Setting up balance accounts
The balance account specified on a vendor payment defines the company bank account that will be used for the transaction. Payment Management also uses the balance account to validate the payment, as the requirements to the payment information is depending on the bank and the bank account.
We recommend that you apply a balance account to all your vendors. This makes it possible for Payment Management to validate the payments when creating the purchase document. See the guide To update balance account on several vendors at one time.
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.
You can set up the balance account the following places:
The vendor card
When you specify the balance account on the vendor card, a balance account is automatically applied to all purchase documents for the given vendor. See the guide To specify a balance account on the vendor card.
The purchase document
If there's no balance account specified on the vendor card, you can specify it directly on the purchase document. By default, it is mandatory that a balance account is specified on the purchase document. You can change this setting in the Payment Management Setup.
The payment journal
When you specify the balance account on the payment journal, only payments that have the given balance account, or payments without a balance account can be created in the journal. See the guide To define the balance account on the payment journal.
The balance account setup
If there's no balance account specified on a payment or on the payment journal, the balance account will be selected based on the currency of the payment. This is set up in the Balance Account Setup.
- Use the icon and search for Vendors, then select the related link. This open the list of vendors.
- Open the vendor card, for which you want to define balance account.
- On the vendor card, on the Payments FastTab, select Payment Information.
- In the field Balance Account No. choose the bank account from which you want to pay the vendor.
- Use the icon and search for Vendor Payment Information Setup, then select the related link. This will open the assisted setup of vendor payment information.
- 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.
- Select Next to go to step 3 in the guide, which will give you a list of all vendors.
- 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.
- Choose Next to go to step 4 in the guide.
- On step 4, enable the Update open Vendor Ledger Entries function, to apply the balance account to open vendor ledger entries.
- Choose Next to go to step 5 in the guide, and finish the guide by selecting Finish.
The requirement for a balance account on purchase documents is by default enabled. This means that when you post a purchase document without a balance account, you'll be reminded to specify a balance account on the document.
- Use the icon to search for Payment Management Setup, and then select the related link.
- On the Purchase and Payments FastTab, enable or disable the Balance Account Requirement setting as needed.
The Balance Account Setup will be used if the payments don't already have a balance account defined, and if a balance account hasn't already been defined for the given payment journal.
- Use the icon and search for Balance Account Setup, then select the related link. This will open the balance account setup page.
- On the list, select the currency for which you want to define a default balance account.
- In the Balance Account No column, use the dropdown arrow to choose the default bank account for paying vendors in the given currency.
- 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.
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.
- Use the icon and search for Payment Journal, then select the related link. This will open a payment journal.
- On the payment journal header go to the Batch name selection, and select the . This opens the General Journal Batches.
- In the general journal batches list, select the payment journal for which you want to define Balance Account No..
- On the general journal batch, select the Payment Management Journal check box.
- 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:
- Use the icon and search for Payment Journal, then select the related link.
- On the payment journal, in the action bar, select Prepare > Payment Journal Setup
- On the Payment Journal Setup page, in the Bal. Account No. field, choose the balance account number to use for the given payment journal.
If payments created by a payment suggestion don't have a balance account specified, you can add a balance account manually to the lines. To do that, select Prepare > Set Balance Account No., specify the relevant balance account number, and then in the Update field, specify for which lines you want to update the balance account number.