Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

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Posted on by Community Member Microsoft Employee

Importing a bank statement includes vendor payments, but the function does not consider payments that was posted to the vendor and bank already. are you supposed to remove the vendor payments from the imported statement that defeated the purpose of a bank statement import, and import the statement again using the bank reconciliation journal but what then if the receipts on the Bank account reconciliation? the standard way to process a vendor payment is to run the suggest vendor payments and then process the payment (export) on the Bank system, once processed the payment journal is posted. you can wait for 2 days until the payment reflects on statement to only process the payment (would have to delete payment journal in this case). the question what is the correct way? or was the payment reconciliation journal function just slapped on by someone who does not now how vendor payments and treasury actually work? The Auto apply function works great on the Payment reconciliation journal, but not on the General journals very sad.

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Jens Glathe 6,092 on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Hi Philip,

you could also manually define a bank transit account (g/l), and post the vendor payment batch against this g/l account. In Bank reconciliation, you post against bank transit - problem is, to have this reconciled, you would need open items for g/l, which is an AddOn (at least in Germany). To add to the gaps, the suggest vendor payments batch is even more broken since NAV2013 - unapplied credit memos can lead to surprise side effects. The AddOn variants are usually better. Doesn't look like you can do without an AddOn...

with best regards

Jens
Community Member Microsoft Employee on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Thanks, Jens.

I'm Using Opplus already on an older version of NAV.

I was actually hopping that if MS Dynamics NAV adds functions to the new versions they actually do it all they way, no add-ons required:(

add-ons normally try's to add value by over complicating the process and adding miles of code that ends up never begin used.

The new function for payment recon is almost there.. it is just the vendor payment application or "transit account" applications that are missing, then you would be able to process the whole bank statement in a single journal (think that was the idea)..

I think the conclusion would be that the Payment Reconciliation Journal is a great new feature for Customer receipts and bank charges, but it does not work if vendor payments, has already been processed.

You have to use the Bank reconciliations for the vendor payments and then choose to use transfer to journal or the payment reconciliation for the receipts.
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Jens Glathe 6,092 on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Hi Philip,

there are things in NAV that beggar imagination :) I think you are right, there is quite a big gap in this functionality. Usually this is filled in by a local package, like (in Germany, for example) a payments addon. This is there since... I don't know, I'd say 2000 at least, and it fills this gap. It is so ubiquitous in german installations of NAV that even other payment addons build on this functionality... go figure. What they (akquinet) essentially did was introduce a bank transit account (g/l) and bank transit postings, controlled by the type of journal batch. This way you can post your payment (file acknowledged by bank, apply the V/L or C/L entries) and do a bank reconciliation (against bank transit account, G/L). To top it off you can have open G/L entries to reconcile the transit accounts (among others).

As for making a dev change to fill this gap yourself, I would say possible, but not recommended. It is a big one, pretty complex (as in you have a lot of opportunities to make the errors others have already made and mitigated), and there are addons on the market to fill it nicely and add some more useful functionality as a side effect. I would suggest to take a look at akquinet PMT, and gbedv OP-Plus (would be my choice).

with best regards

Jens
Hannes Holst 5,767 on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Hi,

I've just test in a Cronus-company and yes, when a Payment is posted on a vendor, the payment will not be recognized in the Payment Reconciliation Journal.
In case you want to export a Payment-file out of NAV and use the Payment Reconciliation Journal, you could just delete the Payment Journal after you did export a Payment-file. For this it might necessary to integrate a small change that allows to delete a Payment Journal after it has been exported.

Alternatively, it might be possible in your banking software to export payments and receivables separately. Then you could reconcile the vendor payments through the bank reconciliation and customer payments through the Payment Reconciliation.
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Community Member Microsoft Employee on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Thanks,

The NAV community all state this "The Payment Reconciliation is designed to reconcile the customer invoices, vendor payments and bank ledger entries in one go." but if the vendor payment are processed as per normal step 1 to 6 above, Vendor payments can not be Applied on the Payment reconciliation (invoices will be paid already), vendor payments need to apply to bank ledger entries or even g/l entries for vendor payments and vendor ledger entries for invoices (current scenario). Most businesses only use 1 bank account for Payments and receipts, I think this function was intended for companies where they use separate accounts for receipts and payments.

If MS Dynamics NAV adds the option to apply vendor payments to bank ledger entries and g/l entries the function will work for all scenarios and not just 1 as is currently the case.

