How to Choose the Best Bank Reconciliation Option in Dynamics 365 Finance
Bank reconciliation is a critical part of financial management, but not all reconciliation methods are created equal. In Dynamics 365 (D365) Finance & Supply Chain Management (F&SCM), understanding the differences between the Simple, Advanced, and Treasury Automation Suite (TAS) options can make a significant impact on efficiency, accuracy, and scalability. In this blog, we’ll break down each bank reconciliation approach in D365 F&SCM to help you identify the best fit for your organization’s current needs and future goals. We’ll also examine where each method works best, outlining the key advantages and potential limitations to support a confident, informed decision.
Let’s dive in.
1) Simple Bank Reconciliation
The Simple Bank Reconciliation method in D365 F&SCM is a straightforward approach that requires minimal setup and offers flexibility in timing. It allows users to manually match bank transactions with general ledger entries, providing control over the reconciliation process without added system complexity. While it lacks automation, it’s a dependable option for organizations with relatively low transaction volumes.
Best Used For
- Bank accounts with minimal transaction activity
- Organizations with limited direct debit and transfer transactions
- Teams that prefer or require hands-on control over the reconciliation process
Advantages
- Out-of-the-box availability: Enabled by default in the system, requiring no extra modules
- Minimal setup: Easy to configure and quick to implement
- Flexible timing: Can be used daily, weekly, or monthly without additional adjustments
Disadvantages
- Manually driven: Each transaction must be manually cleared, which can be time-consuming
- No automation: Lacks the automated features available in more advanced options
- Manual reporting: Month-end reconciliation reports must be assembled manually, adding effort and risk of oversight
2) Advanced Bank Reconciliation
The Advanced Bank Reconciliation option in D365 F&SCM offers greater automation and efficiency, designed for organizations with more complex banking needs. By configuring matching rules and rule sets, this method can automatically match transactions, significantly reducing manual effort and improving accuracy. It also supports the settlement of accounts payable and accounts receivable invoices directly within the reconciliation process, making it a powerful tool for higher transaction volumes.
Best Used For
- Companies managing multiple bank accounts
- Accounts with a large volume of transactions
- Businesses processing numerous direct debits and transfer activities
Advantages
- Out-of-the-box functionality: Available by enabling on bank account setup without extra modules
- Automated matching: Configurable matching rules streamline transaction reconciliation
- Invoice settlement: Supports posting and clearing of AP and AR invoices as part of the process
- Enhanced reporting: More robust month-end reporting compared to the Simple method
Disadvantages
- Heavy upfront setup: Requires significant initial configuration of matching rules to fit business needs
- Segregation of duties risks: Combining reconciliation and payment posting can create control concerns
- Electronic reporting knowledge needed: May require familiarity with Electronic Reporting to configure bank import formats
3) Treasury Automation Suite (TAS) Bank Reconciliation
Treasury Automation Suite (TAS) is a third-party solution by SK Soft that offers enhanced bank reconciliation capabilities similar to the Advanced method but with additional automation and audit features. TAS is best suited for organizations that require automated bank file transmission, encrypted file handling, and strict segregation of duties for compliance purposes. This option requires a separate subscription and installation, but it integrates tightly with D365 F&SCM for a streamlined experience.
Best Used For
- Companies already using TAS for other treasury or payment processes
- Organizations needing automated transmission of bank statements and files
- Businesses requiring encrypted bank file handling
- Environments with strict audit and segregation of duty requirements
Advantages
- Streamlined setup process: More user-friendly configuration and data import capabilities than Advanced reconciliation
- Report formats maintained by SK Soft: Eliminates the need to manually map or update bank import formats
- Approval workflow support: Enables approval processes on transactions generated from bank reconciliation, addressing segregation of duty concerns
Disadvantages
- Additional subscription cost: TAS is a paid add-on, not included out of the box
- Heavy upfront setup: Similar initial configuration requirements as Advanced reconciliation, though somewhat more streamlined
- No automatic invoice settlement: Unlike Advanced, TAS does not automatically settle customer or vendor invoices after payment posting
Now that you understand the three bank reconciliation options, it’s important to ask the right questions, outline your next steps, and know where to turn for expert guidance.
Questions to Ask
Before deciding which option is best, take a moment to think about key questions that will clarify your current process and identify opportunities for improvement. Here are a few we recommend to consider:
- How long do my bank reconciliations take today?
- Could my transactions be auto-matched?
- Are there transactions that could be mapped and posted automatically, such as direct debits or bank fees?
- Does my bank provide the BAI2 statement format needed for smooth import?
Next Steps
As for your next steps, we suggest reviewing these bank reconciliation options with your accounting team and anyone currently involved in the reconciliation process. It’s important to gauge their interest and assess how these methods might improve your workflow. If the advanced or Treasury Automation Suite options seem like a good fit, consult your IT team about enabling the Modern Bank Reconciliation feature for testing. While advanced reconciliation is already included in your D365 environment, the modern bank reconciliation feature unlocks important capabilities like automatic matching and invoice settlement that require activation. For TAS, you’ll want to discuss the installation process and subscription requirements.
For More Information
If you want to explore which reconciliation method aligns best with your organization’s needs or would like help with setup and testing, Stoneridge Software is here to help. Don’t hesitate to reach out to us with any questions. You can contact us anytime at on our support page to learn more. Our experienced consultants can guide you through the process and ensure you get the most from D365 F&SCM.
Post by Jordan Soderstrom and Austin Shaw
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