How to do a bank reconciliation in Business Central

Preparing for bank reconciliation in Business Central

Make sure the books are current first. Post customer receipts, vendor payments and any transfers dated in the statement period. Only posted bank account ledger entries can be matched. On the Bank Account Card, check that Last Statement No. and Balance Last Statement agree with the previous reconciliation.

Next, decide how statement lines will arrive. You can type them. You can also import a file that your bank provides in a supported format. A third option is a bank feed, which downloads transactions for you. File import relies on a bank statement import format, chosen on the bank account card.

Create the reconciliation and bring in the statement

Choose Bank Account Reconciliations, then New, and select the bank account. Enter the statement date and the Statement Ending Balance exactly as the bank printed them. Use Import Bank Statement to load the file. The lines appear in the left pane with date, description and amount. Open ledger entries appear in the right pane.

Have no file? Then Suggest Lines fills the left pane from the ledger entries themselves. You tick them off against the paper statement and remove anything the bank has not cleared. That approach is quicker to start. However, it depends on a careful human check.

Match lines in a bank reconciliation in Business Central

Choose Match Automatically and set the date tolerance. Business Central pairs lines and entries by amount, date and text, such as document or check numbers. It colors the matched rows. For what remains, select a line on the left and one or more entries on the right. Then choose Match Manually. Several entries can match one deposit line.

Copilot adds a reconciliation assist. It can propose further matches where the text is similar but not identical. It can also suggest a G/L account for leftover lines, based on their description. You accept or reject each proposal, so control stays with the accountant. Remove Match undoes a wrong pairing.

Handle differences and outstanding items

Statement lines with no ledger entry are usually bank fees, interest or a payment nobody recorded. Select them and use Transfer to General Journal. That creates journal lines against the bank account. Add the balancing account and post the journal. The new ledger entries then appear on the right, ready to match.

Ledger entries with no statement line are outstanding items. Typical cases are checks not yet cashed or deposits in transit. Leave them open, and they carry into the next reconciliation. Run the test report before posting. It lists outstanding checks and deposits, and it confirms that the balances agree.

Post the bank reconciliation in Business Central

When the total difference is zero, and the totals agree with the ending balance, choose Post. Matched ledger entries close and carry the statement number. The bank account card gets the new last statement balance. A bank statement record is also stored, and you can open it later from the bank account.

Did you find a mistake after posting? You can undo the reconciliation from the posted bank statement. That reopens the entries, so you can redo it. Reconcile at least once a month. If your process still relies on spreadsheets, our consultants can set up imports, matching rules and feeds with you.

Bank reconciliation in Business Central: questions

What is the difference between bank reconciliation and the payment reconciliation journal?

The Bank Acc. Reconciliation page checks posted ledger entries against the statement. The Payment Reconciliation Journal starts from the statement instead. It applies incoming and outgoing payments to open invoices and posts them as it goes. Many teams use the journal each day and reconcile once a month. So the two tools work well together.

Which bank file formats can be imported?

Business Central imports statement files through data exchange definitions, and standard ones exist for common formats. Banks vary, though. So the first step is to ask your bank which export formats it offers. Then pick or adapt a definition that reads that file. We can help you set up a bank reconciliation in Business Central that imports cleanly.

Why does my reconciliation show a difference I cannot find?

Check the opening balance against the prior statement first. Then look for a ledger entry matched to the wrong line, and for transactions dated after the statement date. Filter each pane to open rows. That usually exposes the cause within a few lines. If it does not, compare the totals of each pane again, line by line.

Can credit card accounts be reconciled the same way?

Yes. Set the card up as a bank account with its own posting group that points to a liability account. Record charges against it, and reconcile to the card statement on the same page. The payment to the card company is then a transfer between accounts. So the same routine works for cards and for bank accounts.

Can I correct a reconciliation after it is posted?

Open the posted bank statement from the bank account and use the undo action. The statement is reversed into an open reconciliation, and the ledger entries open again. Then you can fix the matching and post it once more. Note the reason for the change in your close checklist, so the auditor can follow it.

Related pages for bank reconciliation in Business Central

Bank reconciliation in Business Central runs more smoothly when payments and feeds are set up well. These pages cover check printing, bank deposits and the month-end close that reconciliation belongs to. They also describe our banking integration services. Start with the bank deposits guide, since it shows how one statement line can match a whole bundle of checks. For the product detail, see Reconcile bank accounts on Microsoft Learn.