D365 BC - Finance Essentials PDF

Financial Essentials in Microsoft Dynamics 365
Business Central
Reference Companion Guide
REFERENCE COMPANION GUIDE
Contents
Module 00: Introduction ................................................................................................................. 4
Expert and Course Introduction .................................................................................................. 4
Module 01: Getting Started with Finance ....................................................................................... 4
Module Overview ........................................................................................................................ 4
Finance Focused Role Centers ..................................................................................................... 4
Finance Master Data ................................................................................................................... 5
Module Review ............................................................................................................................ 8
Module 02: Chart of Accounts ........................................................................................................ 8
Module Overview ........................................................................................................................ 8
G/L Account Card......................................................................................................................... 8
Create an Account in the G/L Account Card ............................................................................... 8
G/L Account Categories ............................................................................................................. 10
Maintaining G/L Account Categories ........................................................................................ 10
Assign Dimensions to G/L Accounts .......................................................................................... 12
Assign Dimensions to a Single Account ..................................................................................... 12
Maintaining the Chart of Accounts ........................................................................................... 12
How to maintain the Chart of Accounts .................................................................................... 13
G/L Entries ................................................................................................................................. 14
Module Review .......................................................................................................................... 15
Module 03: General Journals ........................................................................................................ 15
Module Overview ...................................................................................................................... 15
Creating Journal Entries ............................................................................................................ 15
How to Create Journal Entries................................................................................................... 15
Processing Journal Entries ......................................................................................................... 17
Standard Journals ...................................................................................................................... 18
Recurring Journals ..................................................................................................................... 18
Processing Recurring Journals ................................................................................................... 20
Deferrals .................................................................................................................................... 23
Using Deferrals .......................................................................................................................... 24
Reversals .................................................................................................................................... 26
Module Review .......................................................................................................................... 26
Module 04: Processing Customer and Vendor Invoices ..............................................................27
Module Overview ............................................................................................................. 27
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Invoicing Options ....................................................................................................................... 27

Invoicing Customers .................................................................................................................. 28
Processing Vendor Invoices ....................................................................................................... 30
Correcting Posted Invoices ........................................................................................................ 32
Module Review .......................................................................................................................... 32
Module 05: Cash Management - Receivables and Payables ........................................................ 32
Module Overview ...................................................................................................................... 32
Bank Account Overview ............................................................................................................ 32
Bank Account Card Fields .......................................................................................................... 33
Customer and Vendors in Cash Management .......................................................................... 34
Analyzing Receivables and Payables ......................................................................................... 34
Cash Receipt Journal and Payment Journal Overview .............................................................. 35
Entering Payments in the Cash Receipt Journal and Payment Journal ..................................... 35
Applying Payments .................................................................................................................... 37
Applying Payments Scenarios.................................................................................................... 37
Payment Registration ................................................................................................................ 39
Reconcile Payments with the Payment Registration ................................................................ 39
Suggest Vendor Payments ......................................................................................................... 41
Use the Suggest Vendor Payments Batch Job ........................................................................... 42
Check Management................................................................................................................... 45
Print and Void Checks ................................................................................................................ 48
Payment Reconciliation ............................................................................................................. 51
Using the Payment Reconciliation Journal ................................................................................ 52
Bank Data Conversion Service ................................................................................................... 56
Payment Services....................................................................................................................... 58
How to Set Up and Use Payment Services ................................................................................ 58
Module Review .......................................................................................................................... 58
Module 06: Cash Management - Bank Reconciliation .................................................................. 59
Module Overview ...................................................................................................................... 59
Bank Reconciliation ................................................................................................................... 59
Performing a Bank Reconciliation ............................................................................................. 59
Module Review .......................................................................................................................... 61
Module 07: Payment Discounts and Payment Tolerances ........................................................... 61
Module Overview .................................................................................................................61
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Payment Discounts .................................................................................................................... 61

Set Up Payment Discounts ........................................................................................................ 62
Process Sales Payment Discounts ............................................................................................. 64
How to process Sales Payment Discounts ................................................................................. 65
Process Purchase Payment Discounts ....................................................................................... 66
Payment Discount Tolerance and Payment Tolerance ............................................................. 67
Set Up a Payment Discount Tolerance and Payment Tolerance ............................................... 68
Process the Payment Discount Tolerance ................................................................................. 69
Module Review .......................................................................................................................... 70
Module 08: Managing Receivables Reminders and Finance Charge Memos ............................... 70
Module Overview ...................................................................................................................... 70
Reminder Terms ........................................................................................................................ 70
Set Up and Assign Reminder Terms .......................................................................................... 71
Set Up Additional Fee ................................................................................................................ 73
Create and Issue Reminders ...................................................................................................... 74
Set Up and Assign Finance Charge Terms ................................................................................. 76
Create and Issue Finance Charge Memos ................................................................................. 77
Calculate Interest on Reminders ............................................................................................... 78
Interest Calculation Rules in Reminders ................................................................................... 79
Review Reminders and Finance Charge Entries ........................................................................ 80
Module Review .......................................................................................................................... 80
Module 09: VAT............................................................................................................................. 80
Module Overview ...................................................................................................................... 80
Display VAT Amounts in Sales and Purchase Documents ......................................................... 81
Adjust VAT Amounts in Sales and Purchase Documents and Journals ..................................... 82
Unrealized VAT .......................................................................................................................... 83
VAT Statements ......................................................................................................................... 84
VAT Settlement.......................................................................................................................... 86
Running the Calc. and Post VAT Settlement Batch Job ............................................................. 87
Module Review .......................................................................................................................... 88
Module 10: Prepayments .............................................................................................................. 88
Module Overview ...................................................................................................................... 88
Setup Prepayments ................................................................................................................... 88
Assign Prepayment Percentages ..........................................................................................90
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How to Assign Prepayment Percentages .................................................................................. 90

Process Prepayment Sales and Purchase Orders ...................................................................... 92
Module Review .......................................................................................................................... 93
Module 11: Accounting Periods .................................................................................................... 94
Module Overview ...................................................................................................................... 94
Accounting Periods Window ..................................................................................................... 94
Creating New Accounting Periods ............................................................................................. 95
Allow and Disallow Posting ....................................................................................................... 95
Closing a Fiscal Year ................................................................................................................... 96
How to Close a Fiscal Year ......................................................................................................... 96
Module Review .......................................................................................................................... 98
Module 12: Course Review ........................................................................................................... 98
Course Review ........................................................................................................................... 98
Module 00: Introduction

Course Introduction
Welcome to the course Financial Essentials in Microsoft Dynamics 365 Business Central. Are you
looking for information and guidance on how to set up and process the everyday finances in a
company in Dynamics 365 Business Central? Then you're at the right place. We will start this course
with discovering the core functions in financial management, such as setting up the G/L accounts,
posting general journal lines, sales and purchase invoicing, and processing payments. But this course
also covers payment discounts, payment tolerances, VAT, and prepayment invoices. At the end of
this course, we will finish with looking at how to set up accounting periods and how to close a fiscal
year. Let's get started.
Module 01: Getting Started with Finance

Module Overview
Before looking at the core of Financial Functions, let's first get started with finance in Microsoft
Dynamics 365 Business Central.
Finance Focused Role Centers

To work in the most efficient with Microsoft Dynamics 365 Business Central, it is important that
you use the role center that best suit your professional needs.
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Microsoft Dynamics 365 Business Central offers more than twenty role centers. Financial users can
use one of the following role centers:
• Accountant
• Accounting Manager
• Outsourced Accounting Manager
• Accounts Payable Coordinator
• Accounts Receivable Coordinator
• Bookkeeper
To learn more on role centers, please refer to the Introduction to Microsoft Dynamics 365 Business
Central course.
Finance Master Data

Finance in Dynamics 365 Business Central, involves working with at least one of the following types
of master data:
• G/L accounts
• Dimensions
• Customers
• Vendors
G/L Accounts
G/L accounts in the chart of accounts represent the financial structure of a company. You can set up
balance sheet accounts and income statement accounts.
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To learn more about G/L accounts, please refer to the Chart of Accounts module in this course.
Dimensions
A dimension is the type of information that you want to add to your entry. For example, the cost
controller wants to analyze the expenses per department.
Therefore, a dimension called Department can be set up. A dimension value is one of the possible
values for a particular dimension that you can add to your entry.
For example, for each department a dimension value will be set up, which is named Sales,
Administration, Manufacturing and so on. Dimensions are used for analysis purposes. They enable
users to analyze expenses by department, sales by region, by customer group, etc.
To learn more on dimensions, please refer to the Application Setup in Microsoft Dynamics 365
Business Central course.
Bank Accounts
One of the important tasks to perform by the finance department is processing payments and bank
statements. Each bank account has its own card that contains different kinds of information. On the
bank account card, you enter information that is specific to the individual bank account, and you can
change this information, if this is necessary.
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For more details on bank accounts in Microsoft Dynamics 365 Business Central, please see the Cash
Management - Receivables and Payables module in this course.
Customers and Vendors
Companies sell their items and services to customers. They also purchase items and services from
vendors. Users working in the finance department process customer and vendor invoices and
payments. Furthermore, receivables management also might involve sending reminders to
customers. After setting up customers and vendors, you can use them in documents and journals.
In many of the modules in this course, we will work with customers. For example, one of these
modules is Processing Customer and Vendor Invoices and Cash Management - Receivables and
Payables.
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Module Review
Now that we have a basic understanding of the important finance master data, let's move to the next
module and look at G/L accounts more detailed.
Module 02: Chart of Accounts

Module Overview
The chart of accounts with its G/L accounts represent the financial structure of a company. So it's
important to have a good understanding of how to set up and maintain G/L accounts. In this
module, we will also look at G/L account categories and subcategories and at assigning default
dimensions to G/L accounts.
G/L Account Card

The income statement and balance sheet or two important company reports. An account in the
income statement and the balance sheet is called a G/L account, and all the G/L accounts make up
the Chart of Accounts list. You use G/L account cards to create and edit G/L accounts.
In the Chart of Accounts list, all G/L accounts are available and can be viewed at one time. However,
there is also a G/L Account Card for each account, and this can be accessed from the Chart of
Accounts list.
Create an Account in the G/L Account Card

In this video, I will demonstrate how to create a new G/L account, and that will also give me the
opportunity to explain the most important fields on the G/L account card. So to do so, I will first
need to go to the chart of accounts, and that's something I can do by clicking on the finance
departments and then selecting the chart of accounts option. If you want, you can also use a search
function and search for the chart of accounts. So let me click here. And next you will see the chart of
accounts of Cronus International with a number of G/L accounts, balance sheet accounts, and so on.
And to create a new account, I will click here on the new action. So first, I need to enter the number.
So in this case, let's take number 8140, and, of course, the number needs to be unique. Next I will
enter the name, and in this case, I would like to create the G/L account to post maintenance products
on. And then I need to select whether this is an income statement or a balance sheet account. Now,
this is a very important field, and the system will use this field when closing the income statement at
the end of a fiscal year, and that's something I will explain in the last module of this course. And this
is, of course, an income statement account. There we go. Then we need to -- or I can select an
account category and subcategory. And by the way, these fields are not mandatory so you can leave
them blank. But I would advise to use categories and subcategories because that will enable you to
use a number of financial reports that we will see in one of the following modules of this course. So
in this case, I will select one of the predefined categories -- assets, liabilities, and so on. So in this
case, this is, of course, an expense account. And there where the account categories are
predefined. So I need to select one of these six categories. You can define subcategories
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yourself. So here you can see a number of examples of the subcategories created by our demo
company Cronus International. And in this case, I will use utilities expense. Now, more information
on these categories and subcategories is explained in one of the following lessons. So in this case,
again, utilities expense. There we go. Then I can select whether this is a debit, credit, or both
accounts. I will stick with both here. And I can then select the account type. Now, this could also be
very interesting because with the account type you can structure the chart of accounts. And to
demonstrate this or to show this, let me go back to the chart of accounts. So I will click on escape.
There we go. And here we can see a number of bold accounts. You see? So balance sheet, assets,
fixed assets, and so on. And there you can see that, by assigning begin total, heading, and so on, we
can assign a structure to the chart of accounts, and that makes it better -- readable, easier to use,
and so on. And that's what you can see here. You see there's also begin total, there's also end total,
and there's total. Now, if you use begin total and total, you can use the function indent chart of
accounts, and then the system will automatically indent all the lines between a begin and an end
total. You see? So these accounts, they're indented. And, again, that gives you a specific structure,
which makes the chart of accounts easier to use. And the indent chart of accounts function also
automatically creates the totaling formulas. So that's something that's, again, very interesting to
use. So let me search for my account because it's not finished yet. So there we go. So the
maintenance products. Now we'll open the account card again. So here I will stick with posting it.
Because this is an account I would like to post to, a posting account. Then totaling is not necessary
here because totaling is only necessary when the account type is total or end total. Then at right side
I can assign the account as a reconciliation account, and a reconciliation account is an account that is
retrieved in the report that you can run from the general journal, and that will give you an overview
of the balance of an account that you would have before and after posting. That's something I will
show you in one of the following modules. Then automatic extended text. I will leave this blank
because there is no extended text for this account. Also, direct posting is a very important field.
Direct posting is used to enable or disable posting directly to the account. So for example, G/L
accounts that you assign to posting groups, like the receivables account, the payables account, and
so on, there you would clear the fields, and direct posting is not allowed. And the only way to post to
the account is then through a posting group. OK? So I will leave this field selected because I would
like to post directly to the account. But for some accounts it could be very interesting to clear the
fields. Then blocked -- OK, that's quite obvious. I can also select to omit the default descriptions in
journals also here. I will leave this blank. And then we can go to the next FastTab, the posting
FastTab. Now, this is also very important because here we can enable that calculation for a G/L
account. And the basic rule I always apply is that, when you would like to use the G/L account in a
document, such as a purchase invoice, a sales order, and so on, you will have to assign values in
these fields because these values are used by the system to calculate, for example, VAT. So let's start
with the first field. That's quite self explanatory, so purchase sales. So this is, of course, a typical
purchase account. Then there's a general business posting group. So also here, I can select one of
the existing posting groups, and I will use domestic. Now, the general business posting group
together with the VAT business posting group can be overruled by the business posting groups that
are assigned to customers and vendors. So these will only be used in journals, for example, where
you don't use a customer or a vendor, which also means that you don't have to enter the business
posting group and the VAT business posting group, but it's not a problem if you do. More
important are the product posting groups. So here I will select one of the existing product
posting groups. So I could select, for example, miscellaneous. I could select services, for
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example. So let's take miscellaneous. There we go. And by entering the general product posting
group, the system also entered the VAT product posting group. Now, this is very important. For me,
this is the most important field here on this FastTab. If you have to enter the FastTab to enable VAT
calculation, this is a very important field because, with this, we will define the VAT rate. In this case,
this is 25 percent of VAT. So it's very important that the system can calculate VAT in a correct way, of
course. Then there's the default intercompany G/L account number. This is used in an intercompany
setup to map a G/L account to the intercompany chart of accounts. In this case, I'm not using the
intercompany setup. Otherwise, I could enter here the G/L account on which we post maintenance
products but then in the intercompany chart of accounts. The default deferral template -- deferral is
also a very interesting concept that I will explain in the module on general journals. So for the time
being, I will just leave it blank. So, again, a very important posting if you want to use accounts in
documents, like purchase and sales documents, you have to enter the posting FastTab. Then the
other FastTabs, we're not covering this in detail, but just for your information, if you're setting up a
consolidation, then -- but similar to the default intercompany partner account, then you can map
these G/L accounts to the G/L accounts in your consolidation company. So for example, if you're
using a consolidation, you are also creating a consolidation company with a chart of accounts, and
here we can map G/L accounts to accounts in the consolidation company chart of accounts. And
there's also a consolidation translation methods that you might have to use when you're
consolidating between different currencies. Then there's reporting. In reporting, I can specify how I
would like the system to calculate exchange rate adjustments for the additional reporting currency.
Now that's something that is covered in the course Finance Advanced in the financial reporting and
analysis -- sorry. In the foreign currencies module. So also here, I will just leave this unchanged. And
then finally, cost accounting. And also here in Finance Advanced, we cover cost accounting. And if
we are using cost accounting, you can see here the linked cost type.
G/L Account Categories

You can personalize the structure of your financial statements by mapping general ledger accounts to
account categories. The G/L Account Categories window shows your categories and subcategories,
and the G/L accounts that are assigned to them. You can create new subcategories and assign those
categories to existing accounts.
You create a category group by indenting other subcategories under a line in the G/L Account
Categories window. This makes it easy for you to get an overview, because each grouping shows a
total balance. For example, you can create subcategories for different types of assets, and then
create category groups for fixed assets versus current assets.
You can specify whether the accounts in each subcategory must be included in specific types of
reports. The account categories help define the layout of your financial statements.
Maintaining G/L Account Categories

So as you just saw, we can select one of the predefined G/L account categories, but as a user, you
cannot create new categories. Let me show you this again. So I will go to finance, chart of
accounts. Then I will open a G/L account, whatever, land and buildings, for example. And
there you can see the account categories. So the six categories that we can use. But,
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again, I cannot create new categories as a user. However, I can create and maintain subcategories,
and that's also something very interesting. So first of all, we can go to the account categories and
subcategories from the G/L account card, as you can see here, but, of course, there's also an option
to do this from the role center. I can use the search function if I want, but if I click here on the
finance department, I can go to the G/L account categories. There we go. So here you can see the
different G/L account categories and subcategories. And here you have to pay attention because the
description at the column description is showing me the subcategories. The categories are displayed
here, and, again, I can select one of the existing categories, but I cannot create new ones. However, I
can do this for the subcategories. And let's go and have a look, and I will scroll down. I will go to the
expenses. So here you can see that Cronus International has created a number of expenses like rent
expense, advertising, and so on. And there's also an insurance expense, but you see there are no G/L
accounts linked to the insurance expense. However, Cronus has a couple of G/L accounts to which
they post insurances like building and car. So I would like to create a new subcategory and link G/L
accounts to the subcategories. I could do this through the insurance expense subcategory directly,
but I would like to create two new subcategories, building and car insurances, and then link the G/L
accounts to these new subcategories. So let's do this. I will click here on new. First I will go to edit
lists. There we go. So that's important. First we need to come to this layout. Then if I scroll down
here, you can see the insurance expense, and I will click on new to enter a new line. So here on enter
a name, I can then start with, for example, the building insurance. There we go. And so this is, of
course, an expense. I will stick here to expense. And I will not map the G/L account already. I will do
this afterwards. First I will create a second new subcategory, and this one is called car insurances.
OK. And also this is, of course, an expense, so the account category is expense. And there we go. So
we now have our two new subcategories, building and car insurances. But from a structural point of
view, I would like to link them to the insurance expense subcategory, and that's something I can do
by selecting one of the two and then clicking on indent. And you see now that, in this way, it's very
easy to apply a specific structure to the subcategories. So now I have an insurance expense, which is
now like a group subcategory, and the building and car insurances are linked here to the insurance
expenses. OK. They're not linked in a way that you would do with the totaling G/L accounts, for
example, because here, if I would like to see a total on the insurance expense account, I will also
have to map here the right G/L accounts. So this means that I will have to map three different lines.
So first, let's start with building insurance, and I will use the search function to search for the
account. Let's enter building. There we go. And here you can see there's an account. I've created a
new account, by the way, so it might be possible that you don't find it in your chart of accounts, but
you can then very easily create it if you want. And I will select here account 8150, the account to
which we post building insurances, and I will do the same for the car insurances. So there we go. And
in this case, I will search for car, and there you can see 8540, car insurances. And also, this is an
account that I just created. And now these two accounts are mapped. And I haven't posted any
invoices to the account yet, which means that the balance shows zero. But once that you now start
posting insurances to these accounts, you will, of course, see that the system will automatically
display the balance. But if I also would like to display the balance on my group insurance expense
subcategory, I also have to enter the G/L accounts there. You see? So it's not that you can enter a
totaling formula or that the system does it automatically, no. I'll have to enter something like this.
So 8150, then the pipe symbol, 8540. And now my total insurance expenses will be displayed
on this line.
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Assign Dimensions to G/L Accounts

By assigning dimensions and dimension values when posting to G/L accounts, you can tag G/L entries
for analysis purposes. For example, by assigning department dimension values when posting
expenses, you can analyze expenses by department.
By assigning default dimensions to G/L accounts, you can link specific dimensions and/or dimension
values to G/L accounts. Furthermore, you can make dimensions and/or dimension values mandatory
for specific G/L accounts.
The following lesson demonstrates how to assign a default dimension to a single account. You can
find more information on default dimensions in the Application Setup in Microsoft Dynamics 365
Business Central course.
Assign Dimensions to a Single Account

If you want to assign default dimensions to a G/L account, that's something that you can do from the
chart of accounts, or you can also do this on the G/L account cards. Let's go and have a look, and I
will start by going to the chart of accounts. So there we go. And now you just select the G/L account
to which you want to assign a default dimension. Then you can click here on show the rest. Next I
can click on navigate, account, and then I can select the dimensions action, as you can see here.
Now, if you display the list in another way. So this is the role center. You could say that, by clicking
on manage, edit lists, you can see that the chart of accounts is displayed in another way. There
assigning dimensions is also quite simple. Also here, I will, first of all, select the G/L which I would
like to assign the default dimension. Then I will click on navigate in the ribbon. And then there's the
dimensions action. But instead of assigning the default dimension in the list, you can also do this
from the G/L account cards, and that's something I will show you in the following example. So first of
all, I will look for an expense account. So for example, I will go here to an expense account and
suppose building insurances. So here's the expense account to which we post building insurances or
any other expense account. It doesn't really matter which one you use. But most important is that I
now open the account card. So there we go. And here also it's very easy, I will click on dimensions.
Next I can select the dimension I would like to assign. So in this case, suppose I would like to assign
the department dimension to this expense account. So there we go. And then the dimension value
codes. So in this case, Cronus has three departments -- administration, production, and sales. And I
would like to assign, for example, the administration department to the building insurances expense
account. Then there's a value posting, and in this case, I will select code mandatory, which means
that the department dimension is a mandatory dimension but that the user can choose between the
different values. More information, by the way, on the setting or assigning default dimensions,
including the different options here in value posting, is covered in the application setup course.
Maintaining the Chart of Accounts

Maintaining the chart of accounts involves the following tasks:
• Adding and modifying accounts

• Deleting accounts
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• Consulting the Where-Used List
The following lesson demonstrates how to perform these actions.
How to maintain the Chart of Accounts

In one of the first lessons, I already demonstrated how to create a new G/L account. So creating,
adding, modifying G/L accounts is something very easy to do. Let's also have a look at how we can
delete G/L accounts, and let's first go to the chart of accounts. There we go. And, of course, if you
try to delete an existing G/L account, there are a number of rules that apply, and the first very
important rule, but also very obvious one, is that the G/L account that you're trying to delete cannot
have a balance. If there is a balance, then, of course, trying to delete G/L account will result in an
error message. So here you can see that the balance must be equal to zero. So I cannot delete this
G/L account. Then there's a second rule, also very important. Suppose that the balance is zero.
Then the system will check if there are entries in a nonclosed fiscal year, and if there are any of these
entries, you also will not be able to delete the G/L accounts. So the last time you posted to the G/L
account should be in a year that is already closed. So these are the two basic rules, and it also
applies, for example, to other types of master data like customers, items, and so on. But then there
are a couple of additional rules that we can specify in the general ledger setup and that a system will
check to see if a G/L account can be deleted, yes or no. Let me search for a specific account to show
you an example. OK. So here we can see a number of accounts. So for example, the realized
exchange gains, losses, and so on. So let me scroll to the right. You can see the account that I've
selected doesn't have a balance, and we also never posted to the account. So there are no entries
for this account. If you want to check this, by the way, just click here on the net change fields, and
you can see nothing has been posted to the account. So the two basic rules are OK. As so, there is,
of course, no balance, and there are no entries. So this means that it should be possible to delete
the G/L account. But as I just said, we can add a couple of additional rules in the general ledger
setup. And what you will see is, if I now try to delete this account, the system will, first of all, check
one of the settings in the general ledger. The first one is allow G/L deletion before. So let's go and
have a look in the general ledger setup. There we go. So I will open the general ledger setup, and by
clicking on show more, I can display all the fields. And here on the general FastTab, you can see
there's a field allow G/L account deletion before. You see, so here I can enter a date, and based on
the date, the system will check if an account can be deleted because even when the two basic rules
apply, the ones I just explained, then it still could involve a risk deleting accounts. So for example,
the last time I posted to an account was two years ago, and the fiscal year is already closed. There's
no balance any more on the account. Then you're able to delete it. But, of course, you're deleting a
G/L account that you still used in a year that can still be checked by authorities, by the government,
by fiscal authorities, and so on, which means that you're running the risk of losing important data.
Not the entry posted to the account, by the way, because the system will not delete these, but the
account will be deleted. In order to prevent these situations, you can simply enter here a date. So
for example, suppose, because Cronus has -- let me show you. 2020 as work date. Suppose that I
would like to say that accounts that have been used in 2016 and later should not be deleted, then I
can enter here the 1st of January, 2016. There we go. And this is now an additional rule that
the system will use when deleting accounts. It will now check if the account is used in 2016 or
later, and if so, even when the balance is zero and even when the fiscal year is closed, it will
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still not allow me to delete the G/L account. OK? It could be very interesting to set -- to maintain this
field. Then there's the check G/L account usage. Also, this is an important or very interesting
feature, and I will demonstrate this. Now, by enabling this field, the system will check if a G/L
account is used in one or the other setup page. Now, suppose that you assigned the account in a
posting group setup page, or like the example that I will show you, in the currency page, then the
system will not allow you to delete the account even if you still haven't used it and so on. So check
G/L account usage, I will select it. So I will enable it. Then let's go back to the chart of accounts. So
here I can see my account realized exchange losses. So like I just showed you, and let me do this
again, if I click on balance, there are no entries for this account. So we have never used the G/L
account. But you still -- or you will see now that it's still not possible to delete the account. So let me
show you. I will click on delete, yes. And now the system has used the usage function that I just
enabled in the general ledger setup because it's telling me that the G/L account is used in one or
more setup windows. And by clicking on yes, I can have a look, and, of course, the account is used on
the currencies setup pages, and because it's assigned as the realized losses account to all these
currencies for Cronus International. So that's also something that could be interesting to use.
Another interesting feature that you can use is the where used list. Let's have a look. So I will go to
the chart of accounts, and we just saw that you can use G/L accounts in setup pages, like, for
example, posting groups and so on. So let me go to specific accounts. So for example here, the
customers domestic G/L account. And I think this account is used in the customer posting group
setup page, but I'm not sure. So you can, of course, go and check the customer posting groups, but
instead what I also can do is go to the where used function. So if I click on navigate account, I can go
to the where used list. And in this case, I can see indeed that this account is used in the customer
posting group domestic. So very simple function, but could be very efficient because it can very
quickly show you all the setup pages where a specific G/L account is used.
G/L Entries
When posting to G/L accounts, the system creates general ledger (G/L) entries. You can retrieve G/L
entries in several ways.
From a G/L Account
To retrieve all the entries posted to a G/L account, perform the following steps:
• Choose the lookup icon, enter “Chart of Accounts”, and select the related link.
• Select an account with a net change, for example, account 6110 “Sales, Retail - Dom.”.
• In the ribbon, on the Navigate tab, select Ledger Entries.
Using the Navigate Function

You can use the Navigate function if you want to retrieve the G/L entries from a specific document or
journal.
To retrieve the G/L entries from a posted sales invoice, perform the following steps:
• Click the lookup icon, enter “Posted Sales Invoices”, and select the related link.
• Select the first line, and in the ribbon, on the Actions tab, select Navigate.
• Select the G/L Entry line, and in the ribbon, select Show Related Entries.
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Module Review
OK. Our chart of accounts is ready, and it's nicely structured with categories and subcategories. Let's
now start using G/L accounts.
Module 03: General Journals

Module Overview
General journals are used to post information into the general ledger and other accounts. Examples
of such postings are adjustments, depreciations, accruals, and so on. In Business Central, there are
some more advanced functions to process journal entries faster and more efficiently, like recurrent
journals and deferrals. But before we get to these, let's first have a look at how to enter and post
general journals manually.
Creating Journal Entries

In Microsoft Dynamics 365 Business Central, general journals are used to post information into the
general ledger and other accounts.
You can create and post journal entries for:
• Single entry lines without a separate balancing account line

• Multiple entry lines by using a balancing account line
• Entries with Dimensions
When entering an amount in the Amount field, the following rules apply:
• A positive amount represents a debit to the account

• A negative amount represents a credit to the account
How to Create Journal Entries

So if you're entering general journal lines manually, that's something you can do with or without a
balancing account. Let me show you this. So first of all, I will go to the general journal. So by clicking
on finance, I can select general journals. And then you will see that Cronus International has set up
two different journal batches for the general journal, and I will go for the default batch. Now, the
first time that you open the default batch, you might see a number of lines, and if you want to clear
the default batch, you can post these journal lines, or you can use the select function to delete them.
So I already deleted them, as you can see here. And then the second thing I did is collapsing the
FactBox pane because at the right side you can see the FactBox pane, which can be very interesting
because it displays the dimensions used for a specific line, and also if there are any incoming
documents, which is also something that I will demonstrate in this lesson, by the way. But to see a
bit more fields on the general journal line, I will collapse the FactBox pane. There we go. Now,
entering a line manually is very easy to do, but first the very important thing we have to look
after for is the posting date because this will specify when a transaction will be posted. So
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for example, if I would like to post on the last day of January 2020, then I will enter at posting date
January 31st, 2020. There we go. So now the system will post, of course, on this date. Then there's
the document type field. So here we can select the number of different document types. But in
most of the cases -- not always, but in most of the cases in the general journal, you will leave the
document type field blank. That's different for cash receipt or payment journals, for example, that
we will see in one of the following modules. There you would select payment or refund. But, again,
in most of the cases, general journal lines we use the document type blank. Then there's the
document number, which the system assigns automatically based on the linked number series. And
then there's the account type. So here you can see the different types. We can post, of course, to
G/L accounts, but also to customer, vendor, bank accounts, and so on. So in this case, I will use G/L
accounts. Next I can look up the account number. So you can enter the number. You can enter the
name. So for example, if I would like to post to an expense account, I can enter, for example, the
first two numbers, like 81, and the system then shows me a number of expense accounts. OK,
suppose a very simple posting, cleaning. There we go. Next the system will retrieve the posting
groups, and that's something, by the way, that you can also switch off. If you go to the batch and
you clear the field copy VAT setup to journal lines, you will see that then the system will not copy the
posting groups from the G/L account. But for my example, this is OK. Then the amount, I will enter
100. And that's very important to realize now. This is an amount including VAT. Because I have
copied the posting groups, including the VAT posting groups, the system will consider this as an
amount including VATs and will take out the VAT when posting the journal lines and will post the VAT
to a specific -- to a separate VAT account. You see? Or in other words, this is with VAT calculation.
OK. Second line. So the expense, I would like to post this to, let's say, the cash account. I will go to
the second line. I will use the same posting date. I also leave the document type field blank. Then in
account number, I will now enter the cash account, 2910 for Cronus, and I will enter -- and that's also
very important -- minus 100. This is very important, but once you know the rules, also quite easy.
Positive amounts are debit amounts. Negative amounts are credit amounts. So I would like to post a
debit to the expense account and a credit to the cash account, and that's something I can do like this.
OK. So, again, very easy to enter accounts -- sorry. General journal lines manually in this way. But
entering exactly the same can also be done in a different way. So I can also enter exactly the same
on one line, and that's, of course, by using the balancing account. So let me demonstrate this. So I
will go to the third line, and now by the way, you see that the system automatically suggests the
following number, number 2, and that's because my previous lines are in balance. So when there's a
balance between debit and credit, the system will automatically suggest the following number on the
next line. But, of course, if you would like to stick with number 1, that's something that you can, of
course, change very easily. OK. Number 2 is OK for me. So next I will go to G/L account. I will use
the same account so that you can compare the two examples very well. OK, the amount can be
different. For example, 300 in this case. And now instead of going to the following line, I will stay on
this line, and by scrolling to the right, I can now enter the balancing account number. So if I use the
same account, entering 2910, you see I have entered exactly the same as the first two lines, but
everything now on one line. And you can see also here now that the total balance is zero. So that's
the difference between using the balancing account or not using a balancing account, of course. OK?
So in both ways, I can now try to post. If I click on post, the system will ask, do you want to post
the journal lines? Yes. And there we go. Everything is successfully posted.
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Processing Journal Entries

Before posting a general journal, you can run the Preview Posting function to preview the impact of
posting. This helps you to understand the effect transactions will have, and to reduce errors in
posting.
To run the Preview Posting report, follow these steps:
• On the Actions tab, choose Preview Posting.

