Setting up balance accounts

The balance account stated on a vendor payment, defines the company bank account that will be used for the transaction. Payment Management uses the balance account to validate the payment, as the requirements to the payment information is depending on the bank and the bank account. Beside from defining which balance account should cover the payment, It is also important to define a balance account, in order for Payment Management to validate the payment.

Tip

We recommend that you apply a balance account to all your vendors, as this will make it possible for Payment Management to validate the payments when created on the purchase document. See the guide To update balance account on several vendors at one time.

Overview of balance account setup

Balance accounts can be set up several places in Business Central, and each setup defines when the balance account is applied to the payment. We recommend that the balance account is applied as early in the payment process as possible. See the description below, for more information on when a setup is used for applying a balance account to the payment.

Balance account on the vendor card: You can define the balance account directly on the vendor card. This ensures that a balance account is automatically applied to the purchase document for the given vendor. If you wish to apply balance account to several vendors at one time, you can use the assisted vendor payment information setup - this feature is descried in the section To update balance account on several vendors at one time.

Balance account on the purchase document: If no balance account has been defined on the vendor card, you can define it directly on the purchase document. If a balance account is required on the purchase document - this is a setting defined on the Payment Management setup page - then an error message will appear, if you try to post the purchase document without a balance account.

Balance account on the payment journal: Balance account can also be defined directly on the payment journal. In this case, only payments that has the given balance account, or payments that have no balance account can be created in the journal. If payments created by a payment suggestion do not have a balance account, the balance account defined for the payment journal will be applied to the payments. See To define balance account on the payment journal for more information.

Currency determined balance account: If no balance account has been specified on the payments nor on the payment journal, then the balance account setup will determine which balance account to apply to the payments, depending on the currency of the payment. This setting must be activated on the payment journal setup. For information on how to set up balance accounts in accordance to currency, see To set up currency determined balance account.

To define balance account on the vendor card

  1. Use the Search for page or report icon and search for Vendors, then select the related link. This open the list of vendors.
  2. Open the vendor card, for which you want to define balance account.
  3. On the vendor card, on the Payments FastTab, select Payment Information.
  4. In the field Balance Account No. choose the bank account from which you want to pay the vendor.

To update balance account on several vendors at one time

  1. Use the Search for page or report icon and search for Vendor Payment Information Setup, then select the related link. This will open the assisted setup of vendor payment information.
  2. In step 2 in the guide, in the Payment Method (New) column, choose the same payment method as given in the Payment Method (Current) column. This will import all vendors to the guide, with the given payment method, without updating the payment method.
  3. Select Next to go to step 3 in the guide, which will give you a list of all vendors.
  4. In the list of vendors, in the Balance Account No. column, choose a balance account number on those vendors which balance account must be updated.
  5. Choose Next to go to step 4 in the guide.
  6. On step 4, enable the Update open Vendor Ledger Entries function, to apply the balance account to open vendor ledger entries.
  7. Choose Next to go to step 5 in the guide, and finish the guide by selecting Finish.

To enable balance account requirement on purchase documents

  1. Use the Search for page or report icon and search for Payment Management Setup, then select the related link. This will open the Payment Management setup page.
  2. On the Purchase and Payments FastTab, activate the Balance Account Requirement feature.

Balance account requirement has now been activated. The next time you try to post a purchase document without a balance account, you will be reminded to define a balance account on the document.

To set up currency determined balance account

  1. Use the Search for page or report icon and search for Balance Account Setup, then select the related link. This will open the balance account setup page.
  2. On the list, select the currency for which you want to define a default balance account.
  3. In the Balance Account No column, use the dropdown arrow to choose the default bank account for paying vendors in the given currency.
  4. Repeat step 2 and 3 to setup more default balance accounts.

When you have finished the setup you can close the page. When generating a payment suggestion in the payment journal, Payment Management will now use the balance account setup to define which balance account to apply to vendor payments that do not have a balance account defined.

Tip

If you leave the box Currency blank and choose a Balance Account No. then the given balance account will be used as default balance account for local currency payments.

Note

The balance account setup will only be used if the payments do not already have a balance account defined, and a balance account has not already been defined for given payment journal.

To define balance account on the payment journal

  1. Use the Search for page or report icon and search for Payment Journal, then select the related link. This will open a payment journal.
  2. On the payment journal header go to the Batch name selection, and select the Search for page or report. This opens the General Journal Batches.
  3. In the general journal batches list, select the payment journal for which you want to define Balance Account No..
  4. On the general journal batch, activate the Payment Management 365 journal box.
  5. Fill in the Bal. Account Type and the Bal. Account No., if you want a fixed balance account to be used for this journal. Otherwise, leave the Bal. Account No. field blank and use the alternative method described below.

Alternatively you can:

  1. Use the Search for page or report icon and search for Payment Journal, then select the related link. This will open a payment journal.
  2. On the payment journal, in the action bar, select Prepare > Payment Journal Setup
  3. On the Payment Journal Setup page, in the Bal. Account No. field, choose the balance account number to use for the given payment journal.