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Microsoft Dynamics Financial Accounting - How it Works:

Financial Management in Dynamics 365 Business Central

Financial management in Dynamics 365 Business Central essentially consists of four areas (invoicing, financial accounting, cost accounting, payroll) as well as various interfaces (e.g., Elster). Within these areas, you exclusively work with interconnected data from all departments, thereby obtaining a comprehensive 360-degree view of the company with high informative value.

Navision Accounting:

Your Functions for Finance Management

    • Document exchange (add-on)

      With the app Anveo EDI, you can easily exchange data

      • with your customers (e.g., orders, invoices, credit memos, delivery notes, item data, availability, prices),
      • with your partner companies (improved business relationships through automated processes),
      • with suppliers (e.g., order processing, confirmations, availability, or delivery notes), or
      • between locations/companies (e.g., financial data and item information).
    • Document capture and processing (add-on)

      For professional document management, we offer you an interface to a third-party software. We collaborate with partner companies such as d.velop (App d.3) or Continia (App Document Capture). Even when it comes to document output, Continia can assist with the help of the Document Output add-on.

      D3.ecm is a document management system that allows you to organize printed documents from your business applications, paper documents, business-related and evidence-relevant emails, and much more.

      Continia Document Capture
      With this tool, you can scan all types of documents, extract OCR data, register, and archive them. PDF files are downloaded directly from specified email addresses and processed with OCR technology upon request. This process runs automatically, meaning without the user’s intervention. Paper documents are scanned using desktop or network scanners and processed in the same way.

      Continia Document Output
      With the Add-On, you gain a software solution for managing digital file outputs from Microsoft Dynamics 365 Business Central. The Add-On saves you time and reduces your complex manual processes, helping you keep track of all sent and created documents.

    • Purchase discounts

      If you are granted a purchase discount as part of your purchase, you can take this into account in the system. Two types of purchase discounts are distinguished:

      • Purchase line discount: A discount is granted when a specific combination of creditor, item, minimum quantity, unit, or start/end date exists. This functionality applies in the same way to purchase documents.
      • Invoice discount: A percentage discount granted when the value of all lines on a purchase document exceeds a certain minimum value.
    • Electronic payments or direct debits

      With the debtor’s consent, you can collect payments directly from the debtor’s bank account using the SEPA direct debit mandate. It is also possible to work with payment and cash discount tolerances. In this context, you set up the following:

      • Bank file export format
      • Customer’s payment method
      • Direct debit mandate
      • Direct debit authorization (information about bank accounts, affected sales invoices, and direct debit instructions)

      Any payments that could not be processed will be notified to you by your bank, and you will then need to manually reject the respective direct debit posts.

    • Credit memos and complaints

      You can handle both

      • payments from creditors (purchase credit) and
      • refunds to debtors (sales credit).

      Purchase credits
      If you want to return items to your supplier or cancel services you have purchased, you can create and post a purchase credit that indicates the requested change regarding the original purchase invoice.
      Sales credits
      If a debtor wants to return items, for example, because of quality issues, you can create and post a sales credit for this customer. If payment has already been made, you must then make a payment to the customer so that they receive the refund.

    • Open item management and dunning

      It is easy to inform debtors about open items. You can create dunning methods to specify when and how reminders are created. After the dunning methods have been created, the dunning method code is assigned to the relevant debtors. A dunning method contains various dunning levels and determines how many reminders are sent to a debtor.

    • Proforma invoices

      You can create proforma invoices using sales documents in the system. When you are ready to post them, you have the option to choose from various posting functions such as:

      • Post
      • Post and new
      • Post and send
      • Posting preview
      • Invoice draft
      • Proforma invoice
      • Test report
      • Remove from task queue
      • Attach as PDF
      Proforma invoice in Dynamics 365 Business Central
      Proforma invoice
    • Consolidating deliveries into a single invoice

      If you want to invoice more than one delivery at the same time, you can use the function to create consolidated invoices. Before you can create a consolidated invoice, you must have booked more than one sales delivery for the same debtor in the same currency. In other words, you must have created and booked two or more sales orders as delivered but not invoiced.

