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In Microsoft Dynamics 365 Business Central, you control where item charges post to in the general ledger by assigning posting groups to each item charge. You assign a general product posting group and a VAT product posting group on the item charge card.
The general product posting group combines with the general business posting group from the vendor or customer to determine which general ledger accounts your item charge posts to. This happens through the general posting setup.
The VAT product posting group combines with the VAT business posting group to determine which VAT account your item charge posts to. This happens through the VAT posting setup.
When you use item charges on purchase orders or sales orders, the posting setup transfers from the item charge to the document and then through to the journals when you post.
How posting groups control item charge postings in Business Central
Item charges in Business Central let you add costs like freight, handling, or insurance to the value of your items. To control where these costs land in your general ledger, you set up posting groups on each item charge.
On the item charge card, you define two posting groups: a general product posting group and a VAT product posting group. These two settings determine which accounts the system posts to when you use the item charge on a document.
Setting up posting groups on item charges
You typically define your general product posting groups and VAT product posting groups when you set up the system. After that, you assign the relevant groups to each item charge you create.
Once the posting groups are in place on the item charge, the setup follows the item charge wherever you use it. When you apply the item charge on a purchase order or sales order, the posting setup transfers from the item charge to the document. When you post the document, it carries through to the journals.
How the general and VAT posting groups determine the accounts
The two posting groups work in different ways.
The general product posting group works together with the general business posting group, which comes from the vendor or customer. This combination looks up the general posting setup to determine which general ledger accounts the item charge posts into.
The VAT product posting group works together with the VAT business posting group. This combination looks up the VAT posting setup to determine which VAT account the item charge posts into.
The result is that you have full control over both the cost accounts and the VAT accounts for your item charges, simply by assigning the right posting groups on the item charge itself.
Q&A
What posting groups do you assign to an item charge in Business Central?
You assign a general product posting group and a VAT product posting group to each item charge. These determine which accounts the item charge posts to when you use it on purchase or sales documents.
How does the general product posting group decide which account to use?
The general product posting group combines with the general business posting group from the vendor or customer. This combination uses the general posting setup to determine which general ledger accounts the item charge posts into.
How is the VAT account determined for an item charge?
The VAT product posting group on the item charge combines with the VAT business posting group. This combination uses the VAT posting setup to determine which VAT account the item charge posts into.
Where does the posting setup go when you use an item charge on a document?
The posting setup transfers from the item charge to the document, such as a purchase order or sales order. When you post the document, the setup carries through to the journals.
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