Transit Account for Bank Postings
Business Value
Many companies use transit accounts to manage payments before they are posted to the final destination account. This is particularly useful for companies that process a large number of payments and need to ensure that they are correctly allocated and processed. The support of transit accounts in 365 business Banking enables companies to make their payment processes more efficient and improve the accuracy of payment reconciliation.
Good to know
Transit accounts and corresponding postings only make sense for G/L entries, as the Microsoft Dynamics 365 Business Central standard does not support entry status (Open/Closed) for G/L entries.
In bank entries, transactions that have not been executed can be identified via the Open field.
By using transit accounts, companies can also exercise better control over their payment processes at the G/L account level and ensure that all payments are properly processed before being posted to the final destination account.
Functional Description
With the transit accounts feature in 365 business Banking, companies can define an additional account for transit postings in the Bank Account Posting Groups. This account is used to temporarily capture payments before they are posted to the final destination account. When a payment is made (see Payments), the bank entry (Open = Yes) and the associated G/L entry are posted to the defined transit account.
Once the payment has been successfully processed and captured via the payment reconciliation journal, the G/L entry is automatically transferred from the transit account to the final destination account. This ensures that all payments are correctly allocated and processed while simultaneously improving the transparency and traceability of payment processes.
The setup field is Transit Account No. on the Bank Account Posting Group. The bank account ledger entry itself is still created and left open – only the G/L account used for the balancing entry is changed. The entry records which account was used in the Transit Account No. field and whether the amount has already been moved to the bank G/L account in the Transit Account Cleared field. Both fields are available on the Bank Account Ledger Entries page and are hidden by default.
Payments that are reconciled in the same run
If the payment reconciliation journal posts the payment and reconciles the bank statement in the same run, the bank account ledger entry is never open. In that case the balancing entry is posted directly to the bank G/L account and the transit account is not used – there would be nothing left to clear.
For more information about setup and usage, see Transit Account for Bank Postings.