• Select one of the resulting entries, and in the ribbon, select Show Related Entries to view the
entries.
The Preview Posting function is available on following journals and documents:
Post a Journal
Once journal lines are entered, you can post them. To post a general journal, the following conditions
must be met:
• The Total Balance field at the bottom of the General Journal page is equal to zero.
• The general journal lines are balanced by date, based on Posting Date.
• If the Force Doc. Balance field is selected in the controlling general journal template, the
general journal lines must also balance by document number and document type.
To post the general journal, follow these steps:
• On the ribbon, select Post.

• Select Yes to post the journal lines.
Only visible journal lines, or, in other words, lines that are within the filter, and are in balance,
are posted. The entries that are hidden because the filter is applied are not posted, even if
they balance.
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To post several general journal batches at the same time, follow these steps:
• In the Batch Name field, choose the drop-down list to open the General Journal
Batches page.
• On the Home tab, select Post.
• Select Yes to post the journals.
Standard Journals
Standard journals are useful for transactions that are posted frequently with few or no changes, but
do not have a fixed recurrence between two posts. A standard general journal is a general journal
that is saved as a default set of lines. It can be accessed at a later stage to automatically fill in general
journal lines.
A standard journal is created from a journal, and it can be:
• Created only for journals of the type General

• Used only within the same journal template
• Used for the different journal batches from the same journal template
Recurring Journals
Recurring journals are useful for transactions that are posted frequently with few or no changes.
Some criteria for a recurring journal includes the following:
• Contains special fields for managing recurring transactions

• You can use it to allocate single entries to multiple general ledger accounts
• You can create it for:
o Each general journal type (general, assets, cash receipts, payments, intercompany,
jobs, sales, and purchase)
o Fixed asset journals
o Item journals
o Resource journals
• Balancing fields will not be available on the journal lines
• The journal lines are preserved after posting
Recurring Methods
The Recurring Method field determines how the amount on the journal line is treated after posting.
The following table shows the various recurring methods.
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Recurring
Description Examples
Method
Monthly accrual of an electricity invoice is

Use when the journal amount is the
not received until the end of the first week
same each period. The amount on the
Fixed of the following month. Monthly income
journal line remains unchanged after
accrual for the sales value of items shipped
posting.
but not invoiced.
Recording variable expense invoices if

purchase documents are not used (for
Use when the journal amount is example, stationery, maintenance).
different each period. The amount on Recording regular customer sales if sales
Variable
the journal line is deleted after the documents are not used. Recording payroll
recurring journal is posted. for an itinerant/irregular workforce, where
the hours change every
week/fortnight/month.
The balance of the account on the line

is allocated among the accounts Periodic allocation of an expense account
specified for the line on between departments. Periodic allocation
the Allocations page. Therefore, the of overheads posted to a single overhead
Balance
balance on the account on the line is account to several specific overhead
set to zero. Remember to fill in accounts. Intercompany expense
the Allocation % field in allocations.
the Allocations page.
The amount on the journal line

Monthly accrual of a contract cleaning
Reversing remains unchanged after posting, and
invoice not received until the following
Fixed a reversing entry posts on the
month.
following day.
Monthly accrual of an electricity invoice is

The amount on the journal line is not received until the end of the first week
Reversing
deleted after posting, and a reversing of the following month. Monthly income
Variable
entry is posted the next day. accrual for the sales value of items shipped
but not invoiced.
Reversing The balance of the account on the line The same examples as the Balance method
Balance is allocated among the accounts but the allocations are only temporary. (For
specified for the line on example, the allocations are temporary
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the Allocations page. The balance on because they are only an estimate for
the account is set to zero. A reversing periodic reporting.)
entry posts on the following day.
Processing Recurring Journals

So let's look at some examples of how to use the recurring journal, and I will start with searching for
the recurring journal. And here I will select the recurring general journals. There we go. And here
we can see the recurring general journal, and it looks a lot like the regular general journal that we
saw in the previous lessons, but you can already notice some differences, I think, like the recurring
methods, the recurring frequency, and so on. So these are fields that we use in the recurring journal
and that you don't find in the regular general journal. OK, let's start with the first example, and in
the previous lesson, we saw the different recurring methods. And in this lesson, I will start with
variables. So we saw that fixed is a method that we can use for fixed amounts. So if the amount
stays the same for my different periods, then I will use fixed. But if the amount changes period to
period, then it's better to use variable because with variable, as we will see in this example, the
system will set the amount to zero after posting, and that's what I would like to do here. So and by
the way, the example that I will demonstrate here is depreciation, so the posting of depreciation
expenses. And I know that there is a fixed asset application area in Business Central that can
calculate depreciations automatically, but still I would like to use this example because I also would
like to demonstrate the allocations function, and there the depreciation example is a very good one,
in my opinion. OK, so first of all, and because the depreciation amount changes from period to
period, I will use variable. Then there's the frequency. So that's the depreciation is something I
would like to post once a month. So I can enter 1M. But there you have to pay attention because, if
you enter 1M and if you're going from February to March, you will see that after posting February,
the system will suggest the 28th of March, and that's, of course, not what we want, or the 29th. But
that's not what we want. We want to post on the last day of the month, and that's something that
you can achieve by extending the date formula like this, so 1M plus CM, which stands for current
month. And this will ensure me that we're always posting on the last day of the month. Then the
posting date, this is also something that you might have to pay attention to because in the recurring
general journal, the rule is the system will only post lines where the posting date is equal or later
than -- or before the work date. So equal or before the work date, very important. Why is this? Well,
quite simple. In that way, you can have different lines with different frequencies, and the system, by
applying that rule, will never post in the future. You see that's the reason. OK. In this case, let's
double-check my work date. So if I go to my settings, you can see that my work date is the 31st of
January, 2020, and that's fine. So I can stick with the 31st because, again, the rule is that the posting
date should be equal or before the work date, and in this case, it's equal. Then document type, I will
leave blank. Document number, as we saw in the previous lesson, you can use variables, percentage
1, 2, and so on. In this case, let's keep it simple. And then I can select the account type. In this case,
I will stick with G/L account for my depreciation example. OK, so normally, when entering a
depreciation posting or a depreciation lines in the general journal, probably you would start with
the depreciation expense account, but in this case, I will do it the other way around. I will start
with the balance sheet account, and the reason is quite simple. I would like to allocate my
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depreciation expense to different departments. And because allocating is done based on the
balancing account, I will have to enter the expense account as the balancing account, and for that
reason, I will start here with the balance sheet account. OK. So in this case, let's look for the
account. And I will use account 1240, accumulated depreciation operating equipment. Here also,
you might have to pay attention if you're following along with the example because, first, you might
have to enable direct posting for this G/L account. Otherwise, you cannot post to the account if
direct posting isn't enabled. So here you see in my example I already enabled it. If this is not the
case in your demo environment, just go to the G/L account cards and select the direct posting fields.
OK. So the account is selected. Then I will enter the amount. And also, this is very important
because we need to post a credit amount to this account, and remember what we saw in one of the
previous lessons, to post credits, we enter negative amounts. So suppose that this is the -- let's use
an amount that is a bit higher, something like this. Suppose that this is my depreciation expense for
January. OK. Then I can now allocate the depreciation expense. Now, to go to allocations, I can click
here on the allocated amount field, or I can click on allocations. OK, so again, here I will now enter
the expense account. So my depreciation expenses, let's look up the account. So by entering part of
the description. And I will select depreciation equipment, 8820. Now, like I just said, the example I
would like to make here is I would like to allocate part of the depreciation expense to each
department. And for that reason, first, I will now select the department for the first line. So by
clicking on navigate in the ribbon, I can click on dimensions. Next I will select the dimension code,
departments and the dimension value, administration. So the first department I would like to assign
depreciation expenses to is the administration department, and now I can do this based on the
quantity or based on the percentage. And for this example, the most convenient option is
percentage. And suppose that, for example, the administration department should get 20 percent of
the depreciation equipment expenses, I can just enter the percentage, and you see that the system
automatically calculates the amount. OK. I will do the same for the second line, but, of course, for
another department. I will use the same account. But in this case, by going to dimensions, I will
select again the department dimension but another dimension value, so for example, production.
And suppose that we want to assign 70 percent to the production department and then the
remaining 10 percent to the sales department. So, again, the same account and now dimensions,
department, and sales, so the third department of Cronus International. And like I just said, the
remaining 10 percent. So there you go, I've assigned 100 percent. Again, you can see the amounts
appearing in the last field on the line, and this is what will be posted not only to the G/L account but
also to the dimensions that I have selected for each line, in this case, the department dimension. But
if you want, by the way, you can, of course, also assign multiple dimensions. OK, let me close this
page. Back to the recurring journal, and everything is complete now. So the method is there, the
recurrent frequency that we just saw. There's the document number and the amount with the
allocation. Last but not least, if you want, you can enter an expiration date. You don't have to, but in
some -- for some examples, you might want to enter an expiration date to end, for example, a
specific journal line on the last day of the year and so on. So that's something that you can enter,
but, again, you don't have to. So let's go and post this example. So I will click on post, yes. And
everything now is successfully posted. Now, first of all, what we see here now on the recurring
general journal line is exactly the same but with two differences. So we still see variable. There's
still one month plus current month, but, of course, the difference now is that the 29th of
February, 2020, isn't the posting date field. So you see that the system applied the frequency
when posting the previous -- the January amount, and you also see that the amount is set
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to zero. So this means that the next time I will have to enter the amount again, and by using the
allocation keys, the system will allocate each percentage again to the different departments, you
see? So that's a very nice example of what you can do with the recurring journal. And by the way, if I
try to post again, you will see that there is nothing to post, and the reason is quite simple, like I
already explained, because the posting date is now later than the work date, the system doesn't
process this line. Let's go and have a look at the results, and I will do this by searching for the G/L
registers. So here the first line, that's the register created when posting the recurring journal. So
let's go and have a look. I will select the line, and if I now click on general ledger, you can see what
the system has posted. So let me collapse here the FactBox pane, and now you can see the different
lines. So four lines, as you can see, so three lines for account 8820, and, of course, the difference
between each line is the department. So if I click on navigate and if I click on dimensions, you can
also see the dimension the system posted to. And then here, of course, my balance sheet accounts.
Let's now look at the second example of how to use the recurring general journals. And I will use the
search function again to go to the recurring journals. There we go. So in here we can still see the
first line appearing, and I will just leave it there because that's also the way you might want to use it
in real life, all these different postings, depreciations, accruals, and so on. And, again, because of the
posting date rule, the system will only process these lines based on your work dates. OK, my first line
demonstrated the variable recurring method. In this case, let's use one of the reversing methods,
reversing fixed, reversing variable. Let's use reversing fixed in this case. And as we already saw in
the previous lesson, the reversing methods will also create reversing entries when posting. So first of
all, I will use the same date formula. There we go. And I will, of course, change my posting date
because, if I stick with this posting date, the system will not process the line because the posting date
is later than my work date. So I will set it to the 31st of January, 2020. There we go. Then document
type, document number. That's OK. And then for example, in this case, I would like to post an
accrual. So an accrual of expenses, for example. So first of all, I will look up an expense account. So
let's take electricity and heating. I will clear the posting group fields because I don't want to post
with VAT. So I would like to post without VAT. So there we go. And then I will enter the amount
fields. So suppose that I would like to create or post an accrual of, let's say, 800. Then there are two
options now to enter the balancing account. So I can do this by going to the allocated amount fields.
So let's use this function. So I will click on allocated amount, and I will enter the balancing account.
In this case, I've created a new account. There it is. So I've created a new account, but you can also
use one of the existing accounts just to demonstrate the function in the recurring journal. So the
account that I'm using here is 2331, accrued expenses. And I will post everything to this account. In
this case, there's no need to allocate to different departments, for example, so 100 percent will go to
the accrued expense account. So that's the first way of entering the line. You could also enter a
second line, of course, as we saw in one of the first lessons of this module. But in this case, I've
entered everything on one line. OK. So let's go and post. So I will click on post. Do you want to post
the journal lines? Yes. Everything is successfully posted. What the recurring journal is concerned,
you can see here the posting date also for the second line now on February, which means that we
are ready to post on February. And, of course, because we have used reversing fixed, so the fixed
method, you see here the difference with the first example is now that the amount will stay there.
So the next time, supposing that the amount is indeed still 800, I can just post the line without
having to adjust something. You see? So that's the intention, of course, of fixed. Let's also look
at the results. I will search for my G/L registers. There we go. And here the first line. So let's
go and have a look. I will click on general ledger, and here we can see now the four lines
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the system created. So let's maybe sort on document number. So here, first of all, you can see the
posting on the 31st of January. So the initial posting where we have posted expenses, electricity and
heating expenses, for 800 against the accrual account. But what you then see, and that's the effect
of the reversing method, is that we get the reversing entries one day later. So on the 1st of February,
the reversing entries are posted. And that's very important because, as I told you in the previous
lesson, in some examples, it's very important that we are posting on the last day of the month, and
this is one of the examples because, otherwise, if we are not on the last day of the month, the
reversing entries might not appear in the next period, you see? So that's why it's very important here
to post on the last day of the month. So this is an example of how to use one of the reversing
methods in the recurring general journals.
Deferrals
To recognize a revenue or an expense in a period other than the period in which the transaction was
posted, you can use functionality to automatically defer revenues and expenses over a specified
schedule.
To distribute revenues or expenses on the involved accounting periods, you set up a deferral
template for the resource, item, or G/L account that the revenue or expense will be posted for.
When you post the related sales or purchase document, the revenue or expense are deferred to the
involved accounting periods, according to a deferral schedule that is governed by settings in the
deferral template and the posting date.
To set up a deferral template, follow these steps:
• Select the lookup icon, enter “Deferral Templates”, and then select the related link.
• Select New.
• Fill in the fields as necessary.
• In the Calc. Method field, specify how the Amount field for each period in the Deferral
Schedulewindow is calculated. You can choose between the following options:
o Straight-Line: The periodic deferral amounts are calculated according to the number
of periods, distributed according to period length.
o Equal Per Period: The periodic deferral amounts are calculated according to the
number of periods, distributed evenly on periods.
o Days Per Period: The periodic deferral amounts are calculated according to the
number of days in the period.
o User-Defined: The periodic deferral amounts are not calculated. You must manually
fill theAmount field for each period in the Deferral Schedule window. For more
information, see the “To change a deferral schedule from a sales invoice” section.
Finally, in the Period Desc. field, specify a description that will be shown on entries for the deferral
posting. You can enter the following placeholder codes for typical values, which will be inserted
automatically when the period description is displayed.
• %1 = The day number of the period posting date

• %2 = The week number of the period posting date
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• %3 = The month number of the period posting date

• %4 = The month name of the period posting date
• %5 = The accounting period name of the period posting date
• %6 = The fiscal year of the period posting date
Using Deferrals
So now that we know what a deferral template is, let's go and have a look at an example here in the
application. And let me explain the scenario I would like to demonstrate. So first of all, I will create a
new deferral template, one that I can use to post deferrals once a month over the whole fiscal year,
so 12 months in this case. And then I will assign it to an expense account, an insurance account, and
I will post an insurance invoice. So that's a scenario I would like to demonstrate. So first of all, I will
look for the deferral templates. So here you can see that Cronus doesn't have any deferral templates
yet. So I will start with creating a new one. And I will enter a code. And let's use the code 12
months, for example, so that it's a perfectly explains what it will do. So the description, the same, so
that's OK. Then the deferral account. So here, of course, you need to pay attention. This is a
balanced sheet account that the system will use to post deferral to and from. So from the expense
account, for example, to the deferral account. From the deferral account to the expense account,
and so on. I will use one of the accounts I have created in one of the previous lessons, but if you
want, you can create a new accounts or select another account. That's, of course, not a problem at
all. So I will use here the account accrued expenses because it's a balance sheet account. And I will
also -- in real life, again, this is also quite important that you select the correct account. Then as we
saw in the previous lesson, you saw the explanation of the different fields. First of all, the deferral
schedule -- sorry. The deferral percentage. I will stick with 100 because I would like to use this
template to defer the total amount, but as you can see, you can also set up templates that will not
defer the total amount, only 50 percent or 60 if you want. Then the different methods. There's
straight line, equal per period, days per period, and user defined. Also here I will stick with straight
line, but then my example of my insurance invoice, I will show you how you can look at the result of
these different methods. Then the starting date, this is also very interesting, posting date, beginning
of period, end of period, beginning of next period. And in this case, I will select the beginning of next
period because my insurance, for example, if I receive my invoice, it is always for an insurance that is
starting at the beginning of next period, just an example, of course, but just to explain what this field
will do. And then this is also very important, the number of periods. So I will enter 12. And then the
period description. Notice that this is just a plain text field. It's not a field with options or selection
or whatever. And this means that this is not defining the period length. So here I'm entering 12.
Here I can see that this is intended to be 12 months, so a period description M, or let's just enter
month. That's even more clear. And what is very important here, that the number of periods is
always based on your accounting periods. Because you can't enter a period length, this is always
referring to the accounting periods. Now, in my experience, I think most companies are using
months as accounting periods, which means that now, because Cronus is also using months as
accounting periods, this is 12 months. But if a company is using something else like four weeks or a
quarter, then, of course, this is referring to another period length. So very important, this is
always based on the length of an accounting period. So there we go. This is my deferral
template, and we are now ready to use these templates. And like I just said, I will assign the
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template to a G/L account although you don't have to. You can also enter templates manually in a
document or a journal line. But in this case, I would like to link it to a G/L account. I will go to the
chart of accounts. I will look up an insurance account, and in one of the previous modules, I've
created a couple of insurance expense accounts. So let me take the building insurance, for example.
There we go. And if you scroll down to the posting FastTab, you can see there the default deferral
template fields. So here I can look up the template, and because there is only one, let's take this
one. Which means that now by default the system will suggest this deferral template when you use
the account in a document, in a journal, and so on. And I will demonstrate this by creating a new
purchase invoice. Let's create a new purchase invoice, and this is something, because I'm using the
business manager role center, that I can do very easily from the role center and directly by clicking
here on purchase invoice. There we go. Next I can enter the vendor name. I will take an existing
vendor, for example, service electronics or another vendor, whatever. Then, of course, very
important, the posting dates for the document because we just saw in the template that we have a
number of options to specify when the deferral should take place, and that's, of course, always based
on the posting date of the document. In this case, I will stick with the 31st of January, 2020. So
that's OK. Then the vendor invoice number. And then I will go to the lines. So here on the line, I will
select G/L account. Then I will look for my building insurance G/L account. There we go, building
insurances. Next I will enter quantity and then the total costs. So let's take, for example -- let's take
this amount. OK. So an insurance of 21,800. So that's what we can see here. And now we know
that we have assigned a deferral template to the account. So we know that this is an account that
can be deferred, based on the template that we have assigned. A couple of remarks here. So in
most of the cases, it's possible that the user first would like to see the effect of the deferral before
actually posting the document, and there are two things we can do. So first of all, I can go to line,
and next I can click on deferral schedule. So by doing this, you can see how the system will defer the
total amount. And a couple of things that are important. So first of all, I can see the amount to defer
and the calculation method, you see? So this is typically a straight line. You can compare it a bit with
depreciations as straight line depreciation, which means that each period the same amount will be
deferred. Then also the starting date. Because I chose to start the deferral at the 1st of the next
month, you can see that we are not starting on the 31st of January, but on the 1st of February. And
then, of course, the number of periods. And so, again, this is what the system will do here in this
scenario with a small difference here in the last period, and that's, of course, a rounding difference.
Suppose you would like to see the effect of the other methods. That's also something that is
perfectly possible. If I click here on the calculation method, and for example, equal -- or let's take
days per period. Then you will see a difference. So if I click now on calculate schedule, you will see
now that the system will take into account the number of days of each month, and that for example,
in February, the amount is lower than, for example, in March because March, of course, has a couple
of days more. So that's the result of days per period. So let's go back to straight line, calculate it
again, and so on. So here you can not only look at the result for each method. By selecting a method
and calculating the schedule and then clicking on close, the system will also apply that specific
method. So you don't have to stick with the predefined method for the template. You could also
switch on a document basis. OK. This case, again, straight line. So I will click on close. There we go.
And now we're ready to post. But I just said there's a second way of looking at the result because
here I could see -- and that's very interesting, of course, I could see the amounts the system
calculates. But by going to the posting preview function, you can also see the accounts the
system will post to. And remember you saw the function in one of the previous lessons.
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So if I go to actions, and next if I click on preview posting -- there we go -- you can see here that the
system is planning to post 28 G/L entries. And, of course, if I now click on show related entries, you
can see all these deferral entries. So let's start at the top. So this is the normal purchase posting. So
first, everything is posted to the expense account, but then at the same time, it's deferred
immediately, you see? So reversed on the expense account. And then each month, based on straight
line methods, the system will post part of the amount to the expense account, you see? So also very
interesting, especially for bookkeepers or accountants, to look here at the result of the deferral
before actually posting the invoice. OK, so this is what I would like to post. So that's what I was also
expecting. And this means that now I can carry on with posting the document. So I will go to the
home tab here on the ribbon, and I will click on post. Do you want to post? Yes. And now everything
is posted. And also here, if you want, you can have a look at the results. So the posted invoice. And
if I click on navigate here, initially, I only see four entries, but that's because the system now also is
filtering on the posting dates. If I delete the posting date and if I click on show related entries again -
- sorry. Find. There we go. You can also see now here the 28 entries we just saw. So this is basically
displaying the same thing as we just saw in the preview posting. So the different entries based on
my deferral templates. You see? So that's an example of how we can use deferrals. And by the way,
although we're covering the general journals module, I have used purchase document example here
for the deferrals, but also on the general journals, you can use deferrals. So let me go to the general
journals. If I open an existing batch, the default batch, for example, and if I scroll to the right, you
can see here almost the last field on the line the deferral code. So if you prefer, for example, to post
the deferral from a general journal, that's also perfectly possible. We can use it in exactly the same
way on the general journal lines, as we just saw in the purchase invoice.
Reversals
To undo an erroneous journal posting, you select the entry and create a reverse entry (entries
identical to the original entry but with opposite sign in the amount field) with the same document
number and posting date as the original entry. After reversing an entry, you must make the correct
entry. You can only reverse entries that are posted from a general journal line. An entry can only be
reversed once. You can reverse entries from all Ledger Entries windows.
The following procedure is based on the General Ledger Entries window.
• Select the lookup icon, enter “General Ledger Entries”, and then select the related link.
• Select the entry that you want to reverse, and then choose the Reverse Transaction action.
Note that is must originate from a journal posting.
• In the Reverse Transaction Entries window, select the relevant entry, and then choose
the Reverseaction.
• Select Yes on the confirmation message.
Module Review
In this module, we learned how to use general journals in Business Central. Now, this is an
important financial function for financial users because general journals are one of the core
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functions in financial management. Another core function is sales and purchase invoicing. Let's go
to the next module to find out how that works.
Module 04: Processing Customer and Vendor Invoices

