What constitutes a bank?

Owned by Stephen Abela
Last updated: May 31, 2020
2 min read

We have been asked multiple times how to treat a wallet or loan or just a simple cash balance within Business Central/NAV.  Somehow the naming convention may confuse and limit our line of thought.  And yet when using an ERP system we are compelled to make the best use of it...that would also mean stretching the definition of a bank, to include any item which represents a cash transaction.

Step-by-step guide

Some companies opt not to fully utilise the Bank functionalities offered by the system and limit the Bank Account features simply to bank accounts, as in the traditional sense.  And yet in today's world this is very much a limiting view especially when considering the huge impact that challenger banks are having within our economy.  This is all the more important when considering that the Bank functionality provide the user with the following features:

  • Statement Reconciliation
  • Fast payment recognition
  • Foreign Currency retention
  • Month-End Revaluation
  • Payments - which may not necessarily be swift
  • Related Contacts
  • Numerous Reports

With this in mind we insist to move away from G/L Entries and instead opt to fully utilise the Bank Features.  This however leads us to the next question, and that's how to handle the different natures of the accounts as some of them are by default deems to be an asset whilst other ones are a liability.  Through the Bank Account Posting Groups this can be handled perfectly giving us the option to set a Bank Account posting group per bank if necessary.  The step-by-step process is provided here. 

In conclusion, our reply as to what constitutes a bank within Business Central/NAV our reply is a very simple one - anything which holds cash including, loans, overdrafts, wallets, director loans, savings and our very traditional cash drawer.