SETUP MATCHING RULES – ADVANCE BANK RECONCILIATION

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Happy New Year to All!

Here is my first post of 2018 on Advance Bank Reconciliation

INTRODUCTION

Advanced Bank Reconciliation feature introduced in AX 2012 facilitates automatic bank reconciliation by importing the bank statements and reconcile them with bank transactions posted in AX.

This feature is being used extensive and most popular across all the industries, it reduces lot of human effort and helps the organization to use the resources effectively.

In this blog, I will be discussing on setting up the matching rules which helps in reconciliation process to automatically match the bank statements and bank transaction in AX with pre-defined criteria.

SETTING UP MATCHING RULES:

Matching rules are the criteria that you define to match the imported bank statement with the bank transactions, it is important to define the criteria’s by understanding the business data to ensure there is no incorrect matching of records.

Microsoft Dynamics Finance and Operations provides an ability to match transactions with three different actions to perform.

This blog focuses on three action you can define in matching rules with specific examples,

  • Match with bank document
  • Clear reversal statement lines
  • Mark new transactions

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ACTION 1 : Match with Bank Documents

This action setup helps to match the bank statement lines with bank transactions in AX, this functionality is used to match most of the transactions and used widely in the reconciliation process.

Example:

BANK STATEMENT LINES:

Bank transaction code Booking date Amount Document number
100 1/2/2018 150.15 66555444
100 1/2/2018 255.27 77888999

AX BANK TRANSACTIONS:

Date Bank Transaction Type Amount Payment Reference
12/30/2017 4 150 66555444
12/30/2017 4 255 77888999

Step 1 : Define the matching rule

This step allows to define criteria to match the transactions by Amount, Date, Document number, transaction type and Payment reference.

Additionally, we can also define criteria to match the transaction by descriptions, Transaction currency etc.

In this example, there will be no basic criteria defined to match the transaction, however additional criteria is defined as Payment reference(AX) = Document number(Statement)

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Step 2 : Select the statement lines to run matching rules against

This step allows to filter those statement lines which needs to be searched and matched against the AX bank transactions. Usually banks have specific transaction code for different types of transactions like deposits, chargebacks, fees etc.

In this example, the criteria will be defined as Bank transaction code =100

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Review after the matching rule is executed, both transactions has been matched in the reconciliation worksheet,

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Note: The allow penny difference has been setup for the bank to accept reconciliation difference up to $1.

ACTION 2:Clear reversal statement lines

This action can be used to clear the statement lines from reconciliation worksheet incase the bank creates erroneous transactions and reverse them.

These transactions usually do not exists in AX as it is error from bank side, but the bank statement contains all these transactions, so it is necessary to clear such transactions in reconciliation process.

Example:

BANK STATEMENT LINES:

Bank transaction code Booking date Amount Document number Reversal
200 1/2/2018 320.12 33222111
300 1/2/2018 -320.12 33222111 Yes

Step 1 : Find reversal statement lines

This step allows to add criteria to find and select the reversal statement line to be matched with the original transaction.

In this example, the bank sends the reversal statement lines with Bank transaction code = ‘300’

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Step 2 : Find Original Statement Lines

This step allows to define criteria to find the actual statement line which needs to be matched against reversal transaction.

We can define basic criteria and additional criteria to match based on the business requirement.

In this example, opposite amount check box is marked and match with document number is marked so the transactions can be cleared automatically.

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Review after the matching rule is executed, transactions has been matched in the reconciliation worksheet,

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ACTION 3: Mark New Transactions

This action is used to mark the statement lines as new for those transactions which are not recorded in AX. For example, Bank fees, charges etc.

Example:

Bank transaction code Booking date Amount Description
900 1/2/2018 220 Maintenance Fees
900 1/2/2018 340 Returned Deposit Fees

Step 1: Find Statement Lines

This step allows you to define criteria to find the statement lines that must be marked as new.

In this example, the criteria are defined as Description contains ‘Fees’ and Bank transaction code = ‘900’

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Step 2: Do not mark when there are matching bank transactions

This step allows to define criteria not to mark statement line as new if there are AX bank transactions found identical to statement line.

There could be scenario, when fees and other charges are booked in AX by users and may not want to mark the statement lines again as new.

For this example, I am not using this criteria as I have to mark all the statement lines with Description contains ‘Fees’ and the Bank transaction code = ‘900’ as new.

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Review after the matching rule is executed, transactions has been matched in the reconciliation worksheet,

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