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Business Central Vendor Deferral Entries

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Posted on by Nadim1

Hi all,

Our team is using the Deferral Module in Business Central to defer prepaid entries via Purchase Invoices.

We've encountered a couple issues here, namely, the fact that Business Central does an /in and out/ entry (Dr & Cr expense account for the prepaid addition), as well as the Invoice # as a description for the /out/ portion of the entry to the expense account (which makes it confusing as to what that entry relates to). I've posted a screenshot below, GL 6502 is our expense account, 1521 is the prepaid account (deferral account). In this example scenario I'm trying to defer $100 of expense over the 3 month period of Oct - Dec 2023.

I have 2 questions:

1. Is there any way to prevent Business Central from doing an /in and out/ entry in the posting month? Line 1 & 3 are unnecessary as they net out and just create extra transactions.

2. If there's no way to prevent this behavior, is there any way to change the description on Line 2 & 3 (aside from using the Edit function after it's posted)? I'd like them to have the same description as Line 1 but instead it seems to default to what the assigned Purchase Invoice # is. This way it will be clear that these 2 lines net each-other out in GL 6502 (while the balance nets out, it's not clear that these 2 entries are related to each-other based on description). Relevant screenshots below.

G/L Entries Preview

Purchase Invoice Description

Deferral Schedule Descriptions

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Dynamics 365 Business Central

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JP-10032319-0 7 on at

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Have you found a solution for this yet?

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YUN ZHU 102,361 Super User 2026 Season 1 on at

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As far as I know, this is standard behavior and is not recommended to be modified by customization because of the high risk.

Thanks.

ZHU

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Saif Ali Sabri 2,791 Moderator on at

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“AI was used in this reply”.
Solution for Business Central Vendor Deferral Entries Issue

Your concerns involve the unnecessary "in and out" transactions and the default description applied to the deferral entries. Below are solutions for both issues:

1. Prevent "In and Out" Entries in the Posting Month
Unfortunately, Business Central requires the initial expense posting before deferring it, meaning that the Dr/Cr to the expense account in the posting month is system-driven and cannot be disabled. However, you can try these workarounds:
Option 1: Post Directly to the Prepaid (Deferral) Account

Instead of posting the expense initially to GL 6502 (expense account), post it directly to GL 1521 (prepaid/deferral account).

This way, Business Central will only generate the deferral entries for the following periods and skip the in-and-out posting to the expense account.

However, this requires adjusting your default account selection for vendor invoices.

Option 2: Use Accruals Instead of Deferrals

If you want cleaner journal entries, you might consider setting up accrual postings instead of deferrals.

With accruals, you would post directly to 1521 (Prepaid) and manually recognize the expense monthly via a Recurring Journal.

2. Change the Description of the Deferral Entries
Since Business Central defaults the description of the deferral entry to the Invoice No., you cannot change this through standard settings. However, you have these options:
Option 1: Modify Deferral Template

Go to Deferral Templates (Deferral Templates page).

In the "Description" field, you can try adding a dynamic reference, but standard BC does not allow extensive customization here.

Option 2: Use a Customization (Extension) to Override the Description

A developer can create a Business Central Extension that modifies the "Description" field in deferral entries to match the original transaction description (instead of the invoice number).

This requires modifying Codeunit 1720 - Deferral Posting Management to dynamically copy the description from the purchase invoice line.

Option 3: Manually Update the Entries

Unfortunately, the only built-in method is manually editing the descriptions after posting, which is time-consuming but feasible for small volumes.

Conclusion & Best Approach

Prevent "In and Out" Posting? → Post directly to the deferral account (1521) instead of the expense account (6502).

Change Deferral Entry Description? → Requires a customization or manual editing.

Would you like guidance on setting up an extension to automate the description update?

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Gavin 2,510 on at

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Hi,

You can change the description of Line 1 by personalising the Purchase Invoice page and adding the "Posting Description" field. This will default to the Invoice number which you can overtype with the detail you like.

See below. This is the default text you can overtype.

So I overtype is as per below:

Which is now reflected in the postings:

Hope this helps

Thanks

Gavin

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Gerardo Rentería Ga... 27,507 Most Valuable Professional on at

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Hi

You can modify the description by subscribing to this event.

Best

GR

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Khushbu Rajvi. 23,132 Super User 2026 Season 1 on at

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Hope this helps as well: https://community.dynamics.com/blogs/post/?postid=840d39c4-5a3d-4d2b-b8d0-477b52479208

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