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Recognize your own payments on the bank statement

Using the end-to-end reference, 365 business Banking recognizes your own transfers on the bank statement and applies them to the corresponding bank account ledger entry.

When you pay from the payment journal and post, the vendor invoice is already applied, and there is an open bank account ledger entry. When the transfer appears on the bank statement one or two days later, the line must close exactly this bank account ledger entry and not the invoice again.

Background

For an outgoing transfer, the statement shows the name of the recipient. For automatic application, this initially looks like a payment to this vendor. Related party and amount match, so an open vendor invoice of the same vendor for the same amount reaches the match confidence High. The bank account ledger entry that your payment actually created has no related party, because it is posted against the bank account, and only reaches Medium.

Without further checks, the line would be applied to the invoice. The invoice would be applied a second time, and the bank account ledger entry would remain open.

How recognition works

Every payment you carry out through 365 business Banking receives an end-to-end reference. It is sent to the bank with the payment order, stored on the bank account ledger entry and returned with the bank statement. How it is created is described under Carry out payment.

During automatic application, 365 business Banking checks each open bank account ledger entry of the account:

1. End-to-end reference. If the reference of the bank transaction matches that of the bank account ledger entry exactly (not only as a prefix), the document number counts as matched.
2. Message to recipient. Otherwise, the document number also counts as matched if the Message to Recipient of the bank account ledger entry is in the payment reference of the transaction.
3. If the bank account ledger entry has no Message to Recipient, the standard checks the Document No. and External Document No. of the bank account ledger entry.

If a bank account ledger entry is recognized by its end-to-end reference, it is placed first within the match confidence High, ahead of any open invoice. As a result, the bank account ledger entry created by the payment itself is always selected.

Collective payments

In a SEPA collective credit transfer, all lines of the same collective booking carry the same base of the end-to-end reference, each with its own ending (-1, -2 …), see End-to-end reference and collective payments. The bank decides whether the collective booking is booked as one transaction or as individual transactions:

• One collective transaction: The transaction states the base. If its amount equals the sum of the open bank account ledger entries of the group exactly, it applies all of them together. If the amount does not match exactly, the group is not applied together. The line then keeps the application determined by the standard, and Check application states the sum of the open bank account ledger entries and the amount of the transaction.
• Individual transactions: Each transaction states the reference of its own line with the ending and applies the bank account ledger entry of that payment. If a bank states only the reference of the whole group for individual transactions as well, the reference no longer identifies which bank account ledger entry is meant. A bank account ledger entry therefore only takes precedence if its reference is unique among the open bank account ledger entries of the account or its remaining amount equals the transaction amount exactly. In this way, each transaction applies the bank account ledger entry of its own payment.

Check application shows why a reference was not unique: "The end-to-end reference … is used by more than one open entry, and the amount does not tell them apart."

Prerequisites

• The payment was carried out and posted through 365 business Banking, so an open bank account ledger entry with an end-to-end reference exists.
• The bank returns the end-to-end reference in the statement. In the Bank Transaction FactBox or under Bank Transaction Details, you can see whether it was delivered (flag Has End To End Reference): Payment reconciliation journal.

No setup is required. Optionally, define your own number series for the references in the Banking Setup, field End-to-End Reference Nos.: Banking Setup.

See also

• How automatic application works
• Carry out payment: process per bank connection
• Bank account ledger entries
• Transit account