Payment Application with Open Sales Documents
With 365 business Banking, incoming payments can be applied to open sales documents – that is, sales orders and sales invoices that have not been posted yet. The typical case is a customer prepayment that arrives before the document has been invoiced.
Because no customer ledger entry exists at that point, the payment is posted on-account to the customer and the document reference is stored as a preliminary entry. When the document is invoiced, the preliminary entry is applied automatically to the newly posted sales invoice.
Setup
- Choose Payment Application Settings in the search of Microsoft Dynamics 365 Business Central.
- Enable Enable Sales Document Matching so that open sales documents are proposed automatically for incoming payments.
- Enable Show Sales Documents in "Apply Manually" page so that open sales documents appear as proposal lines during manual application.
Good to know
The two options are independent of each other. You can disable the automatic proposal and still offer sales documents for manual application – or the other way round.
Automatic application
- Retrieve the bank transactions into a payment reconciliation journal.
- Choose the Apply Automatically action.
- If a statement line references an open sales document, it is applied on-account to the customer of that document. The proposal is rated with the match quality High - Sales Document.
- Review the result and post the reconciliation as usual.
Manual application
- Select the line in question and choose Apply Manually.
- On the Payment Application page the open sales documents of the customer appear as separate proposal lines with the account type Sales Order or Sales Invoice.
- Set the Applied toggle for the documents you want.
- Close the page and post the reconciliation.
One customer per payment
A payment reconciliation line can only settle sales documents of a single customer. A sales document also cannot be applied more than once within the same reconciliation.
Posting and resolution
When the reconciliation is posted, the payment is posted as an on-account payment to the customer – the Sales Order and Sales Invoice account types serve for selection only. At the same time a preliminary entry is created for each applied document.
As soon as the sales document is invoiced, the open preliminary entry is applied automatically to the posted sales invoice. When a sales order was applied, this refers to the invoice posted from that order.
Reviewing preliminary entries
Choose Preliminary Entries in the search to review all preliminary entries. The list shows, among other things, the origin, the document, the amount, the amount not yet settled, the match quality, and whether the entry is still open.
Preliminary entries are kept
Preliminary entries are never deleted. They are closed once they have been settled in full. You can set the Manually Verified field to mark an entry as reviewed.