Bank reconciliation in Business Central

Create the reconciliation and fetch the bank statement

Open the Bank Account Reconciliation page, choose New, and enter the bank account, the statement date and the ending balance from the bank. You then have two ways to fill the lines in the Bank Statement Lines pane:

• Import a file with the Import Bank Statement action. You can set up formats for comma-separated or semicolon-separated CSV in the Set up a bank statement file format assisted setup and link the format to the bank account.
• Use Suggest Lines to fetch invoices with open payments.
• Microsoft also describes bank feeds through Envestnet Yodlee. Check Learn to see whether the service is available for banks in your country before you rely on it.

Automatic matching

Choose Match Automatically. The function compares text on the bank statement line with text on the bank account ledger entries. In the Transaction Date Tolerance (Days) field you specify how many days before and after the posting date the system may look. If the field is 0 or empty, it only matches on the posting date itself.

Matched lines are shown in bold green. You can see the basis for a match with Match Details. Manual matches are not overwritten by the automatic function, so you can mix the two methods.

Matching is text based. The more consistent payment references, invoice numbers and descriptions are, the more lines match from the start. It can therefore pay to ask customers to use the invoice number as the payment reference.

Manual matching and differences

For lines that are not matched, you select the bank statement line in one pane and one or more bank account ledger entries in the other, and choose Match Manually. It can also be several statement lines against one entry, for example a deposit covering several card providers. Remove Match undoes it.

Differences must be resolved before you can post. Typical causes are that a bank movement is missing in Business Central, that something is posted in the system but has not happened at the bank, or that text and amount differ too much. Fees and interest often have no entry: use Transfer to General Journal, fill in the balancing account, post, and then match.

Check and post

Run Test Report first. Among other things, it shows the balance on the general ledger account on the statement date, the sum of differences and outstanding bank transactions and checks. You can post a reconciliation with unmatched bank account entries, but not with differences on statement lines.

When Total Balance in the statement pane matches the balance fields in the other pane, choose Post.

Keep the test report with the statement. It shows what was outstanding on the statement date, and is good documentation if anyone later asks why a bank movement was only reconciled in the following month.

Avoid posting directly to the bank account

Microsoft recommends that the general ledger account in the bank posting group does not allow direct posting. Direct postings break the link between the bank account ledger entry and the general ledger entry, and that is the classic reason a balance never adds up. It particularly affects the opening balance and foreign currency bank accounts.

Register an opening balance on the bank account through a journal with a balancing account, not directly on the general ledger account. If direct postings have already been made, they must be applied against each other before you do the first reconciliation.

Undo a posted reconciliation

If you discover an error, use Undo on the Bank Account Statement List page. The reconciliation comes back as open, and you can correct it and post again. Remember to check the statement number and the Balance Last Statement field, which you can change. There is no function that moves the balance forward to all later statements.

Microsoft also has a reconciliation assistant with Copilot, which Learn calls a preview. Check its status before you build a process on it.