Dynamics 365 Business Central

Dynamics 365 Business Central – A closer look at the Balance and Total Balance Fields in Journal pages

12th Sep 202412th Sep 2024Gavin WhittakerLeave a comment

Introduction

I’m often asked what the “Balance” and “Total Balance” fields represent on the General Journal page (or any journal page). Since its something I go through regularly I thought I’d take the opportunity to make it into a blog post 😊 . (I also love revisiting some of the basics of journal functionality)

Therefore in this post we’ll walk through how the “Balance” and “Total Balance” fields are calculated and why I often refer to them as the “unbalanced” amounts.

Its also nice as it gives us the opportunity to highlight some of the basic functionality in the journal like how you can “Balance” a line using the “Bal. Account No”.

General Journal Example

To demonstrate how the balance and total balance fields are calculating, I’ve created a four line journal in the General Journal page. Crucially on the third line I’ll enter a “Balancing” general ledger account in the “Bal. Account No” field. (more on why later)

The journal I’ve entered is below with the balance and total balance highlighted:

At this point, I have a four-line journal with a total amount of the lines is £180.00. The “Balance” field currently shows £100.00, while the “Total Balance” shows £160.00. As a result, all three values differ from one another.

Now let’s break this down and first look at how the “Balance” field is being calculated.

The Balance Field (or is it the unbalanced field?)

The “Balance” field represents the running total of the journal lines based on the line you have selected in the journal. For example, in the screenshot above, I’ve selected the top line, so the “Balance” field shows £100.00, as this is the value of the first line. If I were to click on the second line, the “Balance” would change to £150.00 as per below.

However this isn’t where the story ends with the “Balance” total😉.

If I click on the 3rd line the “Balance” will remain at £150.00, but why is this? Why hasn’t the balance field changed to £170.00? If you look closely its because the 3rd line has been balanced with a G/L Account. Therefore the “Balance” of the journal on the 3rd line remains at £150.00.

Finally if I click on the 4th line of the journal the balance will change to £160.00 as this is the sum of 1st, 2nd and 4th lines of the journal. (its the sum of the unbalanced lines of the journal)

Total Balance

The “Total Balance” field disregards which line you’ve selected in the journal and shows the “Total Balance” of the unbalanced lines. In this case, it’s £160.00.

To wrap this up, if I add a fifth line that “balances” the lines that are unbalanced, the “Total Balance” changes to £0.00 (and would show £0.00 regardless of where you click in the journal).

Its also important to note you can only post the batch when the “Total Balance” is zero.

Conclusion

The “Balance” field provides a running total based on your selected line, while the “Total Balance” reflects the sum of all unbalanced lines in the journal. Recognising how these fields work not only helps in verifying your entries, but also ensures your journal is correctly balanced before posting.

Thanks for reading!

Dynamics 365 Business Central – Considerations for Document Date and Posting Date when posting Sales Invoices from a Sales Order

4th Sep 20244th Sep 2024Gavin WhittakerLeave a comment

Introduction

A common conversation when showing users Sales Orders in Business Central revolves around the importance of updating the Document Date and Posting Date prior to posting the Sales Invoice from the Sales Order. In the early stages when going live with Business Central, it’s also a common mistake not to change these dates, which often leads to reconciliation issues and can potentially require corrections.

In this post I’ll go through why its essential those dates are updated if there is a delay from the time of creating the Sales Order, to Shipping and Invoicing. I’ll also point out some settings that can help prevent posting errors with dates, and other methods for posting Sales Invoices if users keep forgetting to change them causing issues with incorrect entries being posted.

The role of Document Date and Posting Date on a Sales Order

The Document Date and Posting Date are two key dates on a Sales Order. Let’s first look at each of these individually.

Document Date

The Document Date on the Sales Order is used as the Document Date of the Invoice when you post the Sales Invoice. It also determines the Due Date, which is calculated based on the payment terms specified in the Sales Order.

Posting Date

This date is used for the ledger entries that are created when you ship and/or invoice the Sales Order. For example it will be used on the G/L Entries, Customer Ledger Entries and also the Item Ledger Entries and Value Entries.

Now we know how important these dates are, let’s take a look at the common issue users encounter when posting Sales Orders.

The Common Issue – Defaulting Dates

When you create a Sales Order its not only the “Order Date” that defaults to your Work Date but also the “Document Date” and “Posting Date” (you can can change the behaviour of how the Posting Date defaults but more on that later 😊)

This creates a problem if there’s a time delay from the point of raising the Sales Order to the point when you will ship and invoice the Sales Order. When a delay occurs you must manually change the Document Date and Posting Date when you come to ship and invoice the Sales Order, or the ledger entries that are created will have the wrong dates.

Let’s look at this more closely with an example.

Walkthrough Sales Order to Sales Invoice

Here we have a Sales Order that was created on the 15th of August. As you can see the Order Date, Document Date and Posting Date all reflect the 15th of August.

