Transit Account for Bank Postings
The transit account enables a two-stage bank posting: an initiated payment is first posted against an interim account. Only once the bank has actually executed the transaction and the bank account ledger entry is closed through the payment reconciliation journal is the amount moved to the bank G/L account.
The bank G/L account therefore only shows amounts that have actually moved, while payments that have been initiated but not yet executed remain visible on the transit account.
Setup
- Choose Bank Account Posting Groups in the search of Microsoft Dynamics 365 Business Central.
- In the Transit Account No. field, enter the G/L account that bank entries of this posting group are posted to instead of the G/L Account No.
Recommendation
Use a dedicated G/L account for transit postings. Its balance then always equals the total of the payments that have been initiated but not yet executed.
Posting logic
Stage 1: initiating the payment
When a payment is carried out and posted, the only difference from the standard is the G/L account of the balancing entry:
- The bank account ledger entry is created as usual and stays open.
- The balancing entry goes to the transit account instead of the bank G/L account.
- The bank account ledger entry records which account was used in the Transit Account No. field.
Stage 2: clearing through payment reconciliation
As soon as the bank transaction has been retrieved and the bank account ledger entry is closed through the payment reconciliation journal, 365 business Banking automatically moves the amount from the transit account to the bank G/L account of the posting group. The bank account ledger entry is then marked accordingly in the Transit Account Cleared field.
Automatic transfer
The transfer happens automatically when the bank account ledger entry is closed – no manual intervention is required.
Exception: posting and reconciling in one 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 to clear.
Review
The two fields Transit Account No. and Transit Account Cleared are available on the Bank Account Ledger Entries page. They are hidden by default and can be shown through personalization. This lets you see, per bank entry, which transit account was used and whether the amount has already been transferred.
Good to know
Transit postings are primarily useful at G/L entry level, because standard Microsoft Dynamics 365 Business Central does not track an entry status (Open/Closed) for G/L entries. In bank entries, transactions that have not been executed can be identified through the Open field instead.