    • Payment processing (add-on)

      With the OPplus 365 add-on from our partner company Continia, you can optimize your payment processing (import and export) with manufacturing companies, wholesalers, or end consumers. Automate your processes (reconciliation, pre-accounting, etc.) and gain more transparency over your payments.

    • Asset accounting

      Within the system, you manage all assets and can also depreciate them. Furthermore, you always have maintenance costs in view, can manage insurances, book asset transactions, and generate individual reports and statistics.

    • Bank account management

      Bank accounts are managed within the system as their own subledger. They are needed for payment processing. On the “Bank Account Reconciliation” page, you reconcile your bank accounts and can make automatic payments.

    • Budget management

      You have various options for managing budgets within the system. For the same period, you can manage multiple budgets by setting up budgets with different names. First, you set up the budget name and enter the budget figures. The budget name is then assigned to all budget entries you create.

      Additionally, there are various evaluation options for budgets within the system, such as:

      • Financial reporting based on account schedules containing budget entries
      • Analysis of budgeted amounts versus actual amounts in the chart of accounts

      How to work with budgets within the system is explained in our blog article „Budgets einrichten in Dynamics 365 Business Central“ (German article).

    • Accounts receivable

      Manage your debtors clearly within the ERP system:

      Payments to debtors and the reconciliation of bank accounts can be done automatically. Additionally, debtor payments can be reconciled from lists, the cash receipt journal, or debtor entries.

      Payment default forecast
      In case of payment default, it is possible to block a debtor. To keep an eye on potential payment defaults, the system predicts which debtors are likely to have overdue payments.

      Simply remind your debtors of overdue amounts and calculate interest and overdue fees automatically.

      Accounts receivable in Dynamics 365 Business Central
      Accounts receivable
    • Intercompany transactions

      The system offers several functions for mapping intercompany transactions. This requires a shared chart of accounts and an agreement on a set of dimensions for intercompany transactions.

      The following functions are included:

      • Setting up intercompany transactions per company
      • Setting up intercompany partners
      • Setting up intercompany creditors and intercompany debtors
      • Setting up intercompany chart of accounts
      • Setting up intercompany partner G/L accounts
      • Setting up intercompany dimensions
    • Chart of accounts

      Manage your financial data within the system via the chart of accounts. The system offers a standard chart of accounts that you can use or modify by adding new accounts, for example.

      Setting up G/L accounts is done according to the chart of accounts. G/L accounts form the core of financial management.

    • Consolidation

      If your company consists of more than one tenant, it is possible to summarize the annual financial statements accordingly.

      Within the ERP system, you can create a consolidated balance sheet report in the accounting role center. This gives you an overview of the financial status of your overall business.

    • Accounts payable

      Centrally manage your creditors within the system. Create invoices and handle all payments (e.g., to creditors, employees, checks).

      Accounts payable card in Dynamics 365 Business Central
      Accounts payable card
    • Prepaid expenses

      To determine the company’s success in a period-appropriate manner, deferral accounting is necessary. In the system, you can make these deferral postings automatically via a predefined plan.

    • Currency management

      Bank accounts can be maintained in foreign currencies:

      Currency management in Dynamics 365 Business Central
      Currency management
    • XBRL support

      XBRL (eXtensible Business Reporting Language) is an XML-based language aimed at ensuring a standard for the uniform reporting of financial data (e.g., financial analyses). It is possible to implement this standard.

      Taxonomies are available at On the XBRL website, you can download taxonomies or obtain further information.

    • Expense reimbursement

      Transactions for employees are supported in a similar way to creditors. When employees spend their own money on business activities, you can book the costs to the employee’s account. Then, you can reimburse the costs by making a payment to the employee’s bank account, similar to paying creditors.

    • Payroll processing (add-on)

      With the app Infoniqa payroll 365 (formerly NAPA 3 by Haveldata), you can easily process payroll payments.

    • Travel expense management (add-on)

      With the app Continia Expense Management, you can integrate a simple and transparent travel expense management into your ERP solution. Let your team submit expenses via browser or mobile app and centrally and conveniently approve them.

