How to use posting groups in Business Central

This video introduces posting groups

which are an important accounting

concept in Business Central. To ensure

efficient and accurate transaction

processes, posting groups link

customers, vendors, and VAT or sales tax

with GL accounts. There are three main

kinds of posting groups. General such as

general business and product posting

groups. Subleddger specific like

customer, vendor, or inventory and VAT

or tax posting groups. Business posting

groups focus on who you do business

with. For example, you can group master

data based on whether it's domestic,

foreign, or whatever fits your

accounting needs. Product posting groups

focus on what you buy or sell. You can

group master data, for example, around

resale, manufacture, or retail. We

combine the who business posting groups

and what product posting groups and

posting setups. For example, when we

sell a retail item to a domestic

customer, the posting setup might point

to the sales revenue and COGS accounts.

Another example is the VAT posting

setup. When we sell an item that uses

the standard VAT rate to a domestic

customer, the sales VAT account is used.

We can assign posting groups to

customers, vendors, and items, or they

can inherit posting groups from

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templates. Here's an example. We'll open

a sales invoice and choose a

customer. Notice the general and

customer posting groups. These will come

from the customer. The customer posting

group contains a receivable account

where the receivable amount will be

posted in the general

ledger. Now we'll add an item and look

at the general and inventory posting

groups it uses.

Notice that the inventory posting group

contains the inventory account where the

item inventory amount will be

posted. For the general product posting

group, let's look at how it combines

with the customer's general business

posting group. Notice the cogs and sales

accounts. These are where the cogs and

revenue amounts will be posted.

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Let's preview the posting to see the

ledger entries we'll create. The entry

for the customer is based on the

customer posting group. It contains the

due date, remaining amount and other

relevant information. The entry for the

item is based on the inventory posting

group. It has information like

quantities, sales amounts and so on. The

entry for VAT is based on the VAT

posting setup. For example, it shows the

VAT rate and base amounts. All

subleddger amounts will be reflected in

general ledger

entries. Sales revenue and COGS GL

accounts are taken from the general

posting setup. Sales tax or VATGL

accounts come from the VAT posting

setup. The receivables account comes

from the customer posting group. Now,

let's look at how to post directly to GL

accounts without using subleddgers. We

can choose GL accounts only on lines on

journals and documents. This allows

subleddgers like the customer or

inventory to exist alongside the general

ledger. Posting groups keep subleddgers

in sync with the general ledger. If we

don't use subleddgers and post directly

to a GL account, we can enable direct

posting for the account. For accounts

where direct posting is not enabled, we

can use the where used list to see the

posting groups that use this account.

Thanks again for watching. We've just

seen how posting groups make accounting

less complex when posting transactions

and how we can post exactly what we want

at the general ledger.

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