Module Overview
In Microsoft Dynamics 365 Business Central, there are different ways to invoice customers or process
vendor invoices. In this module, we'll discover how and when to use these different invoicing
options. At the end of this module, you will also get an overview of how to correct posted invoices.
Invoicing Options
In Microsoft Dynamics 365 Business Central, there are several ways to process customer and vendor
invoices.
Invoicing Customers
How to invoice customers depends on whether you want to invoice shipments or not. When
invoicing shipments, it is important that shipped items are not manually entered on sales lines again,
because then they will be posted from inventory twice.
Instead, when invoicing sales shipments, use one of the following functions:
• Invoicing one shipment:

o Post the invoice from the sales order
o Use the Get Shipment Lines function in a sales invoice
• Multiple shipments:
o Use the Get Shipment Lines function in a sales invoice
o Use the Combine Shipment function
When selling something else than items (services, fixed assets, …), you can directly create a sales
invoice, or post the invoice from a sales order.
Invoicing Vendors
Like invoicing customers, invoicing receipts is different from invoicing purchased services or
expenses.
To invoice purchase receipts, use one of the following options:
• Invoicing one receipt:

o Post the invoice from the purchase order
o Use the Get Receipt Lines function in a purchase invoice
• Multiple shipments:
o Use the Get Receipt Lines function in a purchase invoice
Processing expenses or purchased services is generally done by directly creating a purchase

invoice.
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Invoicing Customers
So there are several ways to invoice customers, and one of the fastest and most simple ways is
invoicing customers from a sales order. Let's go and have a look, and I will demonstrate this by
creating a new sales order. So by clicking on the sales order action in my role center, I can create a
new order, assign a number, and for example, in this case, I will sell to customer 10000. You can see
the posting date, the order date, the due date, and so on. Let's go to the lines. And suppose that
this customer orders some items. So for example, let me take the London swivel chair from location
blue, and suppose that a customer wants four pieces. OK, what I'm selling to the customer is not
very important. I'm selling an item. Most important is the invoicing process. And if I scroll to the
right, you can see that the 4 is copied to the quantity to ship and quantity to invoice fields. And
based on these fields, I can now start processing the order. So if I click on the post action in the
ribbon, you can see that there are three options. So the first one ship, the second one invoice, or the
third one ship and invoice. So this is the first way to invoice customers. So based on your ship
quantity, you can also invoice customers from a sales order, and suppose I would like to ship and
invoice the sales order immediately, I can stick with the third option, click on OK, and the sales order
is posted. If you want, you can go and have a look at the posted invoice. So here is the posted
invoice. I can see my four London swivel chairs appearing. If I click on actions, I can navigate to have
a look, for example, at the G/L entries, the VAT entries, and so on. So, again, the first way of
invoicing customers. Then there's the second way, and that's invoicing customers from a sales
invoice. Now that's something that you could do when you invoice, for example, a service. When
you don't need to ship what you're selling separately from invoicing, then you can also directly create
a sales invoice. However, a sales invoice can also be interesting for invoicing multiple shipments, and
that's also something I will demonstrate. So I will start again with creating new sales orders. In this
case, I will create two new sales orders for the same customer. So let's take customer 10000 again,
and I will sell some items. So in this case, for example, some side panels, 100 pieces. And maybe also
a second item. Let's take the Athens desk, 4 pieces. There we go. And I will post the order.
However, very important, I will only ship. I will not invoice. Suppose this is what this customer has
ordered. We do have the items on stock, which means that we can ship them immediately, and
that's basically what we will do here. So here I will select ship in order to only post the shipments.
So here if I now scroll to the right, you can see that the quantity shipped is 100, and 4 for the second
item, but everything is still to invoice. Now, the same customer places another order. So I will go to
sales order again, so I will create a new sales order. And this is now a second order for the same
customer, customer 10000. Again, I will enter some items, and in this case, for example, some
mountings, 150 pieces. And also here, we see that we do have the items in stock, so there's no
availability warning, which means that we can ship them just as the previous order. So also in this
case, I will only select ship. And there we go. So also here, if I scroll to the right, you can see now
that the 150 pieces are shipped but not invoiced yet. So this means that the situation is that we have
two shipped but none invoiced orders for this customer, and maybe we have agreed to invoice the
customer at the end of the month, which means that I would like to create an invoice for multiple
shipments. So that's also something that we can do. So let me demonstrate. I will go to sales
invoice, so I will create a new sales invoice. This is, of course, an invoice for customer 10000, so
there we go. And now this is very important, I will need to use a function to retrieve the
shipped non invoice lines. What you never should do in this case is create the lines manually
because, if I create manually a line, an item line, for example, for the item I want to invoice,
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then when posting the sales invoice, the system will post the items a second time from inventory,
and that's, of course, not the intention. So instead of entering lines manually, it's better to go to a
specific function. So here at the top, if I click on line, you can see the function get shipment lines. So
in using this function, I can retrieve all shipped non invoiced items for this customer. So here you can
see the examples I just made, so the side panel and the Athens desk, and then the mounting. And it
seems that there's another item that we didn't already invoice to the customer. But here it's up to
you what you would like to select. For example, if I click here, I can click on select more, and suppose
I only would like to invoice the last three lines. That's no problem at all. So I can select each line, or
you can make a selection of multiple lines or one line, if you want. OK, suppose I would like to invoice
these three lines. Next I will click on OK. And you will see that the lines are inserted here in my new
sales invoice with a reference to the shipment number, for example. So this is the second way of
invoicing, and by the way, I can change anything I want. So suppose that you don't want to invoice
the full quantity, that's no problem at all. I can enter 90 or 50, whatever. So that's something that is
possible. And I can also update prices. The system has retrieved these prices from the sales order,
but suppose that at the moment of invoicing, we would like to change the prices. That's still
possible, just as entering a line discount and so on. OK. So let's go to the home tab on the ribbon,
then click on post. Do you want to post the invoice? Yes. And there we go. Now we have -- let's
have a look at the invoice. So now we have invoiced multiple shipments with one invoice, as you can
see here. Also interesting to know is that, when you use this way of invoicing shipments, you will see
that the sales orders are saved in the system. So if I go to my sales orders, by clicking here on the
sales order queue, you can see here the sales orders I have just used in my example. So let me open,
for example, 1005. So let's go and have a look. So I will click on view. So there we can see the sales
order, the mountings, so the mountings we just invoiced. And here if we now scroll to the right, you
can see that the quantity of 150 is entered in the quantity shipped but also in the quantity invoiced
field, you see? So invoicing sales orders with a sales invoice, so by using the get shipment lines
function will result in the fact that your sales orders will stay in the system. Now, suppose that I
would like to apply the concept of invoicing multiple shipments for multiple customers. Then instead
of entering everything manually like I did in my previous example, we can also use the combined
shipments function. So let's go and have a look, and I will use the search function, and I will search
for the combine shipments function. There we go. So I'm basically, like I just said, this is a report
that will create sales invoices of all posted shipments, so all items that have been shipped but are not
invoiced yet. So exactly the same as I did manually in my previous example, but then by using a
function. So I can enter the posting date and the document date, and so for example, suppose that
this is something that we do typically at the end of the month. Then I can enter January 31st, 2020,
for example. I can select if I would like to calculate invoice discount, if I would like to post invoices.
So if I don't select a field, the system creates non-posted invoices. If I select the fields, it will try to
post the invoices immediately. Then standard payment terms, copy text lines, and so on. And then if
you want, you can also filter here on customer. If you don't want to run the function for all
customers, for example, you can enter any filter. So I will leave this open so that the system checks
each customer, and by clicking on OK, the report runs, and we will get a result in a few moments. So
the shipments are now combined, and the number of invoices created is 5. So apparently, there
were shipped items that were not yet invoiced for five customers, and that's what we will find now
in the sales invoices. So now if I go to sales invoices, so the non-posted sales invoices, of
course, you can see here the five invoices. So the first five lines are the invoices the system
just created. So for example, if I open -- let's take the second one -- you will see basically
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the same result as in my previous example, you see. So this customer also had a number of shipped
but non-invoiced items, and similar to my previous example, the system now created a sales invoice
for all these shipments, you see? So exactly the same but by running a function. So if you made
agreements with multiple customers to invoice, for example, everything at the end of the month, the
combined shipments function is very efficient and a very good function to use.
Processing Vendor Invoices

Processing vendor invoices is very similar to invoicing customers, and so very similar to what we just
saw in the previous lesson. This means that the first way of processing a vendor invoice is also
posting the invoice from a purchase order. Now, let me also demonstrate this. I will click here on
purchase order, and I will create a new purchase order. I will order from vendor 10000, so London
Postmaster, or any other vendor. I can see the document date, and that's fine. You can see here the
mandatory field vendor invoice number. So for the time being, I will leave it blank, but, again, you
see that it's mandatory. So before posting the invoice, I will have to enter the vendor invoice
number. So suppose -- and let's keep it very simple -- that I'm ordering some items. So I will enter
the item. I will look up the item or enter the number, if you know by heart, and in this case, we're
ordering some conference tables. So I'm ordering them for location blue, and the quantity is, for
example, 10. So this is, again, a basic Normal purchase order where I can now enter or update
prices. I can enter discounts, if you want, and so on. So similar to what we saw with sales orders,
you can see here that the quantity is now copied to the quantity to receive and the quantity to
invoice. And this means that also here we have a number of options if you click on post. So if I click
on post, I can receive the order, I can invoice the order, or I can receive and invoice the order. Now,
a couple of basic rules that apply, and by the way, they also apply to sales orders. First of all, you can
never receive or ship more than you have ordered. So suppose I've ordered 10 tables and I see that
11 tables arrive to warehouse. Then if I try to enter 11, you will see that this doesn't work. So the
system will give me an error, and if I actually do want to receive 11 tables, first of all, I will have to
update the quantity field. So, again, you can never receive or ship more than you have ordered. And
then you can also not invoice more than you have received or you have shipped. And suppose that
for some reason I would like to post the invoice first before we actually received any of these items,
also here you will see that this doesn't work. So if I click here on invoice again, I will get an error
because the system says there's nothing to post. You see, so I can only invoice what is received. OK.
Again, this is the first way of posting purchase invoices, so posting the invoice from the purchase
order. Now, suppose that the vendor delivers the ten tables and that we also receive the invoice
immediately. Then I could click here on post and then receive and invoice, but if I try, I will get
another error because I didn't already enter the vendor invoice number. So we just saw that this is a
mandatory field. And by the way, this is something that you can switch on or off. So if I go to the
purchases and payables setup, you can see here the external document number mandatory field,
and because this is selected, the system will check if there is a vendor invoice number, and if not, we
just saw, it will throw an error. So I will have to enter a vendor invoice number. Now, the reason's
quite simple. The vendor invoice number is used as a payment message if you're going to pay the
invoice to the vendor, and that's why you can make it mandatory. So for example, in this case, let
me enter something like this, and now if I try again, click on post, receive and invoice, and then
if I click on OK, you will see that now it will work. And, again, I will get a posted invoice. So
here are the ten tables I just saw on the order, and if you navigate on the invoice, just as
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with the sales invoice, I can see now the G/L entries, the VAT entries. In this case, we have vendor
ledger entries, and so on. So this is a first example, the first way of processing vendor invoices. Now,
the second way, and also this is quite similar to what we saw for sales, is posting or processing the
vendor invoice by creating a new invoice. And here we can see the action purchase invoice, and
that's something that we will do in general -- in two different situations. So first of all, that's
something that you can do when you want to process expenses, expense invoices, and that's
something I will demonstrate in a few moments. But let me start with processing or invoicing
multiple receipts, and that's similar to what we saw for sales invoices or sales orders. So also here I
will start with entering a few -- sorry. A few sales purchase orders. So the first purchase order, I will
enter some bases for location blue, and I will post the order, but I will only receive. So suppose that
the vendor delivers the item but doesn't send the invoice yet. So maybe you will only send the
invoice at the end of the month. So this means that I can only receive the order. So in order to
receive the items in inventory, I will select receive and click on OK. And also here, you will see now if
I scroll to the right, that we have a quantity received, but everything still should be invoiced. I will
create the second purchase order for the same vendor. So very simple purchase order because the
focus here is on the invoicing process, and in order to invoice multiple receipts at the same time, I
will also post but only receive the items. So also here, very important that I only receive the items.
So there we go. So this means that now we have two posted receipts from this vendor and that we
can now post the invoice for the two posted receipts at the same time. And suppose that we indeed,
that we receive a purchase invoice from the vendor with both receipts on it. I can go to purchase
invoices, and I can enter the vendor name. So as you see, this is very similar to what we saw in the
previous lesson for sales orders. And because now, if I click on line in the ribbon, there is the get
receipt lines function. So in this function will show me all posted receipts that still should be
invoiced. So here you can see the two items that I've received from two separate orders, and let me
select all of them. So the two lines, there we go. And if I click on OK, they will be inserted in my
purchase invoice. So now I can enter the invoice or the vendor invoice number, and I can post. And
this will then, of course, post the invoice, or this will invoice both items. So I click on yes. There we
go. So in this case, I don't need to see the posted results because we know what happened. So,
again, invoicing multiple receipts can be done quite easily like I just demonstrated. But in general,
there's also a second situation in which you create directly purchase invoices, and that's invoicing
expenses. And so that's typically something a bookkeeper might want to do. So for example, when
we receive expense invoices. So let me take, for example, vendor 30000 in this case, I can already
enter the vendor invoice number. So there we go. And in this case, I will not use items, but in
general invoices -- sorry. Expenses are invoiced by posting them directly to a G/L account. Now, for
Cronus International, most expenses start -- have a number that starts with 8, and so here you can
see now repairs and maintenance and so on. And suppose that we purchased some maintenance
products. There we go. I can do this for location. However, this is not mandatory in this case, so I
can also leave it blank. And then if I enter 1, I can then enter the direct costs, excluding VAT, so for
example, 680. There we go. Very easy. Here at the bottom, if I scroll down, you can see the total
fields. So the amount without VATs, the VAT amount, and then the total amount. So then after
checking this and confirming that this is OK, I can now simply post my expense invoice. So there we
go.
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Correcting Posted Invoices

There are several ways to correct posted invoices. From a posted invoice, the following actions are
available:
• Correct: The Correct function creates and posts a corrective credit memo to reverse the
posted invoice and prepares a new invoice that can be used to correct the initial one.
• Cancel: The Cancel function creates and posts a corrective credit memo to reverse the posted
invoice.
• Create corrective Credit Memo: The Create Corrective Credit Memo function creates a
corrective credit memo that can be modified before posting.
The Cancel and Correct functions cannot be used to correct invoices with items that were invoiced
form a sales order or purchase order. If an invoice in fully or partially paid, it is not possible to use
any of these functions.
Module Review
After following this module, you should now be able to invoice multiple shipments or receipts, but
also to process expense invoices. But also remember the options we have to correct posted invoices.
Module 05: Cash Management - Receivables and

Payables
Module Overview
For many companies, processing bank statements consumes a lot of time. To save time, more and
more companies use electronic banking functions, such as generating payment files or importing
bank statements. In Dynamics 365 Business Central, you can create payment files from the payment
journal or import bank statements using the payment reconciliation journals. But first we start with
setting up bank accounts and processing payments manually with special attention for the
application process. Also, stay tuned if you want to find out how we can use manual or computer
checks to pay vendors. We'll finish this module by looking at how to include payment services like
PayPal on sales invoices.
Bank Account Overview

Using bank account cards, you can keep track of all your bank accounts, in any currency. After you
have set up the bank accounts, you can also use the check printing option. To use electronic banking
services to import bank statements and export payments, you must set up and enable the involved
services.
To set up bank account, follow these steps:
• Select the lookup icon, enter “Bank Accounts”, and then select the related link.
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• In the Bank Accounts window, select the New action.

• Fill in the fields as necessary. Choose a field to read a short description of the field or link to
more information.
The demo in the following lesson provides more information on the different fields on a bank
account card.
Bank Account Card Fields

So let's look at one of the existing bank accounts of Cronus International, my demo company. So
here in the role center, I will click on bank accounts, and here we can now see the list of bank
accounts, and let's have a look at World Wide Bank Euro. Here we go. So here we can see how a
typical bank account card looks like in Business Central. So we have the different FastTabs -- general,
communication, posting, and transfer. So let's start with the general FastTab, and by clicking on the
show more link, you can display all the fields of the general FastTab. And we always start, of course,
with assigning a number. So in this case, you see that my demo company uses the bank's name as a
number, which is a very good practice, but you can also just use a number series, of course. Then
there's the name, the bank branch number, bank account number, and so on. And then also very
important, the balance and the balance local currency. Now, these two fields show that you can
perfectly create bank accounts in foreign currencies, and as a matter of fact, this is for Cronus
International a bank account in foreign currencies because the local currency of Cronus International
is British pound, GDP, while this is a bank account in Euro. If I scroll down here on the posting
FastTab, you can see the currency code Euro. So this means that the balance and the balance local
currency contain different amounts because the balance is the balance in Euro while the balance
local currency is, of course, for Cronus International the balance in British pounds. So very
interesting bank accounts in foreign currencies. Another thing that is important, more and more
important now with this in real life is processing bank transactions electronically. So instead of
entering everything manually, you can also create payment files. You can create direct debit
collection files. You can import bank statements, and so on. And that's also something we will
demonstrate in this module. Now, to enable these functions, you might have to enter a number of
fields, like, for example, the SEPA direct debit export format. Or if you scroll down to the transfer
FastTab, the payment export format, the bank statement import format, and so on. Now, depending
on the region you're working on, you will use specific formats, and in Europe, for example, we're
using the SEPA format, and SEPA stands for single Euro payment area. And most European countries
nowadays support the SEPA format. And by signing, for example, here the SEPA format, the system
knows how to create payment files or direct debit collection files like here in this field. But these are
functions that we will cover more in detail in the following lessons in this module. So let me scroll
down. There is a communication FastTab. It speaks for itself, I think. And then very important also,
the posting FastTab. So we already saw the currency code, which is very important, but also the
bank account posting group because, if you post to a bank account, you, of course, also would like to
post to G/L accounts, and as you know, this is done by linking posting groups. So in this case, you can
see here the posting group, the bank account posting group with the G/L accounts linked to it. And
so in this bank account will be posted on account, G/L account 2930. If it you're working in a
region where checks are used as a payment device, you can enter here fields like the last
check number, the transit number, and so on. And then as I already showed you at the
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bottom, at the transfer FastTab, bank statement import format, the payment export format, and also
here, if you're living in Europe, you might want to enter the IBAN bank account number and the
SWIFT code. So this is a general overview of a bank account card. And in the practice of this lesson,
you can create the bank account yourself.
Customer and Vendors in Cash Management

To manage the total finances of the company, you must be able to manage customer and vendor
data. On both the customer and the vendor card, the Payments FastTab with cash management-
related fields such as the payment term and payment method.
Choose a field to read a short description of the field or link to more information.
Analyzing Receivables and Payables

When you post transactions to customers and vendors in Microsoft Dynamics 365 Business Central,
the following entries are created:
• Customers:
o Customer ledger entries
o Detailed customer ledger entries
• Vendors:
o Vendor ledger entries
o Detailed vendor ledger entries
Customer and vendor ledger entries are posted entries from sales and purchase documents such as,
orders and invoices.
The detailed customer and vendor ledger entries store the actual amounts of the customer and
vendor transactions, such as an invoice. The customer and vendor ledger entries show the amounts
as FlowFields.
Examples of where additional detailed ledger entries are created to change the ledger entries include
the following:
• Foreign currency exchange rates

• Payment discounts
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• Payment tolerances
• Applications
• Rounding
Cash Receipt Journal and Payment Journal Overview

In Microsoft Dynamics 365 Business Central, payments received from customers are recorded in
the Cash Receipt Journal. Payments to vendors are created and posted in the Payment Journal. In
the payment journal, you can use the Suggest Vendor Payments batch job to have the system
suggest open vendor entries, based on specific payment date.
Entering Payments in the Cash Receipt Journal and Payment Journal

Before covering the more advanced features, such as the payment reconciliation journals, let's first
have a look at how to process payments manually. And I will do this by processing a payment from
the cash receipt journal and one from the payment journal. So let's start with the cash receipt
journal. So in here I can see that there are three different batches -- bank, general and giro. And
what's very important here is the balancing account number. So some of these batches have a
balancing account, a fixed balancing account, which means by default everything will be posted, will
be balanced to this account, which is also the way to set this up. So, and for that reason I will use the
bank batch. There we go. And there we can see now the cash receipt journal. Also notice that I've
collapsed the factbox pane in order to see a bit more fields. And when I would like to process a
payment manually the first thing I need to do is to enter the posting date. So I will stick with the
work date, the 23rd of January, that's fine. Then very important, the document type. Now,
remember in general journals we said to leave the document type blank. Here it's very important
that we use payment or refund. Because by selecting the document type payment, the system will
also process additional functionality related to, for example, payment discounts, payment tolerances
and so on. So that's why I always advise to use payments or refund as document type in cash
receipts and payment journals. Then there's the document number, which is fine, and the account
type. So although I could post to a G/L account in cash receipt journals, in most of the cases we will
use customers, because typically we can use the cash receipt journals to post customer
payments. So I will select customer and then the account number. So this is of course the customer
number. I can enter the customer number or name or I can click the assist edit to look it up. So
suppose we have received a payment from customer 10000, I can simply select the customer. Now,
the next thing that is very important is that we try to apply the payment, because probably the
customer's paying one or more open documents like an invoice, credit memos and so on. And the
application process means that we will map the payment with one or more open customer ledger
entries. More information on these applications in the following lesson. But here I will already show
you how we can make applications. Now, in general there are two different ways. I can click the
apply entries action in the ribbon, or I can enter the applies to document number directly on the
line. And so, for example, if I see, by looking at the payment message, that the customer paid one
invoice, I can go to the applies to document number, click here on the assist edit and the assistant
will show me all the open customer ledger entries of this customer. Next I can select the
line. So suppose that the customer paid this invoice, there we go, I can click on OK and you
will see now that the document number is entered and that also the amount is
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updated. And so notice the negative amount because we're posting a credit to the customer and this
means now that if I post this payment, the system will also post the application. So let me do this, I
will click on post. Do you want to post? Yes. So this is the first example of how to process payments
manually. But let's look also at the second example. And, like I just said, in this case lets use the
payment journal. So there where you typically use cash receipt journals to process customer
payments we use payment journals to process vendor payments. Also here I will use the worldwide
bank operating batch so the bank batch where the worldwide bank operating is linked. And as you
can see this is quite similar to the cash receipt journals that we just used. Also here I will collapse the
factbox pane. And although there are a number of advanced functions, such as the suggest vendor
payments, I can also simply enter payments manually in the payment journal. So this is quite similar
to what we just did in the cash receipt journal. So also here I will select document type payment. In
this case, because there's no number series linked to the batch, I have to enter the document
number manually. Next I can go to the account type field. So by default in most of the cases this is
probably vendor, but if you want you can also switch to customer to G/L account or any of the other
types. But I will stick with vendor, and in this case let's post the payment to vendor 10000 along with
postmaster. In my cash receipts journal example, I've entered applies to document number directly
on the line. So this is something I could also do here by entering the applies to document
number. But, like I said, there's also a second way of applying entries and that's by going to the apply
entries action in the ribbon. So let me do this. So I will click on apply entries. I will get the same
overview as in my previous example but in this case I need to select entries by assigning the applies
to ID. And this will also enable me to select multiple lines, something that I will do in one of the
following lessons. Now, suppose -- and let me enlarge this a bit, that we have paid, for example, this
invoice. So the invoice of 8,132. Again, like I just said, in order to select the line we need to assign an
applies to ID and that's something that I can do by clicking on actions. And then set applies to
ID. And what you will see is that the system will automatically use the document number as applies
to ID. Here at the bottom I can see the balance, and by clicking on OK the system will insert the
amount -- if I scroll to the right -- there we go, and we'll also post the application. But now by using
this way of applying you will see that the applies to document number is not visible on the line. And
this means that if you use the applies to document number on the line, by default you're having a
one-on-one relation. Or, in other words, you can only apply one document at a time. While using
the apply entries function in the ribbon will give you the opportunity to apply multiple documents at
the same time. So everything is entered. Let me click on post. And the journal is posted. So let me
now show you what happens on customer and vendor levels. So I will do this for the customer
because for the vendor it's exactly the same. So if I now go to customers, and if I go to my customer,
the Cannon Group PLC, so let me click on manage and view -- so for example, to open the customer
card. And so here you can see the customer card. And what I'm interested in are the customer
ledger entries. So by clicking on the navigate tab I can click on ledger entries. There we go. And here
I can see the transactional data of my customer, 10000. And here we can see the payment I just
posted, so the payment of 8269.04. Now, very important is the remaining amount, because the
remaining amount is showing an amount of 0, which is telling me that this entry is applied. Now, in
this case, because we don't have that many entries, if I look a bit more at the bottom, I can see the
invoice also with remaining amount. So probably these two have been applied with each other, I'm
sorry, so this line and the first line. But in order to be sure, there's a better way to get an
overview of the applied entries. So let me expand the factbox pane. If you select an entry,
the system will display here the number of applied entries. And by clicking here on the 1,
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I can see the entry that the other one is applied with. So, of course, my invoice, 103015, that I've
used in my example. So that's the best, the fastest way to get an overview of the applied
entries. Another thing that you see by posting the payment and at the same time the application is
that the system has created a number of detailed customer entries. So if I select this line, I can click
here on the remaining amount field, or I could go to navigate and select here detailed ledger entries.
So let me do this for this invoice line. And here I can see now that we have two detailed entries. The
first one is the initial entry. So the entry created when the invoice was posted. And now the second
line is the application. So when posting the application, the system will not modify the amounts
directly on the customer ledger entry, but it will create additional, detailed customer ledger entries,
and so in this case the second one. And because the second one, with entry type application, has a
negative amount, these two add up to zero. You see? So that's the way that receivables and
payables are processed in business central.
Applying Payments
When you receive a cash receipt from a customer, or you make a cash refund, you must decide
whether to apply the payment or refund to close one or more open debit or credit entries. You can
specify the amount you want to apply. For example, you can apply partial payments to customer
ledger entries. Closing customer ledger entries makes sure that information such as customer
statistics, account statements, and finance charges are correct.
You can apply customer ledger entries in several ways:
• By entering information in dedicated windows, such as the Cash Receipt Journal and Payment
Reconciliation Journal windows
• From sales credit memo documents
• From customer ledger entries after sales documents are posted but not applied
The previous lesson already showed how to apply a payment to a single customer ledger entry. The
following lesson demonstrates how to:
• apply a payment to multiple customer ledger entries

• apply posted customer ledger entries
• to correct an application of customer entries
Applying Payments Scenarios

Let me now show you how we can apply entries after posting the payment. And to demonstrate this
I will go to the cash receipt journal. And the scenario here is that we have received a payment from a
customer, but at the moment that we are processing the payment, we don't find the invoice, so the
documents that the customer has paid. So, first of all, let me open the bank batch. There we
go. The posting date is OK. As document type I will again select payment and the account type is
customer. The account number, customer 30,000, John Haddock Insurance, and I've been looking in
the open entries but I don't find an invoice with the exact amount and so on. And this means I
would like to post my payments and apply it. So let me first enter the amount and the amount
the customer has paid is this one. There we go. And again I don't find an invoice or
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multiple invoices matching the amount. So I will simply post it as an open payment. And so an
unapplied payment. So that's something I can do very quickly now by clicking on post. And there we
go. So everything is posted. So let's look at the result, and now you will very clearly see the
difference with my previous example because now if I go to the customer -- and let me scroll down
to customer 30000 -- next I will click on show the rest, then I will go to navigate, history, ledger
entries. There we go. And so what we see now is that we have a payment line. So there's a
payment entry with the amount I just entered manually. But with the same amount here in the
remaining amount field. And that's, of course, because we didn't apply the payment. And again the
scenario in this case was that at the moment of processing the payment, the user doesn't find the
invoice or invoices that the customer paid. But afterwards, when analyzing the customer, now I can
find the invoice. So here I can see the payment and there is the invoice the customer paid. Now, this
means that also after posting the payment we still should have the possibility to apply entries,
because now I would like to apply these two entries. Now, that's something that's quite easy to
do. So, first of all, very important, you need to go to the customer ledger entries for the customer
for which you want to post the application. So in this case my customer, John Haddock. Next, I will
go to actions. There we go. And here in the ribbon you can now see the apply entries action. And
again this is quite similar to what we are doing in the cash receipt or the payment journal. However,
now it's very important that we select one of the entries we want to apply. So it doesn't really matter
which entries. So the payment or the invoice but it's important that we select one of the entries we
want to apply. Then I can click on apply entries and what you will see now is that the entry that I've
selected is now in the header. You see? And so that's why it's important, that's why it should be one
of the entries that you want to apply. So now there's an amount that I can apply with, so the
76,167.75. So next I can select the line or the lines I would like to apply with. So, for example, in this
case the second line. And now I will have to do the same as in the cash receipt or the payment
journal, and that's assigning the applies to ID. So by clicking on actions I can now run the set applies
to ID action, there we go. And because we're not in a document, there's no document number to
use as applies to ID, but instead you see here that the system uses the user account, in my case
admin. That's done, which means that now the balance is zero, because these two amounts
perfectly match up. And I can now post the application. That's very important, because in real life
sometimes I see that users now click on close. But if you click on close nothing happens. You need
to post the application. And so by clicking here on post application, the system will ask me the
document number and the posting date and next I can click on OK. So now the application is posted,
and as a result you can see now the remaining amount of the payment and the invoice is set to
zero. So it's that easy to apply entries after posting the actual payment. Now, another thing that's
very easy to do but also very interesting in some situations is unapply entries. Now suppose in this
case because the customer has multiple invoices with the same amount, suppose that I've applied
with the wrong invoice. And I would like to correct this. Then the first thing that I want to do is
unapply these entries. And so first I need to unapply them so that I can apply them afterwards with
another invoice with the same amount. Now, to unapply entries -- and you can already see the
action here in the ribbon -- the same remark, first select one of the entries you want to unapply. So,
for example, the payment in this case, then click on unapply entries. Then the system will show you
the entries that are applied. So in this case only two entries, but you can also have more than two
entries, of course. And if this is what I would like to unapply, then I can simply click here on
Unapply and confirm by clicking on yes. So there you go. And as a result the remaining
amount is entered, of course. Now, also here a very good example of how the system
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creates detailed customer ledger entries. Because it didn't remove the previous application, no, it
just created another additional detailed entry. So if I now click here on the remaining amount, you
see that we have three detailed entries. So the first one, the initial entry, then the application I just
posted, and then the third one is a result of running the unapplied function. So the unapplied
function will also create additional detailed customer or vendor ledger entries because at vendor
side it works in exactly the same way. So now there's a remaining amount again, and if you want you
can run the apply entries function again to apply with another invoice.
Payment Registration
The Payment Registration window is designed to support you in tasks involved in balancing internal
accounts by using actual cash figures to make sure that payments are collected efficiently from
customers. This payment processing tool enables you to quickly verify and post individual or lump
payments, process discounted payments, and find specific unpaid documents for which payment is
made.
Payments for different customers that have different payment dates must be posted as individual
payments. Payments for the same customer that have the same payment date can be posted as a
lump payment. This is useful, for example, when a customer has made a single payment that covers
multiple sales invoices.
Because you can post different payment types to different balancing accounts, you must select a
balancing account in the Payment Registration Setup window before you start processing customer
payments. If you always post to the same balancing account, you can set that account as the default
and avoid this step every time that you open the Payment Registration window. To do this, complete
the following steps:
• Select the lookup icon, enter “Payment Registration Setup”, and then select the related link.
• Alternatively, in the Payment Registration window, select the Setup action.
• Fill in the fields in the Payment Registration Setup window. Choose a field to read a short
description of the field or link to related information.
Reconcile Payments with the Payment Registration