    • Time tracking (optional add-on)

      Times can be recorded via timesheets. Additionally, we work with our partner company Tempras, whose app TempVision provides an integrated solution for time and operational data recording, deployment planning, and access control.

    • Cash flow forecasting or liquidity planning

      Within the scope of cash flow forecasting or liquidity planning, the expected liquidity position is determined. This is very important to ensure the solvency of a company.

      Based on the currency assets of the previous period, the system compiles and calculates the projected operating revenues and expenses periodically. Subsequently, the liquidity surplus or deficit is calculated.

      Integration of Cortana Intelligence
      By integrating Cortana Intelligence, you can improve your planning. This includes documents with due dates in the future.

    • Contribution margin analysis (optional customization)

      Calculating the contribution margin of items is particularly important for accurate price calculation. This process can certainly be implemented in the system.

      Multi-stage contribution margin analysis (customization)
      If simple contribution margin analysis is not sufficient for you, we can extend it through custom development. This allows you to have your selection of desired additional metrics to control your company and relate your costs (e.g., cleaning, maintenance, electricity costs) to direct (e.g., advertising revenue) and indirect revenue (e.g., ancillary services like printing).

    • Cost and performance accounting (add-on)

      The Cost and Performance Accounting app by CKL is a tool for cost control (internal performance accounting). The add-on provides you with quick and clear information about the revenues and costs of your company.

      Wondering how the app extends the system standard? Our technology interpreters Theo and Tessa have created a detailed comparison of system standard and add-on for you.

    • Cost type accounting

      You define a cost type plan with a structure and function similar to the chart of accounts. You can transfer the P&L accounts from the chart of accounts or create your own cost type plan.

    • Cost center accounting

      Cost centers are typically departments and profit units of a company.

    • Cost object accounting

      Cost objects are products, product groups, or services of a company. These are the finished goods of a company that bear the costs. You can also link cost objects to projects in your company.

    • DATEV (interface)

      With the Microsoft-certified SNC/DATEV Interface for Microsoft Dynamics 365 Business Central Cloud, you can automatically convert your booking and master data into a DATEV-compliant format. This enables direct and smooth data transfer to the financial accounting of your tax consultancy – and vice versa back to you.

    • Elster (interface)

      We can develop an interface for Elster exports for you.

    • Debt collection (interface)

      Many companies outsource payment collection. To facilitate this, we can easily implement an interface to a debt collection company.

Cost and Performance Accounting

In Comparison: Standard vs. CKL-Add-On


It’s me, Theo the Technology Interpretor!

As a Technology Interpreter, I’d like to explain to you how the add-On expands the standard of Dynamics 365 Business Central. After all, the devil is in the details.


  • Administration

    Criterion Standard Dynamics 365 Business Central/NAV Add-On CKL Cost and Performance Accounting
    Balance sheet accounts as cost types
    Enhanced fact boxes
    Flexible allocation rates
    P&L accounts as cost types
    Initialization of cost accounting data from financial accounting data
    Cost types independent of financial costs
    Cost type plan
    Cost center plan
    Variable cost center structure
    Cost carrier plan
    Variable cost carrier structure
    Performance types
    Flexible performance types
    Master data reconciliation: financial accounting and cost accounting
    Transfer headings and totals
    Central program setup administration
    Central role center or controller cockpit
  • Dimensions

    Criterion Standard Dynamics 365 Business Central/NAV Add-On CKL Cost and Performance Accounting
    Individual definition of dimensions
    Use of all booked dimensions
    Use of two base dimensions (cost center and cost object)
  • Functions

    Criterion Standard Dynamics 365 Business Central/NAV Add-On CKL Cost and Performance Accounting
    Booking of production data
    Booking “only” with cost center information
    Booking “only” with cost object information
    Booking with joint cost center and cost object information
    Booking of times and services
    Posting function
    Navigate for all bookings
    Balance check function
    Automatic real-time transfer of financial accounting data in batch run
    Use of quantity bookings from merchandise management
    Recurring bookings
  • Distribution system