Let’s say we are waiting on more stock of this item, and therefore we aren’t ready to deliver this item on the day of the Sales Order. Then, a few weeks pass, the goods arrive at our location, and we are ready to ship and invoice the Sales Order.

Although my Work Date in Business Central is now the 29th of August (two weeks after the Sales Order was created), the Document Date and Posting Date remain set to the 15th of August when I created the Sales Order. As a result, it’s easy to ship and invoice the Sales Order without remembering to update the dates, as shown in the demonstration below.

As you can see below the Posted Sales Invoice has the incorrect Document and Posting Date of the 15th of August

Therefore, if we were to look at the ledger entries we’d see they were incorrect, as they have posted with the date of 15th of August rather than the 29th of August.

Some Sales Setup options to help

There are built in features to help mitigate these errors. These are located in the “Sales and Receivables Setup” page and are highlighted below

Lets go through each one in turn:

Option 1: Posting Date Check on Posting

With this option selected the user will be warned when posting the Sales Order if your Work Date differs from the Posting Date. For example, I’d receive the message below if I’d have tried to post a Sales Order with a date of the 15th of August while having a work date of the 29th of August

Option 2: Default Posting Date

With this option selected the Posting Date is left blank meaning it must be populated prior to posting. If you try and post without a posting date you are presented with the following error:

Forcing the user to enter the correct date should help reduce errors

Option 3: Link Doc Date to Posting Date

I’ve included this one because it can be used in conjunction with the second option. For example, when this option is selected and you change the Posting Date on the Sales Order, the Document Date automatically changes as well.

This is demonstrated below where the Document Date is automatically updated when I populate the blank Posting Date

This means that by being forced to change the Posting Date, because its blank, I’m automatically changing the Document Date 😊.

Some Invoicing Alternatives

Another option might be to Invoice using the “Sales Invoice” page rather than from the Sales Order.

When using the Sales Invoice page, the invoice is created based on your Work Date, reducing the likelihood of errors with the Document Date and Posting Date. This method also offers additional functionality, such as the ability to consolidate multiple Sales Orders (or more accurately, Shipments) into a single Sales Invoice.

You can also use the “Combine Shipments” feature which gives the option of entering a Posting Date which is defaulted from the Work Date.

Both of these options require you to have posted the Sales Shipment as the “Sales Invoice” using the “Get Shipment Lines” feature to invoice Sales Orders and the Combine Shipments also looks at Shipment Lines from Sales Orders.

Conclusion

This post goes through how important the Document Date and Posting Date are on a Sales Order and how to avoid pitfalls of posting with them set incorrectly.

It outlines a couple of standard features you can use to prevent those errors and also how other features such as invoicing from a Sales Invoice rather than the Sales Order might be more useful in some cases.

Thanks for reading!

Dynamics 365 Business Central – How to post part payments due to bank fees and still fully apply the Sales Invoice using a Cash Receipt Journal

30th Aug 202430th Aug 2024Gavin WhittakerLeave a comment

Introduction

There may be instances when you receive payments from a customer and need to account for bank fees. This is especially common with certain credit cards, like American Express.

In this post, I’ll walk you through how to record both the cash received and the fee while applying the full invoice amount.

The Scenario

In this example, we have a sales invoice for £1,200.00, which the client has paid using American Express. American Express has deducted a £50.00 fee, resulting in only £1,150.00 being deposited into our bank account.

We therefore need to account for 3 things:

The Cash Receipt of £1150.00
The Bank Fee of £50.00
Ensure the full Sales Invoice is applied

The third point is crucial, as the client has paid the invoice in full, even though we have only received a partial payment due to the bank fee deduction.

Walkthrough

First, here’s the customer ledger entry for the sales invoice that the customer has paid. As shown below, the invoice is for £1,200.00 and is currently fully outstanding.

As with many tasks in Business Central there are a number of different approaches I could take when posting the cash. However I’m going to use my good old friend the Cash Receipt Journal.

Once in the Cash Receipt Journal I’ll pickup the Customer and click “Apply Entries” as per below:

Next, I’ll apply the full amount of the Sales Invoice

Then, I’ll add the payment amount of £1150.00 and the Bank Fee of £50.00 as part of the same document number:

When I preview post this we can see the following entries

If we take a closer look at the G/L entries we can see Debtors being reduced by the full £1200.00, the Bank Account has an entry for £1150.00 and the Fee an entry of £50.00

We also have a Customer Ledger entry for the full amount along with a Bank Account Ledger Entry for £1150.00.

Finally, I’ll post the entry, and by reviewing the original Customer Ledger Entry for the Sales Invoice, we can see that it has been fully applied.

Conclusion

This post provides a straightforward method for handling bank fees on customer payments, ensuring that the sales invoice is fully applied and the correct amounts are recorded for both the bank reconciliation and bank fees.

Thanks for reading!