So the payment registration is a function that we can use to process payments as fast and efficient as
possible. Let me go to the search function and I will search for the payment registration
function. There we go. And the first time that you open this page, the system will display the setup
page. Here you need to complete some fields -- like the journal template and the batch name, for
example -- in order to set up the function. But that's of course something that you only need to do
once. Once this has been done, the list of open entries are displayed immediately, as you can see
here. So that's basically what the function is all about. So all the open customer entries, which
potentially can be paid by customers, are displayed here in this list. Also notice that I have added the
document number column which is something that you can do by clicking on the settings icon and
then selecting personalize, because I think it's very useful to also see the document number in
this overview. But again that's something you can add by going to personalize. OK, to do basic
functions here in the payment registration is posting payments and posting lump
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payments. And let me show you an example. So, for example, suppose that John Haddock paid
here, this invoice. The only thing I need to do is select here the payment made field. So there we
go. You can see here the amount received. So if the customer paid the full invoice or the full
amount, I can leave this as it is. And I can simply click here on post payments. So by clicking on yes
the payment is posted. You see? So very easy. Only a couple of steps to post a customer
payment. Now, another thing that we can do is post a lump payment. Now a lump payment, very
simple, is the payment of multiple invoices at the same time. Now, suppose that we have received a
lump payment of the Cannon Group so I can select all the invoices the customer has paid. So, for
example, this invoice and also this one. So two invoices. That's OK. And to post these two invoices
as a lump payment I will simply click here on post as lump payment. So the system will ask us for
confirmation, where we can see total amount that we can check with the bank statement, for
example, and then I can click on yes and the lump payment is posted. Let me show you the
results. So I will go to customers. And I will go to customer 10000. By clicking here on show the rest,
I can go to navigate. I can go to history and then select ledger entries. There we go. And let me
collapse here the factbox. So here I can see the lump payments. You can see that the remaining
amount is zero. And if I would like to know the applied entries, so to get an overview, I can click on
navigate and next I can click on applied entries. And there you can see now the two invoices I've
posted from the payment registration. You see? And so also very easy to post a payment of multiple
documents at the same time. On the payment registration, there are also a couple of search
functions that we can use. So let's go and have a look. And the first one is a very simple function to
search for additional customer information. So by clicking on search customers, I will get the
customer list and, starting from the list, I can search on additional information, maybe by going to
the cards, by looking at the sell to customers, sales history and so on. Again, the intention is to have
very quick access to additional customer data. And then there's also search documents. So let me
click on search documents and there it's very interesting. We can search on a number of additional
criteria, like document number and amount. So if we look at the list here and the payment
registration, what we see here is everything that is posted for each customer. So these are the open
customer ledger entries. So again this means by default everything here is posted. But suppose now
that the customer did a prepayment and maybe in advance on the sales order that is not posted
yet. Then what the customer has paid doesn't appear in this list. Now, first of all, what is very
important is that we find back what a customer has paid. And I can use a search function to find
this. So, for example, suppose that I see an amount of 1,500. So I can enter the amount because
that's what a customer has paid. And I can click on search. OK. Now, in this case the system doesn't
display anything. So there's no open document, no document, no sales order whatsoever of
1,500. OK. Maybe there's a sales order of more or less 1,500. Or in other words let's try using an
amount tolerance. So let's enter a tolerance percentage of 10, which means that if I accept the field
and the system displays that it will look for documents between 1,350 and 1,650. So let me click on
search and there we go. So now we can see a number of amounts -- sorry, a number of documents,
sales orders within the 10 percent tolerance. Let's look at the first one. So I will click here on this
one. So in there we can see that this is an order of Selangorian, so one of our customers, and maybe
the customer paid in advance, so a prepayment on this sales order. OK. So suppose now this is
something I would like to post and because I would like to include, of course, the payments in my
posted entries. Then in order to not have to go out of the payment registration function, I can
now click on general journal. So let me do this. There we go. So the system will open the
general journal. There's the posting date with the document type payment. So in this
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case it's not a vendor payment but a customer payment, and I will look up the customer and select --
we just saw customer Selangorian, so let's select the customer. There we go. Let me collapse the
factbox pane and I'll enter the amount. And that should be a negative amount, of course, so minus
1,500. If you scroll to the right you will see, of course, the balancing account that we have set up in
the payment registration function. And now if I click post I can very easily post the payment. You
see? So also payments that were done by customer, so payments of nonposted documents like sales
orders, can be processed from the payment registration page. And then another thing that you can
see here is the finance charge memo action. If customers paid too late we can charge them
interest. And that's a function that we'll cover more detail in one of the following modules. But if
you want you can also enable the finance charge memo calculation from the payment registration
page. So let me click on here on due date and let's take ascending. And so basically what you see
here are the oldest open entries. So I can see, for example, Guildford Water Department, John
Haddock Insurance and so on. So if you're selecting an overdue invoice, the system will also notify
you. This is the day received. This is the due date. And here at the bottom you can see that the
payment is overdue and that we can calculate interest for late payments. So by choosing the finance
charge memo button, so let's do this, the system will open or will create a new finance charge memo
for this customer. So if I want to complete this finance charge memo first I will need to click on the
lines so that the system assigns a number. That's very important because otherwise by clicking on
actions and using the suggest finance charge memo lines function this doesn't work if there's no
number assigned. So click anywhere on the lines so that the system assigns a document
number. Then I can go to actions and click here on this action. Here I can see now the number
appearing and if I now click on OK, you will see that the system will insert a number of lines and that
this customer needs to pay this amount of interest. So after checking this and agreeing with the
finance charge memo I can issue the document. So let me click on issue. I will not print it for this
example just click on OK. And everything is now processed. And so now I can post the payment in
the payment registration. There we go, and this customer now has a finance charge memo. And the
finance charge memo will of course also appear now here in the payment registration.
Suggest Vendor Payments

In the Payment Journal window, you can use the Suggest Vendor Payments batch job to suggest
payment lines. Lines for things like payments that are due soon, or payments where a payment
discount is available, are suggested based on your settings. To benefit fully from suggested lines, you
must first prioritize your vendors. For more information, see Prioritize Vendors.
When you use the Suggest Vendor Payments batch job to create payment lines for your vendors,
you can fill two special fields to make sure that the generated lines use the due date to calculate the
posting date. These fields are Calculate Posting Date from Applies-to-Doc Due Date and Applies-to-
Doc Due Date Offset. Also, if the calculated posting date is in the past, then the posting date is
moved up to the work date, and a warning is displayed.
Alternatively, you can manually create payment lines using the due date to calculate the posting
date. After you apply vendor ledger entries, you can use the Calculate Posting Date action to
update the posting date on the journal line with the due date of the related purchase invoice.
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Use the Suggest Vendor Payments Batch Job

So let's look at some examples of how to use the suggest vendor payment batch. To do so I'll have to
go to the payment journals of course. If I click on cash management, I can open the payment
journals. And I've already used the payment journals before. I remember to post a payment
manually. And I will start here with the bank batch. And the bank batch has the worldwide bank
operating as balancing account. And here we are. And in the ribbon you can see suggest vendor
payments action. So let me click here. And here you can see the basic layout. And I will start with
the basic layout. So very simple way to start using the function. So first of all, very important,
there's the last payment date. So this is a reference date. We'll compare this with the due date of
my vendor invoices. And there's the posting date and the starting document number. So here I will
enter any number. There we go. And now if I click on OK you will see -- so this is a general remark
that you will always get if you don't filter on currency. So the system will now suggest all
currencies. Now but more important here we will see now that the system creates three lines. So
the first two lines for vendor 10000 and the last line for vendor 20000. And if you scroll to the right,
you can see the amount and that's very important. I can see here the applies to document number
field directly on the line. Which means that we're working one-on-one. So one invoice, one
document per line. However, you can also combine. So let me also show you this. First of all, I will
delete the existing lines. And I will run the function again. But in this case -- so I will do exactly the
same as in my previous example, except for this field. So now I will summarize per vendor and you
probably can already expect what will happen. So now if I run the function obviously I will now only
get one line for vendor 10000. And as a result, if you now scroll to the right, you see that the applies
to document number field is not entered anymore. So that's similar to what I've showed you at the
beginning of this module when processing the payments manually. Now if I would like to see the
documents that will be applied if I post, I can click here on the apply entries action in the ribbon and
there you can see the two documents. OK. So this is how we can use the function in the most basic
way. Let's look at some other interesting features that we can use when working with the suggest
vendor payments batch. And the first thing I would like to demonstrate is using vendor priorities and
available amounts. First I will run the batch without. So here you can see the settings that I will
use. So the last payment date is now the 23rd of February, which means that the system will include
more vendor invoices than my first example. I will enter the starting document number -- so let me
use the same -- and I will click on OK. And after accepting the message on currencies, you can see
here what the system suggests. And you can tell the difference immediately with the previous
example. So a lot more lines are suggested here. Now as a user first of all I would like to know how
much we're going to spend on paying vendors if we would process the payment journal as we see it
here. And that's something that you can do by running the test report. If I go to actions, you can see
that there's a test report action. And by clicking on a preview, I can get the test report listing all the
payment journal lines but also the total. So if I move to the last page and if I enlarge this a little bit,
you can see now that this totals up to more than 400,000. That's way too much for me. I don't want
to spend that amount on paying vendors at this moment. I only have, for example, 200,000
available. Well, then we can work with an available amount. So let me show you this. So, first of all,
I will close the test report. Then I will delete all the lines and I will run the batch again. So I will run
it again with the same last payment date, so the 23rd of February. But in this case let me click
on show more. The number of additional options will appear. And here you can see that
there's an available amount field. So and that could be very interesting because like I just
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said if I only want to spend a certain amount on paying vendors at this moment, I can enter the
amount here. For example, 200,000. Now, at the same time the system automatically selects use
vendor priority, and more Information on that in a few moments. So let me now enter the starting
document number. There we go. And I will click on OK. So now you can see that only five lines are
suggested. So not all the lines that we just saw but only these five lines. And now very important, if I
go to actions and if I click on test report and if I ask to preview, you can see now -- let me enlarge this
a little bit -- that this totals to 199,970. So it's very clear that the system took into account the
available amount. And so very interesting. But why these vendors, why these invoices? Well, this is
because of the vendor priority. If we go to a vendor -- and so, for example, if I select vendor 10,000
and then if I click on card, there we go, if you then scroll down and expand the payments FastTab,
you can see here the priority field and for this vendor this is one. And one is the highest
priority. And for that reason this vendor is suggested now in the payment journal. Vendors with
priority two, for example, if I would move to vendor 20,000, you can see here priority two, which is a
lower priority. And for that reason because the available amount is only 200,000, vendor 20,000 is
not suggested, even though we might have overdue invoices based on the last payment date. But
the system will take into account the available amount and first will suggest all vendors with priority
one, then priority two and so on. Let's now look at another very useful feature and to explain let me
run the suggest vendor payments batch again. I will stick with the same posting date. Now I will not
use an available amount anymore. So the system can suggest everything based on the last payment
date. I will enter my starting document number. There we go. And I will run it just as I did
previously. And we can see now again all the lines appearing. What is very important here is that all
these lines carry the same posting date. So we will pay all these invoices, all these vendors on the
same date. At this moment Cronus's work date, the 23rd of January. However, not all these invoices
have the same due date. So if I scroll to the right, you can see here the applies to document due
date. And maybe some invoices are overdue. We should have already paid them at the end of 2019,
for example. But there are also invoices that only should be paid in February and the fourth of
February and even the 12th and so on. Now, the reason that these invoices are included, this is
because, of course, my last payment date, which is the 23rd of February. But again this means that if
you combine these two dates that we're paying a lot of invoices too soon. We only need to pay the
invoice on the 12th of February instead of the 23rd of January. Now, this can be quite easily
resolved. And let me demonstrate this. And I'll run my batch again. So suggest vendor payments. I'll
leave everything as it is except for a new feature that I will now demonstrate, the calculate posting
date from applies to document due date. And the system will do literally what it says here. So it will
use the posting date based on the due date. So if I run it, if I enter my starting document number,
you can, first of all, you can see here a remark where the system says that there are also invoices
that already should have been paid and that they will be paid on the work date. So the system will of
course not use posting dates in the past but it will use the work date the instead. And as a result you
can see now that the posting dates for my different lines can be different, so the 31st of January, the
23rd and so on. And if you scroll to the right, you can see that some invoices are only paid in
February, on the fourth and the 12th. And that is of course, like we just saw, because of the fact that
the posting date is now based on the document due date. You see? These are two now exactly the
same. So this means that we are not paying our vendor invoices too soon. We're only paying them
on the due date. Now, you can combine the feature with a date formula. So if I go back to the
suggest vendor payments batch, if you want, you can add the applies to document due date
offset. So that says something that you can use to pay, for example, one day before the
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due date. So if you enter minus one day, the system will suggest posting dates of one day before the
due date. Or also the other way around, if you want to pay one day after the due date you can also
enter plus one day. So then the system will apply the offset date formula to the payment journal
lines. Now, in my previous examples, I didn't pay attention to the payment type. And in Business
Central you do have a number of options. And, for example, if I go to suggest vendor payments, if I
scroll down a bit, you can see here the balancing account type, the balancing account number and
the bank payment type. And one of the options we have is paying vendors with checks. Now, in
some regions this is something very important. While in other regions checks are not used anymore
as a payment device. So it depends a little bit where you're working, whether you're going to use
computer checks, manual checks as a bank payment type. But another thing that we can do is pay
vendors by creating a file. So by exporting the payment lines, creating a file, sending the file to our
bank and then have the bank pay our vendors. And that's something that more and more companies
nowadays use because of the efficiency and so on. Now, let's look at an example. For this example
I've created a new batch where I linked the worldwide bank Euro. First of all, let me show you
because you might, if you want to follow this example you might have to check a number of
things. So if I go to the worldwide bank Euro, we need to be sure that there's a payment export
format specified. And so this is something I briefly discussed at the beginning of the module. If you
want to create payment files that you can send to your bank, you will have to enter the format here
and also that depends on the region. The European format is SEPA, and the states or in other regions
they might have other formats that you want to use or that you have to use. So that says something
very important. So I've created then the new payment journal batch. So let me go to payment
journals where I've linked the worldwide bank Euro. And this is not the batch I would like to use --
there we go -- and I'll run the suggest vendor payments batch. So I can leave everything as it is. But
in this case, for this example, I have entered a currency code filter. So by scrolling down to the
vendor FastTab, I have selected currency code and here entered Euro. Because I only want to
include Euro payments in this example. So for the rest I can leave everything as it is and I can click on
OK. So the system will give me a currency message that I will accept it and there we go. So here I
can see now all my vendors in currency code Euro that should be paid based on the last payment
date. So now it's very important, if I would like to create a file by using the export function that my
lines don't have any errors anymore, because now the system will check if all the information that it
needs or that should be included in the file is available. And you can already see the red lines. These
are the lines that don't have all the required information. Now, if you want to get more information
on the type of error, you can expand the factbox. The first line doesn't seem to have any problems,
but if I go to the second line, you can see what the problem is and there's no recipient bank
account. So the system doesn't know to which bank account the invoice should be paid. So that's
something that could be very interesting. You have to look at potential errors that you might have in
order to resolve them. So let's just keep the first line. So that's the vendor I would like to pay. The
rest I will delete. So I will select everything and then clear the first line again and then I will click on
delete. There we go. So it's a very simple example. But at least we have one vendor, one vendor
invoice that we can now pay. So there's no error anymore. And next I can click here on export. So if
you now click on export you will see that the system creates an XML document that I can have a look
at. I can save the file, for example, and so on. So that's how we can create these payment files. So
the file that I now have I can send to my bank and they will perform the payment to this
vendor. Now, in cases that your file got lost or something else happened, you can go to the
credit transfer registers and there's a function to reexport a payment file. You see? So in
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case something went wrong, you can always reexport your payment file and send it to the bank
again.
Check Management
You can issue electronic and manual checks in Microsoft Dynamics 365 Business Central. Both
methods use the payment journal to issue checks to vendors. You can also void checks and view
check ledger entries. The process of issuing checks suggests payments, creates ledger entries, and
prints the computer checks.
To Issue checks, perform the following steps:
• Choose the lookup icon, enter “Payment Journals”, and then choose the related link.
• Fill in the journal with relevant payments, for example by using the Suggest Vendor Payments
function. For more information, see Suggest Vendor Payments.
• In the Bank Payment Type field on journal lines for payment that you want to make with
checks, select one of the following options:
o Computer Check: Select this option if you want to print a check for the amount on the
payment journal line. You must print the checks before you can post the journal lines.
You can only select Computer Check if the Bal. Account Type or the Account Type is
“Bank Account”.
o Manual Check: Select this option if you have created a check manually and want to
create a corresponding check ledger entry for this amount. By using this option, you
cannot print checks from Microsoft Dynamics 365 Business Central. You can only
select Manual Check if the Bal. Account Type or the Account Type is “Bank Account”.
• In case of computer checks, select Print Check.
• In the Check window, fill in the fields as necessary. Choose a field to read a short description
of the field or link to more information.
• Select the Print button.
Check printing is affected by the settings in the Document No. on the Suggest Vendor
Payments batch job and One Check per Vendor per Document fields on the Print Check report.
Computer Check Printing
You can print computer checks from the Payment Journal, by clicking Print Check on the ribbon.
The Check report contains two FastTabs:
• Options
• Gen. Journal Line
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The Options FastTab is used to determine how the batch job is executed and contains the following
fields:
• Bank Account: The bank account that the printed checks are drawn from.
• Last Check No.: Automatically updated with the last check number that is used for the
selected bank account. This field is not updated if the Last Check No. field is not populated on
the selected bank account's card.
• One Check per Vendor per Document No.: If this field is selected only one check for each
vendor, for each document number, is printed.
• Reprint Checks: If printed checks must be reprinted before you post, click to insert a check
mark to reprint the checks.
• Test Print: If this field is selected the checks are printed on blank paper.
• Preprinted Stub: If this field is selected it will indicate that check forms with preprinted stubs
are used.
The Gen. Journal Line FastTab is populated with the journal name and batch. Additional filters can be
added in a blank line.
Document Number and Computer Check Printing
In Microsoft Dynamics 365 Business Central, the number of checks to print and the check amount is
determined by the following information:
• Selection of the One Check per Vendor per Document field in the Check report.
• Contents of the Document No. field in the Payment Journal window.
These fields affect one another, based on how entries are created in the following ways:
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• Document No. in the Payment Journal, with and without summarizing by vendor.
• One Check per Vendor per Document No. field in the Check report.
When you are using the Suggest Vendor Payments batch job to populate the payment journal lines,
the system specifies a starting document number. The following table shows the results when the
batch job is run without selecting the Summarize per Vendor check box.
Number of Starting Document

Result in the Payment Journal Window
Vendors No. Field
One payment line for each open vendor ledger entry

for the vendor.
Each payment line:
One vendor Empty
Is applied to the related open vendor ledger entry
Has an empty Document No. field

for the vendor.
Each payment line:
Contains a document
One vendor
number
With the same currency has the same document
number

for the vendor.
Each payment line:
Multiple
Empty
vendors
Has an empty Document No. field

Multiple Contains a document for the vendor.
vendors number Each payment line:
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For the same vendor with the same currency, has the
same document number
If the Summarize per Vendor check box is selected on the Suggest Vendor Payments batch job, the
payment lines are populated as shown in the following table.
Number of Starting Document

Result in the Payment Journal Window
Vendors No. Field
One payment line for each currency, summarize the open

vendor ledger entries with the same currency.
Each payment line:
One vendor Contains a
only document number
Is applied to the related open vendor ledger entries
Has a different currency and different document number
For each vendor, one payment line for each currency,

summarize the open vendor ledger entries with the same
currency.
Each payment line:
Multiple Contains a
Vendors document number
Is applied to the related open vendor ledger entries
For each vendor, has a different currency, and different
document number
Print and Void Checks

There are two options when you print checks:
• Print a check for each payment line

• Sum payment lines into a single check
The following table shows how the One Check per Vendor per Document No. field and Document
No.field together affect how payment lines are created and printed. These payment lines are created
and printed based on the assumption that the payment lines are in the same currency as the bank
account contained in the Bal. Account No. field.
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One Check per

Document No. in
Vendor per
Payment Journal Number and Amount of Checks Printed
Document No.
window
field
A check is printed for each payment line. If any payment

line contains a negative amount, an error occurs and the
Empty Blank
program does not print checks for the remaining
payment lines after the negative amount.
A check is printed for each payment line. If any payment

Contains a
line contains a negative amount, an error occurs and the
Empty document
program does not print checks for the remaining
number
payment lines after the negative amount.
One check for each vendor is printed. For each vendor:
The check amount is the net amount of all the payment

lines for that vendor.
Contains a check
Blank The balancing bank account on all payment lines is
mark
cleared and a new payment line is created for the net
amount.
The Account No. for the new payment line is the
balancing bank account.
One check for each vendor, for each document a

number is printed. For each vendor:
The check amount is the net amount of the payment

Contains a lines with the same Document No.
Contains a check
document
mark The balancing bank account on payment lines with the
number
same Document No. is cleared and a new payment line is
created for the net amount.
The Account No. for the new payment line is the
balancing bank account.
Voiding Checks
Voiding checks is performed when handwritten checks are not cleared by the bank, or when
computer checks must be deleted or reprinted.
In Microsoft Dynamics 365 Business Central, you can void checks two ways—financially void
posted checks and void unposted checks.
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Financially Voiding Checks

A posted check that must be voided is known as a financial void. When financially voiding a check,
make sure that all financial transactions that result from the check payment are also canceled. In
Microsoft Dynamics 365 Business Central, users can unapply and void the check and the transactions,
void only the check, and enter a date to use for the void. In Microsoft Dynamics 365 Business Central,
financial voids are made from the Bank Account Card.
Void Unposted Checks
Before you post a check, if you must delete or reprint a check, you can void it in the Payment Journal.
After you void a check, you can delete or reprint the payment lines(s) from the journal. To void a
single printed but unposted check, follow these steps:
• Select the lookup icon, enter “Payment Journals”, and select the related link.
• In the Batch Name field, click the drop-down list and select the appropriate batch.
• Click OK.
• In the Payment Journal lines, click the line for the check to be voided.
• Click Void Check.
• Click Yes to the message that asks to void the check.
Now that the check is voided, you can delete or reprint it from the payment journal.
To void all printed but unposted checks in a batch, follow these steps:
• Open the payment journal.

• In the ribbon, click Void All Checks.
• Click Yes to the message that asks to void all checks.
After all checks are voided, you can delete or reprint them from the payment journal.
Reprint Void Checks
When you print checks, the Last Check No. in the Check report is updated automatically with the last
printed check number. When you reprint checks, make sure that the correct check number will be
used. For example, if the check number must be 206, then enter 205 is in this field.
• To reprint a single voided check, follow these steps:

• Select the lookup icon, enter “Payment Journals”, and then select the related link.
• Select the relevant batch.
• Click the line with the voided check.
• Click Print Check.
• Update the Last Check No.
• Click to insert a check mark in the Reprint Checks check box.
• Click Print.
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Payment Reconciliation
You must regularly reconcile your bank, receivables, and payables accounts by applying payments
recorded in the bank to their related unpaid invoices and credit memos or other open entries in
Microsoft Dynamics 365 Business Central.
You can perform this task in the Payment Reconciliation Journal window by importing a bank
statement file or feed to quickly register the payments. Payments are applied to open customer or
vendor ledger entries based on matches between payment text and entry information. You can
review and change automatic applications before you post the journal. You can choose to close any
open bank account ledger entries related to the applied ledger entries when you post the journal.
The bank account is automatically reconciled when all payments are applied.
The Payment Reconciliation Journal window specifies payments, either incoming or outgoing, that
have been recorded as transactions on your online bank account and that you can apply to their
related open customer, vendor, and bank account ledger entries. The lines in the journal are filled by
importing a bank statement as a bank feed or file.
A payment reconciliation journal is related to one bank account in Business Central that reflects the
online bank account where the payment transactions are recorded. Any open bank account ledger
entries related to the applied customer or vendor ledger entries will be closed when you choose
the Post Payments and Reconcile Bank Account action. This means that the bank account is
automatically reconciled for payments that you post with the journal.
Apply Automatically
You use the Apply Automatically function, either automatically when you import a bank file or feed
with payment transactions or when you activate it, to apply payments to their related open entries
based on a matching of data on a journal line with data on one or more open entries.
On journal lines where a payment has been applied automatically to one or more open entries,
the Match Confidence field has a value between Low and High to indicate the quality of the
data matching that the suggested payment application is based on. In addition, the Account
Type and Account No. fields are filled with information about the customer or vendor
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that the payment is applied to. If you have set up a text-to-account mapping, the automatic
application can result in a match confidence value of High - Text-to-Account Mapping.
For each journal line in the Payment Reconciliation Journal window, you can open the Payment
Application window to see all candidate open entries for the payment and view detailed information
for each entry about the data matching that a payment application is based on. Here, you can
manually apply payments or reapply payments that were applied automatically to a wrong entry.
Map Text to Account
In the Text-to-Account Mapping window, which you open from the Payment Reconciliation
Journalwindow, you can set up mappings between text on payments and specific debit, credit, and
balancing accounts so that such payments are posted to the specified accounts when you post the
payment reconciliation journal.
Payments posted based on text-to-account mapping are not applied to open entries but are merely
posted to the specified accounts in addition to creating bank account ledger entries. Accordingly,
text-to-account mapping is suited for recurring cash receipts or expenses, such as frequent purchases
of car fuel or bank fees and interest, that regularly occur on the bank statement and do not need a
related business document.
Payments on reconciliation journal lines are only set to posting according to text-to-account mapping
if the automatic application function can only provide a match confidence of Low or Medium. If the
automatic application function provides a match confidence of High, then the payment is
automatically applied to one or more open entries, and the payment is not posted to the accounts
specified in the Text-to-Account Mapping window. In other words, a match confidence
of High overrules a text-to-account mapping.
On a payment reconciliation journal line where the payment has been set to posting according to
text-to-account mapping, the Match Confidence field contains High - Text-to-Account Mapping, and
the Account Type and Account No. fields contain the mapped accounts.
Using the Payment Reconciliation Journal