    Criterion Standard Dynamics 365 Business Central/NAV Add-On CKL Cost and Performance Accounting
    Automatic time determination for dynamic allocations
    Function for simplified setup of reallocations (standard distribution codes)
    Validities for distributions
    Iterations/Iteration methods
    Basic setup plausibility check
    Step ladder procedure
    Distribution of any dimensions
    Distribution with dynamic reference quantities
    Distribution with static reference quantities
    Distribution: Cost center to cost center
    Distribution: Cost object to cost center
    Distribution: Cost object to cost object
    Copy distributions
    Distribution simulation
  • Reporting

    Criterion Standard Dynamics 365 Business Central/NAV Add-On CKL Cost and Performance Accounting
    Analysis at transaction level
    Defined reports for Jet Reports
    Defined Power Pivot analysis templates
    Individual cost center or cost object analysis
    Result analysis according to individual specifications
    Excel export function
    Group analyses (hierarchy levels)
    Cost type reports (predefined or individual)
    Cost center reports (predefined or individual)
    Cost object reports (predefined or individual)
    Multidimensional ABC method (Activity-Based Costing)
    Report overview of customized reports
  • Billing systems

    Criterion Standard Dynamics 365 Business Central/NAV Add-On CKL Cost and Performance Accounting
    Flexible standard cost accounting
    Marginal cost accounting
    Marginal standard cost accounting
    Multistage fixed cost accounting
    Normal cost accounting
    Process cost accounting
    Target cost accounting
    Partial cost accounting
    Full cost accounting
Microsoft Dynamics Accounting

Your Benefits through Our Finance Management Functions

Icon showing a magnifying glass


Using networked data from all departments, you can keep an eye on key performance indicators at all times. For example reports and financial charts with integrated Power BI dashboards including the option to export to Excel.

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Decision Making

Networked data and clear diagrams provide you with well-founded decision-making templates. Recognize patterns and trends at an early stage and gain new insights.

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You receive automatic recommendations from the system. For example, for accounts payable accounting, when it comes to utilizing discounts or avoiding reminder fees.

Icon showing the time 04:00 or 16:00

Quick Acting

Accelerate financial closing and reporting by automating the reconciliation of accounts payable and accounts receivable in the background.

Icon symbolizing the law

Legally Compliant

The system checks legal requirements in the background. You don’t have to worry about anything.

Kontenplan in Dynamics 365 Business Central
Dynamics 365 Business Central chart of accounts
From Theory to Practice:

Tutorial: Financial Accouting in Business Central

    • How do I read bank statements?

      Processing bank statements is one of the tasks of accounting.

      How can the system assist you with this?
      By default, you can import bank statements in the CAMT format. To do this, you need to set up your bank account or make settings to the corresponding existing bank account. Here’s how:

      Search for “Bank Accounts” and access the appropriate list.

      Depending on whether the bank account has already been set up or not,

      • click on the New button to create a new bank account or
      • select an existing bank account and click on Edit.

      If you have created a new bank account, enter all available information about this account in the respective cards (e.g., General, Contact, Posting).
      In the Transfer card, you can then handle the import of bank statements. Here, enter information such as SWIFT code and IBAN correctly. Also, select the SEPA CAMT option under Bank Statement Import Format.

      Entering transfer data for a bank account Entering transfer data for a bank account

      Now all important settings have been made, and you can start importing bank statements.

      To import bank statements, navigate – for example, via the search – to Payment Reconciliation Ledger Entries.

      Once there, click on Import Bank Transactions in the above navigation.

      Import of bank transactions Import of bank transactions

      Double-click to select your bank and then open your bank statement in CAMT format.

      Your bank statement has now been successfully imported, and you can continue with the payment reconciliation. To do this, simply open the newly created Ledger Entry, for example, based on your reference number in the payment reference.

      A proposal for the item settlement has already been made. You can review this proposal in the defined Ledger Entry and manually settle items not proposed for reconciliation as needed via Reconcile Items. If you have set the bank account G/L account to “reconcilable” in the chart of accounts, you can compare the balance after posting the bank statement with that on your bank statement before posting via “reconcile”.

    • How do I create a payment reminder?

