Hi, and thanks for watching. This video introduces posting groups,
which are an important accounting concept in Business Central,
and shows how to post directly to general ledger accounts.
Accountants want transactions to be posted timely, accurately, and to the
right general ledger accounts. Businesses want to process sales and
purchase transactions without friction an without insight into accounting details.
Posting groups bridge this gap by linking customers, vendors, and VAT
or sales tax, and sub ledgers with GL accounts.
There are three main kinds of posting groups. General, such
as general business and product posting groups that specify the
accounts to use. Subledger specific, like customer,
vendor, or inventory posting groups that determine the accounts to
use for receivables, payables, and inventory. VAT or tax posting groups,
such as VAT business and product posting groups that determine
the accounts to use for VAT or tax.
Business posting groups focus on who you do business with.
For example, you can group master data based on whether
it's domestic, foreign, retail, industry, or whatever fits your
accounting or reporting 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, in posting setups. For example when we
sell a retail item to a domestic customer, the posting
set up 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 templates.
Here's an example. We'll open a sales invoice and choose
a customer. Notice the general, VAT, 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 will add an item,
and look at the general, VAT, 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 customers general business posting group.
Notice the COGS and sales accounts. These are where the
COGS and revenue amounts will be posted.
Let's also look at how the VAT product posting group
from the item combines with the VAT business posting
group from the customer. Note the sales VAT account. This
is where VAT will be posted.
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.
An entry for VAT is based on the VAT
posting set up. For example it shows the VAT rate and base
amounts.
All subledger amounts will be reflected in general ledger entries.
Sales revenue and COGS G/L accounts are taken from the
general posting set up.
Sales tax or VAT G/L accounts come from the VAT
posting setup. The receivables account comes from the customer
posting group.
The inventory account comes from the inventory posting setup.
Now let's look at how to post directly to G/L
accounts, without using subledgers.
We can choose G/L accounts only on lines on journals
and documents. This allows subledgers like the customer, vendor,
VAT, and inventory subledgers to exist alongside the general
ledger, and reduces accounting complexity.
Posting groups keep subledgers in sync with the general ledger.
If we don't use sub ledgers and post directly to
a G/L account, we can enable direct posting for the
account. Let's see how this works.
When creating a purchase invoice, if we choose a G/L
account line type we need to select a G/L account with
direct posting enabled.
For accounts where direct posting is not enabled, we can
use 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 to general ledger.
