Payment Methods | Automatic Payment in Dynamics 365 Business Central

Payment methods in Dynamics 365 Business Central offers users the opportunity to assign additional functionality behind each payment. One such case is to enable automatic payment upon invoice issuance. Users can have a wide range of payment method codes that can help distinguish the type of method used involving said payment:

D365 Business Central Payment Methods

These payment methods can then be defined on individual transactions or assigned to master data including customers and vendors. However, within the payment methods the user can further functionality by having the balancing account enabled. In this example, the cash account is being selected as the balancing account. When an entry is posted with the payment method “CASH”, a payment will automatically be made upon posting an invoice. Here we have a purchase invoice with payment method code “CASH”:

D365 Business Central Payment Method Code

Now that it is posted as 108210 in Vendor, under Vendor Ledger Entries, one can see the payment to the invoice being automatically inserted:

D365 Business Central Vendor Ledger Entries

If we examine the cash account G/L 11200, we see the cash account has declined by the $1,231.34 via a credit entry, resulting from the payment to the vendor invoice:

D365 Business Central Vendor Invoice

One can also choose balancing account type of Bank Account instead of G/L account to pick the bank account to allow for instant receipt of funds or payment of funds:

D365 Business Central Payment Methods Receipt

By doing so, the bank account will be credited at the time of posting and the user will not need to go and make a manual payment entry. This is particularly useful for entries to vendors where payment has already been issued or will soon be issued.

If you have any questions about payment methods in Dynamics 365 Business Central, please contact us!

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