By Kim Dallefeld
It is important to gain an understanding of the great things posting groups can provide for you in Business Central. Yes, the term ‘posting group’ means general ledger accounts are involved. For most users that’s all they know and ever care to know. As will be explained with inventory, expanded use can provide benefits. One great advantage of these fields is the filtering options that are provided. There is a lot of power when posting groups are understood and utilized optimally within your organization. Both your general ledger detail as well as to reporting and filtering and reap benefits.
Customers and Vendors – nothing mysterious here
For the most part, customer posting groups, bank account posting groups, inventory posting groups and vendor posting groups control the asset side of their associated transactions (Accounts Receivable for customers, Bank/Cash for bank accounts Inventory for items and Accounts Payable for vendors). Yes, posting groups have additional fields for other functionality but we’re keeping it simple here.
Let’s look at an example using customer posting groups.
Trade Customer – a sale to a customer posts to an accounts receivable account.
Employee Customer – posts to a different accounts receivable account.
However, maybe the sales post to the same account receivable regardless of the customer posting group. Why use to posting groups, in this case? So you can run reports for just customer or just employees.
Functionally, vendor posting groups’ main purpose is to control the accounts payable accounts. Inventory Posting Setup is tied to groups of inventory and locations, examples are provided below. However, they are good to use for printing reports. For vendors, we often use for specific payment runs.
General Posting Setup – not mysterious just possibilities
The following explanation is only showing sales and cost of sales. General ledger accounts for credits, invoice discounts, line discounts and more are also controlled with the same and/or additional setups.
Most of the confusion for users comes from General Posting Setup. In General Posting Setup, General Business Posting Groups and General Product Posting Groups combine to control posting of sales, cost of sales, purchases, inventory adjustments, to name the most common.
General Business Posting Groups are attached to customer and vendors. While General Product Posting Groups are attached to items and resources. General Posting Setup is where the business and product groups combinations define the general ledger accounts for recording of sales, purchase and cost of sales. As is usual, there are other accounts and usages of general posting setup.
Should the desire be to record sales in the general ledger based on type of customer (Foreign and Domestic) regardless of what is being sold, the general posting setup could look something like:
Foreign All Items Sales Account 1 Cost of Sales 1
Domestic All Items Sales Account 2 Cost of Sales 2
Take this a little further, so in the general ledger we can see the sales by customer type and by product group. Product Groups in the example are New and Refurb:
Foreign New Sales Account 1 Cost of Sales 1
Foreign Refurb Sales Account 2 Cost of Sales 2
Domestic New Sales Account 3 Cost of Sales 3
Domestic Refurb Sales Account 4 Cost of Sales 4
What if you just want to use the posting groups (customer type and product group) for filtering and don’t want four different sales and cost of sales account? That’s no problem, you will still need four records in general posting setup but not additional general ledger accounts. For example:
Foreign New Sales Account 1 Cost of Sales 1
Foreign Refurb Sales Account 1 Cost of Sales 1
Domestic New Sales Account 1 Cost of Sales 1
Domestic Refurb Sales Account 1 Cost of Sales 1
Inventory Posting Setup – no mystery, but options
The following examples focus on the inventory account in the balance sheet. Inventory posting setup controls other accounts such as interim inventory for expected cost posting on receiving and shipping.
Let’s back up and talk about Inventory Posting Groups a little more since these require a combination of location and inventory posting group. The following is an example of two location (Red and Blue) using one inventory account in the general ledger.
Red All Items Inventory Account 1
Blue All Items Inventory Account 1
Please know that if you want to know what part of your general ledger inventory balance is for the Red location, you do NOT need a separate general ledger account. You can simple run the Inventory to G/L Reconcile report and apply a Location Filter for the Red location. However, if you would prefer to see a separate general ledger account, your Inventory Posting Setup would look like:
Red All Items Inventory Account 1
Blue All Items Inventory Account 2
Let’s expand this to have the general ledger differentiate inventory, not by location by rather by product type. We’ll use product types of Software and Hardware. Inventory Posting Setup:
Red Hardware Inventory Account 1
Red Software Inventory Account 2
Blue Hardware Inventory Account 1
Blue Software Inventory Account 2
Just like with General Posting Setup where we wanted both customer type and product group separated in the general ledger, we can separate location and product type. Inventory Posting Setup will have four records going to four different general ledger accounts.
Red Hardware Inventory Account 1
Red Software Inventory Account 2
Blue Hardware Inventory Account 3
Blue Software Inventory Account 4
General Posting Setup Expanded – more features, less mystery
A great use of General Posting Setup is using the General Business Posting Group to define specific inventory adjustment accounts to be used for such things as obsolete inventory writeoffs, damage inventory, donations, research/development usage and more.
Using and example of damaged and donations for hardware and software, the general posting setup would be:
Damage Hardware Inventory Adjustment (expense account 1)
Damage Software Inventory Adjustment (expense account 2)
Donations Hardware Inventory Adjustment (expense account 1)
Donations Software Inventory Adjustment (expense account 2)
You can unhide the general business posting group field in the item journal and when product is written off, simple enter the appropriate value.
Recap – mystery solved
There are many more fields in all of the setups reviewed above and there are other posting groups, such as fixed assets, jobs and tax. In all cases, the goal is to direct and control general ledger postings without the users selecting general ledger accounts.
A user creates a sales order or sales invoice and selects a customer (defined there is the general business posting group and the customer posting group.) As an item is added to the document, the system has a defined general product posting group and inventory posting group. So defined on the sales document are the following (keeping the example simple):
Accounts Receivable from customer posting group
Sales Account from general posting setup (gen. bus. post. Grp. + gen. prod. post. grp.)
Cost of Sales Account from general posting setup (gen. bus. post. Grp. + gen. prod. post. grp.)
Inventory Account form inventory posting setup (item inventory posting group + location)
Whether you’re new to BC, looking for a way to get at a different set of data or get better accounting for certain transactions, posting groups are the solution not the mystery!