Set up balance accounts

The balance account defined on a vendor payment defines the company bank account that will be used for a transaction. Payment Management uses the balance account to validate payments, as the requirements for the payment information depend on the bank and the bank account. So, in addition to defining which balance account should cover the payment, it is also important to define a balance account so that Payment Management can validate the payments.

Balance accounts can be set up in several places in Business Central. In Payment Management, you start by setting up balance accounts based on currency to ensure that a balance account can always be applied to a payment.

If a balance account hasn't been applied on the payments or on the payment journal, the balance account setup and the payment currency determines which balance account will be applied to the payment. This setting must be activated on the payment journal setup which we'll take a look at later in the training.

In the assisted setup, you already set up the standard balance accounts, but let's take a closer look.

Set up the balance account based on currency

1. From the Role Center, search for Payment Management Setup, and then choose the related link.
2. On the Payment Management Setup page, select Manual setup.
3. On the Manual Setup page, select Balance Account Setup.
4. The Balance Account Setup page will open and from there you can specify which balance accounts should be used for payments in a specific currency. You can only add one balance accounts for each currency.
   

When Payment Management generates a payment suggestion in the payment journal, it will use this balance account setup to define which balance account to apply to vendor payments that do not already have a balance account defined.

This setup is necessary to prevent a situation where there is no balance account specified for a payment. This will act as a fail-safe, for when there is no setup on the vendor. If you have a very simple account setup, then this setup will be everything you need. For more advanced setups with several accounts in the same currency, you'll have to setup balance accounts on the vendor instead.

More places to set up the balance account

In addition to setting up balance accounts based on currency, you can also set it up on the vendor card, the purchase document, and the payment journal.

Balance account on the vendor card If you define the balance account directly on the vendor card, you ensure that a balance account is automatically applied to the purchase document for the given vendor. If you wish to apply a balance account to several vendors at the same time, you can use the assisted vendor payment information setup.

Balance account on the purchase document If a balance account hasn't been defined on the vendor, you can define it directly on the purchase document. If a balance account is required on the purchase document, an error message appears if you try to post the purchase document without a balance account.

Balance account on the payment journal: If you define a balance account directly on the payment journal, only payments that have the given balance account, or payments that have no balance account can be created in the journal.

In the next unit, you'll learn how to keep the currency exchange rates updated in Business Central.

Video

The following video demonstrates how to customize the setup of balance accounts.