How to Set Up Initial Bank Account Balances in Dynamics 365 Business Central

Goal:

Establish the Bank Account’s sub ledger detail in a manner which prepares for processing future bank reconciliations.

Requirements:

• Ending Bank Balance from a current bank statement.
• A list of outstanding checks, outstanding deposits and any other uncleared transactions from the last bank reconciliation in the previous system

Example – Beginning Balances:

In this example, The General Ledger account associated with the Business Central (BC) bank account has already been set up and populated with the correct GL account balance as of the last date in the previous system. In the screenshot below the GL account, “Bank Account,” has a balance of $10,000.00 as of 12/31/2018, and the balance on the associated Bank Account Card shows $0.

To properly establish the BC Bank Ledger detail, General Journal entries will be set up and posted so they do not change any historic GL Account Balances. To do this you need to post transactions that will debt and credit the same GL account but will create Bank Account Ledger Entries which can be used for reconciliations.

• For this example, we will use the following details for establishing the Bank Ledger detail as of 1/31/18:

Setup:

• Make sure that Direct Posting is set to “Yes” on the corresponding BC GL account as shown in the screenshot below.
  • At the end of this process, you should set this field value back to “No” again. or you might have issues reconciling the GL to the bank statement in the future.
  • For this method to work, your Bank Account’s “Bank Acc. Posting Group” needs to be set up properly, associating the Bank Account. In this example, the proper GL Account is “10101” as shown below.

Establishing the Beginning Bank Balance and Outstanding Items:

Create General Journal entries, as shown in the following screen shot, to establish the correct Bank Account Ledger detail from the previous system.

• The columns shown are the minimum values will need to set up in a GL Journal batch.
• BC will create one line in the Bank Ledger for each transaction.
• Also note that the “Bal. Account No.” field value is set up with the same GL Account No. assigned to the Bank Acc. Posting Group used by the Bank Account, as shown in the screenshot above. By setting up the journal in this manner, BC will debit and credit the same G/L account, causing a net zero effect to the GL Account’s balance, while still leaving open Bank Account Ledger Entries.
• If you have many lines you need to import, you can use the Configuration Package tools to speed up the process of setting up these lines.

After posting the above entries, the Bank Account and the G/L Account balances should match, as shown on the left below, and there are Open Bank Ledger Entries that you can use for processing Bank Reconciliations (shown on the right).

 

Initial Bank Reconciliations:

In order to prepare for the first live bank reconciliation (on 2/28/18), we need to post an initial bank reconciliation for 1/31/18. For that first bank reconciliation, we only need to clear the initial entry representing the balance on the 1/31/18 bank statement (and none of the outstanding checks, deposits or other items).

 

In order to get the lines populated with transactions that can be marked as cleared, you’ll need to run the Suggest Lines function, as shown below.

 

When the lines are available, you can mark the bank balance shown on the 1/31/2018 bank statement as cleared as shown below.

 

The value in the Cleared Inc./Dpsts. Per Stmnt field needs to match the line amount in the Deposits/Transfers section that represents the initial bank balance. If filled out correctly, the Bank Reconciliation will post without any errors. If there are errors, fix the issues and post it.

 

For more information please email Lex Edison, Sr. Dynamics 365 Business Central Consultant at ACE Microtechnology, Inc.