The Advanced bank reconciliation feature lets you import electronic bank statements and automatically reconcile them with bank transactions in Microsoft Dynamics 365 for Finance and Operations, Enterprise edition. This topic explains the reconciliation process.
Import an electronic bank statement
You import your bank statements by using the Import statement action on the Bank statements page. On the bank statement, the bank account is identified through a combination of values that are set on the bank account details. These values include the bank name, bank account number, routing number, Society for Worldwide Interbank Financial Telecommunication (SWIFT) code, and International Bank Account Number (IBAN).
You can upload a bank statement that contains information for either a single account or multiple accounts. If there are multiple accounts, the accounts can be in different legal entities.
- To import a single bank statement file for a single account, set the Import statement for multiple bank accounts in all legal entities option to No, and select the bank account that is associated with the statement. Click Browse to select the associated bank statement file, and then click Upload.
- To import a single bank statement file for multiple accounts, set the Import statement for multiple bank accounts in all legal entities option to Yes. Click Browse to select the associated bank statement file, and then click Upload.
If any statements in the electronic file can't be associated with a bank account by using the identifying fields, they won't be imported. However, other statements in the file can still be imported. The user then receives a message that states that the import of bank statements was unsuccessful for specific bank accounts. Note that the user who is importing the bank statement file must have access to a legal entity to import statements for that legal entity's bank accounts.
You can use a zip file to upload multiple statement files to Finance and Operations in a single process. To import multiple bank statement files for multiple accounts, combine all the bank statement files into one zip file. In the Import bank statements dialog box, set the Import statement for multiple bank accounts in all legal entities option to Yes. Click Browse to select the zip file that contains the bank statement files, and then click Upload. The import process will recognize the zip file and upload each statement that is included in it, regardless of the legal entity of the bank account.
A Reconcile after import option is available. When you set this option to Yes, the system automatically validates the bank statement, creates a new bank reconciliation and worksheet, and runs the Default matching rule set when the bank statement is uploaded. This functionality automates the process up to the point where transactions must be manually matched.
Validate the bank statement
To validate a statement, on the Bank statements page, click Validate. Bank statements must be validated before they can be reconciled. This step is automatically completed if you set the Reconcile after import option to Yes at the time of import.
Bank statement validation verifies the following details:
- The bank statement matches the selected bank account.
- The bank statement currency matches the bank account currency.
- The opening balance of the statement equals the closing balance of the previous statement for the bank account.
- The date doesn’t overlap the date for another bank statement for the same bank account.
- There are no gaps in the dates for statements for the bank account.
- Dates on the statement lines are between the from-date and to-date of the bank statement.
- The opening balance and summarized line amounts equal the ending balance.
When the validation is completed, the status of the bank statement is updated to Validated. A bank statement must be validated before it can be reconciled.
Reconcile the bank statement
After you’ve imported an electronic bank statement and validated the statement on the Bank statements page, you can reconcile the bank statement by using the Bank reconciliation and Bank reconciliation worksheet pages.
On the Bank reconciliation page, click New to create a new reconciliation, and then select the bank account of the statement that was imported. A bank account can have only one open bank reconciliation. The cut-off date determines the bank statement transactions and Operations bank transactions that are included on the reconciliation worksheet. By default, the current system date is used as the cut-off date, but you can change the date for the reconciliation. The remaining header information is automatically taken from the statement. This step is automatically completed if you set the Reconcile after import option to Yes at the time of import.
On the Bank reconciliation page, click Worksheet to open the Bank reconciliation worksheet page. If you set the Reconcile after import option to Yes, the Default matching rule set is automatically run for the reconciliation. To manually run matching rules, click Run matching rules to select the matching rule sets or matching rules to run against the bank transactions. If you have many transactions to process, you can complete this step as a batch process.
The Bank reconciliation worksheet page has four grids that contain transactions. The two upper grids show transactions from the bank statement and Operations that haven’t yet been matched. The two lower grids show matched transactions. The Bank statement transaction details tab shows details for the unmatched bank statement transaction that is selected in the upper grid.
There are three ways to match or reconcile bank statement transactions:
- Match the transactions with Operations bank transactions.
- Match the transactions with a reversal bank statement transaction.
- Mark the transactions as New, so that they can be posted later as a bank transaction in Finance and Operations.
To manually match transactions, select the transactions in the Bank statement transactions grid, select the corresponding transactions in the Operations bank transactions grid, and then click Match. The selected transactions are moved from the upper grids for unmatched transactions to the lower grids for matched transactions. Additionally, the matched and unmatched total amounts are updated. You can have one-to-one, many-to-one, and many-to-many transaction matches. Matches must follow the rules for allowed date differences and transaction type mapping. These rules are set on the Cash and bank management parameters page.
Penny differences might occur in your reconciliation. You can match a single bank statement transaction and a single Operations bank transaction that have penny differences if the penny differences are within the tolerance amount that is defined by the Allowed penny difference field on the bank account. The amount is shown in the Correction amount field on the matched Operations bank transaction. When the bank reconciliation is marked as reconciled, corrections are automatically posted by using the main account that is defined on the associated bank transaction type. Corrections aren't supported for the Check and Deposit document types.
Bank statement transaction reversals are matched by using the reconciliation worksheet. Two statement lines can be matched if the amounts are opposite, and if one of the transactions is marked as a reversal. You can also set up a matching rule for the Clear reversal statement lines action.
Reversed Operations bank transactions must be reconciled by using the Operations bank transactions page. You can reconcile two Operations bank transactions together if the documents have the same bank account, document type, and payment reference, and if they have opposite amounts. You can also reconcile a single canceled check to prevent those transactions from appearing on the reconciliation worksheet.
If there are new bank-initiated transactions, such as interest, fees, and charges, that aren’t yet in Finance and Operations, you can add them to a journal that is associated with the selected bank statement reconciliation. Select a bank statement transaction in the Bank statement transactions grid for unmatched transactions, and then click Mark as new. The status of the transaction is set to New, and the transaction is moved to the Bank statement transactions grid for matched transactions. You will post transactions that are marked as New later, from the Bank statement page.
You can unmatch transactions that were incorrectly matched. Select the matched bank statement transaction, and then click Unmatch. All associated transactions are moved back to the upper grids for unmatched transactions, and the matched and unmatched total amounts are updated.
After completing your reconciliation process, you should mark the Bank reconciliation worksheet as reconciled. This process will automatically post correction amounts using the accounts set on the Bank transaction type page. The bank reconciliation for a statement can be marked as reconciled at any time, even if there are bank statement lines that have not yet been matched. The unmatched transactions will automatically move to the next reconciliation worksheet as unmatched bank statement transactions to be reconciled. Note that once a bank statement reconciliation has been marked as reconciled, it cannot be undone. The reconciliation will no longer be editable and you will no longer have the ability to make updates to that reconciliation.
Post new transactions that are associated with the reconciliation
Bank statement transactions that you marked as New on the reconciliation worksheet are posted on the Bank statement page. On the Bank statement page, select the statement ID to view the statement details. On the Accounting menu, you can use the View distributions and View accounting options to view details behind the new transactions and the associated ledger entries. Select the Post option to post the bank statement lines that are marked as New to the general ledger. Note that posting can be completed only one time per bank statement.