Let's start by looking at the payment reconciliation journal and a couple of its basic features. So I will
click on cash management and then payment reconciliation journal. So currently we don't have any
payment reconciliation journals outstanding. So by clicking on process you can see that there are a
number of actions that I can choose from. Import, edit or new journal. So now if I click on new
journal, I can create a payment reconciliation journal manually. So, for example, I can select one of
the banks. Let's take the worldwide Bank Operating and there you can see now how a payment
reconciliation journal looks like. And if you want you can also start entering lines manually. So I can
enter a line manually by, for example, selecting an account name, the account type, as with vendor
customer account and so on. So I could use it more or less in the same way as, for example, the cash
receipt journal or a payment journal. But there are a couple of more advanced features that you can
use in the payment reconciliation journal. So, for example, you can see here the import bank
transactions action, but also the apply automatically action. And so the system can try to apply
imported bank transactions automatically. And that's something I will show you in one of the
following steps. But first of all let's go and have a look at how we need to set up the bank if
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you want to enable the import of bank statements. So I will go to bank accounts. So for my example
I will be using the worldwide bank Euro. And now it's very important that if you scroll down, that you
enter the bank statement imports format. So in this case again I will be using the SEPA format. But
depending on the region you're working in you might have to use other formats. And because I'm
using the SEPA format I also need to have a valid bank account number and a valid swift code. So
that's very important before you can import bank statement, in this case the SEPA bank
statement. And so based on this setup I can start now importing bank statements as I'll show you in
one of the following lessons. So on the payment reconciliation journal that I just showed you, we
saw there's an apply automatically function available, which means that the system can make
automatic applications and that's of course very, very interesting. But, of course, the automatic
applications are always based on the information that we have available on the payment
reconciliation journal line. And based on the application rules, the system will try to match to apply
automatically. So let's go and have a look at the payment application rules. So if I search for the
payment application rules, there we go, we can see a list of all the rules that currently are set. But
what is very important? First of all, the match confidence. So based on the available information, like
I just said, the system will search for transactions to apply with. And if there's a lot of information
available, you might have the confidence high. So high is telling me that what the system suggests is
almost always correct. But besides high, you can see that there's also medium, which means that
there's already a bit more doubt. And there's also low, which is, which means that you always have
to double-check what the system suggests. And in some cases it might also not be correct. And then
there's also the match confidence Num as you can see. That's very important. That's also a field we
see appearing in the payment reconciliation journal lines in one of the next topics, if I import bank
statement. And so for each line the system will display the match confidence. Then you can see the
priority. So each line has a priority and then you can see that there are a couple of fields where we
can specify based on which information the system should try to make an application. So, for
example, there's the related party matched, so if there's a full related party match. So in other
words if there's enough information available in the payment reconciliation journal to match with
the related party, the customer or the vendor, then this could lead to a high match confidence. But in
this case together with the document number, external document number match. So if the
customer provided, for example, the invoice number it paid, then also there we can have a match
and the number of entries within the amount tolerance found. And so also that is something that
can be very important. Now, as you see, we can change this. We can modify the payment
application rules. So if you think that some of these rules have to be modified, you want to set, for
example, other options in one of these fields, that's something that you can perfectly do. However, I
would advise to try to start with standard payment application rules because they're set up in a very
good way. And the only one you see that some rules might not work in your situation, it could be
interesting to go and modify them. If you have modified rules, but you want to revert to the default
rules, notice here the restore default rules action in the ribbon. So I can click on this action to restart
to the default rules in case you might have modified some of the lines and you want to switch back
to the default rules. Now, notice the description of this column -- number of entries within the
amount tolerance found. And that's also a very important feature that we can use -- the tolerance
settings. And let me demonstrate this. I will close this page, and then I will go to the bank account
that I've set up for imported bank statements, so in my case the worldwide bank Euro. So there
we go. And on the general FastTab notice that there are two fields, the match tolerance type
and the match tolerance value. Now, these fields can be set up in order to enable the
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system to recognize or to apply payments with small payment differences. Here when clicking on the
match tolerance type field notice that there are two options, percentage or amounts. And based on
the type I can then enter a percentage or an amount. Now, if the tolerance value is 0, like we have in
this case, then the amount paid should match exactly the invoice amount. So if there's a very, very
small difference, the system will not find back or will not supply, not suggest to apply
automatically. But in real life these small differences can of course, they can occur. And by entering
again a percentage or an amount, the system can take into account these differences and can still
suggest to apply automatically even when there is a very small payment difference. So in this case
let's take five or whatever. You can also set an amount if you want. But that could be very
interesting to use in combination with the apply automatically function that I will now show you in
the next topic. Let's now import a bank statement and check the result. And I will do this by clicking
on cash management and go into the payment reconciliation journals. Next if I click on process, I can
select import bank transactions. And as I already mentioned I've prepared the worldwide bank Euro
for importing bank statements. So I will select this bank and click OK. Next I can retrieve my file. So
by clicking on choose I've prepared a file, statement No. 4. So that's the one I will select. And I will
click on open. So now you see that the system has processed the bank statement and five out of
eight lines are apply. So let's go and have a look at the result. So here you can see now the payment
reconciliation journal, with a number of lines from the imported bank statement. Now, before we
process these lines, let's go and have a look at some of the information that we see here on the
payment reconciliation journal. And, first of all, there's the match confidence. So remember in the
section on the payment application rules I explained that, based on the information that is available
on the bank statement, this system will try to apply automatically, and with the match confidence we
can see whether this succeeded, yes or no. So if the match confidence is none, then, of course,
there's no automatic application. And know that the system made an application but that's
something that we might have to check and so on. Then there's the transaction date, transaction
text, so most of these fields are quite self-explanatory, including the account name, account type. So
all the basic information that we need to process the bank statement. Now, besides the information
we see on the line, you can also select a line and click on the bank transaction details in the
ribbon. And this might give you some additional information when you need to examine a specific
line, for example. OK. Let's focus now a bit more on the lines. Because there's still some work to be
done, although the system has applied some of these lines automatically. Let's start with this
line. So here the payment of invoice BBB and so on. So what is important? Well, first of all, it's a
medium confidence. So possibly the system selected the correct invoice, the correct vendor, the
correct vendor or customer. And also what is important is that the applied amount equals the
transaction amount. And you see that this is not the case for each line. In this case, these match
perfectly. And there's no difference. OK. But still it's only medium. So I would like to double-
check. So let's click on the match confidence. So there you can see here. So the application, the
applied amount. So the system suggests to apply to 108016. So in this case the document number,
that's my internal number. But here you can see the external document number. And that's a
reference on the bank statements which the system has used to apply automatically with this
transaction. So and this looks to be OK. Because also the amount is exactly the same. So it seems
that here the system suggests a correct application. And this means that, for example, by selecting
a line, and if the application is correct, I can also accept the application. So there you see that
the confidence now shows accepted. So that says something that went quite well. Let's look
at the second line. So there it is the transaction text mentions that three invoices were
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paid. But there's quite a huge difference. And the transaction amount is 17,396 but the applied
amount is only 3,868. And the document number is 103017. So in this case it seems that the system
only suggests to apply only one document where we need three invoices. So also here let's have a
closer look. So I will click on the match confidence. And here I can see what the system
suggests. But indeed there's only one invoice that the system suggests to apply, which is not
correct. Because we have -- there are three invoices that should be applied. OK. It seems that the
customer's correct. So that's OK. But instead of this first line, I would like to select the next three
lines, because by doing this, you see now that there's no difference anymore. So it seems that these
three invoices were paid. So these should have been applied. So in here, this is an example where
you see that the system didn't find the documents. It found the customer in this case but not the
documents. And so there we needed to help the system a bit by selecting the documents, you could
say, and also here, now by accepting, I can accept the applications. Then another example, this line,
so there's a medium confidence. So the transaction amount is 23,195 and the applied amount
21,059. So here you can see the documents that were paid. So let's go and have a look. So I will
click here on medium. And it seems that the correct documents were applied. But the customer
paid more than the total of these documents. And so the extra amount is higher than the tolerance
that we have set. It's quite a high amount. So this is, of course, not within the tolerance settings. So
this means that the customer paid too much and that we have to post it as an open amount on the
customer. You see? And that's something that can also be done, because as long as there is a
difference, you will not be able to post the payment reconciliation journal. And so we should resolve
these differences. OK. Let's go ahead and do this, because once again the correct invoices were
applied but there are still some differences. And the function that we need here is the function
transfer difference to account. Because the difference of 2,136 should be transferred to a specific
account. So if I click this, there we go. You can see the amount, then the account type. And here,
very simple, I would like to transfer to the customer account itself. And so that this is an open
customer ledger entry that we can apply maybe with another invoice and so on. So I will search for
the customer. There he is. And I will click on OK. Next, you get the message that the system has
created a separate line. And here I can now see indeed the line. And so the line with match
confidence manual and with no difference anymore, and this means that we can also accept these
applications. Then another situation, this line. So there we have received a payment from Beef
House, but the payment text only mentions B House. And the system didn't recognize the
customer. But maybe I as a user has recognized the customer and I would like to assign it to the Beef
House customer. And that's something I can do by entering the information manually. And so this is,
of course, also something that can happen. So when the system doesn't recognize the related party
but you as a user do, then you can still enter the customer and the vendor manually. So let's do
this. I have selected the customer. And now we need to look for customer Beef House. There it
is. Okay. So there's the customer. Entering the customer is resulting in effect the match confidence
now is manual, which is OK. But if you want, you can go a step further. So maybe you want to check
if there's an invoice that can be applied, which means that just as in the cash receipt journal you can
use the applied manually function and look for the invoice. So here I can see the transactions, but
there's no exact transaction or no amount that matches the 1,450. So for the time being I will just
leave it open. One of the last things that we can do or that I should do here, and this is also very
interesting, you can see that there are two lines that don't have a match confidence. So the
match confidence is none. None. In both cases we're more or less processing something that
I would like to post directly to a G/L account. Because here we're looking at the service
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fee. So each month we're paying a service fee for the copy machine and here's the monthly rent
payment. So the payment that we receive rents for a specific building. Now, again, this is something
I would like to post to a G/L account. And if you want you can enter the G/L account manually. So
that's quite easy to do, account type G/L account and then the account number. However, in some
cases it might be interesting to use the map text to account function, because maybe the next month
I will have to pay the same service fee and I will receive the same description. And so based on the
description, based on the text, I can now map a specific G/L account so that the system next time will
recognize the G/L account automatically. You see? So let's do this. I will click here on map text to
account. There you can now enter the text. Sorry. Do this again. This should be enough. Then I can
look for the debit and credit account. So in this case I'm looking for an expense account. Let's take
office supplies as an example. So debit and let's also enter it as credit account. And next I will click
on close. So now you see, by doing this, this system has changed the match confidence. So the
match confidence is now high text to account mapping. You see? And, again, like I already
mentioned, the next time the same transaction text is used or a text that includes service fee copy
machine, the system can now automatically map to the account 8210. So now that I've processed all
lines, and that's, by the way, something that you can tell by looking at the match confidence column,
they all have a specific value, I can process or post the payment reconciliation journal. And there are
two options to do so. So, first of all, you can use the post payments only action, which will only post
the lines but will not reconcile them. Or, as you can see, there's also the post payments and
reconcile bank account action. And that will perform both actions at the same time, which means
that your entries are also reconciled. So let's do this. I will click here. So then I can confirm by
clicking on yes. And there you go, everything has been posted. So let's go ahead and look at the
results. I will go to my bank account in this case, and I will go to the World Wide Bank Operating, and
I'm interested in the bank account ledger entry. If I click on navigate, and if I click on ledger entries,
you can see the different ledger entries. And because I ran the post and reconcile function, so both
actions were performed, you see here that these bank account ledger entries are not open
anymore. So they have been reconciled at the same time.
Bank Data Conversion Service

The Bank Data Conversion Service in Microsoft Dynamics 365 Business Central enables you to
convert payment information to any data format that your bank requires, using a global provider of
services.
You can export payment lines from the Payment Journal window to a file or a data stream that you
then upload to your bank for automatic processing so that you do not have to make electronic
payments individually.
You can import bank statement files into the Payment Reconciliation Journal window by using the
bank data conversion service to convert a file that you receive from your bank to a data stream that
Business Central can import. To import or export bank files, you must set up your own bank account
and your vendors' bank accounts.
To sign your company up for the bank data conversion service:
• Select the lookup icon, enter “Bank Data Conv. Service Setup”, and then select the
related link.
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• The Bank Data Conv. Service Setup window opens with three fields prefilled with relevant
URLs of the provider of bank data conversion service. Note:
In the CRONUS International Ltd. demonstration database, the User
Name and Password fields are prefilled with demonstration logon information, which you will
replace with your company’s actual information as you sign up for the bank data conversion
service.
• In the Sign-up URL field, choose the browser button to open the service provider’s sign-up
page.
• On the sign-up page of the bank data service provider, enter the user name and password for
your company’s subscription to the service, and then complete the sign-up process as
instructed by the service provider.
• Your company is now signed up for the bank data conversion service. Proceed to enter the
user name and password that you specified for the service in the related setup fields in
Microsoft Dynamics 365 Business Edition.
• In the Bank Data Conv. Service Setup window, in the User Name field, enter the same value
that you entered as logon name on the service provider’s page in step 4.
• In the Password field, enter the same value that you entered in the Password field on the
service provider’s page in step 4.
It is recommended that you protect the logon information that you enter in the Bank Data Conv.
Service Setup window. You can encrypt data on the Microsoft Dynamics 365 Business Central server
by generating new or importing existing encryption keys that you enable on the Business Central
server instance that connects to the database.
To encrypt your login information:
• In the Bank Data Conv. Service Setup window, choose the Encryption Management action.
• In the Data Encryption Management window, enable encryption of your data.
To view or update the list of currently supported bank data formats:
• Select the lookup icon, enter “Bank Data Conv. Service Setup”, and then select the related
link.
• In the Bank Data Conv. Service Setup window, choose the Bank Name - Data Conversion List
action to open the list of bank names representing bank data formats that are supported by
the conversion service.
• In the Bank Name - Data Conversion List page, choose the Update Bank Name List action.
The list of bank data formats that are supported by the bank data conversion service is now updated.
This is the list of bank names, filtered by the country/region, that you can select from in the Bank
Name - Data Conversion field in the Bank Account Card window.
You have now signed up for the bank data conversion service. Proceed to reflect the sign-up
information on every bank account that will use the service.
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Payment Services
As an alternative to collecting payments through bank transfer or credit cards, your customers can
pay you through their account with payment services, such as Microsoft Pay, PayPal, or WorldPay.
After you enable a payment service in Microsoft Dynamics 365 Business Central, a link to the service
is available on sales documents that you send by email to your customers. Customers can use the link
to go to the payment service and pay the bill, directly from the sales document. If you don't want to
include the link, for example, if a customer will pay with cash, you can remove the payment service
from the invoice before posting.
The Microsoft Pay, PayPal Payments Standard, and WorldPay Payments Standard extensions are
installed in Business Central, and are ready for you to enable.
How to Set Up and Use Payment Services

To get up and running with these payment services is quite easy. First of all, I'll use the search
function to search for payment services. And here you can see that I already have a demo sandbox
payment server. By the way, this is a PayPal example. So if I click on setup, you can see here all the
fields that you need to enter. So there's the name, the description and the PayPal account ID. And,
again, everything is, of course, everything demo set up here in this case. But in real life you would of
course enter your own PayPal references like target URL and so on. Once that the service is enabled,
we can start using it. And you can also specify if you want to always include it on documents. So
let's go and have a look at how this now can be used. Suppose I'm creating a new sales order. So
what you will see now that on documents such as this sales order document, there is, on the invoice
details FastTab, the payment service field. So there you can already see that the system will trigger
the PayPal payment service that is set up. So let's go ahead and post this. So I will post and select
ship and invoice. And let's now check the posted invoice. So here on the posted invoice you will also
see the payment service. So the same as we just saw on the sales order. And now, for example, if I
print the document, so let me click on print and get the preview. You can see here the link
appearing. You see? So the PayPal link, let me enlarge it a little bit so you can see it better, so where
in real life I could now click on and pay the invoice using PayPal. So that's basically what these
payment services are all about.
Module Review
You made it to the end of this comprehensive module. And this means that you now should have a
good overview of cash management in Dynamics 365 Business Central. So now you not only know
how to set up bank accounts and process payments manually but you also have an overview of the
capabilities to process bank accounts and transactions electronically.
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Module 06: Cash Management - Bank Reconciliation

Module Overview
In the previous module we saw how to process bank accounts and bank transactions. Now it's
important that bank account ledger entries in Business Central match with bank statement
transactions. And that's why bank accounts must be reconciled periodically. Let's see how this
works.
Bank Reconciliation
To reconcile bank accounts in Finance and Operations, Business edition with statements received
from the bank, you must fill in the lines in the Bank Acc. Reconciliation window.
Bank reconciliations are used to compare the open bank account ledger entries with the bank
statement transactions. When you run the reconciliation batch, for each open bank account ledger
entry, a reconciliation line is created. If all the suggested reconciliation lines match the bank
statement lines for the corresponding date range, the reconciliation can be posted.
In a typical business situation, the following differences can occur:
• Transactions entered into the bank account in Microsoft Dynamics 365 Business Central are
not on the bank statement.
• Transactions on the bank statement are not in Microsoft Dynamics 365 Business Central.
• Transactions in the bank account and on the bank statement correspond to one another but
are recorded differently.
These differences must be reconciled before the reconciliation process can be completed.
Performing a Bank Reconciliation

So in the previous module we saw that we can run the reconciliation process from the payment
reconciliation journals where we combine it with the posting of the bank statement. But of course
you can also run your reconciliation separately. So let's go and have a look and I will use the search
function to search for the bank account reconciliations. So there we go. And the first thing I need to
do is create a new statement. So I will click on new. And then I will need to select the bank that I
would like to reconcile. So, for example, the World Wide Bank Operating. Next the system will
update the statement number. And that's also very important. I will have to enter the statement
date. And suppose this is something that I'm doing at the end of the month. So, for example, the
31st of January 2020. You can now see the balance last statement appearing and the statement
ending balance. And here at the bottom you can see now the bank account ledger entries. So based
on the bank that I've selected, you can see all open bank account ledger entries or, in other words, all
the bank account ledger entries of this bank that haven't been reconciled yet. OK. The next thing
that I now need to do is import or enter the bank statement lines. And that's something indeed
that can be done by importing the bank statement or by suggesting lines. So depending on
the bank and the way that is set up, you might be able to import the bank statement like
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we did with the payment reconciliation journals in the previous module, or, if you don't have an
electronic bank statement to import, you can also just run the suggest lines function. So there we
can enter the starting date and the ending date. But in most cases we need the starting date blank
and enter only the ending date. I would like to include checks, for example. And then if I click on OK,
the system will also fill the left side, the bank statement lines. But of course because I didn't import
an actual bank statement, this is now just a copy of the bank account ledger entries. So currently we
have a one-on-one relation because the only source where the system can get information on the
potential bank statement lines or the open bank account ledger entries that's, of course, different
again if you import bank statements. But now we just use the suggest lines function. And now it's,
of course, all about checking the actual bank statement. So this should appear on the bank
statement. And there are a number of things that can happen. So, for example, it could be possible
that a certain transaction that we already posted in Business Central doesn't appear on the bank
statement. Maybe it was at the end of the month and will only appear on the bank statement of
next month. Then, of course, here at the left side I will have to remove lines. And suppose that the
last line doesn't appear on the January bank statement but will appear on the February bank
statement probably and I will click on delete. So I will delete the line. There we go. And, of course,
what you see now happening here at the right side is that the last lines the bank account ledger entry
is not applied anymore. So after posting the reconciliation, this is still considered as an open bank
account ledger entry and will be suggested the next month. So that's basically what happens
here. Another thing that can happen is that the amounts can appear on the bank statement but are
not posted yet on Business Central. And of course we need to take care of this. We need to post it
on Business Central in order to reconcile them with the actual amounts on the bank statement lines.
But first if I see now my bank statement an amount that I don't find back in Business Central I first
have to enter it here. So let's do this. And I will start with entering the dates, for example, the last
day of the month. Here we can choose between bank account check or difference and I will stick
with bank account ledger entry. I will enter the description and suppose that these are interests and
then the amount. Here we go. And so that's basically what appears on my bank account on my bank
statement and what I have to post in Business Central. Now, in order to post it, I will use the transfer
to general journal action in the ribbon. So then I will enter the template and the batch, and I've
created a specific batch for my reconciliations, which you can also just use the default batch if you
want. Then I will click on OK and then the system prepares the journal as you can see here. So here I
will need to enter the account. And let me look for an interest account. Here you can see the
amount appearing. So that's something that the system retrieved from the bank reconciliation, and,
of course, the balancing account is my bank account. And by posting this journal, the system will
now of course create a new bank account ledger entry that we can use in the reconciliation. So now
if I click on post, yes, everything is posted. I can go back to my reconciliation, and as you can see now
we do have a new bank account ledger entry. But what you see here is that the bank account ledger
entry is not matched yet with the bank statement line. So that's something that I still need to
do. And I can do this with match manually or match automatically. So if I run the match
automatically function, you can see now that my new interest line is matched with the bank
statement line of minus 60. So now that I'm ready with processing my bank account reconciliation, I
can go ahead and post it. So I've entered the statement ending balance. Next I can click on post
and I can post a reconciliation. So everything is posted now, and if I look at the results, if I go to
bank accounts, and if I take the World Wide Operating bank account and next navigate ledger
entries, you can see that all these ledger entries are closed. And so the open field is
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cleared, except for the John Haddock Insurance bank account ledger entry which we have removed
from the reconciliation. So that one is still open and will appear on the next bank account
reconciliation.
Module Review
In this module we saw how to check the bank ledger entries and the balance on the account against
the statement from the bank.
Module 07: Payment Discounts and Payment

Tolerances
Module Overview
Every company wants their customers to pay in time. Now, to achieve this goal, payment discounts
can be used as an incentive for customers to quickly pay their outstanding amounts. In this module,
we will start with setting up payment discounts and then we'll look at different scenarios in which to
process payment discounts. In the second part of this module we will explore payment tolerances to
process payment differences in a structured and automated way.
Payment Discounts
Granting payment discounts provides an incentive for customers to quickly pay their outstanding
amounts in full. Microsoft Dynamics 365 Business Central uses payment terms to keep track of
payment discounts that are given to customers or received from vendors.
The different methods that are available to set up payment discounts for an invoice include the
following:
• If the payment discount is known at the time the invoice order is entered, do one of the
following:
o Select an existing payment term
o Enter a new payment term for the invoice or order
• If the payment discount is not determined until the invoice is paid:
o The customer can reduce the payment without negotiating a payment discount
o If the discount is acceptable, adjust the payment discount for the invoice after it is
posted, but before the payment is posted and applied
Payment discount amounts can also be calculated on credit memos. Then, users can automatically
reduce the payment discount given on invoices that the credit memo is applied to.
A payment discount can be calculated on amounts that both exclude and include VAT. The setup is
determined by the fields selected on the General Ledger Setup page.
• Pmt. Disc. Excl. VAT: Excluding VAT
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• Adjust for Payment Discount: Including VAT
The general ledger accounts for payment discounts must be set up differently, depending on
whether payment discounts are calculated on amounts including or excluding VAT.
• Customer Posting Groups and Vendor Posting Groups: Excluding VAT

• General Posting Setup: Including VAT
Set Up Payment Discounts

If you want to use payment discount when selling to customers or purchase from vendors, the first
thing that we have to do is specify the payment discount in the payment terms. So let me show you
this. So I will open the payment terms. So in the first thing that we do with payment terms, of
course, is entering the due date calculation. And that's something that the system will use to
calculate the due date of an invoice. But besides that, you also see that there are fields to enter the
discount date calculation and the discount percentage, and if necessary to calculate payment
discount on credit memos. And here you can see one of the payment terms our demo company is
using one month eight days. And this one is set up in a way that the due date calculation uses one
month. So the customer that has this payment term should pay invoices within one month. But if
they pay within eight days, they can receive two percent payment discount. And the same goes for
vendors of course. So we need to pay within month. But if we pay within eight days, we can take
two percent of payment discount. So that's the first thing that's very important at setting up or
specifying the conditions in the payment terms page, as you can see here. Now, before that we can
start using the payment discount, we first need to do some additional setup. And here it's very
important to make the difference between payment discount including or excluding VAT. And I've
created an example to show you the difference, both from the calculation perspective as the setup
perspective. So let's go ahead and look at this slide. And suppose that here you can see the two
systems. So there's excluding VAT and including VAT. Suppose we sell for 1,000. By the way, this is a
sales example. But it's exactly the same for purchase. So we're selling for 1,000. And if we look at
excluding VAT, 1,000, excluding VAT means that the payment discount is calculated on the amount
without VAT. So excluding VAT, which means that the payment discount is calculated on the
1,000. So this will give me a lowered VAT base on which then, for example, the 25 percent of VAT is
calculated. So that's typically for excluding VAT. So what you see here is, instead of 250, there's only
245 VAT. And typically on the invoice we then see two totals. So the first one without payment
discount and the second one with payment discount. Then including VAT will, of course, first
calculate the amount including VAT. So 1,250. And then calculate the payment discount. And in this
case the payment discount is 25. And so this means that without payment discount the total amount
to pay is 1,250. With the payment discount, it's 1,225. So you see these amounts match. And, by
the way, depending on the region where you're working, you will have to set up one of these two
systems. So, for example, I live in Belgium and in Belgium we use the excluding VAT. But in other
countries/regions this might be including. Now, based on the setup, so based on the selection that
we make in the general ledger setup, by the way, we'll have to set up the payment discount in a
specific way. So suppose that we're going for the excluding VAT in the general ledger setup, the
payment discount excluding VAT should be selected, should be enabled. And we will then
enter a VAT tolerance percentage. And the G/L account to which the payment discounts will
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be posted can be set up in the customer posting group and the vendor posting group pages. So this
is the setup that we need to do for excluding VAT. So let me show you this in the application. So,
first of all, I will go to the general ledger set up, and let me click on show more to show some
additional fields. So here you can see the payment discount excluding VAT field. So Cronus didn't
select this field which means that they're calculating payment discounts including VAT. And I will just
leave it as it is. But again, like I just said, it depends on the country, on the region that you're
working in. So here let's stick with including VAT. So that's the first thing. Now, if you are selecting
payment discount excluding VAT, you also have to enter a VAT tolerance percentage. Now, this is
not displayed in the general ledger setup of Cronus International. But in the local versions of
countries/regions where in general you're using payment discount excluding VAT, you will also find a
field VAT tolerance percentage that you can then enter. So that's the first thing. And then the
second thing that is very important, the G/L account. So, for example, if I go to the customer posting
groups, you can see that there we can specify the payment discount, debit and payment discount
credit account. We also need to look at the payment discount including VAT, because that's the way
that our demo company is set up. There we will, of course, start with payment discount excluding
VAT, no. And then, very important, the field adjusts for payment discount. So there are two
options. No and yes. So if we stick with no, then the G/L accounts are also entered on the customer
and the vendor posting groups. But if we select yes for the adjust for payment discount, then we
need to enter the G/L accounts on the general posting setup, and we also need to enable the adjust
for payment discount in the VAT posting setup. Now what do we mean by adjust for payment
discount? Well, quite simple. If we look at the payment discount amount here, and so the 25, that's
of course an amount including VAT because we have calculated two percent on the total amount
including VAT. With the adjust for payment discount, no or yes, we can specify whether we want the
system to take out the VAT amount and post the VAT amount separately from the base. In other
words, if this is yes, when posting the payment with the payment discount, the system will take out
the VAT amount, will post the VAT amount to the payment discount G/L account and the VAT
amount will be posted to the VAT G/L account. You see? So that's the difference between these
two. And if we select yes again, then we have to assign G/L account on the general posting setup
and enable the adjust for payment discount also in the VAT posting setup. So let me also quickly
show you this in the application. So I will go back to the general ledger setup, and again the payment
discount excluding VAT is not selected for our demo company, but they also didn't select the adjust
for payment discount. So this means that they're not taking out the VAT from the total amount. So
they will just post the total amount to the payment discount G/L account. If you would select this
field, then, like we just saw in the overview slide, I will have to go to the general posting setup,
because now I need to assign the payment discount accounts here on the general posting setup. You
see the sales payment discount, debit and credit account, and if you scroll to the right you can see
the same for the purchase accounts. And that's also very important if you want to set it up properly,
you also have to select the adjust for payment discount field in the VAT posting setup. And the last
thing to do before we can start processing payment discounts is of course assigning payment terms
to customers and vendors. So, for example, if I go to customers, and if I open Customer 10000, and if
we look at the payments FastTab, we can see here the payment term one month 8 days. Remember
this is the payment term that's set up with payment discount. So if we start selling to this
customer, this customer can get payment discount at least if they pay within eight days.
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Process Sales Payment Discounts

