Microsoft added several features in Dynamics NAV 2015 and 2016 for “Bank Integration” – Vendor EFT Payments, Bank Statement Imports, and Positive Pay Export. Various versions of these functionalities have existed in Microsoft Dynamics NAV for years, either as Dynamics NAV “add-ons” or customizations done by Dynamics NAV implementation partners. Microsoft has attempted to standardize the approaches on a scale-able framework to make these integrations more a matter of “configuration” than “customization”. For North American users, the results are mixed thus far, but we are looking forward to further improvements.
Bank Integration in NAV 2016: The New Approach
Microsoft is taking a “configured services” approach to integrations across-the-board – so you can sign up for Microsoft credit card processing, and “incoming document OCR” services from Lexmark. Similarly, with banking integration, Microsoft has partnered with a European services company called AMC Banking to do file format conversions on-demand via web services to spit out Dynamics NAV data in whatever format is standard for the particular bank you use.
This should provide standardized, configurable approaches rather than having your local Dynamics NAV partner customize the export and import routines (and re-customize when you upgrade). However, this also locks you into specific “standardized” data formats and some banks are more standard than others.
Another caveat is that this ties Dynamics NAV into online services offered by other companies. As with many Dynamics NAV add-ons (like Zetadocs Express or Jet Express), there is a base level of service built-in that is free, but anything beyond that will cost you either additional license fees or ongoing service fees, in the case of the bank integration. AMC Banking allows free unlimited exports and imports, for a single bank account. Each additional bank account will cost you $15-20 (USD) per account, per month. That’s an additional $240 (USD) in “bank fees”, annually, per account. We recently worked with a client that had 27 branches, each with their own bank account. That amounted to nearly $5,000 in fees, annually, for the privilege of doing bank statement imports and auto-matching for reconciliations. It became clear that an investment of $2,000 to customize an import that would work across the company was a wise investment. Do the math before making a decision one way or another.
Business Process Differences in Dynamics NAV 2016
Vendor EFT Payments
The bank integration functionality was initially built into the European version of Dynamics NAV and so supports the business flow that is typical to that region, rather than what we are used to in North America (or at least with our Canadian clients).
|1.||“Suggest Vendor Payments” to load Payment Journal with Bank Payment Type “EFT”||“Suggest Vendor Payments” to load Payment Journal with Bank Payment Type “EFT”|
|2.||Export EFT files to a network folder location||Export EFT files to a network folder location|
|(Analogous to printing cheques and can be voided and re-exported)||(Creates a set of exported payment ledger entries but does not flag as “exported/cheque printed” or control posting on that basis)|
|3.||Send copy of file to the bank for processing||Send copy of file to the bank for processing|
|4.||“transmit” function – confirms that file was sent to bank successfully and moves file to a second folder location – locks the Payment Journal lines so they can neither be edited nor deleted||DELETE Payment Journal lines|
|5.||Print/Send EFT Remittance notices to Vendors||Wait for confirmation file from bank|
|6.||Post Payment Journal||Import confirmation file to Payment Reconciliation Journal|
|7.||Process successful bank transactions into Payment Journal|
|8.||Post Payment Journal|
(It should be noted that the AMC Banking services does not securely send your generated file to your bank. They simply pull your standard Dynamics NAV data over to their server, use a standardized mapping to reconfigure that data to your bank’s format, and hand it back to you to save to your network before you send it to your bank.)
From a process standpoint, using the Payment Journal to generate the export file but then deleting and not posting those lines seems a little “loose”. From an accounting standpoint, there is potentially a time gap between creating the export file, which commits to the payment, and actually posting the payment in Dynamics NAV. If your bank is very quick with the confirmation files, this may be okay; but if your bank takes a few days to turn that around, you could potentially have significant payments sent out and not accounted, for a period of time.
Bank Statement Auto-Reconciliation
If you choose to use the new Bank Statement Import to import bank statement electronic files and “auto-match” for bank reconciliation, you are forced to use the “Worldwide” or “W1” Bank Reconciliation page which is significantly different from the North American Bank Reconciliation page that is familiar to Dynamics NAV users. The W1 page presents a simple side-by-side view of imported bank statement lines and Dynamics NAV bank ledger entries. If the bank statement lines include previously unaccounted bank fees and such, they have to be pushed to a General Journal and posted before being reconciled on the Bank Reconciliation. page.
The North American Bank Reconciliation Worksheet presents more details in the header, separates “cheques” from “deposits and other items”, and includes functionality to write amount discrepancies and missing items to a general journal batch presented on the same page, which contributes to the overall reconciliation so that everything can be posted at once.
This may be just personal preference, but I like the detail and functionality on the classic North American Bank Reconciliation Worksheet page.
Positive Pay Export
The inclusion of a standard Positive Pay Export is a great addition, as it allows you to send your bank a file of approved cheques. If someone tries to cash a cheque that is not on that list, it will not go through. This is a great benefit if you are processing and distributing a lot of cheques and are concerned about fraud.
Check with your bank as to the fees charged for this service, as they can be substantial – particularly if you discover you have to void a cheque that you previously included in the Positive Pay file – that is a wrinkle in the system that you will pay for each time. Also, if you already mostly pay by EFT – and so have less chance of a paper cheque getting scammed, this may not be worth it.
Finally, consider that the Positive Pay Export also uses the AMC Banking services, so again if you use more than one bank account you will need to be paying the extra AMC fees.
Configurable Data Mapping
One of Microsoft’s aims is to create a data integration framework that is more configurable, so that less client-specific “customization” is necessary (which makes it easier to support multi-tenant cloud-based Dynamics NAV databases). While they have done this, the structure is sufficiently cryptic and the documentation is sufficiently sketchy. At this point, it certainly cannot be considered “end-user configurable”.
AMC Banking now has standard mapping available on their servers for most North American banks, so if you stick with the “out of the box” configuration in Dynamics NAV and choose the appropriate bank format from their list, it will work, but going beyond that is definitely tricky and requires a lot of testing. Also, you will need to check with your bank as to whether the services you are currently subscribed to match that format. We had an instance where the client’s bank had three different formats available and the services they subscribed to were not configured with the standard AMC mapped to. Changing their bank services subscription had the unfortunate ripple effect of changing the file format that their non-NAV Payroll service was using – which led to buying an add-on for the payroll program so it could transmit the same format as Dynamics NAV.
Microsoft is pushing Dynamics NAV in an interesting direction with respect to various types of online integrations but, consider all of the costs and process changes involved before jumping on the bandwagon. We are still doing a lot of client customizations for Vendor EFT outputs, Bank Reconciliation Imports and Positive Pay.
For more information, contact BDO Solutions.
Header image via freeimages.com/Hans Thoursie