Understanding Payment Method Codes in Business Central
In this video, UG Expert Dave Wiser gives an overview of payment method codes in Business Central.
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Key Takeaways
- Overview: Payment Method codes are used to assign specific payment methods (like cash, check, ACH, credit cards, etc.) to customers and vendors, and these codes are shared across sales and purchase documents.
- How it works: The balance account and its number are special features and Dave demonstrates how payment method codes assigned to customers and vendors automatically copy onto sales and purchase documents. These codes can be changed on invoices if needed.
- Account type and number fields: Normally, invoices post debits to accounts receivable and credits to sales or accounts payable, but using the balance account type and number fields, receivables or payables can be settled against another account or bank account. For example, cash payments can be automatically deposited into a checking or PayPal account and posted to a G/L account.
- In practice: When the type and number are entered for a transaction, the system automatically settles the invoice. Dave demonstrates this by creating a sales invoice, showing that the cash method code is applied and the invoice is posted in the Customer Ledger Entries.
- Automatic posting: The system automatically matches payments against invoices, posting the payment to the bank account and updating the general ledger entries accordingly. He highlights this by showing the entries in the Bank Ledger and General Ledger, noting the automatic posting of the payment and the corresponding credits and debits.
- Conclusion: By using payment method codes, you can automatically clear documents on the payable side, such as moving balances to a PayPal account, which helps streamline operations and reduce manual tasks. Alternatively, these codes can be used for filtering, identification, and sorting for customers and vendors.
