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Automatically generate customer payments and settle open invoices

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Posted on by CU02071246-2

Hello all,

Is there any possibility to configure reconciliation matching rules in D365 F&O so that the system can automatically generate customer payments and settle open invoices based on predefined rules?

Scenario:

Import a bank statement
The bank statement contains a payment from a customer
In D365, no customer payment has been created
Requirement – while running reconciliation rules, the system should generate the customer payment and settle it against open invoices

Example:
A customer makes one large payment covering several invoices. In D365, there are multiple open invoices for this customer. We want the system to settle the oldest invoices first, so it should identify the oldest outstanding invoices and apply the payment accordingly.

I am aware of the action type "Settle customer invoice" in Reconciliation Matching Rules, but it doesn’t seem to fully support this scenario.

Is it possible to achieve this without custom modifications?

Thank you

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Dynamics 365 Finance

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Sagar121 308 on at

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Automatically generate customer payments and settle open invoices

Advance Bank reconciliation will help you.

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CU02071246-2 40 on at

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Automatically generate customer payments and settle open invoices

CA Neeraj Kumar, thank you for your response. This is helpful information; however, it would only be useful in this case if the system did not post the customer payment journal automatically, without ability to change it. I don’t think it’s possible to change the journal before posting through reconciliation matching rules, and therefore I cannot change the settlement type.

There is suggestion under review regarding this problem:

Modern bank reconciliation : option to post or not directly transactions from bank statement

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CA Neeraj Kumar 139 on at

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Automatically generate customer payments and settle open invoices

Hi,

Since you are already using the "Settle Customer Invoice" option under Bank reconciliation Matching rules which can be defined on certain conditions, it is not fulfilling the requirement. If i understand correctly, your requirement is to match the customer invoices automatically on FIFO basis.

To do the same, while doing the customer payment journal manually, we have an option to change the settlement type = Open Transactions [we insert column to see the settlement type, by default it remains None/Designated transactions when we select by ourself the related invoices to settle] which automatically do the settlement on FIFO basis.

To change the settlement type automatically, we have option to define the Automatic settlement option in AR parameters.. presently i am sharing only the standard document for reference.

Automatic settlement and prioritization - Finance | Dynamics 365 | Microsoft Learn

and use Customer posting profile wisely so to avoid automatic settlement for all the customers.

In case you find issues in setting up, i will try further by explaining step by step, please give a try and let us know the results. Hope this will help.

Regards,

Neeraj Kumar

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CU02071246-2 40 on at

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Automatically generate customer payments and settle open invoices

It is possible to automatically create customer transactions from bank statements by using reconciliation matching rules (e.g., matching the invoice number from the payment details line with the invoice number in D365). The issue arises after the customer payment is created - with the settlement with open invoices.

This is in D365 F&O, and I’m considering the current out-of-the-box capabilities of the system. The business scenario assumes that no customer payments exist before importing bank statements. Since the volume of payments is large, we do not want to create them manually.

Yes, Modern bank reconciliation is enabled.

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Frank Hamelly | MVP... 46,615 Super User 2025 Season 2 on at

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Automatically generate customer payments and settle open invoices

Do you have Modern bank reconciliation enabled? Cash application in advanced bank reconciliation - Finance | Dynamics 365 | Microsoft Learn

This article walks you through configuration.

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Sohaib Cheema 47,694 User Group Leader on at

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Automatically generate customer payments and settle open invoices

These are just the transactions matching rules. I have not seen anything like automatically creating the customer transactions (which are on the bank statement).
There are features like Automatically clear bridged transactions, but nothing like creating transactions.
Do you use another system/ERP for Accounts Receivables (Sales Ledger)? Why do you not have the customer payment transactions by the time you receive the bank statement? Does your bank work faster than you post the customer transactions in the system?

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