Mastering Bank Reconciliation in Microsoft Dynamics 365 Business Central: A Step-by-Step Guide

7 days ago
3 min read

Bank reconciliation is a critical process for any business. It ensures that your accounting records match your bank statements, helps identify discrepancies, prevents fraud, and gives you a clear picture of your cash position. For businesses using Microsoft Dynamics 365 Business Central, bank reconciliation can be streamlined, accurate, and efficient—but only if you follow the right process.

In this guide, we’ll walk you through step-by-step how to master bank reconciliation in Dynamics 365 Business Central, and share tips to make it faster and error-free.

Why Bank Reconciliation Matters

Reconciling your bank accounts ensures:

Accuracy in financial reporting – Eliminates errors in accounts and prevents surprises.
Cash flow visibility – Know exactly what funds are available for operations or investments.
Fraud prevention – Detect unauthorized transactions before they become major issues.
Regulatory compliance – Maintain proper documentation for audits and compliance purposes.

Step-by-Step Bank Reconciliation in Dynamics 365 Business Central

1. Set Up Your Bank Account

Before reconciling, ensure your bank account is properly set up in Business Central:

Navigate to Cash Management > Bank Accounts.
Enter your bank details, including account number and currency.
Configure any automatic bank statement import methods supported by your bank.

2. Import or Enter Bank Statements

You can reconcile manually or use the Bank Statement Import feature:

For manual entries, input your opening and closing balances along with all transactions.
For electronic statements, upload your bank’s CSV or XML file to Business Central.
Ensure all bank charges, interest, and transfers are included.

3. Match Bank Transactions with General Ledger Entries

Dynamics 365 Business Central allows you to:

Automatically match bank statement lines to ledger entries using the Suggest Lines feature.
Manually reconcile unmatched lines by selecting the corresponding ledger entries.
Split payments if a bank transaction corresponds to multiple invoices.

Tip: Use filters and sorting to quickly locate unmatched transactions for faster reconciliation.

4. Handle Discrepancies

Sometimes, amounts won’t match due to:

Outstanding cheques or payments
Bank fees not recorded in Business Central
Duplicate or missing entries

Use the Adjust Bank Account Balance function to account for minor differences, and investigate significant discrepancies promptly.

5. Post the Reconciliation

Once all lines are matched and discrepancies resolved:

Post the reconciliation to lock it in the system.
Business Central automatically updates the general ledger and the bank account balance.

6. Review Reports and Audit Trails

After posting, generate reports to verify:

Bank Account Reconciliation Report – Shows matched and unmatched transactions.
Bank Account Statement Journal – Maintains a detailed audit trail.

These reports help with audits, compliance, and internal controls.

Tips for Efficient Bank Reconciliation in Business Central

Use Bank Feeds: Automate statement imports to save time.
Set Up Recurring Payments: For regular transactions, create templates to reduce manual entries.
Regular Reconciliation: Don’t wait until month-end—weekly or daily reconciliation reduces errors.
Leverage AI & Automation: Dynamics 365’s AI-assisted reconciliation can suggest matches, detect anomalies, and speed up the process.

Why Partner with The BC Team

Optimizing your bank reconciliation process ensures accurate financial data and frees up your team to focus on strategic decisions. The BC Team specializes in Microsoft Dynamics 365 Business Central, helping businesses:

Streamline finance operations
Automate reconciliations and reporting
Implement best practices for cash management
Train staff to maximize ERP capabilities

📞 Ready to take control of your cash and finance processes? Book a discovery call with The BC Team today and see how Dynamics 365 Business Central can simplify your bank reconciliation and drive smarter financial management.