Payment journals in Business Central: paying vendors step by step

How payment journals in Business Central fit into payables

Purchase invoices create vendor ledger entries with due dates and any payment discount terms. The payment journal is the next stage. It gathers those open entries into a run. A payment line has Document Type Payment, Account Type Vendor, an amount and a balancing bank account. The money leaves from that bank account.

Most companies keep one batch for each bank account or payment method in payment journals in Business Central. Then checks and electronic payments stay apart, and each batch has its own number series. The same journal can also pay employees for expenses. It can record a manual payment that you made outside the system too.

Using Suggest Vendor Payments in payment journals in Business Central

In the journal, choose Suggest Vendor Payments. Last Payment Date sets the cut-off. The run includes entries due on or before it. Find Payment Discounts also picks up invoices whose discount would expire before the next run. Available Amount caps the total. Use Vendor Priority decides who gets paid first when money is short.

Further options shape the lines. Summarize per Vendor creates one payment for each vendor instead of one for each invoice. Set the Posting Date, the starting document number, the balancing bank account and the Bank Payment Type. Filters on the Vendor section narrow the run, for example to vendors with a particular payment method code.

Adjusting lines and applying entries

The suggestion is a draft. Delete lines you do not want to pay. Change an amount for a part payment. To see or change what a line settles, choose Apply Entries. The page lists the vendor's open invoices and credit memos, and Set Applies-to ID marks the ones this payment covers.

You can hold invoices that you want to skip every time at the source. Enter a code in the On Hold field of a vendor ledger entry, and it stays out of suggestions. You can also block a vendor for payment on the vendor card. This works best for one-time or disputed vendors.

Checks and electronic payments from payment journals in Business Central

For checks, set Bank Payment Type to Computer Check and choose Print Check. Business Central assigns check numbers from the bank account and records each one in the check ledger. You void a misprinted check from the journal. You void a posted one from the Check Ledger Entries page, which can also reverse the payment.

For electronic payments, the vendor needs a bank account, and the bank account card needs a payment export format. Set Bank Payment Type to Electronic Payment and export the file for upload to your bank. Formats differ by bank. So we always test a sample file with the bank before the first live run.

Posting payment journals in Business Central

Run Preview Posting to confirm the entries. Then send the batch for approval if your workflow requires it. Posting closes the applied invoices and creates vendor and bank ledger entries. It also records any payment discount you took. Business Central allows posting only after you print the checks and export the electronic lines.

Afterwards, send remittance advice to vendors and match the payments when the bank statement arrives. Splitting duties helps control. One person prepares the run and another approves it. If you want your payment run quicker or safer, our consultants are happy to look at it with you.

Payment journals in Business Central: frequent questions

Why did Suggest Vendor Payments return nothing in my payment journals?

Common causes are a Last Payment Date earlier than the due dates, vendors blocked for payment, entries marked on hold, or a vendor filter that leaves them out. Also check that the invoices are posted and still open. Then check that no other journal already holds payments for them. That last case is easy to miss when two people work in parallel.

Can we pay part of an invoice?

Yes. Reduce the amount on the payment line. Or open the Apply Entries page and edit the Amount to Apply for that invoice. After posting, the invoice stays open for the remainder. It appears in the next suggestion when it falls due.

How do we void a check that was already posted?

Open the bank account, go to Check Ledger Entries, select the check and choose Void Check. You can void the check only. Or you can void it and unapply the payment, so the invoice becomes open again and you can pay it a second time. Pick the second option when the money never left.

Can payment runs require approval?

Yes. Approval workflows exist for general journal batches, and those include payment journals. The preparer sends an approval request, and nobody can post the batch until an approver accepts it. Combined with permissions, this separates preparing payments from releasing them. Many finance teams switch it on for every bank account.

Does Business Central send the file to the bank automatically?

As standard, it creates the file and you upload it through your bank's portal. Direct transmission is possible with a banking add-on or an integration. We assess which one suits your bank and volume before we recommend a route, and we test it in a sandbox first.

Related payables and banking pages

Payment journals in Business Central sit between payables and the bank. These pages cover the payables process, check layouts, bank reconciliation and direct connections between Business Central and your banks. Read them together, because a smooth payment run depends on clean vendor data and a tidy bank setup. Our consultants can walk through your current payment run with you and suggest small changes that make it quicker and safer. For the product detail, see Make payments, on Microsoft Learn.