D365 Business Central Tip of the Month: Linking customers and vendors

In some businesses, a company might act as both a customer and a vendor. For example, they might purchase goods from you and supply services to you. Managing payments can get complicated when a company you work with serves as both a customer and a vendor. Without a clear connection between their customer and vendor accounts, you might make unnecessary payments, miss out on consolidation opportunities, or lose visibility into their overall balance with your business.

Dynamics 365 Business Central makes it easy to address this challenge by allowing you to link customer and vendor accounts. This feature helps streamline financial processes and ensures greater visibility into your transactions.

In Dynamics 365 Business Central, you can streamline this process by linking customer and vendor accounts. This feature enables you to view consolidated balances, simplify settlements, and improve cash flow management.

Here’s how to set it up:

1. Open the Customer or Vendor page

2. Select the Contact action to view the associated contact

3. Select the Actions drop-down >> Functions >> Link with existing and specify whether to link to a Customer or Vendor

4. Complete the fields as needed to establish the link

Once the link is created, additional fields will appear:

1. On the Customer Card, you can view the Balance as Vendor

2. On the Vendor Card, you can view the Balance as Customer

To consolidate the balances:

1. Go to the Payment Journal page

2. Select the Related drop-down >> Payments >> Other >> Net Customer/Vendor Balances to calculate the net amount

3. Fill out the form and select OK

4. The system will create, but not post, journal lines reflecting the consolidated balance

Linking customers and vendors in Dynamics 365 Business Central helps reduce manual effort, improves financial clarity, and optimizes cash flow management.

By linking a customer and vendor, you can view both balances on their respective pages, making it easier to see the net amount you need to pay or receive. The Net Customer/Vendor Balances action in the Payment Journal allows you to consolidate these amounts into a single net balance, reducing unnecessary transactions. This not only saves time but also helps avoid errors, optimize cash flow, and cut down on transaction fees.

For more tips on how to optimize your Dynamics 365 Business Central system, contact Rand Group today.