Before getting into the how, let’s review the why. Below are two examples of why you would want to do this:
- Your vendor has an automatic withdrawal from your bank account, and you would like to maintain a record in the vendor ledger of Microsoft Dynamics 365 Business Central.
- Charges on a credit card need to be recorded against the vendor for 1099 reporting.
The first step is to set up your payment method with a Bal. Account Type and No. You can see in the example below that the Card and Check payment methods have a Bal. Account Type of Bank Account and a Bal. Account No. populated. When using these two payment methods, the system will automatically create the payment entry and set the purchase invoice to closed.
![](https://www.boyerassoc.com/wp-content/uploads/2021/08/vendorinvoice1.png)
The next step is to select the Payment Method Code under the Invoice Details section on the Purchase Invoice. You can assign a default Payment Method Code on the Vendor card under Payments to automate this process.
When we do a Posting Preview, you can now see two entries in the Vendor Ledger Entry — for the invoice and payment. In the G/L Entry you can see debits and credits for the invoice and the payment.
![](https://www.boyerassoc.com/wp-content/uploads/2021/08/vendorinvoice2.png)
![](https://www.boyerassoc.com/wp-content/uploads/2021/08/vendorinvoice3.png)