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The Invoicing tab on the item card in Business Central holds the fields that matter most to the finance department. These fields control how an item’s cost is handled on inventory, how it posts to the general ledger, and which VAT and posting groups apply. This article walks through each field and explains what it does.
The costing method is set when you create the item and determines how inventory cost is handled. If the method is Standard, the unit cost comes from the standard cost. If the method is FIFO or Average, the unit cost reflects the average cost on inventory.
The standard cost can be calculated from the bill of materials for production or assembly items, or entered manually. It is typically used for items with variants when you want to handle variances separately.
The unit cost reflects the value of the quantity on inventory. The last direct cost shows the most recent direct purchase or manufacturing cost, and Business Central calculates and enters it automatically on the item card.
The indirect cost percentage lets you add cost on top of the last direct cost. Use it when you have extra costs on the item, such as handling charges that you don’t post through the item charge functionality, and you want those costs reflected on the inventory value.
How net invoiced quantity differs from quantity on inventory
The net invoiced quantity is the quantity on inventory that has actually been invoiced. It can differ from the quantity on inventory field higher up on the item card.
For example, if the quantity on inventory shows 87 and the net invoiced quantity shows 67, that means 10 pieces have been received or shipped but not yet invoiced.
Cost is adjusted and posting cost to the general ledger
The Cost is Adjusted checkmark shows whether all entries for the item have been adjusted, either by the Adjust Cost – Item Entries batch job or automatically if set up that way. When the checkmark is set, the item ledger entries carry the correct cost after all postings.
Once the entries are adjusted, you can post the cost corrections into the general ledger. The Cost is Posted to G/L field shows whether the general ledger has been updated with the actual inventory cost from the item ledger entries.
Posting groups that control where cost and revenue land
The posting groups are set when you create the item.
- General product posting group: determines where the cost of the item goes in the income statement.
- VAT product posting group: determines the standard VAT for the item. It is normally filled in from the general product posting group and works together with the VAT setup on customers and vendors when you create order lines.
- Inventory posting group: determines where in the balance sheet the cost of the item is entered. This controls where you see item cost, revenue, and purchases for the item in your chart of accounts.
Special prices, deferral templates, and Intrastat fields
Special prices are used to create special sales prices for the sales people.
You can set up a default deferral template. When you have purchased or sold the item, Business Central can then create the deferral automatically.
If you report to Intrastat, you can also define the tariff number and country/region code here. These are some of the fields you need to set up for Intrastat reporting.
Q&A
What is the difference between net invoiced quantity and quantity on inventory?
The quantity on inventory is the total quantity in stock, while the net invoiced quantity is the part of that stock that has actually been invoiced. The difference is the quantity that has been received or shipped but not yet invoiced. For example, 87 on inventory and 67 net invoiced means 10 pieces are not yet invoiced.
What does the indirect cost percentage do on an item?
It adds a cost percentage on top of the last direct cost. Use it when you have additional costs on the item, such as handling charges that you don’t post through the item charge functionality, and you want those costs reflected on the inventory value.
What does the Cost is Adjusted checkmark mean?
It shows whether all entries for the item have been adjusted with the correct cost, either by the Adjust Cost – Item Entries batch job or automatically if set up that way.
Where does the unit cost come from?
If the costing method is Standard, the unit cost comes from the standard cost. If the method is FIFO or Average, it comes from the average cost.
What does the inventory posting group control?
It determines where in the balance sheet the cost of the item is entered, which controls where item cost, revenue, and purchases appear in your chart of accounts.