After a sales document is posted, the payment discount information for the Pmt. Discount
Date, Original Pmt. Disc. Possible, and the Remaining Pmt. Disc. Possible is recorded on the
customer ledger entry.
Microsoft Dynamics 365 Business Central checks the payment discount date of the applied customer
ledger entry or entries when users apply payments, refunds and credit memos.
If the posting date of the application is the same or earlier than the payment discount date of the
applied entry, the remaining discount amount is subtracted automatically from the remaining
amount of the applied entry, if the applied entry is fully applied.
Adjust a Customer Payment Discount
You can adjust the Pmt. Discount Date and the Remaining Disc. Possible discount fields on the
customer ledger entries. You can adjust the payment discount dates and the amounts when the
invoice is posted without discount information, the discount date passed, and you approve the date
change, and the discount amount is calculated incorrectly.
Apply Posted Payments to Sales Documents that Use Discounts
When you apply a payment or refund to entries while the payment or refund is posted, Microsoft
Dynamics 365 Business Central automatically includes payment discount information. This payment
discount information is included on both invoice and credit memo entries when it calculates the
payment amount or the refund.
Applying Sales Credit Memos with Payment Discounts
When you are posting a credit memo with a payment discount amount that is applied to an invoice,
the Remaining Pmt. Disc Possible amount for the invoice is reduced by the payment discount amount
for the credit memo.
• To apply a posted credit memo with a payment discount amount to an invoice, follow these
steps:
• Select the lookup icon, enter “Customers”, and then click the related link.
• Locate and select the relevant customer.
• On the Navigate tab, click Ledger Entries.
• Select the line with the relevant credit memo.
• On the Home tab, click Apply Entries.
• Select the line with the relevant invoice.
• On the Navigate tab, click Set Applies-to ID.
• On the Navigate tab, click Post Application.
• Click OK to apply the entries.
• Click OK to the message that the entries are posted.
• Click OK to close the Apply Customer Entries page.
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• Review the applied entries in the Customer Ledger Entries page. Notice that the amount in
theRemaining Pmt. Disc. Possible field on the invoice line is reduced by the payment
discount amount on the credit memo.
How to process Sales Payment Discounts

Let's start with the first example. And this is one in which the customer pays in time. And I will start
with creating a new sales invoice. So I will sell to Customer 10000, and we just saw that this
customer is set up with the payment term that has payment discount at two percent. But notice that
you can still make any changes. So I can remove the payment discount. I can increase it. I can do
whatever I want to. But in this case I will stick with the two percent. Next I will enter the sales
invoice line. And in this case I will just use a G/L account to keep it very simple, and we're selling for
1,000. Again, very simple invoice. So here at the bottom we now see the total. And this is
something that you can compare perfectly with the example on my slide. So the 1,250. 1,250. So
let's post this. So I don't want to see the posted invoice. But instead I'm going to post the
payment. And again we just -- I just mentioned in this first example the customer will pay in time so
that he can get the payment invoice, and to post this I will use the cash receipt journal. So let's go to
the bank batch, and let's collapse the factbox pane and, for example, the customer in this case is
paying on the 31st of January. Very important here to choose payment as document type. Next I will
select customer and then the account number. And so we have -- I have used Customer
10000. Okay. Let's now go to the apply entries page. So we'll click on apply entries. And if I scroll
down I can see the 1,250. And make this a bit larger. There we go. So 1,250. So as we saw in one of
the previous modules, let's set the applies to ID. So by clicking on actions, I can now scroll down
again. I can set the applies to ID and basically what you see now is that the system automatically
takes into account the payment discount. And the 1,225 where the payment discount amount is
25. You see? And this means, when we have situations like these where the customer pays in time
and where the correct amount of payment discount is deducted by the customer, everything goes
automatically. So I don't have to do anything manually. I don't have to add lines or trigger any
calculations. As you can see here, everything happens automatically. OK. So let me accept this. The
1,225 is entered. And I will post the journal. So everything is posted. And let's now have a look at
the results and there are a couple of things I would like to check. So, first of all, I will search for the
G/L registers. There we go. And here one with source code cash receipt journal is the one that's
created when posting my example. And by clicking on general ledger, you can see now what has
been posted. And so I can see three lines. The 25, the payment discount, posted to an expense
account, and then the bank account and the customer account. So also this is something that is fully
automatic. Then I'm also interested in the customer entries. So let's go and check the customer. So I
will go to customers. And let's go and have a look at Customer 10000. So I would like to see the
customer ledger entries. So if I click here on navigate history ledger entries -- there we go -- I can see
now here at the top the payment of 1,225. But the amount, the original amount, the amount is
1,250. And also here remember something we saw in one of the previous modules, each customer
ledger entry can have one or more detailed entries. Now, if I click on navigate to show the detailed
ledger entries, you can see here the different detailed ledger entries. So the initial entry, the
1,225. There's an application of 1,250, because the invoice has to be applied completely and
then the difference between the two, the 25, is payment discount. So this means that it's
also very easy to get an overview of the customer ledger entries with entry type payment
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discount. Let's now also take a look at an example where the customer is paying after the payment
discount date. So I will start in exactly the same way. So I will create a new sales invoice for the
same customer. And I will also use the same amount. But let's first double-check the due date is the
23rd of February. But if I go and have a look here the payment discount date is the 31st of
January. And in my first example, the customer paid on the 31st, which means that they could get
the payment discount. And we saw that the system processes the payment discount fully
automatically. OK. In this case I will post to the same G/L account the same amount, to make it easy
where that's concerned, so 1,000. OK. So I will post again. I don't want to see the posted invoice,
but also here let's go to the cash receipt journal to post the payments. So I'll use the bank batch
again. And that's very important in this example. I will post the payment on the 1st of February
2020. So one day too late. So my document type will be payment. There we go. It's a customer,
that's the invoice, of course, Customer 10000 and I will go to the applied entries function again. So
by scrolling down I can see the line, my new invoice, they're in here, and I will run the set to apply --
set applies to ID function. Now you can already of course see the difference with my first example.
So now the system doesn't trigger the payment discount anymore because the payment is received
one day too late. So this means that now the system suggests to apply the full amount. But suppose
now that the customer still took the payment discount. So they only paid 1,225. So they took the
payment discount. There are two things you can do as a user. First, you can leave the amount as an
open amount and ask the customer to still pay the 25, or you could decide to give the customer the
payment discount. Because maybe it's a very loyal customer and they're only paying one day too
late. So let's still give them the payment discount. So if this is the decision then, of course, it would
be very efficient if we can process the payment discount in the same way as in my first example, with
all the detailed customer ledger entries with posting to the correct G/L accounts and so on. Now,
this is possible. But in order to do so I will have to change the payment discount date on the
application entry. So if I scroll to the right, you can see here the payment discount date. And notice
that this is an editable field. So I can change the field. Now, if I move the field to the 1st of February
2020, you will see now that the payment discount is triggered again fully automatically. So now the
system suggests 1,225. And we do have the 25 as payment discount amount. So now if I click on OK,
1,225 is inserted here in my cash receipt journal line and I can post them. And the results will be
exactly the same. And so basically -- and let me quickly show you the fields again just by going to any
customer entry. So basically what I did by going to the apply entries page, I have modified the date
field. So if I scroll to the right at the payment discount due date, so I've modified this field. Notice
we cannot only modify the payment discount date field, it's also possible to modify the remaining
payment discount possible. And suppose that the customer took a bit more, a bit less payment
discount, for example, maybe because of a typo, then by changing here the amount, the system will
also process the transaction fully automatically. So as a user I don't have to add additional lines in
the cash receipt journals. So very important when processing applications you can change date fields
and you can change amount fields.
Process Purchase Payment Discounts

In the Suggest Vendor Payments batch job of the Payment Journal, there are some differences in
the criteria that are used to make a payment when the Find Payment Discounts check box is
either selected or it is cleared. Based on this, Microsoft Dynamics 365 Business Central
suggests the following:
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• If this check box is selected, then payments are made for:

o All open entries that have a Due Date on or before the date entered in the Last
Payment Datefield.
o Any open vendor ledger entry that has a Pmt. Discount Date between the Posting
Date and the Last Payment Date.
• If this check box is cleared, then payments are made for only those entries that have a Due
Date on or before the Last Payment Date.
Payment Discount Tolerance and Payment Tolerance

Sometimes, a customer can underpay or overpay an invoice amount. When this occurs, the following
two options are available:
• Post the payments with a remaining amount. With this option, you must close the remaining
amount using other methods, such as posting an adjustment and, or by contacting the
customer for additional payment.
• Set up payment tolerances to close entries where there is a difference between the amount
owed and the amount paid. With this option, parameters of acceptable differences are used
to post the amounts to G/L accounts.
For accounts payables, payment tolerances are used to make payments to vendors that have a
slightly different invoice amount.
When you use a payment tolerance, you can do the following:
• Set the payment tolerance percentage, payment discount grace period, and the maximum
payment tolerance amount.
• Determine whether to receive a warning when an application is made within the payment
tolerance parameters set.
• Determine to which account to post the difference to keep track of amounts and their
frequency.
• Set up different payment tolerances for different currencies.
• Work with a payment tolerance on invoices and payments, credit memos and refunds.
• Determine the customers who can use or be blocked from payment tolerances.
In Microsoft Dynamics 365 Business Central, there are two types of payment tolerance:
• Payment Discount Tolerance: This takes a payment discount even if the payment discount
date has passed.
• Payment Tolerance: This accepts a slightly larger or smaller amount as full settlement of an
outstanding invoice.
To post a tolerance to a G/L account that differs from the usual payment discount account, the
accounts must be created in the Chart of Accounts and set up on the following:
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• Customer Posting Groups and Vendor Posting Groups: When the Adjust for Payment
Discountcheck box is cleared on the General Ledger Setup page.
• General Posting Setup: When the Adjust for Payment Discount check box is selected on
the General Ledger Setup page.
Set Up a Payment Discount Tolerance and Payment Tolerance

So remember the example with the payment discount where the customer paid one day too late. So
as a user, I extended the payment discount due date on the application entry so that the system
could process the payment discount fully automatically. Now, for a company, it could be interesting
to set these things as sort of a business rule, and that's what we can do with the payment
tolerances. So let's go and have a look at the setup. So, first of all, I will go to the general ledger
setup, and let's scroll down to the bottom and open the application FastTab. There we go. So here
we can see the fields that we can use to set up payment tolerances. And there are two different
types of payment tolerances. First there are the payment discount tolerances, and there are the
payment tolerances. Now, the first one is one that you only use in combination with payment
discounts. And so, for example, companies that are not using payment discounts, they will also
never use the payment discount tolerances, but they can still use the payment tolerances. OK. Let's
start with the first one. Now, what is this setting doing? Well, it's basically doing automatically what I
just did manually. Remember in the example I extended the payment discount due date with one
day. And here you can set up this as a business rule. Now, suppose that we say if payments are
received or done to vendors one or two days too late to get the payment discount but we still would
like to give the payment discount, that's something that we can do by entering the payment discount
grace period. And so, for example, if I enter two days, this means that payments that are received
two days too late to get the payment discount still can process the payment discount. So that's what
this setting is doing. Now, once you start using payment tolerances, you can select to post them to a
specific payment tolerance account instead of the payment discount account. Now, setting up these
tolerance accounts is done at the same place as the payment discount account. So on the customer
and vendor posting groups or maybe on the general posting setup, depending on how payment
discounts is set up. Then another setting that could be interesting is the warning. And I will enable
the warning which means that if this setting is triggered, the system will show me some additional
information, and I still can select as a user whether I would like to process the tolerance or leave it as
an open amount. So, again, this is extending the payment discount due date with a grace
period. Now, another thing that we can do is enable payment tolerances, and that's something that
the system can use to automatically process small payment differences. And so -- and that's
something that most companies have to deal with when customers are paying or maybe when
they're paying vendors. Sometimes these small differences occur. Maybe a rounding different or a
typo, whatever. And if the amount is small enough, then it will be posted to a payment difference
account. Now, instead of having to do this manually, also here we can set up the system based on a
percentage or an amount so that this is something that can be performed automatically. So let's go
to the actions FastTab, and there I can run the action change payment tolerance. So there we
go. First of all, you can decide whether you want to do this for all currencies or per
currency. Now, this depends on the currencies that you're using. And so, for example, if you're
using currencies with more or less the same nominal value, like the euro and U.S. dollar, for
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example, then you can perfectly set this up for all currencies. But if you're using currencies with very
different values, then it might be better to set it up by currency. OK. So, first of all, the payment
tolerance percentage. So here I can enter a percentage, like let's say 3 percent, and then the
maximum payment tolerance amount. So for very small amounts the 3 percent probably will not
reach the tolerance amount, but for higher amounts 3 percent might result in a tolerance that is --
that's too much. So and that's why here I can set the maximum amount. So I can specify that the
payment tolerance can never be more than let's say two, for example. So in this case, two local
currency. So let me click on OK and update the customer and ledger entries. So now the payment
tolerance is set. I can then also specify in this case if I want to post it to separate tolerance account
and if I want to have the warning, which I'll also enable here. Now, to give you some more insight on
how the system will now start using this, let's go and have a quick look at a customer, or let's take in
this case a vendor account. So now if I go to the vendor ledger entries, so you can see here the
different ledger entries of this vendor, and by enabling the payment tolerances, the system has
updated these ledger entries. Because now if I scroll to the right, you can see, for example, in this
case that there's a maximum payment tolerance amount. And in this case, for each entry, each open
entry, this is two. So the maximum amount that I have set, because the 3 percent of these amounts
result in a higher amount than the two, so -- and we will never use an amount higher than 2, as you
can see here. So that's the way that the system will process the payment tolerances. So by
comparing these settings here on the customer and the vendor ledger entries with what is actually
processed when posting the payments. Now, another thing that's also interesting to know is that
you can block payment tolerances on an individual vendor or customer basis. And so, for example,
here on the payments FastTab, you can see the block payment tolerance field. And so if we don't
want to or if we cannot not use payment tolerances for certain vendors or customers, we can block.
Process the Payment Discount Tolerance

Let's now have a look at the result of setting up these payment tolerances. And I will make exactly
the same example as the one with the payment discount where the customer paid one day too
late. I already posted the invoice for the same amount, so 1,000 plus VAT, which means that I can go
directly to the cash receipt journal to process the payment. Next I will enter the payment. So very
important on the 1st of February, so also in this case this is one day too late. As document type, I will
select payment. And the account type is, of course, customer. So once again, it's Customer
10000. And let's now go to apply entries. So here by scrolling down, I can find the invoice the
customer has paid. And as you can see, it's again an invoice of 1,250. So I will set my applies to ID,
and also here you will see now that the system suggests the full amount, and this is basically because
the customer paid one day too late to get the payment discount. But besides the payment discount
due date, there is now also the payment discount tolerance date. And because I have set up a
payment discount tolerance of two days, the payment discount tolerance date is the 2nd of
February, which means that the system will use this date to trigger payment tolerances. And that's
something that I will see if I now click on OK. Because, again, it's still 1,250, so there's no payment
discount. But now by clicking on OK and by changing the amount, because I have to enter the
amount that the customer has paid, and they only paid 1,225, you will see now that the payment
tolerance discount tolerance is triggered and that it will give me the opportunity to leave it as
an open amount or to accept the late payment discount. You see? So that's basically what I
can do here. Here we can get the details, so the balance of 25. So do I want to post it as a
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discount tolerance or do I -- or not accept the late payment discount? In this case let's just post it as a
payment tolerance. Yes. Now I will click on post. So everything is posted, and let's check the
results. So I'll go to Customer 10000, and by clicking on navigate, I can go to the ledger entries. So
the first line is the payment that I just processed. And if I click on navigate to go to the detail ledger
entries, you will see now that there is a detail ledger entry of the type entry type payment discount
tolerance. So this was an example of the payment discount tolerance, and now you can go to the
practice of this lesson where you can make an example of the payment tolerance, and that will allow
you to automatically process small payment differences.
Module Review
To finish this module, let's recap what we learned. After setting up payment discounts, we saw how
to process payments with payment discounts, and this module also covered the payment tolerances.
Module 08: Managing Receivables Reminders and

Finance Charge Memos
Module Overview
If customers have overdue payments, they receive reminders with an overview of their overdue
invoices. If they refuse to pay overdue amounts, they can be charged with additional fees and
interests. In this module, we will start with setting up reminder terms and reminders levels. Once
this is done, we can create reminders and send them to customers. We will also see how to set up
finance charge terms to enable interest calculation and how to issue finance charge memos but also
how to charge interests on reminders. At the end of this module, we will look at the different
options to review reminders and finance charge entries.
Reminder Terms
Reminder terms specify when and how reminders are created. As soon as the reminder terms are
created, theReminder Term Code is assigned to the relevant customers.
A reminder term contains different reminder levels and determines how many reminders are sent to
a customer. Each level will determine when and how the reminder is created. Typically, the first
reminder for an invoice will have a different look than the second and third reminder.
For example, a Reminder Term Code can be set up with three reminder levels and it can have no
more than six reminders. Additionally:
• In Microsoft Dynamics 365 Business Central, a given overdue invoice can appear on no more
than six reminders. The first reminder will be created according to the conditions set up on
level 1, the second on level 2, and the rest on level 3. This means that the third, fourth, fifth,
and sixth reminder will look identical.
• As soon as one of the overdue invoices appears on five reminders, all reminders to the
customer are blocked until that invoice is paid. Even if the customer has other
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overdue invoices that have not yet reached the maximum, additional reminders cannot be
created.
• Typically, this occurs when a company hands over the customer dossier to a lawyer or
another external collections company that will handle the collection of all overdue invoices.
By doing this, the company no longer must keep sending reminders to that customer.
Set Up and Assign Reminder Terms

So I would like to start sending reminders to my customers, but, first of all, I will have to set up the
reminders terms. So let's go and have a look. So I will search for reminder terms, and here we can
see the two reminders terms of our demo company, Cronus International. But the first question is:
How many of these reminder terms do we need? Now, the answer is quite simple. So, first of all, we
will have to look at the number of languages in which we want to send reminders. So if you want to
send reminders in English and German, for example, then you need at least two reminder terms. But
then the second thing we need to look at are the conditions itself. So if you want to use different
conditions for let's say wholesale customers and retail customers, also there you need to create
multiple reminder terms. So the languages and conditions are important in order to specify how
many of these reminder terms we need. So a reminder term is a code and the description. And then
there are a couple of additional fields, but I will come back to these fields a little bit later. So let's
first go to the next step, and each reminder term has a number of levels. And so in this case, you can
see that Cronus International created three levels for their reminder terms, which is also something
that you see quite a lot in the real life, three levels. But you can also use two levels, you can use four,
five, as many as you want. And so there's no limit. So what is important? Well, we will always start
with level 1, which is the first reminder a customer gets, the level 1 reminder. Now, each reminder
level has a grace period. And for the first level, the grace period is the period that the system will
wait before sending out the reminder, so the period after the invoice becomes overdue. So in most
of the cases, companies will not send the level 1 reminder on the same date that an invoice becomes
overdue, but they will include a small buffer. And that's what the grace period is for level 1, so the
five days for Cronus. And so, again, this means that five days after an invoice becomes overdue, level
1 will be sent to the customer. Then there is the due date calculation. Now, you don't have to enter
a due date, as you can see here, but you can. Now, that's very important. If you enter a due date,
then there are two things that will happen. So first of all, the due date is mentioned on the reminder
itself, and the reminder will also get a due date. And so, for example, in level 1, Cronus is charging an
additional fee of 5 local currency, which means that the 5 local currency will get a due date based on
the 14 days. So that's very important. But another thing that is very important is that the due date
can be combined with the grace period of the following levels. Because like I just said, the grace
period for level 1 is the period that the system will wait after an invoice becomes overdue before
sending out level 1. But the grace period for level 2 is the period after sending out level 1, so before
sending out level 2. So, for example, one month after sending out level 1, the system will send out
level 2; and one month after level 2, level 3 will be sent out. You see? So in that way we're defining
the reminder process you could say. But it also depends on the due date. And without due date
calculation, it's five days, one month, one month. But with due date, so, for example, if I enter a
due date of 14 days, then you will see that it's five days, then the system will wait until the
reminder level 1 becomes overdue and then applies the grace period of level 2. So this
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means that it's taking the system 14 days longer and with this setup before level 2 is created. So and
that's also very important to know, of course. It will extend the total period between different
levels. OK. I will not use a due date calculation here in my example. But, again, if you want, you
can. Now, like we saw in the introduction, it's also possible to calculate interests for a specific
reminder level, and that's something I will do at the end of this module. And then there's the
additional fee. And I'll come back to the additional fee in a few moments. So in this case it's a very
simple additional fee, so per level in this case, 5, 10, 15 local currency. But as you can see, there are
a number of additional options that we can apply for these fees. But like I just said, I will come back
to this in a separate lesson. So we have level 1, we have level 2, and we have level 3. So in this way
our reminder levels are created. Now, what is also very important is that we want to send out a
reminder letter. So we want to send out a letter to the customer with specific information. So and
for that reason, for each level, we can write a beginning and an ending text. So if you select a specific
level and if you click on navigate, you can go to the beginning text action and start entering the
beginning text. So just in a very simple example, but I think you get the idea. And then there's the
ending text: Please remit your payment as soon as possible. Notice that there is a percentage which
is a variable. So we can use a number of variables which you can find back by going to the help. And
the percentage 7, for example, is a variable that will result in the total amount. So when I create
reminders, the system will display here the total amount that the customer should pay. But that's
something that we will see in one of the next steps. So once the levels are set up, let's go back to the
reminder terms. So let me close this page. And as we saw, there are a number of additional fields
that we need to have a look at, and the first one is a very important one, the maximum number of
reminders. Now, if this field specifies zero, as we can see here, then each level will be sent out
once. So for Cronus, this is level 1, level 2, level 3, and then it stops. If you want to send -- if you
want to keep sending reminders to your customers, even after all the levels have been sent out once,
you can enter here the maximum number of reminders. Now, suppose I would enter here six, then
in case of Cronus, level 1 will be sent out, then level 2, then level 3, again level 3, again level 3, and
again level 3. So the system will send out the last level until it reaches the maximum number of
reminders. You see? So in that way, you can specify whether you want to stop after sending out
each level or whether you want to continue sending reminders to your customers. Then, as we saw,
we can charge interests and additional fees, but do we want to post them. That's another
question. So in case of Cronus, they answered the question with no. So they don't want to post the
interest and the additional fees. Which means that if customers pay an additional fee, for example,
they will post the additional fee when posting the payments. Then post additional fee per line, that's
if you charge and additional fee per line, but that's something I will come back to in a moment. And
then if you want, you can enter a minimum amount. And if the total overdue amount doesn't exceed
the minimum amount, the system will not send out reminders to the customer. And then a note
about -- well, line fee on report. So, again, a couple of very important fields that you can -- or that
you have to set up here on the reminder terms. Now, once these terms are created, you can start
assigning them to customers. So if I go to customers, and if I open an existing customer, for example,
Customer 10000, and if I scroll down and click on show more on the payments FastTab, you can see
here the reminder terms code. This is where I can assign the reminder terms code, and this is now
how the system will create reminders for this customer. Now, the last thing I would like to show in
the setup is how reminders are numbered. And that's something that is, of course, done with
number series. So if I go to the sales and receivables setup and if I expand the number series
FastTab with all the number series for the sales application area, there you can also see
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the reminder numbers and the issued reminder numbers. So these are the number series the system
will use to number reminders.
Set Up Additional Fee

So we just saw that it's possible to charge an additional fee to customers. So depending on the level,
you can enter the additional fee, and this is possible on a document level or on a line level. But you
can also have the additional fee calculated dynamically. So let's go and have a look. So now we'll go
to the reminder terms and next to the levels, because it's on the level that we set up the additional
fees, and here we can see the most basic way of setting up these fees. So an additional fee per level
on the document level. So this means that per document that the system will charge an additional
fee of 5 for level 1, 10 for level 2, and 15 for level 3. Now, here already you can see that it's possible
to have the system calculate additional fees dynamically, but suppose that we stick to fixed, then
instead of assigning an additional fee on the document level, you can also do this on the line
level. So the more lines are included in the reminder, the higher the total additional fee will be that
the customer has to pay. So I can see header 5, and it's perfectly possible to combine this per line. I
also want to charge an extra local currency, so 1. So that's perfectly possible. However, it's also
possible to, like I just said, make these additional fees dynamically. So let's go and have a look. And
if you select one of the two dynamic types, single or accumulated, you see that the additional fee or
additional fee per line actions in the ribbon become available. So let me go there. Additional
fee. And here we can see that we can do quite some settings in order to have the system calculate
additional fees in a specific way. Now, the first thing that we can do is, for example, enter an
additional fee percentage. And if you do that, the additional fee starts looking a bit like interest
calculation, because also with interest calculation we will calculate a specific percentage on the
overdue amount, and here it will be more or less the same. So, for example, if I set 4 percent, then
the calculation will result in 4 percent of the total overdue amount. I can also enter the threshold
remaining amount. The threshold remaining amount is an amount indeed which the system will not
charge additional fees. So if I enter 500, then the system will only start charging additional fees if the
overdue amount is 500 or more. You see? So under the 500 the system will not charge additional
fees. And then if you want, you can also add a minimum or a maximum amount of additional
fee. And suppose that I would like to use 30 as the maximum additional fee, and then this is a way of
setting up the additional fees a bit more advanced. Now, the question is, of course, that's all very
nice, but what does this result in and what is the difference now between single and accumulated?
So in order to explain this, let's go to another chart, and here you can see the differences. This is a
chart based on the settings I just showed you. And by the way, the blue line is the fixed additional
fee of 5. So the additional fee set directly on the level. So level 1 is 5. So that's the blue line. So and
then you can see here the difference between single and accumulated dynamics. So, first of all, you
can also very clearly see the threshold amount, from 500 and more the system will start calculating
these additional fees. So that's why you can see here the 499. And with single dynamics, it will
calculate immediately 4 percent of 500 being 20. You see? So the total amount will be taken into
consideration, and the percentage calculation is done on the full amount. While with accumulated
dynamics, the system will apply the percentage on the amount starting from the threshold
amount. You see? So which means at the beginning the accumulated dynamics will result in
less additional fees as the single dynamics. And also here on the single dynamics, you can
then very clearly see the maximum additional fee. So I've entered 30, which means that
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we will never charge more than 30 local currency on additional fees. So this is, again, a more
advanced way of setting up the additional fees by using one of the dynamic types.
Create and Issue Reminders

