How to Manage Your Finances in Business Central

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

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

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”.

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

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’

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.

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.

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

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

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).

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:

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).

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.

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

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

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’

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

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

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”.

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.

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.

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

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

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”.

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

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

Intercompany

• Process intercompany transactions

VAT

• Complete tax reconciliations