When creating multiple payments in the payment journal you can have the system create one bank ledger entry per payment or alternatively one bank account ledger entry for the whole batch of payments.
The decision as to whether to have one bank account ledger entry or multiple bank ledger entries is largely driven by how you want the payments to appear on the bank reconciliation. If you are likely to see them individually on your bank statement, then you’d want the system create one bank ledger entry per payment. However, if the payments show on the bank statement as one grand total for the whole batch, you can have the system create one bank account ledger entry for all the payments.
In this article I’ll cover both scenarios. Firstly, how to create individual bank account ledger entries per payment, and then how to create one bank account ledger entry for multiple payments.
Individual Bank Account Ledger Entries
To create individual bank account ledger entries per payment you can add a bank account as a balancing entry on each individual payment as per below
If I were to post this I’d get three individual bank account ledger entries
** Please note, as per the screen shot, you’ll also get 6 G/L Entries posting this way.
Now when I pull the Bank Account Ledger Entries into the bank statement I’ll get 3 individual lines for each payment.
One Bank Account Ledger Entry for multiple payments
To create one bank account ledger entry for multiple payment lines you can leave the “Bal. Account No.” blank on each payment line and create a balancing entry instead as per below:
** Please note all entries require the same Document Number as per the screen shot above.
** Alternatively you can switch the option “Force Doc Balance” off on the General Journal Template and have different document numbers. You then only have to ensure all documents on the same Posting Date balance.
Now when you post this batch of payments you only get one bank account ledger entry for all 3 payments.
** Please note you also get a reduced number of G/L Entries as well.
Now when I pull the bank account ledger entries into the bank reconciliation I get one total of £350.00 for the whole batch of payments rather than individual amounts
One caveat I can think of to the second approach is if you need to reverse one of the payments via the in built “Reverse” feature, you are required to reverse them all. Whereas the individual approach you can reverse them individually.
*Please note you could just create a manual entry to reverse one of the payments though.
As always its best to work through the steps in a sandbox or test company first to see if this meets your individual needs.
Thanks for reading!