So once reminder terms are set up and assigned to customers, we can start creating reminders. So
let me click here on the sales department in the business manager Role Center, and what you see
here is that we have reminders and issued reminders. And you can compare this with invoices. You
have nonposted invoices, which are similar to the reminders. Once that you have created an invoice,
you can post it. Well, with a reminder, you can create it and then you will issue it. So you can
compare this a little bit with the nonposted invoices and the posted invoices. So let's start by going
to reminders. There we go. So currently you see that there are no unprocessed reminders for
Cronus. And by clicking on the process action here, I can start creating reminders. Now, the create
reminder action is what you will typically use to create multiple reminders at the same time, while
the suggest reminder lines action is an action that you use to create one reminder. So let's start with
creating reminders. So then very important, the posting date and the document dates. So and this is
typically something I would like to do at the end of each month, so the 1st of -- sorry, the 31st of
January 2020, and I will use the same document date. So this is of course very important because
these dates are used by the system to compare with the due dates of invoices. So this will specify
whether invoices should be included in reminders or not. Now, here we can see -- or here you can
specify whether to include only overdue amounts or also the open amounts. And then there's
include entries on hold and use header level. That's something I will come back to later in this
module. And if you want, you can also filter on customer, customer ledger entry, and apply fee per
line details. But I will leave these filters open. But, of course, in real life, if you want to create
reminders only for specific customers and maybe only domestic customers or whatever, you can
enter here customer details. Let me now click on OK. And as you can see here, the system has
created a number of reminders. So, again, we still didn't issue the reminders, which means that we
can open a reminder and we can start modifying if necessary. So just as a non-posted invoice, you
can change anything you want. So and you even see that it looks like in the nonposted invoice. So
here at the top I can see the header, some information on my customer, and the name, the number,
and so on. And let me collapse here the FastTab. If I scroll down, you can see the reminder
lines. And here you recognize the beginning text, so the text I've entered, Dear customer, following
invoices, then the detail of the overdue invoices. You can see the additional fee, and you can also
see here the ending text. And notice also the variable. So I've explained that there are a number of
variables that you can use, and in this case the variable will result in displaying the total amount the
customer should pay. So this is a very good example of how a non-issued reminder looks like. And,
again, like I just said, because it is not issued yet, you can change anything you want. If you would
like to delete lines, if you would like to add lines, you can make any change before issuing. So by
clicking on edit, for example, I can apply changes. So everything is now editable. OK. Suppose that
this is the reminder I would like to send to my customer. The next thing that I can do, then, is click
on the issue action. So here at the top I can see the issue action, and this is something I will do to
process the reminder. So here are a number of options. So there's the print option where I can
specify if I would like to print or email the reminder. Then the replace posting date, if
necessary, the hide email dialog and so on. And by clicking on OK, you see now that the
reminder line has been removed from this overview, but instead I can now find it in the
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issued reminders. So if I go to the overview of the issued reminders, there you can see now the one
reminder appearing. So let's go and have a look. And just as a posted invoice, you will see here that
the issued reminder is noneditable. So here it's not possible to make any changes anymore because it
has been issued. And by the way, issuing in this case will only result in an issued reminder and some
issued reminder lines. If I navigate, and there you can see the issued reminders and the finance
charge entries, but no G/L entries, and that's because Cronus International decided to not post the
reminders. It's also possible to post the reminder, and then you will see that the system will also
create G/L entries, will create customer ledger entries, and so on. But here no posting to the general
ledger is done. So let's go back to the other reminders, so the ones that we didn't issue yet. So you
can see here four reminders, and now I would like to issue them all at once, so not one by one,
because that would not be very efficient. So there's also a way of doing that. So if I click on process,
next if I click on issue, you can see the same options where I can choose, for example, between
printing and emailing. But here on the reminder FastTab, very simple, if I remove the number, so the
reminder number, then the system will process all the reminders at once. If I now click on OK, you
will see that they are all processed at once. And if I go to issued reminders, there we can find all
these issued reminders. Let's now have a look at how reminders of level 2 are created, but first I will
go and change the grace period. So I will go to the reminder terms, and instead of a grace period of
one month, I will use one week. And the reason is that I would like to create all the reminders within
the month of February. So one week. And also here one week. There we go. So now I can go back
to the reminders batch. So reminders, process, create reminders. And I will select another posting
date. So let's go and have a look. So not January 2020, but suppose that we're creating reminders --
let me double check. Let's take the 14th of February. There we go. So for the rest I will leave
everything unchanged, and I will click on OK. And now you see that we already have more customers
that should receive reminders. But the ones that I'm interested in are the customers that already
received a level 1 reminder. And one of these customers is Selangorian, Customer 20000. So let's
now go and have a look at the reminder that the system has created now. And so, first of all, in the
header you can see that this is reminder level 2. And what you also notice is that there are a couple
of lines, then there is a blank line, and then we have some more lines. And so this is showing the
level 2 lines and the level 1 lines. Because by the 14th of February, this customer has a number of
invoices that should -- that are reminded for the first time, so the level 1's, and there are a couple of
invoices that are already reminded, that were already included in the first reminder. And what you
see is that all these invoices are combined in one reminder of the highest level, level 2. So but with
the blank line, there's a visual indication of which lines are level 2 and which are level 1 in this
case. For the rest, you can see the additional fee again, and you can also see the ending text. So
that's a reminder I would like to issue. So let's go ahead and do this. So I will click on issue, and
there we go. Now, let's look at another function, and I will open the reminder of Vendor 10000. And
here we can see this vendor -- sorry, not vendor, customer, so this customer will receive for the first
time a reminder, so the reminder of level 1. Now, what you see here on the header, if I click on
actions, is that there is a function update reminder text. So that's a function that I can use in two
different situations. So, first of all, I can use it in a situation where I would like to go from one to the
other level. So, for example, this is level 1. But for some reason I would like to send level 2 to this
customer. So by entering reminder level 2 and by clicking on OK, you see now that the reminder
level is updated. So this is now level 2, yeah, with also the ending text, for example, of level
2. Let's switch back to level 1 because there's another function I would like to
demonstrate. So now we're back at level 1. OK. Remember in level 1 we are using a
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variable that is displaying the total amount. And suppose that I'm modifying the reminder. So let me
click on the home tab and then edit. And suppose I would like to remove the credit memo. So the
credit memo shouldn't be included in the reminder so -- and because we still didn't issue the
reminder, we can make any change, like already mentioned. So I will delete this line. So very easy to
do this. But of course now the total amount is not correct anymore because the total amount is plain
text and the system will not update it dynamically. So this means that I will have to recalculate the
total amount. However, instead of doing this manually, I can also use the update reminder text
function. But in this case, I will not go to another level, I will go -- or I will stick with the same
level. So I will enter the same level. And by running the function, the system will update
automatically the variables again. And you see? So now it has changed to 59,052.54. So that's a
second situation in which it could be interesting to run the update reminder text, so to have the
system recalculate all the variables again.
Set Up and Assign Finance Charge Terms

Finance charge terms specify when and how finance charge memos are created. As soon as the
finance charge terms are created, the Fin. Charge Term Code is assigned to the relevant customers.
The Finance Charge Term
The Finance Charge Terms window contains the fields shown in the following table:
• Code: Unique code of the finance charge term.

• Description: Short description of the finance charge term.
• Interest Calculation: Determines which entries are used in the interest calculation on finance
charge memos. The options are:
o Open entries
o Closed entries
o All entries
• Interest Calculation Method: Determines the interest calculation method for this set of
finance charge terms. The options are:
o Balance Due Method: The finance charge is a percentage of the overdue amount.
FINANCE CHARGE = OVERDUE AMOUNT * (INTEREST RATE/100)
o Average Daily Balance Method: This method considers how many days the payment
is overdue for open entries or how many days it is overdue when closed entries are
paid. FINANCE CHARGE = OVERDUE AMOUNT * (DAYS OVERDUE/INTEREST
PERIOD)*(INTEREST RATE/100)
• Interest Rate: Identifies the finance charge percentage charged when this finance charge type
is used.
• Interest Period (days): Identifies the number of days related to the interest rate. For
example, 12 percent for 360 days or one percent for 30 days.
• Minimum Amount (LCY): Specifies the minimum interest charge in the local currency (LCY).
• Additional Fee: Identifies a charge in addition to the finance charge.
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• Grace Period: Determines the number of days the customer ledger entry could go unapplied
before a finance charge is assessed.
o The first finance charge memo will be created, if the document date on the finance
charge memo header is after the due date of the customer ledger entry, plus the
grace period.
o Any succeeding finance charge memos are created if the document date is after the
due date of the last issued finance charge memo plus the grace period.
• Due Date Calculation: Indicates the date formula that is used to determine how the due date
is calculated on the finance charge memo. The due date is calculated from the document
date.
• Line Description: Identifies a description to be used in the Description field on the finance
charge memo lines. Text variables can be used in this description.
• Post Interest: If this check box is selected, any interest listed on the finance charge memo will
be posted to the G/L and customer accounts when the finance charge memo is issued. The
interest becomes an open customer ledger entry, for which a finance charge memo can be
created and again interest can be calculated for, when the entry becomes overdue.
• Post Additional Fee: If this check box is selected, any additional fee listed on the finance
charge memo will be posted to the G/L and customer accounts when the finance charge
memo is issued. The additional fee becomes an open customer ledger entry, for which a
finance charge memo can be created, when the entry becomes overdue.
• Add. Line Fee in Interest: Specifies that any additional fees are included in the interest
calculation for the finance charge.
Beginning and Ending Text

Information related to the beginning and ending text lines includes the following:
• They can be added for each finance charge term.

• They contain instructions on the payment and the result of nonpayment.
• They include several predefined text variables.
To access the Finance Charge Text pages, follow these steps:
• On the Finance Charge Terms page, select a finance charge term.

• On the Navigate tab, click Beginning Text or Ending Text.
• Add as many text lines as you must have. You can also use predefined text variables that the
program will replace with the appropriate information before the finance charge memo is
printed.
Create and Issue Finance Charge Memos

So once the finance charge terms are assigned to customers, we can start creating finance charge
memos. And the process is very similar to what we saw with reminders. So if I click here on the
sales department, you see that we also have finance charge memos and issued finance
charge memos. You see? Just as we have reminders and issued reminders, we also have
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the non-processed finance charge memos and the processed or the issued finance charge
memos. So this means that we have to start with the finance charge memos. And also here, if I click
on process, I can run the create finance charge memos function in order to have the system create
multiple finance charge memos for multiple customers. So let's do this also here maybe at the end
of the month, so January 31st. I will not filter on customer because I would like the system to check
each customer. And now if I click on OK, there you go, you can see now the results. So here in the
list I can already see the interest amount customers should pay, but let's look at some more
details. If I click here on the number, the finance charge memo opens. So let me collapse that
FactBox pane. And also here you will see that there is a header with the customer information, and
here we can see the detail lines. So you can see the customer ledger entry, the invoice, the
description, the remaining amount, so the total remaining amount on which interest is calculated,
and here the end amount. OK. Also here the system uses a variable where it will make the sum of all
the remaining amounts, the interest amount, and the additional fee so that the customer knows
what to pay. So but typically here is that we have interest calculation. So just as with reminders, as
long as I didn't issue the finance charge memo, I can still make any change, if I would like to modify it,
if I would like to delete it, because also that's possible. That's no problem. Once that I would like to
send the finance charge memo to the customer, I can also do this by clicking on issue. So with the
same options. Also here I can choose between printing or emailing. If I want, I can replace the
posting date. And if you want to issue all the finance charge memos at once, you can also remove
here the number. But let's just issue this number. There we go. So I will click on OK. And let's go
and have a look at the results because you don't see 1002 appearing here anymore, and that's of
course because it has been issued. So if I click here on the issued finance charge memos, and if I go
to the second one, so the one for Selangorian, the one that I just processed, let's go and have a
look. But basically by opening the issued finance charge memo, you see exactly the same. OK. So I
can see also here the amounts, the interest amount, and so on. However, the big differences here,
and that's of course because of the set up that the demo company applied, is that if you navigate
here on the issued finance charge memo that you do see G/L entries, there are VAT entries,
customer ledger entries, and so on. And that's of course because Cronus decided to post interests
and post additional fees for the finance charge memos.
Calculate Interest on Reminders

Now, instead of charging interests on the finance charge memo, you can also do this on the
reminder. And that's also something that could be very interesting because then you're combining
the function of reminder with its different levels with interest calculation. And some companies,
they want to send out maybe level 1 and level 2 without interest calculation, but once that the
customer reaches level 3, they want to charge interests. And for that reason, the interest calculation
is set up on the reminder level. So let me go to the reminder terms. And let's take the
domestic. Let's go to levels. And there we go. So we could already see in one of the previous
lessons that there's the calculate interest field. And, for example, let's enable this for level 3, which
now means, like I just said, that for level 1 and 2 no interests will be charged to the customer, but
once that the customer reaches level 3, the system will also charge interest. Now, the interest
amount is calculated based on the finance charge term. And that's also very important. If you
want to enable interest calculation on the reminder, you also need to set up finance charge
terms and assign them to your customers. So let me quickly show you an example. If I
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open Customer 10000, there we go, if I scroll down to the payments FastTab, you can see here the
finance charge terms codes. So let's now have a look at an example. And I will -- sorry, I will click on
the sales department and go to the reminders again. So remember we have created reminders for
level 1 and level 2, but for level 2 I've only posted the reminder for Customer 20000. So let me
delete all the nonposted reminders -- or the non-issued reminders from the previous
demonstration. And I will create reminders again. So by clicking on process, I will select create
reminders. And in this case we're a few weeks later, so at the end of February, the 28th, I would like
to create reminders. So let's do this. There we go. And you can see the full list of customers that
should get a reminder at the end of February. But I'm specifically interested in Customer 20000. So
let's go and have a look. I will open this -- sorry, I will open this reminder. And so, first of all, you can
see that this is a reminder of level 3. There we go. And you can also see now that the first two lines
have an amount, and that's the interest amount, the same amount as we just saw on the finance
charge terms. Not exactly the same because the date is later, but the same concepts. And the
reason that only the first two lines have an amount is of course because these are -- these have
reached level 3, while the four bottom lines are still in level 2, and we didn't enable interest
calculation for level 2. You see? So that's, first of all, the reminder of level 3, but in this case
including interest calculation. And then there's a very specific field that we can use. So for the time
being I've skipped the field, but let's now have a look at what it does. So, first of all, let's get rid of
these reminders. So I will select all of them, and then click on manage, delete. Let's create again new
reminders at the end of February. So I will click on process, create reminders, but now I will select
the use header level function, and then you will see what happens with the reminder for Customer
20000. So let's run the batch. And now there's my Customer 20000, reminder 1035, so let's go and
have a look. And can see now the difference. So in my previous example, the system only calculated
interests for the first two lines, So the two lines that reached level 3, but now you can see that
there's an interest calculation for each line. And so basically the system literally has used the settings
of the header level for all the reminder lines, also the ones that are only in level 2. You see? So that's
what use header level does, it applies the settings of the header level to all the lines, as you can see
here.
Interest Calculation Rules in Reminders

Unlike finance charge memos, customer ledger entries suggested in reminders are only open entries
at theDocument Date of the reminder.
If the reminder is assigned a finance charge term with an Interest Calculation Method of Balance
Due, then:
• The Interest Calculation field has no effect.

• The amount of interest calculated for each reminder line suggested is based on
the Remaining Amountof the reminder line.
If the reminder is assigned a finance charge term with an Interest Calculation Method of Average
Daily Balance, the Interest Calculation field has the following effect:
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• If Open Entries or All Entries is selected in the Interest Calculation field, then the amount of
interest calculated for each reminder line suggested is based on the Remaining Amount of
the reminder line.
• If Closed Entries is selected in the Interest Calculation field, then the amount of interest
calculated for each reminder line suggested is based on the Remaining Amount of the related
customer ledger entry on its Due Date. Interest can be calculated on the full invoice amount
of the partially applied entries if they are overdue at the time that the partial payment is
applied.
Review Reminders and Finance Charge Entries

To finish this module, let's have a look at how we can follow up on the reminders, because as a user I
would like to know things like how many reminders that we already sent to customers, how many
times has a specific invoice already reminded. So these are the kind of things that I would like to
know. And let's go to customers. So and the first thing that you can do if you select the customer,
let's take Customer 20000 because that's the one that we have processed, I can now go to navigate,
documents, and then issued documents, and I can choose, for example, the issued reminders or the
issued finance charge memos. So here with issued reminders, I can see here that we already sent
three reminders to this customer. And I can, of course, print, I can send the email again, I can open
the reminder, and so on. So that's the first thing that I can do, but then there's also a second
thing. So let me first go to the customer ledger entries. So I will go to navigate, history, and then
ledger entries. And here it's very important to expand the customer ledger entry details FactBox
because per entry you can see here the reminder finance charge entries created. Now, this one
doesn't have any, but if I select an invoice, you can see, for example, that we already have two
reminder and/or finance charge entries. And by clicking on the two, you can see in this case that it's
a level 1 and level 3 reminder. So that's what we already send out for this customer. But if I scroll
down or if I select No. 8, for example, Invoice No. 8, you can see that we even have four entries -- in
this case an entry for level 1, 2, and 3, and also a finance charge memo entry, so the charge of
interests. You see? So that's also something very interesting. And by displaying the customer ledger
entry details FactBox, you can see directly how many reminder finance charge entries there are for a
specific customer ledger entry.
Module Review
In this module, we saw how to set up and issue reminders and finance charge memos.
Module 09: VAT

Module Overview
Value-added tax, or VAT, is a tax on consumption that is paid by the end consumer. In countries and
regions where VAT applies, all companies are required to calculate and report VAT on sales and
purchases. In this module, we will cover a number of VAT-related topics such as setting up
VAT statements to report VAT and running the VAT settlement.
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Display VAT Amounts in Sales and Purchase Documents

Companies can display and calculate VAT amounts in sales and purchase documents differently,
depending on the Prices Including VAT settings on the customer or vendor card.
The selection made in the Prices Including VAT check box determines whether unit prices on sales
documents and direct unit costs on purchase documents include VAT. Set up the Prices Including
VAT check box in the following areas:
• Customer Card
• Vendor Card
• Item Card
• Sales document header
• Purchase document header
The following overview shows the description of the behavior of the Prices Including VAT check box,
when you select it and when you do not select it on the customer and vendor cards.
• Not selected: Sales and purchase documents are automatically set up to exclude VAT from
unit prices and direct unit costs. Therefore, the price and cost fields on the respective
document dynamically display Unit Price Excl. VAT and Direct Unit Cost Excl. VAT.
• Selected: Sales and purchase documents are automatically set up to include VAT in unit prices
and direct unit costs. Therefore, the price and cost fields on the respective document
dynamically display Unit Price Incl. VAT and Direct Unit Cost Incl. VAT.
On the item card, if the Prices Including VAT check box is not selected, VAT is not included in the unit
price, and the unit price is copied directly from the item card to the Unit Price field on the sales line.
If the Prices Including VAT check box is selected, VAT is subtracted from the price on the item card
before it is entered on the sales line, and the VAT Bus. Posting Gr. (Price) field must be filled in.
The following table provides an overview of how unit price amounts are calculated for a sales
document when prices are not set up in the Sales Prices window.
Prices Prices
Including VAT Including VAT
Action performed
field on item field in sales
card header
No check The Unit Price on the Item Card is copied to the Unit Price Excl.
No check mark
mark VAT field on the sales lines.
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The VAT amount for each unit is calculated and added to the
No check
Check mark Unit Price on the Item Card. This total Unit Price is then entered
mark
in the Unit Price Incl. VAT field on the sales lines.
The VAT amount included in the Unit Price on the Item Card is
calculated by using the VAT% related to the VAT Bus. Posting Gr.
Check mark No check mark (Price) and the VAT Prod. Posting Group combination. The Unit
Price on the Item Card that is reduced by the VAT amount is then
entered in the Unit Price Excl. VAT field in the sales lines.
The Unit Price on the Item Card is copied to Unit Price Incl.
Check mark Check mark
VAT field on the sales lines.
If the Prices Including VAT function is set up on customers and vendors, you do not have to change
the settings on the sales or purchase document headers. However, if amounts on individual
documents have to include or exclude VAT, the Prices Including VAT check box in the header can be
changed.
If you change the Prices Including VAT setting in a sales or purchase document header, you receive a
message that asks you to update the unit price or direct unit cost on the lines. If you change the
Prices Including VAT setting, any manual changes that you make to the unit prices or direct unit costs
are overwritten.
Adjust VAT Amounts in Sales and Purchase Documents and Journals

Sometimes it's necessary to adjust VAT amounts in sales and purchase documents and on
journals. And one of the situations in which this might be necessary is if there are small running
differences between what appears on the vendor invoice and what is calculated in Business
Central. So, for example, suppose that we have received vendor invoice of 100 with 24.99 VAT, and
Business Central calculates 125 VAT, then you see that there is small difference that we need to
adjust. So let me demonstrate how we can do this. So here in Business Central, the first thing I will
have to take care for is setup. And, first of all, we will have to allow these VAT differences in the
sales and the purchase setup. So let me go to the purchase and payables setup. So if I open the
purchases and payables setup, you can see here the field allow VAT difference. Now, if this field is
not selected, I will not be able to adjust that amount based on the example I just showed you on the
slide. So if I receive a vendor invoice with a small difference, I will not be able to adjust the VAT
amount. Now, in order to be able to adjust the VAT amount, I will have to select this field. You will
find -- you will find the same field in the sales and receivables setup. So also for sales and receivables
you can specify whether VAT differences can be adjusted. Now, this is a first setting, but there is also
a very important second setting, and that's one that we need to do in the general ledger setup. So
let me go to the general ledger setup, and here I will need to set the maximum VAT difference
allowed. Because, as I've just showed you in my example, if there's a rounding difference of 0.01, for
example, that's something that indeed can be considered as a rounding difference. But if there
is a difference of let's say 3 on a total amount of 100, then that's not a rounding difference
anymore; that's a calculation error, and there you will probably have to ask a new vendor
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invoice. So and for that reason, in order to prevent users to adjust amounts that are too high, I can
set here the maximum VAT difference allowed. So in most of the cases this is something like 0.1 or
0.05. So let's, for example, set 0.05. So this is now the maximum amount that we can adjust. So
let's look at an example, and I will create a new purchase invoice, and let's follow the example we
just saw on the slide. So I will enter Vendor 10000. Then we already entered the vendor invoice
number because that's a mandatory field, as we know. And next I will go to the lines. I will enter the
type G/L account, and let's look for an expense account. For example, office supplies. Quantity is 1,
and the total amount is 100. So here you see now that Business Central indeed calculates 125, so the
total of 125, but suppose now that we see 24.99 appearing as VAT amount on the vendor invoice. So
then I will have to adjust the VAT amount. But that's something I cannot do here on the purchase
header. To adjust the VAT amount, I need to go to the statistics. So that's very important. Open the
statistics. There you can see the general statistics such as the total amount and so on. But here on
the lines, if you click on the VAT amount, this is now an editable field. Now, the fact that this is
editable is because I have allowed VAT differences in the purchases and payables setup. But then
there's also the second setting, which is very important, because if I tried to change this to let's say
26, you will see that this will not work, and the reason is the maximum VAT difference allowed. So
let's revert the change. There we go. But in this case I don't need to change this to 26; I only need to
change it to, for example, 24.99 in my example, and this is no problem at all. So this is something
that the system accepts, and the total amount is now 124.99. And that's also what will appear now
on the purchase header. So now I can go and post the document, and now I have posted exactly the
same VAT amount as those that were invoiced by the vendor.
Unrealized VAT
Microsoft Dynamics 365 Business Central provides the options to process unrealized VAT. VAT is
typically calculated when the invoice is created but is not due or realized until the invoice is paid.
Unrealized VAT Setup
To process unrealized VAT, the Unrealized VAT check box must be selected in the General Ledger
Setup page. You must define how and when VAT is realized in the Unrealized VAT Type field in
the VAT Posting Setuppage. If the default value is blank, this indicates that unrealized VAT is not
calculated for the combination of the VAT business and the VAT product posting groups.
If you must calculate unrealized VAT, the five options that available are:
• Percentage: Each payment covers both VAT and the invoice amount in proportion to the
payment's percentage of the remaining invoice amount. The paid VAT amount is transferred
from the unrealized VAT account to the VAT account.
• First: Payments cover VAT first and then invoice amounts. The amount transferred from the
unrealized VAT account to the VAT account equals the payment amount until the total VAT is
paid.
• Last: Payments cover the invoice amount first and then the VAT. No amount is transferred
from the unrealized VAT account to the VAT account, until the total amount of the invoice,
excluding VAT, is paid.
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• First (Fully Paid): Payments cover VAT first (as in the First option), but no amount is
transferred to the VAT account until the full VAT amount is paid.
• Last (Fully Paid): Payments cover the invoice amount first (as in the Last option), but no
amount is transferred to the VAT account until the full VAT amount is paid.
As soon as the Unrealized VAT Type is selected, enter the accounts that unrealized VAT posts to in
the following fields:
• Sales VAT Unreal. Account

• Purch. VAT Unreal. Account
• Reverse Chrg. VAT Unreal. Acc.
VAT Statements
Most companies are required to periodically submit a VAT declaration. The VAT statement is used to
specify the basis for calculating the VAT that is payable to the tax authorities. The VAT statement is
defined based on the following:
• Accounts in the Chart of Accounts window

• Entries in the VAT Entries window
The advantage of using the VAT entries is that you can close these entries by posting the VAT
settlement. When you work with VAT entries, you can locate VAT correction entries in previous
accounting periods, where the VAT statement is created.
In Microsoft Dynamics 365 Business Central, the VAT statement is typically only defined during the
initial company setup, and it is set up with the format that is required by the tax authorities.
Additionally, it can be previewed and printed after it is defined.
VAT Statement Templates and Names
Before you can create a VAT statement, you must create a VAT statement template. To create a VAT
Statement Template, follow these steps:
• Select the lookup icon, enter “VAT Statements Templates”, and then click the related link.
• Click New.
• In the Name field, enter a unique name for the template.
• In the Description field, enter a short description for the template.
To assign statements to a template, follow these steps:
• On the VAT Statement Templates window, select the relevant template.

• On the Navigate tab of the ribbon, click Statement Names.
• In the Name field, enter a unique name for the statement.
• In the Description field, enter a short description for the statement.
The VAT Statement is now defined in the VAT Statement window.
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Sometimes you could have different VAT reporting requirements, such as when you are reporting to
different government authorities or to different governments. When this is required, you must
create different VAT statements. If different VAT Statements are created based on the same
template, different names are created in the VAT Statement Names window.
VAT Statements
When the VAT business posting group and the VAT product posting group transaction posts, the
system processes the VAT amounts on the G/L accounts according to how they are defined in the
VAT Posting setup. Then the VAT entries are created.
You can use the VAT Statement window to calculate the VAT settlement amount for a specific
period. By defining the VAT Statement window, you determine how the statement is calculated and
how it appears when it is printed. Each line in the VAT statement represents a filter on the G/L
Entry table or the VAT Entry table.
The following list describes the fields that appear on the VAT Statement:
• Name: Accesses the VAT Statement Names window. New statement names can be set up or
existing statements can be selected.
• Description: Description of the VAT statement line. It is recommended that you use the
description from the customs and tax authorities VAT statement form.
Type: Determines what the VAT statement line includes. The following options are available:
o Account Totaling: Used when VAT is totaled by using G/L Account entries. If this is
selected, the Account Totaling field must be filled in with the G/L account range to
total.
o VAT Entry Totaling: Used when VAT is totaled by using VAT entries. If this is selected,
you must fill in the following fields:
▪ Gen. Posting Type
▪ VAT Bus. Posting Group
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▪ VAT Prod. Posting Group

▪ Amount Type
o Row Totaling: Used to define the totaling of other rows in the VAT statement. If this is
selected, the Row Totaling field must be filled in with the row range to total.
o Description: Used when the row is to contain only text or symbols, for example, a
dotted line.
• Account Totaling: If Account Totaling is selected in the Type field, specify the G/L account
interval or a series of G/L account numbers to be included in the row total.
• General Posting Type, VAT Bus. Posting Group, and VAT Prod. Posting Group: If VAT Entry
Totaling is selected in the Type field, the appropriate value for the row must be specified in
each field. These fields determine the VAT entries that are totaled from the VAT Entry table.
• Amount Type: If VAT Entry Totaling is selected in the Type field, specify whether the totaling
of VAT entries will consist of VAT amounts or the amounts on which the VAT is based. The
options are as follows:
o Blank: No amount is totaled.
o Amount: The VAT amount in the selected VAT entries is totaled in the row.
o Base: The Base amount used to calculate the VAT in the selected VAT entries is totaled
in the row.
o Unrealized Amount: The Unrealized VAT amount in the selected VAT entries is totaled
in the row.
o Unrealized Base: The Unrealized base amount used to calculate the unrealized VAT in
the selected VAT entries is totaled in the row.
• Row Totaling: If Row Totaling is selected in the Type field, the row number interval or the
series of row numbers that should be included in the row total must be specified.
• Calculate With: Determines whether Microsoft Dynamics 365 Business Central reverses the
sign of VAT entries when it performs calculations. The options are as follows:
o Sign: Uses the sign of the VAT entry.
o Opposite Sign: Uses the opposite sign of the VAT entry.
• Print: If this is selected, the row is printed on the VAT Statement.
• Print With: Determines whether amounts on the VAT statement are printed with their
original sign or with the sign reversed. The options are the same as in the Calculate
With field.
• New Page: If this is selected, a new page begins immediately after this row when the VAT
statement is printed.
VAT Settlement
Periodically, the net VAT must be remitted to the tax authorities. To calculate this amount, run the
Calc. and Post VAT Settlement batch job. The following list describes some specifics that are related
to this batch job:
• Calculates VAT settlement of open VAT entries in previous accounting periods.
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• Finds all the VAT entries in the VAT Entry window—for every VAT Posting Group combination
that is included in the filters in the batch job.
• Use it to start the posting process or to print a test report.
• Run it as frequently as it is needed.
Running the Calc. and Post VAT Settlement Batch Job

Now, calculating and posting the VAT settlement is something that you would typically do after
creating the VAT statement. So let me show you this. If I use the search function to search for the
calculate and post VAT settlement, there we go, I, first of all, need to enter starting date and the
ending date. So, again, like I just said, in most of the cases this is based on your VAT period. And
suppose that we have created the VAT statement for January 20, then I can enter the 1st of January
2020 until the 31st of January. The posting date in most of the cases is the same as the ending date,
so also here 31st of January, and then the document number. So let me just enter SET001 as
document number. And also very important, the settlement account. So basically what the system
will do is balance each VAT G/L account, and the total balance will be posted to the settlement
account. So in general the amount posted to this account is the amount that we should pay to the
VAT authorities. So in this case, I will use account 5780. And in case you didn't notice, this is the VAT
payable account of Cronus International. Next you can specify if you want to -- if you want to show
the VAT entries, if you want to post immediately. Suppose that you first want to run this report as a
test report, don't select the post field. And if you want, you can also show the amounts in the
additional reporting currency. But I will stick with the local currency. Also something that you can
do, but that I will not do here, is filtering on the VAT posting groups. But I will leave them blank. And
then next, if you click on the, for example, send to or print or preview, the system will run the
function. So let's go and have a look. So here you can see the report with all the different
entries. So if I enlarge this a little bit there you can see the detail. So with the different VAT posting
groups, the amounts, the VAT amount and so on. But more interesting is the posting the system
did. So let's go ahead and open the G/L registers. So in here, by looking at the source code, you can
already tell that this is related to VAT, so the VAT statement. But if I now click on general ledger, you
can see the actual posting the system did, and you can see indeed all the different VAT G/L accounts
have been balanced out, so -- and the total balance is posted now to the VAT settlement
account. And so for January 2020, Cronus International needs to pay 1,260.06 VAT. So when the
payment is done, you can post it to the VAT settlement account, which will also be balanced to
zero. You see? So that's the result, the general ledger result of running the VAT settlement
batch. But also in the VAT entries you can see of course the result of running the function. So let's
go to the VAT statement preview. And if I now click on preview, so I can see now the VAT statement
with all the different amounts. Let me enter a date filter. So I will take the first period of 2020. And
we still see all the amounts because the include VAT entries is set to before and within period. But if
I change this to within period, you see that we don't see any amounts anymore. Why is this? Well,
very simple. Because we only include the open VAT entries. And running the VAT settlement batch,
like I just did, will close the VAT entries of that specific period. So these VAT entries, of course, still
exist, but they're closed. And that's something that you see if you switch from open to
closed. There you see the column amounts again, and let me click on one of these fields to go
to the detailed VAT entries. If you now scroll to the right, besides all the information on
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amounts and so on, you can see now that the closed field is enabled. So for each entry of January
2020, the closed field is selected, which means literally that they are closed. And for that reason,
again, if I would filter on open entries, these amounts are not displayed anymore. So that's the result
of running and also posting the VAT settlement for a specific period.
Module Review
In this module, we worked with VAT in sales and purchase documents, and we also reported VAT
using VAT statements. Please note that if you want to learn more on setting up VAT, follow the
application setup in Microsoft Dynamics 365 Business Central course.
Module 10: Prepayments

Module Overview
If advanced payments are required, both for sales and purchases, you can post prepayment invoices
from sales and purchase orders. Now, before we compose these prepayment invoices, we will first
set up prepayments in Business Central and assign prepayment percentages to customers and
vendors.
Setup Prepayments
To use prepayments, you must set up the following:
• Assign general ledger accounts on general posting groups for prepayments Number series for
prepayment documents
• Prepayment percentages for selected vendors and customers
• Prepayment percentages for combinations of:
o Customers, customer price groups, or all customers and items
o Vendors and items
• Check boxes to require before the posting of sales shipments or purchase receipts:
The receipt of prepayment amounts that are from customers for sales
The issue of prepayment amounts that are from vendors for purchases
Set Up General Posting Groups
Because the prepayment amount belongs to the buyer until he or she has received the goods or
services, companies must set up general ledger accounts to post the prepayment amounts until the
final invoice is posted. To recognize ownership, companies must set up Microsoft Dynamics 365
Business Central to record:
• Customer prepayments in a liability account until the items are shipped.

