Dynamics 365 Business Central – How to post one Bank Account Ledger Entry for multiple payment entries in the Payment Journal

Introduction

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!

Dynamics 365 Business Central – Take Payment Discount on a Payables Invoice that was posted without payment discount

Introduction

When posting a payables invoice in Dynamics 365 Business Central you can specify payment discount that can be taken if the invoice is paid early. You define this using the option below

Please note this can also be defaulted for you onto the purchase invoice from the payment terms on the vendor.

However what happens if the “Payment Discount %” wasn’t entered onto the invoice when it was posted? How can you take payment discount?

Scenario

Lets say I’ve posted an invoice as per below for £100.00 and I wish to take 5%, or £5.00, as a payment discount. (Therefore I should only pay £95.00 and take the £5.00 as discount). However at the time of posting the invoice I didn’t specify a “Payment Discount %’

First create the payment journal selecting the Vendor as per below and click “Apply Entries”. (no need to enter an amount at this point)

Once in the “Apply Entries” window click into “Remaining Pmt. Disc. Possible” and enter £-5.00. Also click into the “Pmt. Discount Date” and change the date to a date after the date of the payment. In my case I’ll change this to 01/11/2020, as my payment date is 31/10/2020

Now when I click “Process > Set Applies-to ID” although it appears to show the full amount being applied, if you look at the foot of page the Payment discount is showing £5.00 and the Applied Amount shows £-95.00

If I click OK this shows the payment amount of £95.00

After I post the payment and check the ledger entries I can see a payment for £95.00 has cleared the full amount of the invoice

Also, drilling down on the “Remaining Amount” of the Payment you can see the additional “Detailed Ledger Entry” for the discount:

So the key things to note are, when applying the invoice ensure you enter the amount of discount you wish to take in the “Remaining Pmt. Disc. Possible” and also change the “Pmt. Discount Date” so its after the date of the payment.

Thanks for reading!

Dynamics 365 Business Central – Posting a Payment Journal with VAT

I came across a situation where a user needed to post a credit card payment via a payment journal with a VAT element so I thought I’d document on my blog 🙂

In order to do this first create a Payment Journal batch with the relevant balancing account, in my case a credit card, and also select the highlighted VAT options below:

** Please note you may have to go to the General Journal Template for Payments and tick these ON before you can select them for the batch.

With the option “Copy VAT Setup to Jnl. Lines” selected, the VAT posting groups will be copied from the GL code and VAT will be calculated.

With the option “Allow VAT Difference” selected, changes can be made to the calculated VAT amounts.

If you only have one G/L expense code to record VAT its fairly simple. You can pickup the relevant G/L code, which should default the “VAT Bus Posting Group” and “VAT Prod. Posting Group”, and the system will calculate the VAT for you. You can then just leave the “Bal Account No.” as the bank account.

Now when you post the entry you will get VAT entries as well as G/L and Bank Account Ledger Entries:

If you wish to record VAT for more than one G/L code you can list the expense codes and blank off the “Bal. Account No” on each line and then have the final line entry as the balancing credit card bank account as per below. (again the VAT posting groups have defaulted from the G/L code)

Now when you post the batch you’ll get the relevant VAT entries as well as G/L and Bank Account Ledger Entries:

If you have the “VAT Difference” option ticked on the batch you can change the “VAT Amount” at any time if this differs from the actual VAT you need to post.

I hope you find this useful if you ever need to post payments with VAT.

Thanks for reading!