      Reminders alert debtors to overdue amounts. The system allows for different reminder methods, including reminder levels, each identified by a distinct code. This reminder code is assigned to the debtor and carried over to the sales document. It serves, for example, to distinguish reminders in German or English. Examples of reminder method codes are GERMAN and ENGLISH. Reminder levels can be configured for each reminder method. These contain rules for when the 1st reminder, 2nd reminder, 3rd reminder, etc., should be issued (e.g., 5 days after the due date of the invoice). Additionally, fees (fixed, dynamic, or cumulative) or interest can be levied. You can choose whether fees and/or interest are booked or only printed.

      Reminder methods can be set up by entering “Reminder Methods” in the search and opening the corresponding link. There, fill in all fields as needed.

      Overview of reminder methods Overview of reminder methods
      Editing the reminder levels of the reminder method 'DOMESTIC'Editing the reminder levels of the reminder method ‘DOMESTIC’

      To create a reminder run, there are several options:

      • Automatic reminder via the batch job Create Reminders (useful when reminders are created for all companies)
      • Manual reminder via the batch job Suggest Reminder Lines (useful when only one debtor is to be reminded). For this, select the debtor in the new empty reminder beforehand.

      You can access these two options by searching for “Reminders,” clicking on the corresponding link, and then clicking on Process.

      Options in the batch job 'Create Reminders'
      Options in the batch job ‘Create Reminders’

      The first important field is the posting date – the system compares this date with the due date of the document. The document date is displayed on the reminder documents.

      If the option Include Only Items with Due Amounts is checked, the batch job only inserts open debtor items that have a due date before the document date.

      If the option Include Items on Hold is checked, the batch job includes open debtor items that contain a value in the On Hold field, regardless of the setting in the Include Only Items with Due Amounts checkbox.

      If the option Use Header Reminder Level is checked, the reminder level of the reminder header is applied to all lines of the reminder to determine whether interest should be calculated for a particular reminder line. If this field is not checked, interest is determined based on the reminder level on each reminder line.

      If desired, debtor or debtor item filters can be entered.

      After reviewing the system’s reminder proposal and making any necessary changes, you must register the reminder. A registered reminder is similar in logic to a booked invoice. A created reminder, however, is similar to a recorded invoice. Once a reminder is registered, it can be reversed through cancellation, and the reminder level is reset.

    • How do I create a summary report (SR) for the tax office?

      For the summary report, there is the batch job “Summary Report (Form)”. Here you fill in the corresponding fields:

      • Reporting period: Period covered by the report (e.g., month, two months, quarter, or calendar year)
      • Date of signature: Date on which the SR is sent
      • Corrected declaration: A checkmark in the checkbox indicates that it is a corrected version of an already submitted summary report
      • Display amounts in reporting currency: indicates whether the evaluated amounts are displayed in the additional reporting currency
      • Switch to monthly reporting: necessary if your company has sales of more than 100,000 euros per quarter (switch from quarterly reporting to monthly reporting, but only select if you are sending a monthly report for the first time)
      • Revoke monthly reporting: A checkmark in the checkbox indicates that you want to switch from monthly reporting to another reporting period (e.g., previously monthly reports, although EU sales are less than 100,000 euros per quarter)

      Before creating the file, you can verify the VAT identification number of your customers online.
      In the end, you will receive a file that you can submit to the tax authorities.

    • How do I check the customer balance in Microsoft Dynamics 365 Business Central?

      In accounting, it is crucial to always have an overview of the customer balances. This is very simple in the system. From your dashboard, click on “Sales” and then on “Customers”. This will give you this overview:

      Overview of Customers Overview of Customers

      Now you have the option to select a customer and view the desired details such as balance or outstanding balance.

      Information about a Customer Information about a Customer

      Clicking on the balance will provide further details on all customer entries, which you can then review again. Of course, you can also access numerous reports (e.g., open items by customer balance).

    • How do I check the vendor balance?

      In accounting, it is crucial to always have an overview of the vendor balances.

      How can the system assist you with this?
      This is very simple. From your dashboard, click on “Purchase” and then on “Vendors”. This will give you this overview:

      Figure 3: Overview of Vendors Overview of Vendors

      Now you have the option to select a vendor and view the desired details such as balance or outstanding balance.