• Vendor prepayments in an asset account until the items are received.
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These general ledger accounts must be assigned to the relevant general posting setup combinations
on the General Posting Setup page. To complete this setup, follow these steps:
• Select the icon, enter “General Posting Setup”, and then click the related link.
• For every line that contains a combination of general business posting group and general
product posting group that requires sales or purchase prepayments, enter the following:
o In the Sales Prepayments Account field, enter the number of the general ledger
account to use for posting sales prepayment amounts.
o In the Purch. Prepayments Account field, enter the number of the General Ledger
account to use for posting purchase prepayment amounts
Set Up Number Series

Companies must set up a number series for every type of prepayment document that is used. The
prepayment documents are as follows:
• Sales prepayment invoices

• Sales prepayment credit memos
• Purchase prepayment invoice
• Purchase prepayment credit memos
The same number series can be used for:
• Prepayment invoices and credit memos

• Regular invoices and credit memos
Alternatively, you can use a different number series. When you use a different number series, each
number series must be unique so that you can browse effectively on posted transactions.
To set up a prepayment number series for sales, follow these steps:
• Select the icon, enter “Sales & Receivables Setup”, and then click the related.
• Expand the Numbering FastTab.
• In the Posted Prepmt. Inv. Nos. field, enter the number series to use to assign numbers to
sales prepayment invoices when they are posted.
• In the Posted Prepmt. Cr. Memo Nos. field, enter the number series to use to assign numbers
to sales prepayment credit memos when they are posted.
To set up a prepayment number series for purchases, follow these steps:
• Select the lookup icon, enter “Purchases & Payables Setup”, and then click the related.
• Expand the Numbering FastTab.
• In the Posted Prepmt. Inv. Nos. field, enter the number series to use to assign numbers to
purchase prepayment invoices when they are posted.
• In the Posted Prepmt. Cr. Memo Nos. field, enter the number series to use to assign
numbers to purchase prepayment credit memos when they are posted.
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Set Up Prepayments Verification

When users post a prepayment invoice to a customer or vendor, they can set up Microsoft Dynamics
365 Business Central to verify that prepayments that are due from a customer are received and
prepayments that are due from a vendor are issued. This feature makes sure that inventory is not
shipped to a customer or received from a vendor before the prepayment invoice is applied.
To set up the prepayments verification when you post sales, follow these steps:
• Select the lookup icon, enter “Sales & Receivables Setup”, and then click the related.
• Expand the General FastTab.
• Select the Check Prepmt. When Posting check box to prevent the posting of invoices before
the receipt of the prepayment amount.
To set up the prepayments verification when you post purchases, follow these steps:
• Select the lookup icon, enter “Purchases & Payables Setup”, and then click the related.
• Expand the General FastTab.
• Select the Check Prepmt. When Posting check box to prevent the posting of invoices before
paying the prepayment amount.
Assign Prepayment Percentages

Companies can specify a default percentage for prepayments to use for all sales for customers and
for all purchases that are from vendors. As soon as the percentage is specified, it is automatically
populated on the Prepayment FastTab of the sales or purchase order header and will be copied to all
sales or purchase order lines. Then the prepayment percentage is calculated on the total sales or
purchase amount of the order.
How to Assign Prepayment Percentages

Let's now have a look at how we can assign prepayment percentages, and this diagram shows how
we can do this on a customer and vendor level, and we have a bit more possibilities what customers
are concerned. So for vendors, it's quite simple. You can assign a percentage on the vendor card,
which means that it applies to all items that we order from the vendor, and even more than items,
also services, G/L accounts, or you can combine it with a specific item. For customers we can do the
same. So all items, which means directly on the customer card or for a specific item. But for
customers, we also have the option to group customers by using the customer price group or to
assign a percentage for a specific item for all customers. So let's look at these possibilities in
Business Central. So let me start with vendors. So if I go to a vendor and if I open the specific vendor
card, there we go, I can scroll down to the payments FastTab, then click on the show more link, and
there we can see the prepayment percentage that appears. So, for example, if I would enter 20
percent, this means that the system will calculate 20 percent on each order line that we enter for this
vendor. So if we order items, but also if we order an expense directly on a G/L account, for example,
the system will use the 20 percent to calculate the prepayment amount per line. Now, instead
of entering the percentage on the vendor card, I can also go to navigate. And here in the
purchases group, you can see the option or the action to go to the prepayment
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percentages. And like we just saw on the diagram, we can here make a combination with an item
number. So if this vendor requires, for example, a specific percentage for an item, so let me take the
Paris guest chair as an example, I can then combine it with a starting and an ending date and enter
the prepayment percentage. For example, 30. You see? You can of course also use the combination,
like I'm doing right now. So the general percentage is 20. The more specific percentage for this item
is 30. And you will see that Business Central always uses the most specific percentage. In this case
the combination of item and vendor. Let's look at the same for customers. And there like we
already saw, there are a few additional options. But we can start in the same way. So I can go to a
specific customer. So, for example, Customer 20000. And also here let's go and have a look at the
payments FastTab because also there I can now enter the prepayment percentage. So, for example, I
would like to use a percentage or enter a percentage of 30, which means that this customer has a
prepayment requirement of 30 percent for whatever they order. So items but also resources,
whatever. So they should pay 30 -- they should prepay 30 percent. But also here it's possible to set
it up more specifically. So if you go to navigate, I can go here to the prepayment percentages
action. There we go. And here we can also make the combination of item and customer. But
besides item and customer, you can also combine with the customer price groups and even for all
customers. Now, suppose for this specific customer I would like to set a prepayment percentage for a
specific item. That's something that I can do, then, from the item card. So, for example, let's take
Item 1960-S. Also here you can combine this with the starting date and ending date and then enter
the percentage. For example, 40. Now, suppose that you want to set a prepayment percentage for a
specific item for all customers. You can also do this from an item. And suppose that for a specific
item we require a prepayment percentage for all customers, first of all, I will look up the item. So
let's take, for example, the Athens desk. And also here, if I go to navigate, there's the group
purchases where I can enter a prepayment percentage for a specific vendor. But in this case, I'm
more interested in sales because I would like to enter a prepayment percentage for all
customers. Because with vendors, it's always one-on-one. But with customers, I can now go to the
prepayment percentage page, which is exactly the same as in my previous example. But here instead
of customer, I will select all customers. And for this item, let's say starting on the 1st of January until
the 31st of January, each customer should prepay, for example, let's take 50 percent. And the 31st
doesn't work, of course, because I have entered the 1st of February. So let's correct this, and that
should be a bit better. OK. So there we go. So for this item, again, the Athens desk, each customer
should pay 50 -- should prepay 50 percent but only in January 2020. You see? So that's another
option of setting up prepayment percentages. And then last but not least, the customer price
group. Now, suppose that you want to group your customers and set up different percentages per
group. That's also something that we can do. So let me search for the customer price group. There
we go. And you also can use these price groups, of course, to assign specific prices per customer
group, but you can also use it for prepayment percentages. So let me first enter two groups. Next I
can go to navigate. Sorry. Here, you can only set up prices. So first I need to create the price groups,
and then I need to go back to items. Because in most of the cases, you also want to assign
percentages for items for a specific group. So let me do this again. And I will select, for example,
let's take the London swivel chair as an example. Let's go to the item card. Then I will click on
navigate, sales prepayment percentages. And now instead of using customer or all customers, I
will of course use customer price group. And then in the sales code field, I will select the price
group. So let's start with retail. So and also here, let's use a starting date and an ending
date. And the prepayment percentage for this group for the first two months of 2020 is,
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for example, 35 percent. And then on the second line, I can enter a customer price group, and in this
case wholesale for the same item, and let's use the same dates. But in this case they only need to
prepay, for example, 20 percent. You see? So I can assign different percentages per customer price
group. So these are the different possibilities we have in assigning prepayment percentages to
customers, vendors, and items.
Process Prepayment Sales and Purchase Orders

Let's now have a look at how we can process prepayments, and the examples I will make are
examples with customers and sales documents. But for vendors and purchase documents, it works
in exactly the same way. First of all, I will go to a customer. So I will take Customer 20000, and
remember in the previous lesson I've entered a prepayment percentage of 30. And I will also assign
now a customer price group. Because also in the previous lesson I have linked prepayment
percentages for a specific item to customer price groups. And suppose that this customer is a
wholesaler. So there we go. Let's now have a look at how we can work with prepayments, and I will
start with a very simple example. So let's create a new sales order for Customer 20000. So I will
enter a number, and next I will enter the customer. And so the customer has an overdue
balance. That's fine for this example. But more important let's focus on prepayments. And if you
scroll down, you see that there is a prepayment FastTab already showing some information. So here I
can see the prepayment percentage. So retrieve from the customer card 30. But notice that the
percentage is editable, which means that everything that you enter on customer vendor items are
only default values that you can still modify on a document basis. So if I would like to use 40 or 20 or
maybe even no prepayment percentage for this order, I can perfectly do this. But, OK, let's stick with
the 30, the default value for this customer. Then another thing that you see is compress
prepayments. That's something that the system will use to combine sales order lines based on the
VAT -- sorry, based on the posting group setup. So suppose that I'm selling tables and chairs. They
have the same posting groups, for example, the system will then create one prepayment invoice
line. If you don't compress prepayments, you will see that there's a prepayment invoice line per
sales order line and that the description is the same. Then there's a prepayment payment term, 14
days, with a prepayment due date, maybe a prepayment payment discount, and the payment
discount date. So these are fields that can be used to encourage customers, for example, paying the
prepayment invoice as soon as possible, because then they might get a prepayment
discount. OK. For this first example, I will leave everything as it is. So let's collapse the FastTab
again, and let's now enter a line. So I will go here to the first line, I will enter item. And so, for
example, the item that the customer is ordering, some side panels from location blue, let's take 300
pieces. OK. So there we go. And you can see now the total amount. So 7,828.50. And the customer
should prepay. There is a prepayment requirement for this customer, which means that suppose
that I'm trying to post the order, I will get an error message telling me that first we need to create a
prepayment invoice. You see? If there is a prepayment requirement, the first thing you need to do is
post the prepayment invoice. Now, that's something that we can do by going to the actions tab on
the ribbon. And then here, on posting, you can see here that there is a prepayment option, and if I
click, there we go, that there are a number of actions that I can select -- prepayment test report,
post prepayment invoice, and so on. So in this case I will of course use the post prepayment
invoice action, and that will create and post the prepayment invoice. There you go. Also
notice that this is a posted invoice immediately, and so there's not like an unposted
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invoice that you can check and then post. No, the system immediately creates a posted
invoice. Now, if you're working with prepayments, you're probably also interested in the invoice. In
other words, let's go and have a look. If you click on navigate, you can see here that we can navigate
to the prepayment invoices or credit memos. In this case, invoice. So let's go and have a look. And if
I open the invoice by clicking on view, you can see here how the prepayment invoice looks like. So
there's the header and the G/L account that is set up, as you could see in one of the first lessons of
this module, to which the system will post in this case the 30 percent prepayment. Now, so for this
first example, let's now finish the sales order. So I will go back to the sales order. The prepayment
invoice is created and posted. And there is no requirement to first pay the prepayment invoice,
because that's also something that you can set up in the sales and receivables setup, as you saw in
one of the first lessons. But in this case, this is not required for Cronus, and this means that by
clicking on post, they can now finish the sales order. So let's do this. And I would like to see the
posted invoice because there you will see how the system processes the prepayment. So, first of all,
there's the invoicing of the 300 side panels. And, as expected, you can see that there's a line with a
negative quantity of the prepayment, which means that, of course, the customer now only has to pay
the net amount. So that's the first example of how we can process prepayments. Let's now look at
the second example. And here instead of using the percentages, I would like to enter a prepayment
amount. And also this is something that is possible. So I will do this by creating a new sales
order. And this can be for any customer. I can use the customer with a prepayment percentage,
which can also use another customer, but to show you how the amount is calculated, let's use
Customer 20000. And also here in this case we're selling an item, so, for example, the London swivel
chair from location blue, and quantity, for example, let's take 24 pieces. There we go. So, again, we
have a total amount excluding VAT, 2959.20 in my case, and this will of course result in also a
prepayment invoice. But, first of all, before posting the invoice, I would like to see the total
prepayment amount. So and that's something that you can do by going to the statistics. So if I open
the statistics of this document, there we go, you can see here the total amount. So let me expand
the prepayment FastTab. And the total amount that the customer should prepay for this order is
591.84. But as you can see here, this amount or this field is editable. So and this means that I can
enter any amount. And so, for example, I would like to use a round amount like 600, I can perfectly
enter this. So no problem at all. And this means that when working with prepayments, you can also
enter amounts directly, so overrule the percentages but enter the amount.
Module Review
This module covered the prepayments function in Microsoft Dynamics 365 Business Central. It
allows you to send prepayment invoices to customers or to process purchase prepayment invoices.
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Module 11: Accounting Periods

Module Overview
When working with the general ledger application area in Business Central, it's important to set up
accounting periods and fiscal years, because they represent time references that you use in, for
example, financial reporting. Now, besides setting up accounting periods, I will also demonstrate
how to close a fiscal year in Microsoft Dynamics 365 Business Central.
Accounting Periods Window

With accounting periods users can create time references in Microsoft Dynamics 365 Business
Central. A fiscal year consists of several accounting periods. The shortest possible fiscal year consists
of one accounting period with one day. This means that you can set up accounting periods that are
different from a calendar year.
You can use the Accounting Periods window to do the following:
• Open new fiscal years

• Define accounting periods
• Close fiscal years
You can use accounting periods in reporting. For example, when you are reviewing posted entries in
aBalance/Budget window where the reporting interval can be specified, one of the options you may
specify to report by accounting period.
The Accounting Periods window contains the following fields:
• Starting Date: Specifies the date that the accounting period will begin. This can but does not
have to be the first day of the month. You can change the starting date of a period manually
when the Date Locked check box is empty.
• Name: Specifies the name of the accounting period. As a default, the program will enter the
name of the month that corresponds to the starting date.
• New Fiscal Year: Specifies whether to use the accounting period to start a fiscal year.
• Closed: Specifies if the accounting period belongs to a closed year. By closing a fiscal year, all
periods in the year will be closed.
• Date Locked: Specifies if you can change the starting date for the accounting period. After
closing a fiscal year, there will be a check mark in this field for all the periods in the year, and
the first period of the next fiscal year.
• Inventory Period Closed: Specifies that the inventory period with an ending date equal to or
greater than the ending date of the accounting period is closed.
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Creating New Accounting Periods

So let's now have a look at how we can create accounting periods. And, first of all, let me use the
search function to search for accounting periods. And here you can see the accounting periods of my
demo company, so 2018, 2019, and so on. So we can see the starting date and the name. We can
also see very clearly see when a new fiscal year starts -- and for Cronus, this is on January -- and if a
period is closed and if the date is locked. And remember date locked means that you cannot change
the starting date of the period anymore. Now, to create a new period, I can very simply click on new,
but let me first scroll down to check the last period of my demo company, and that's December
'21. So now if I click on new, I can create, for example, January '22. So the 1st of January '22. The
system will automatically enter the name, and for me the new fiscal year should start here with this
period. So I will select new fiscal year. So there you go. Very easy to create a new accounting period
manually. But if I would like to create the year, this is something I would have to do 12 times. And
there is, of course, a more efficient and a faster way for doing this, and that's using the create year
action. So if you click on create year, the system will automatically suggest the starting date, the
number of periods, and the period length. So the 1st of January '22 is the starting date, 12 periods of
one month, and if I now click on OK, you will see that these 12 periods are created, January through
December, and also January of next year. If I would like to create another fiscal year, I can do the
same. I can click on create here, click on OK, and now '23 is created. And in that way you can create
an unlimited number of periods and fiscal years in Business Central.
Allow and Disallow Posting

To prevent users posting in wrong or closed periods, there are a number of settings that we can do,
and the first one is in the general ledger setup. So let's go and have a look. So there we go. And on
the general FastTab, the first two fields that you see here are the fields allow posting from, allow
posting to. So and these are the fields that I can use to specify within which date range users are
allowed to post. So, for example, only in the 1st of January 2020 until the 31st of January. So this
means that you can now only post in January 2020. If you try to post outside this date range, so let
me show you this very quickly by creating a new purchase invoice for Vendor 10000, so I will try to
post on February 1st, so let's use a G/L account, for example, office supplies, the quantity is 1 and the
direct cost 100, so very simple invoice, and I will also enter the mandatory vendor invoice
number. There we go. So now if I try to post, you will see that this doesn't work because the posting
date is not within my range of allowed posting dates. You see? So from that point of view, this is a
very important setting. So let me go back to the general ledger setup. And so once a period is
closed, so once, for example, that we have reported the period or created the VAT statement or
whatever, so the trigger to close a period, you can go and change these dates. Now, in some cases,
these settings might be too general because they apply to everything for everyone. And maybe you
would already like your salespersons to post in the next period while bookkeepers are still posting in
the previous period. And that's why, besides the general rule that we see here, you can make
exceptions on a user basis. So if I go to the user setup, you can see the same dates here, allow
posting from, allow posting to. So let me click on new, and I will use my own user account, that's the
only one I have, so admin, and in this case I will enter something else than the general ledger
setup. So, for example, the 1st of -- sorry, the 1st of February until the 29th of February, which
means that now these are other dates than in a general ledger setup. And because this is a
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more specific setup, this will take priority on the general ledger setup. So now if I go back to the
purchase invoice I just created, so and this is the one I just created but that I couldn't post because
the date was outside the allowed range, so let's give it another try. Post, yes. So now you see
everything works. And that's because in the user setup, I'm allowed to post in February, and like I
just said, because that's a more specific setup, it takes priority on the general ledger setup.
Closing a Fiscal Year

Closing a fiscal year involves two steps. They are:
• The first step in the year-end closing process is to close the fiscal year. This process manages
the periods and dates for fiscal years.
• The second step is closing the income statement. The Close Income Statement batch job
transfers the income statement account balances to an account in the balance sheet and it
closes the income statement accounts. The Close Income Statement batch job also creates
lines in a journal that are posted manually. You can use the Close Income Statement batch
job multiple times to transfer the income statement account balances. For example, you
might have to do this when the next entries are posted into a closed year.
How to Close a Fiscal Year

Closing a fiscal year in Business Central is done in two different steps. First we need to close the
year, and then we need to close the income statement. And we also need to perform these steps in
this specific order. So let's first go to the accounting periods. And we already saw the accounting
periods in one of the previous lessons, and there we saw that there is a closed field. Now, notice
that you cannot close an individual period. So I cannot close, for example, January 2020. You can
only close all the periods of a fiscal year. And by running the close year function, the system will
suggests -- will suggest automatically the oldest open fiscal year, and for my demo company this is
2019. And by clicking on yes, all the periods of that fiscal year are now closed. So if I scroll down,
you can indeed see now that all these periods are closed. They all have a date locked, and the first
period of the next fiscal year also has a date locked. And, again, remember date lock means that you
cannot change the starting date anymore. So this is the first step. Very easy but very important to
perform this as the first step, because otherwise I cannot perform the second step. And the second
step is closing the income statement. Now, closing the income statement is very important because
that's the step that will balance all your income statement accounts. And if there is a balance, it will
post it to the retained earnings account. Now, before going to the function, let's go to the chart of
accounts. So in here on the chart of accounts, let me open any account. So, for example, land and
buildings. And remember in one of the first modules of this course, we looked at the G/L account
card. And one of the important fields on the G/L account is the income balance fields. And now this
is becoming very important because if you are going to run the close income statement batch, the
system will look at this field and will balance each G/L account that has income statement in this
field. And, for example, this is a typical balance sheet account, so that this means that it's set up
correctly. And this also means that running the income statement batch will not have any
impact on this account. But if I would scroll down or if I would look, for example, for another
account, let's take the office supplies account as an example, there you see that this is an
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income statement account, which is also correct, because this is the typical expense account, and the
account will be balanced by running the income statement batch -- the close income statement
batch. OK. Let's go and look it up. So I will look up close income statement. There we go. So and,
first of all, the system now suggests the ending date of the most recent closed fiscal year. So we just
closed 2019, and that's why now this date -- this field displays the 31st of December 2019. Then
closing the income statement is done through a general journal. So here I will select the
template. So I will use the general template. There we go. There's the general journal batch. So in
this case I will create a new batch. You don't have to, you can just use the default batch. But I prefer
to create a specific batch, a new batch. So, for example, close, for the rest I will just leave all the
settings as they are. Then there's the document number and, very important, the retained earnings
account. So like I just said, the system will balance all the income statement accounts. And if at the
end, if there's a total balance, it will be posted to the retained earnings account. And so, for
example, the loss or the profit that you made. Then the posting description. And also very
important, you can close by business unit. So that's something I will not cover in detail here. This is
related to consolidation. But you can also close by dimension, and that's something that could be
quite interesting. So closing by dimension means that the system will create a closing entry per
dimension combination. So let me click here on the assist edit. So here you can see all the
dimensions. And, as an example, let me select the department dimension. So in there you will see
that the system will create a closing entry for each department. So there we go. Next I can click on
OK, and the system will go ahead and create the journal lines. So let's go and have a look. So if I go
to general journals and if I open my close batch, there we can see now all the lines appearing. And
first of all, what you will notice is that there's the posting date of December 31st, but starting with a
C, and that's what we call closing date. Now, these closing dates are very useful in financial reporting
because posting these general journal lines will balance all my income statement accounts for 2019,
which means that if I would report on my income statement of 2019, by default the system will show
zero because everything is balanced out. But in all these financial reports, there's the option to
include or exclude closing entries. And if I exclude closing entries in a financial report, these closing
dates will not be included, and in that way I can still see expenses, sales and so on of previous closed
years. So that's why it's very important to use the C. Next there's a document number, the account,
and so on. And so let's scroll down a bit. And what you see is that some accounts appear several
times, like the 8110. And that's of course because we are closing by department dimension. So if I
select this line and if I click on dimensions, you can see that this is a line for the sales department. If I
select the next line and if I click on dimensions, this is for the administration department and so
on. You see? So that's the effect of closing by dimension. So the system can create multiple lines for
the same G/L account, so a line per dimension combination. OK. So this is something that I can
check, and once this is checked, I can go ahead and post the closing entries. So let's go ahead now
and post these entries. So I will click on post in the ribbon. Do you want to post the journal lines?
Yes. And everything is successfully posted, which means that now my fiscal year is closed. And in
most of the cases you can tell by looking at the chart of accounts. So if I go to the chart of accounts,
and let me click here on manage and edit list, so there we go, next I will -- sorry, I will collapse the
FactBox and scroll a bit to the right to see the net change of each account. And for my balance sheet
account, the total net change is still appearing because they are not closed. But if I scroll down to
my income statement accounts, you see that if you compare the amounts with what we had
before, you will see that the amounts are much lower. And I will also display a specific
example. So let's take, for example, sales. So before the amount was much higher, now it
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only displays 10,503.70. And the reason of course is the closing. And so if I look at all the general
ledger entries here, you can see these entries of 2020, so only a few of them totalling to the amount
we just saw, but the closing resulted in an entry of 751,114.33. So this has closed all the entries of
2019. And, again, as an effect, as a result, the system only shows here the net change of 2020. So
that's the result of closing the income statement.
Module Review
In the last module of this course, we saw how to create accounting periods and close fiscal years. If
you want, you can now join me for the course review.
Module 12: Course Review

Course Review
To wrap up, I would like to thank you for being with me on the course. I realize this was a long and
intense course, so congratulations that you made it to the end. I hope to see you in one of the other
courses on Microsoft Dynamics 365 Business Central.
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Financial Essentials in Microsoft Dynamics 365

Invoicing Options ....................................................................................................................... 27

Payment Discounts .................................................................................................................... 61

How to Assign Prepayment Percentages .................................................................................. 90

Module 00: Introduction

Module 01: Getting Started with Finance

Finance Focused Role Centers

Finance Master Data

Module 02: Chart of Accounts

G/L Account Card

Create an Account in the G/L Account Card

G/L Account Categories

Maintaining G/L Account Categories

Assign Dimensions to G/L Accounts

Assign Dimensions to a Single Account

Maintaining the Chart of Accounts

• Adding and modifying accounts

• Consulting the Where-Used List

The following lesson demonstrates how to perform these actions.

How to maintain the Chart of Accounts

Using the Navigate Function

Module 03: General Journals

Creating Journal Entries

• Single entry lines without a separate balancing account line

• A positive amount represents a debit to the account

How to Create Journal Entries

Processing Journal Entries

• On the Actions tab, choose Preview Posting.

The Preview Posting function is available on following journals and documents:

To post the general journal, follow these steps:

• On the ribbon, select Post.

• Created only for journals of the type General

• Contains special fields for managing recurring transactions

Monthly accrual of an electricity invoice is

Recording variable expense invoices if

The balance of the account on the line

The amount on the journal line

Monthly accrual of an electricity invoice is

Processing Recurring Journals

• %1 = The day number of the period posting date

• %3 = The month number of the period posting date

Module 04: Processing Customer and Vendor Invoices

• Invoicing one shipment:

• Invoicing one receipt:

Processing expenses or purchased services is generally done by directly creating a purchase

Processing Vendor Invoices

Correcting Posted Invoices

Module 05: Cash Management - Receivables and

Bank Account Overview

• In the Bank Accounts window, select the New action.

Bank Account Card Fields

Customer and Vendors in Cash Management

Analyzing Receivables and Payables

• Foreign currency exchange rates

Cash Receipt Journal and Payment Journal Overview

Entering Payments in the Cash Receipt Journal and Payment Journal

• apply a payment to multiple customer ledger entries

Applying Payments Scenarios

Reconcile Payments with the Payment Registration

Suggest Vendor Payments

Use the Suggest Vendor Payments Batch Job

Number of Starting Document

One payment line for each open vendor ledger entry