Thanks for the replies, I will make some dev changes.
Hannes Holst 5,767 on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Hi,

Reading your description, it seems you make all your payment-management depending on your bank statement only.

Maybe it's necessary to differentiate here. As I'm only guessing on the information you have written and I do not know the details of your processes, it's always the best to get in contact with your local NAV-partner to discuss about an in-depth analysis and training for your particular situation.

Vendor Payments

1) Open Payment journal (nothing to import here)

2) suggest Vendor Payments

3) add/amend manually

4) export payment-file and import into your banking software OR transfer payments manually into your banking software

5) process payments in your banking software

6) wait for confirmation of successful payment and post the Payment Journal in NAV

--> Now your Vendor-accounts are balanced. NAV waits for the confirmation of the payment through the bank statement.

Payment reconciliation (Customer & Vendor)

Details are outlined here: https://docs.microsoft.com/en-us/dynamics-nav-app/receivables-how-reconcile-payments-auto-application
When posting a Customer invoice, NAV automatically expects a payment. Just posting the invoice is enough for this.
For vendor payments, NAV expects to have the vendor payment posted before (see above). This is necessary, to let NAV know when you actually did pay the invoice (for any cash discounts) or if you pay the invoice at all.

The Payment Reconciliation is designed to reconcile the customer invoices, vendor payments and bank ledger entries in one go.

Identifying payments automatically without a corresponding mapping criteria in the transactions (e.g. customer number, invoice number) is impossible for NAV (or any ERP). Therefor any bank charges etc. you have to apply manually. Check this link here for information about the "Text-to-Mapping"-setup: https://docs.microsoft.com/en-us/dynamics-nav-app/receivables-how-map-text-recurring-payments-accounts-auto-reconcilliation

In case bank charges do have always the same description on your statements, you could use this setup to "train" your reconciliation for automatically apply bank charges to your desired account.

For the Payment Reconciliation is one important information necessary to consider: The Payment Reconciliation does work for one bank account at a time only. In case you have different bank accounts for customer and vendor payments, you'll have to import multiple bank statement and process them individually.

Bank reconciliation
This is used in case you work with the Cash Receipt Journal and Payment Journal separately.
Or, use the Bank reconciliation for bank accounts which you use for company related payments (you do not have a customer invoice or vendor invoice). E.g. rent, utilities, interests etc.

Good luck.
Community Member Microsoft Employee on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

thanks,

I do know that process.

let met try give more detail.

A normal company creates Vendor payments using the suggest vendor payments and then post the journal once a ACK is received from the bank.

Customer receipts are processed via credit card or eft, so the company does not process receipt directly , they only process receipts when funds reflect on bank statement.

bank reconciliation

1. suggest lines to get posted vendor payments, etc.

2. import bank statement

3. Auto apply

4. manually apply vendor payments not automatically applied.

5. transfer to Journal (receipts and bank charges)

6. Auto apply on general journal (text mapping, etc)

issue 1: rouge invoices are created if no customer receipt match is found..

7. Manually apply customer receipts and bank charges not automatically applied.

8. Post journal

9. Suggest line on bank recon

10. Auto apply

11. manually apply remainder not automatically applied.

11. Post bank recon.

the other option:

Payment Reconciliation journal.

1. Import Bank statement

2. Auto Apply

issue 2: this function seems to work Much better than the one from the Journal above and does not insert rouge invoices.

Issue 3: vendor payments are not considered..

3. Manually apply receipt and bank charges not automatically applied.

What do you do with the vendor payments already posted (I can not process them again)?!

removing them from the journal is an option, but then the statement total balance would not work as intended.

4. Post Payment recon.

IF vendor payments where considered as part of this function the bank recon would have been 'redundant'. and simply an audit function at month end.
Hannes Holst 5,767 on at

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RE: Payment Reconciliation Journal - Vendor Payments and Suggest vendor Payments

Hi,

As you have written, for Vendor Payments the intended way to go is:

1) Payment Journal

2) run "Suggest Payments" or type in the payments manually

3) transfer the payments to your banking software (by using the export-function or manually)

4) post journal

After that (maybe 2 or 3 days later), when your bank executed the payments:

1) Import Bank Statement or type in bank statement manually

2) reconcile the bank statement with the bank ledger entries

3) done

Because you have written in a difficult-to-read style, just describe any other problems again.