      Clicking on the balance will provide further details on all vendor entries, which you can then review again. Of course, you can also access numerous reports (e.g., open items by vendor balance).

    • How do I record expenses that are not related to inventory items?

      You have the option, for example, to record purchases of non-inventory items such as paper clips directly to a general ledger account.

      There are two options for this:

      1. Recording the purchase invoice in the Purchase Journal page with the account type “G/L Account”.
      2. Recording the purchase invoice in the document and selecting the type “G/L Account” in the lines.

      It is important that the general ledger account you are booking to is set up in the chart of accounts to allow direct postings. To do this, check the “Direct” box on the general ledger account. Furthermore, make sure that for general ledger accounts that trigger taxation, the following information is filled in:

      • Posting type: Purchases/Sales
      • Business posting group
      • Product Posting Group

      This prevents, for example, the use of a purchase account in a sales invoice. Taxation is controlled through VAT posting groups, but they are only default values that can be manually adjusted in the journal and document.

    • How do I record a sales invoice?

      You create a sales invoice or order to record your agreement with the customer to sell specific products under specific delivery and payment terms.

      You can create the sales invoice directly from a sales quote that your customer has accepted.

      Step 1: Select the magnifying glass icon, enter “Sales Invoices”, and then select the appropriate link.

      Step 2: Enter the name of an existing customer in the “Customer” field.

      Creating Sales Invoice Creating Sales Invoice

      Other fields on the “Sales Invoice” page will now be filled with the default information of the selected customer. If the customer has not been set up yet, follow these steps:

      1. Enter the name of a new customer in the “Customer” field.
      2. In the dialog, click “Yes” to confirm the transfer.
      3. On the page “Select a template for a new customer”, select a template on which the new customer card should be based, and then select “OK”.
      4. A new customer card opens, pre-filled with information from the selected customer template. Fill in the remaining fields.
      5. Once you have filled out the customer card, select “OK” to return to the “Sales Invoice” page.

      Fields in the sales invoice header will be filled with the information you specified on the new customer card.
      Step 3: Fill in the fields on the “Sales Invoice” page in the “General” tab as needed.

      You can now fill in the sales invoice lines for products you are selling to the customer or for any transaction with the customer that you want to record in a general ledger account.

      If you have set up recurring sales lines for the customer, such as a monthly reorder, you can insert these lines on the invoice. You do this by using the “Get Recurring Sales Lines” option under “Actions > Functions”.

      Step 4: In the “Lines” tab of the “Sales Invoice”, select the type of product, cost, or transaction you want to book for the customer with the sales line.

      Step 5: In the “No.” field, select the correct record. The selection in the dropdown depends on the type set previously. So, if you choose “Item” as the type, your items will be displayed; if you choose “Resource”, for example, your employees will be displayed.

      Leave the “No.” field blank in the following cases:

      • If the line is intended for a comment. Enter the comment in the “Description” field.
      • If the line is intended for a catalog item.

      Step 6: Enter in the “Quantity” field how many units of the product, cost, or transaction you want to store in the line.
      The value in the “Line Amount” field is calculated as Unit Price x Quantity.

      The price and line amount on the sales invoice lines are displayed with or without VAT, depending on what you selected in the “Price Includes VAT” field on the customer card.

      Step 7: If you want to grant a discount, enter a percentage in the “Line Discount %” field. The value in the “Line Amount” field will be updated accordingly.

      If you have set up specific item prices for the customer on the relevant customer card in the “Sales Prices and Sales Line Discounts” fact box, the price and amount on the invoice line will automatically update when the agreed pricing criteria are met.

      Step 8: Repeat steps 9 to 12 for each product or fee you want to invoice to the customer.

      The total fields under the items will automatically update as you create or modify items to show the amounts to be booked to the general ledger accounts.

      Step 9: Enter, if necessary, in the field “Charge to Invoice” under the sales lines the amount to be invoiced, which is to be deducted from the value displayed in the field “Total Including VAT” in the lower area of the invoice.

