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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Provisional Entries - ...
Small and medium business | Business Central, N...
Answered

Provisional Entries - D365 Business Cental

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Posted on by Dharmesh 344

Dear Experts,

I need to manage "Provisional Entries" at month-end for expenses and TDS in D365 Business Central.

A Provisional Boolean is available in voucher entries; however, when posting provisional entries, the system also generates Vendor ledger entries with the remaining TDS amount, which creates challenges in reconciliation.

I request your guidance on the best practice to manage Provisional Entries and how to properly reverse or close them once the actual expense invoice and TDS are posted in the following month.

Specifically, I would appreciate clarity on:

  • How to post month-end Provisional Entries without impacting vendor balances incorrectly

  • How to adjust or reverse Provisional Expense and TDS entries after posting the actual invoice

Looking forward to your guidance.

Categories:
Dynamics 365 Business Central
I have the same question (0)
  • Verified answer
    Dhiren Nagar Profile Picture
    Dhiren Nagar 2,685 Super User 2026 Season 1 on at
    Hi,
     
    In my experience the best practice is to book the provisional entry with TDS as per the Microsoft documentation.
     
    Yes this will post the entry in Vendor Account but if you see logically it is correct. Provisions can only be booked if the liability is certain probably from the expected future invoice from expected vendor. Also you need pay your vendor less for the TDS amount which you have paid on his behalf. I think this is the standard practice that when you deduct TDS ideally you have to report deductee PAN number.
     
    The next thing that you can do is when you post the Invoice, apply the provisional entry with the Purchase Invoice. That also you can do as per the Microsoft documentation. Then you can apply the Invoice ledger entry with the TDS entry and your amount payable on the Invoice will be reduced.
     
    The drawback I see is the Purchase Invoice module not having the option to apply Provisional entry which is like big.
     
    I hope this helps by the time Microsoft bring the option on Purchase Invoice.
     
    Regards,
    Dhiren.
  • Verified answer
    OussamaSabbouh Profile Picture
    OussamaSabbouh 11,005 Super User 2026 Season 1 on at
    Hello,
     
    For month-end expense and TDS provisioning in Business Central, don’t use Vendor-type entries or the Provisional flag—that setup is meant for temporary tax calculation and will always create Vendor Ledger Entries and reconciliation issues. Best practice is to post pure G/L accruals (Expense Dr. / Accrued Expense or Accrued TDS Cr.) using General Journals, which keeps vendor balances clean. In the next month, simply reverse the accrual (ideally via recurring journals) and then post the actual vendor invoice with normal TDS calculation. If provisional vendor entries are already posted, fully reverse them and re-post using the G/L accrual method—partial vendor adjustments will break TDS reconciliation.
    Regards,
    Oussama Sabbouh
  • Dharmesh Profile Picture
    Dharmesh 344 on at

    Thank you, @OussamaSabbouh. Currently, we are passing these types of entries through Journal Vouchers.

    Thank you, @Dhiren Nagar. It is working now. There are two options available for Provisional entries:                                                      1. Reverse Transaction, 2. Reverse without TDS

     
     
     
     

    So, I believe we can manage this requirement using these options.

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