Business Central / NAV UG
Experts:
Payment Method Code (with Balancing Account) and Bank Reconciliation
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Payment Method Code (with Balancing Account) and Bank Reconciliation
Hi everyone,
I’m not in finance myself, but I’m posting this on behalf of our finance team. 😊
We currently have certain vendors set up with direct debit using a payment method code that includes a balancing account. This setup is convenient for our AP team – when an invoice is posted, the payment is automatically posted and applied at the same time, so there’s no need to go back and post the payment separately.
However, we’re running into some challenges during bank reconciliation. In some cases, the payment doesn’t actually clear our bank until the month after the invoice and payment have been posted. To work around this, finance has been manually updating the invoice description to indicate when the payment will hit the bank. But understandably, this step sometimes gets missed by AP during invoice entry.
We’re wondering if has anyone found a more effective way to handle this kind of situation? Open to any suggestions or best practices. Thanks in advance!
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2 Replies
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Leslie,
Since you noted Bank Reconciliation, have you linked the Bank Account so that you can import Bank Statements? If no, importing the Bank Statement (Daily, Weekly, Bi-Weekly, Monthly) will pull those payments into the Bank Rec, for Bank Statement Lines. The Finance Team can send the payment to a General Journal and post the application against the Invoice, while doing the Bank Rekonciliation. Then there is no timing issues since you are importing the Bank Statement and the application will occur on the date it processed at then Bank.
The Payment Method process is sweet since it clears the invoice and records the payment. If Finance wants to treat the payment on the actual day it occurs, consider linking the Bank and recording the transaction off the Bank Rekonciliation.
If you want to know more, reply back and I will send you a handout on Linking and Bank Rekonciliation importing the Bank Statement.
Steve – Microsoft MVP
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Steve – Thanks for your response! I’ve forwarded it to the finance team. AP really appreciates having the payment posted and applied at the same time as the invoice; it saves her a significant amount of time.
For now, she’s updating the invoice description before posting to flag the expected payment date our person who handles the bank reconciliation. This helps ensure she is aware of when the funds will actually be withdrawn from our account.
We’re going to continue with this approach for now and later explore using Copilot for reconciliation to see if it offers additional time savings
Thanks again!
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