      If you have set up invoice discounts for the customer, the specified percentage value is automatically entered into the “Invoice Discount in Percentage” field once the criteria are met, so that the corresponding amount is entered into the “Invoice Amount with Discount Excluding VAT” field.

      Step 10: Once the sales invoice lines are completed, select the action “Post and Send”.

      The dialog box “Booking and Sending Confirmation” displays the desired method for the customer to receive the document. You can change the sending method by selecting the button from the field “Send Document To”.

      The sales invoice is output as a PDF if configured accordingly, and booked G/L entries, customer entries, and item entries, etc., can be viewed via “Find Entries”. G/L entries and item entries related to the sales invoice have been automatically recorded in the system, e.g., as receivable and inventory decrease. The sales invoice is no longer in the list of “Sales Invoices” but can be found in the list of “Posted Sales Invoices”.

      Viewing posted invoices
      Once the invoice is posted, you can find it in the list of posted invoices. The list “Posted Sales Invoices” and the list “Posted Purchase Invoices” show the posted invoices with the final invoice numbers. In the list, you can look up each posted invoice and correct or cancel a posted invoice.

      Booked sales invoices in Dynamics 365 Business Central Booked sales invoices
    • How do I correct a sales invoice or create a sales credit memo?

      You can easily correct or cancel a posted sales invoice before it is paid. This is useful if you want to correct a typo or if the customer requests a change in the order process early. Once the posted sales invoice is paid, you need to create a credit memo or a sales return order to cancel the sale.

      Step 1: Select the magnifying glass icon, enter “Posted Sales Invoices”, and select the appropriate link.

      Step 2: From the three dots in the line of the sales invoice you want to edit, select the option “Create Correction Credit Memo”.

      Card 'Sales Credit Memo' Card ‘Sales Credit Memo’

      On the “General” tab of the sales credit memo, some information from the posted sales invoice is already included. You can edit all fields, for example, with new data that reflects the return agreement.

      Step 3: Edit information about the lines according to the agreement, such as the number of items to be refunded or the amount to be credited.

      Step 4: Select the action “Apply Entries”.

      Sales Credit Memo: Apply Entries Sales Credit Memo: Apply Entries

      Step 5: On the “Apply Entries to Customer Ledger Entries” page that opens, select the line with the posted sales document you want to allocate to the sales credit memo and then select “Set Apply ID”.

      Sales Credit Memo - Apply Entries to Customer Ledger Entries Sales Credit Memo – Apply Entries to Customer Ledger Entries

      The credit memo’s number will be inserted in the “Apply ID” field.

      Step 6: Enter in each line in the “Amount to Apply” field the amount you want to apply if it is less than the original amount.

      In the lower area of the “Apply Entries to Customer Ledger Entries” page, you can see the total amount to cancel all involved entries, i.e., when the value in the Balance field is zero.

      Step 7: Select the “OK” button. Once you post the sales credit memo, it will be applied to the specified posted sales invoices.

      After you have created or edited the necessary sales credit memo lines and indicated the application of individual or multiple entries, you can proceed to post the sales credit memo.

      Step 8: Execute the action “Post”.

    • How do I record a purchase invoice?

      One of the tasks of accounting is to record (purchase) invoices. This can be done in the system in the following ways:

      Method 1: Receipt of the invoice by email.

      Assuming you receive an invoice via email in Outlook from a supplier. Due to the seamless integration of Outlook into Dynamics 365 Business Central, the two programs are automatically connected. You open the email and click on the logo. This opens Dynamics 365 Business Central with contact details as well as all available information and statistics about the supplier in the same window.

      By clicking on “New” in the window, you can create a new purchase invoice. Through OCR integration, the text of the email is recognized and fields such as item number, item name, and quantity are automatically filled in. This saves you valuable time. Then, you verify the information and confirm the entries.

      Figure 2: Details of the Creditor Details of the Creditor

      Now enter the invoice number and decide whether you need to adjust any other information. Once done, the purchase invoice is posted in Dynamics 365 Business Central. Now, if you switch there, you can directly view the invoice.

      Method 2: Receipt of the invoice through other means.

