In Business Central, three posting groups on the item card control how transactions hit your chart of accounts. The General Product Posting Group works together with the General Business Posting Group from the customer or vendor in the General Posting Setup, and this combination determines which cost, revenue, or prepayment account is used.
The VAT Product Posting Group controls VAT postings through the VAT Posting Setup, deciding which purchase and sales VAT accounts in the balance receive the item’s VAT.
The Inventory Posting Group works with the location code from the document or journal in the Inventory Posting Setup to determine which inventory or variance accounts are used.
You can change the posting groups on documents and journals in most cases, since the values flow from the item card to the document and into the journal before posting.
Where you find the posting groups on the item card
On the item card, you set up three posting groups on the Cost and Posting tab:
- General Product Posting Group
- VAT Product Posting Group
- Inventory Posting Group
These three groups define how each item posts into the chart of accounts. They are added to every item, and the posting flows from the item to the documents, or to the journals if you post directly in journals. The document carries the posting groups through to the journal as well. In most cases you can adjust the posting groups on the document or the journal if you need to.
How the General Product Posting Group determines cost and revenue accounts
When you post, the General Product Posting Group applies to the General Posting Setup. Together with the General Business Posting Group, which comes from the customer or vendor, it determines which cost account or revenue account is used, and which prepayment account the entry posts to in the chart of accounts.
So it is the combination of the product side from the item and the business side from the customer or vendor that decides where the amount lands.
How the VAT Product Posting Group determines VAT accounts
The VAT Product Posting Group applies to the VAT Posting Setup. It determines where to post the item’s VAT, for example into the purchase and sales VAT accounts. These all post into the balance.
How the Inventory Posting Group determines inventory and variance accounts
The Inventory Posting Group that you set on the item applies to the Inventory Posting Setup. Together with the location code, which comes from the document or the journal, it determines which inventory accounts are used, or which variance account in the income statement.
This is how the posting groups on the item card control the way Business Central posts your transactions.
Q&A
Which posting groups do you set on the item card in Business Central?
You set the General Product Posting Group, the VAT Product Posting Group, and the Inventory Posting Group. You find all three on the Cost and Posting tab of the item card.
What determines which cost or revenue account a transaction posts to?
The General Product Posting Group on the item combined with the General Business Posting Group from the customer or vendor. This combination applies to the General Posting Setup, which determines the cost account, revenue account, and prepayment account.
What does the VAT Product Posting Group control?
It applies to the VAT Posting Setup and determines where the item’s VAT posts, for example into the purchase and sales VAT accounts. These entries post into the balance.
What does the Inventory Posting Group control?
It applies to the Inventory Posting Setup. Together with the location code from the document or journal, it determines which inventory accounts are used, or which variance account in the income statement.
Can you change the posting groups after they default from the item card?
In most cases, yes. The posting groups flow from the item to the document and into the journal, and you can change them on the documents and journals if needed.