import { Callout } from "zudoku/ui/Callout";
# Setup
Before you can start using 365 business Banking, you need to configure some basic settings in Microsoft Dynamics 365 Business Central. The installation of 365 business Banking already provides a basic setup, which you can customize to meet your specific requirements.
## General Ledger Setup
In the **General Ledger Setup**, under the **Banking** section, you will find the settings for 365 business Banking. The following options are available:
| Field Name | Description | Default Value |
| --- | --- | --- |
| Bank Account Chart Balance Type | Specifies the type of balance to be used in bank account charts. | Period Balance |
| Payment Reference Overflow Option | Specifies what to do if multiple invoices are paid, but the payment reference exceeds the maximum length. | |
| Bank Account Reconciliation Line Posting | Specifies how G/L Account bank account reconciliation lines are posted, when posting setup is specified. Select whether to use a clearing account or post directly to the G/L accounts. | Use Clearing Account |
| Create Bank Accounts | Specifies whether bank accounts should be created automatically when payment reconciliation journal lines for new customer or vendor bank accounts are applied. This option leads to a higher rate of automatically reconciled bank transactions, as more bank accounts are available for reconciliation. | Yes |
| Bank Account No. Series | Specifies the number series for bank accounts. | _Microsoft Standard_ |
| Standing Order No. Series | Specifies the number series for standing orders. | `SO00001` - `SO99999` |
| Payment Advice No. Series | Specifies the number series for payment advices. | `RN00001` - `RN99999` |
### Bank Account Chart Balance Type
The **Bank Account Chart Balance Type** option determines which type of balance is displayed in the bank account charts. You can choose from the following options:
- **Period Balance** (default)
This option shows the balance based on transactions within the displayed period (e.g., month). This is useful for tracking financial development over a specific period.
- **Balance to Date**
This option shows the running balance up to a specific date. This is helpful for viewing the current account balance at a specific point in time.
- **Both**
This option displays both the period balance and the balance to date, allowing you to view both perspectives simultaneously.
### Payment Reference Overflow Option
The payment reference in bank transactions is limited to 140 characters. In cases of batch payments or settling multiple invoices with one payment, this may result in the payment reference being insufficient to include all document numbers or references.
The **Payment Reference Overflow Option** allows you to define how to handle such cases. You can choose from the following options:
- **Create Payment Advice**
The Create Payment Advice option automatically generates a payment advice for the affected items when payments exceed the maximum length of the payment reference.
- **Split Payment** (Recommended)
The Split Payment option divides the payment into separate transactions for any additional items not included in the payment reference when the maximum length is exceeded.
- **Always Create Payment Advice**
The Always Create Payment Advice option automatically generates a payment advice for every payment, regardless of the payment reference length. This can be useful when payment advices should always be used.
Payment advices complicate the reconciliation of incoming payments, as additional reference numbers (payment advice numbers) are created, which are not known in the recipient's system and complicate automatic allocation.
We recommend using the Split Payment option to make it easier for your business partners to allocate payments and to achieve a high degree of automation.
### Bank Reconciliation Line Posting
The **Bank Reconciliation Line Posting** option controls how bank reconciliation lines with the account type *G/L Account* are posted when a [posting setup](bank-reconciliation-posting-setup.md) (general posting groups and VAT posting groups) is defined.
You can choose between the following options:
- **Use Clearing Account**
With this method, the payment is first posted against a clearing account.
The system then creates an additional posting (technically an “invoice” entry) that applies the posting setup to correctly record the expense or revenue and clears it against the same clearing account.
This method is the **recommended setting**, as it provides clear traceability and transparency between the payment and the resulting G/L postings.
It is particularly useful for VAT-relevant transactions, bank fees, corrections, or reconciliation scenarios, ensuring the highest level of control and auditability.
- **Direct Posting** (default)
With this method, the payment is posted **directly to a G/L account**, and the posting setup is applied immediately to the *payment* entry.
As a result, the final G/L and VAT entries are created at the moment the payment is posted.
This can be useful when no simulated receivables or payables are required and the posting process should remain as simple as possible.
However, transparency is lower because payment and expense/revenue are combined into a single posting.
#### Comparison of Options
| Option | Advantages | Disadvantages | Typical Use Cases |
|--------|------------|----------------|--------------------|
| **Use Clearing Account** | Highest transparency; clear separation of payment and expense/revenue; consistent VAT handling; supports corrections and reconciliation; clear audit trail | More posting lines; slightly more complex | Recommended for most companies; VAT-relevant transactions; bank fees; scenarios requiring deferrals or structured posting logic |
| **Direct Posting** (default) | Fewer posting lines; fast and simple process; ideal for straightforward G/L postings | Less traceable; combines payment and expense into one entry; VAT setup applies directly to the payment line | Smaller companies; simple G/L postings without deferrals; cases without complex VAT requirements |
When using deferral schedules together with the Direct Posting option,
a clearing account will still be used automatically.
This is necessary to correctly generate and manage the deferral entries and to ensure proper period allocation.
### Create Bank Accounts
The **Create Bank Accounts** option determines whether bank accounts should be created automatically when payment reconciliation journal lines for new customer or vendor bank accounts are posted. This option leads to a higher rate of automatically reconciled bank transactions, as more bank accounts are available for reconciliation.
365 business Banking automatically creates new bank accounts in Microsoft Dynamics 365 Business Central when a payment reconciliation journal line with an unknown bank account of a customer or vendor is posted (see [Related Party Matching](bank-reconciliation/related-party-matching.md)). The new bank account is created with the relevant information from the payment reconciliation journal line or the bank transaction.
#### Associated Bank Accounts
In the **General Ledger Setup**, in the **Bank** action group, you will find the **Manage Associated Bank Accounts** action. This action opens the **Associated Bank Accounts** page, where you can manage bank accounts of associated companies to prevent the creation of a new bank account for internal transfers (e.g., in the case of erroneous transfers by the customer) and assign it to the reconciled customer.
## Payment Methods
The payment methods determine which types of payments can be used for your bank accounts and transactions. These settings can be found on the **Payment Methods** page, where you can select and configure the desired payment types.
For more information on setting up payment methods, see the [Payment Method Setup](setup/payment-method-setup.md) documentation.
## Banking User Setup
Setting up the Banking User is an important step in establishing a secure connection to your bank accounts. The Banking User is responsible for connecting to your bank accounts and allows you to retrieve transactions and initiate payments.
For more information on setting up the Banking User, see the [Banking User Setup](banking-user-setup.md) documentation.
## Additional Settings
In addition to the settings mentioned above, you can make further adjustments to optimally tailor 365 business Banking to your needs. These include:
- **ZKA Codes**
ZKA codes (Business Transaction Code, GV-Code) are used to identify specific business transactions. These codes can be managed on the **ZKA Codes** page.
For more information, see the [ZKA Codes Setup](setup/zka-code.md) documentation.
- **SEPA Purpose Codes**
SEPA Purpose Codes are used to indicate the purpose of a payment. These codes can be managed on the **SEPA Purpose Codes** page.
For more information, see the [SEPA Purpose Codes Setup](setup/sepa-purpose-code.md) documentation.