The advanced bank reconciliation (ABR) feature in Microsoft Dynamics 365 Finance can help automate and accelerate your organization’s reconciliation process. In this video tutorial, we’ll guide you through how to set up and use ABR in Dynamics 365 Finance.
This feature lets you import bank statements and automatically match statement lines with bank transactions in Dynamics 365 using customizable matching rules. It can match bank statement transactions to your bank subledger transactions for both outgoing and incoming payments. It can match journal entries to the subledger, generate vouchers for new transactions such as bank fees, and settle customer invoices upon receiving payment.
By reducing manual matching, ABR can significantly decrease the time and effort required for reconciliation, while also precluding human error.
Enabling Advanced Bank Reconciliation
Microsoft provides standard formats through Electronic Reporting, and with the use of the Modern Bank Reconciliation feature, setup and configuration generally require a minimal amount of effort. Most of the setup comes in the Reconciliation matching rules, where users can define criteria to match or generate a voucher upon the order of precedence for the defined rules.
ABR must be enabled individually for each bank account where you want to use the feature. Note that once this is activated and a bank statement is imported, the feature cannot be turned off for that bank account.
Key Features
Electronic Bank Statement Import: Dynamics 365 Finance offers robust out-of-box capabilities for importing electronic bank statements in widely used formats, including BAI2, ISO 20022, and MT940. This functionality enables organizations to automate the input of bank transaction data and help reduce the risk of manual data entry errors. To further streamline the reconciliation process, Dynamics 365 can be integrated with SharePoint, allowing for the automated retrieval of bank statement files from a centralized, secure SharePoint folder.
Automated Bank Statement & Transaction Matching: Prioritize and execute custom matching rules to automate the time-consuming task of reconciling bank statement lines with ledger transactions. Dynamics 365 supports matching criteria such as amount, date, and reference numbers, as demonstrated in the video.
Automatic Creation & Posting of New Transactions: Reduce manual entry by automating the creation and posting of transactions not matching an existing ledger entry. Matching rules support the creation of customer payments, vendor payments, and vouchers directly from imported bank statements.
Reconcile After Import: Reduce manual effort by enabling “Reconcile after import” to automate bank statement validation, reconciliation worksheet creation, and transaction matching using preconfigured rules.
Modern Bank Reconciliation: Consider further enhancing the bank reconciliation process by enabling the Modern Bank Reconciliation feature in the Feature Management workspace. This feature provides extended matching logic and a user-friendly interface, as shown in the video.
How Forvis Mazars Can Help
With features like ABR, finance teams can achieve faster month-end closings, improved data accuracy, and enhanced audit readiness. With support for multiple bank statement formats and flexible rule configurations, automated reconciliation offers a scalable solution. This tool can help finance professionals devote more time to strategic tasks, rather than routine data entry—driving improved financial control and visibility.
The Microsoft team at Forvis Mazars can help you set up advanced bank reconciliation in Dynamics 365, configure rules, make any necessary adjustments to the file format or mapping, and train your users on how to add additional rules and process statements. Our experienced technology consultants can help your organization achieve more with its business systems. Forvis Mazars is a certified and top 1% Microsoft Business Applications Partner. Connect with us today to learn more or start your next project.
Related reading: Dynamics 365 Finance Feature Management Developer Tips