      If you receive the invoice through other means, you can also record it directly in the system (not via the Outlook integration). For example, you can send a PDF invoice to the system and see it displayed in the system under “Incoming Documents”.

      Now there is the option to capture the document using OCR. This will create an invoice with all data automatically filled in, such as item number and desired quantity.

      Method 3: Booking a purchase invoice from the order.

      Regardless of how the purchase invoice arrives in the company, many companies work with upstream orders. Usually, the delivery of a purchase order is checked by purchasing and booked in the system. Subsequently, the accounting department has the option to invoice the associated purchase invoice directly from the order upon receipt. Alternatively, you can create a new purchase invoice and pull in the delivery booked by purchasing into the document. Then, the invoice can be posted.

    • How do I create a purchase credit memo?

      In addition to booking a purchase invoice, the accounting department also needs to process purchase credit memos. Search for “Posted Purchase Invoices” and select the appropriate link.

      Then select the posted purchase invoice you want to cancel and click on “Correct” in the above navigation and then on “Create Correction Credit Memo”.

      Creating a Correction Credit Memo Creating a Correction Credit Memo

      Most fields in the purchase credit memo header are filled with information from the posted purchase invoice. You can edit all fields (e.g., deliver to an alternative vendor address).

      At the end, select the action “Apply Entries”.

      Apply Entries Apply Entries

      On the “Apply Vendor Ledger Entries” page that opens, select the line with the posted purchase document you want to allocate to the purchase credit memo and then select “Set Apply ID”. The purchase credit memo number will be inserted in the “Apply ID” field.

      Enter in each line in the “Amount to Apply” field the amount you want to apply if it is less than the original amount.

      In the lower area of the “Apply Vendor Ledger Entries” page, you can see the total amount to cancel all involved entries.

      Click the “OK” button. Once you post the purchase credit memo, it will be applied to the specified posted purchase invoices.

      After you have created or edited the necessary purchase credit memo lines and indicated the application of individual or multiple entries, you can proceed to post the purchase credit memo.

      Perform the action “Post”.

    • How do I pay a vendor?

      In addition to invoice processing, payment is also an important task of accounting. Through the menu item “Payment Management”, you can access the payment journals. At this point, you have two options:

      • You can manually enter the payment and reconcile entries
      • or generate payment proposals.

      In the payment proposals, the system displays payments that are due soon. This helps you decide which payment should be made first with the help of artificial intelligence. Then, you can proceed to make the payment.
      You can then, of course, generate a corresponding payment file that you can read and process in your online banking or bank software.

      Related vendor ledger entries are automatically closed in both cases.

      Payment Journals Payment Journals
    • How do I close a fiscal year in Microsoft Dynamics 365 Business Central?

      At the end of a fiscal year, some administrative tasks arise. The specific tasks depend on your company.

      How can the system support you?

      The system assists you in closing a fiscal year. Closing the fiscal year is one of the tasks for closing the books. After you have closed the fiscal year, the “Closed” and “Date locked” fields are activated for all periods of the year. You cannot reopen a year or deactivate the checkboxes.

      The following tasks can be handled with the ERP solution:

      General ledger entries

      In preparation for closing the fiscal year, you should have set up system-wide and user-specific posting periods within which postings are allowed. In the context of closing a fiscal year, the following tasks can be performed:

      • Perform necessary general ledger adjustments
      • Update and post recurring general journal entries
      • Execute account schedules

      Customers and sales

      • Post all orders, invoices, credit memos, and complaints for customers
      • Post all cash receipt journal lines
      • Update and post recurring journal entries related to customers and sales
      • Reconcile customers with the financial accounts

      Vendors and purchases

      • Post all orders, invoices, credit memos, and complaints for vendors
      • Post the payment journal
      • Update and post recurring journal entries related to vendors and purchases
      • Run the Vendor – Balance to Date report
      • Reconcile vendors with the financial accounts

      Fixed assets

      • Post all maintenance costs through the fixed asset journal or invoices
      • Post adjustments
      • Post appreciations
      • Post depreciations
      • Update and post the journal for recurring assets


      • Process intercompany transactions


      • Complete tax reconciliations
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