integration).
5. Match entries:
   • >System auto-matches based on amount/date.
   • >Manual match possible for unmatched lines.
6. Post the reconciliation.

Benefits:

• >Detect missing entries
• >Prevent fraud or double posting
• >Ensure audit compliance

Reconciled statements are stored and can be printed or exported for documentation.

Set Up Payment Reconciliation Journals

The Payment Reconciliation Journal is used to match customer/vendor payments against open invoices or entries. It supports automatic suggestions and match rules for fast processing.

Configuration Steps:

1. Navigate to Payment Reconciliation Journals.
2. Click +New to create a template.
3. Assign:
   • >Bank Account
   • >Journal Template (e.g., PAYREC)
   • >Match Tolerance (for date/amount)
4. Enable Bank Statement Import Format if connected via service provider.

Setup ensures the journal is ready to load incoming payments and suggest matches automatically.

Use the Payment Reconciliation Journal

Once the setup is done, you can use the journal to reconcile incoming payments against customer/vendor invoices.

 Daily Workflow:

1. Open the Payment Reconciliation Journal.
2. Click Import Bank Statement.
3. System displays Bank Statement Lines and Ledger Entries.
4. Click Match Automatically:
   • >Matches are suggested based on rules (e.g., amount, invoice number).
   • >Manual matching can be done if system suggestion is incorrect.
5. Review matches:
   • >Adjust if needed
   • >Add comments for audit trail
6. Click Post to:
   • >Register payment in ledger
   • >Close invoice if full amount paid
   • >Post differences if applicable (discounts, charges)

Features:

• a. Automatically applies payments to open invoices
• b. Posts differences to G/L accounts (like bank charges or discounts)
• c. Can handle overpayments and underpayments
• e. Supports direct integration with bank feeds

 Business Value

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