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How to Prepare for Reconciling Bank Statements Using Advanced Bank Reconciliation in Microsoft Dynamics 365 Finance (Part 1 of 2)
Posted on: May 3, 2023 | By: Hope Jin | Microsoft Dynamics AX/365, Microsoft Dynamics Manufacturing
Managing bank statements and transactions can be a tedious task, particularly when dealing with a high volume of transactions. Microsoft Dynamics 365 Finance provides the Advanced bank reconciliation feature to make bank reconciliation more manageable. This feature enables businesses to import electronic bank statements and automatically reconcile them with bank transactions. In this two part blog series, we will explain the reconciliation process in detail, from importing the electronic bank statement to validating and reconciling the statement. This blog will explain importing and validating electronic bank statements in more detail, two steps that needs to be completed before the reconciliation process. Look forward to Part 2 where we detail the bank 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 or if it is associated with multiple bank accounts 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.
You can use a zip file to upload multiple statement files to Finance 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.
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