A walk through the basic processes in Business Central for Beginners

Introducing the Functional Areas
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A beginner video is for people with little or no experience with Business Central. It is explained thoroughly and is easy to understand. Beginner Watch the "basic" videos to take the tour of the main processes of Business Central. This is the basic, need-to-use functionality. The Basics

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Presenter: Sune Lohse, Chief Strategy Officer

How does an item flow through purchasing and sales in Business Central?

In this video, I will give you a very simple example of the basics of Business Central meaning purchasing and selling items and how that looks and how it works.

This is what happens in the video

So, just a very basic overview.
But first of all, let’s start in a PowerPoint to see what I’m actually going to show you.

So the scenario I’m doing here is a resale of a new item.
I’m going to make a bike helmet.

So I want to buy a bike helmet and before I can do that, I need to create it in my inventory as an item, then I can purchase it and put it on inventory, even invoice the purchase order and I can sell it to a customer and draw it from inventory.

Then I have, of course, my financial transactions I can look into.

So we’re going to look at that scenario in Business Central.

So first of all, I will go to my item list to create a new item and I want this to maybe be called 1005.

A bike helmet and some of the fields are filled in automatically on my items, some are not and I need to enter all the required fields with the red asterisks.

So with the pieces item, I need to go down to my costing and to my general product posting group.

It’s an item, my inventory posting group, it’s just a recent item and I’d like to define an expected purchase price if I already know that and then, of course, a unit price.

So I will sell this for a 150 of my local currency.

So I’m almost done with setting up this item in this small scenario, and if I go back to my item list, I should be able to see it here on my item list with 0 on inventory.

Next thing I want to do is to create a purchase order because I’m going to buy this item into my warehouse and I will buy it from the vendor that I have agreed with to sell me this item like this.

I’m buying an item.

I can select the item number and maybe I’m buying 10 pieces to put on my inventory and I need to enter the price from the vendor and it might cost 56 of my local currency like this.

Now, I can actually post this item into my inventory and I selected a location that I call simple 1, which is the location I’m using.

And what I’m posting now is actually the inventory movement, meaning I’m just receiving the item on the inventory that creates the inventory handling.

So now it’s actually created an item entry and I can see in my inventory card that I have 10 on stock and I can see here the quantity received is 10, the quantity to invoice is 10.

Later on, I will get an invoice from my vendor and I can enter the invoice number up here for that invoice and I can post the invoice, of course with the correct unit cost, so maybe it’s not 56 but 58 and I need to reopen it to be able to change the purchase order.

So I’ll just say here it’s 58 and now I can post this purchase order.

The invoicing. So, in Business Central, we distinguish between receiving or shipping on the sales side and invoicing.

So it’s the quantity handling and then it’s the amount handling and if I’m opening the posted invoices, I can see that it created here a posted purchase invoice for my history that I can see what happened.

So now it’s actually on the inventory.

When I get back here on my item list, I can see I have now 10 on inventory and I’m ready to sell it.

So I will create a sales order in here.

And it looks exactly the same as on the purchase side.

I just press new, I enter my customer name or customer number that I’m going to sell to.

And he has a lot of overdue balance that I could look into, I’ll not do that now, but I will sell him in item; my helmet, from this location code Simple 1.

Maybe he will buy four of those like this and with the price coming from the item card, the unit cost is seen here taken from the item card and I can see here the unit price excluding VAT and that’s the amount in Euro or in Dollars because it’s not a Danish item and I knew I entered the price correctly on the item card.

So, if I’m scrolling down somewhere here on my invoicing detail, I can see here it’s a US Dollars customer.

So that’s okay and the unit cost is in LCY, meaning local currency.

So everything is good here and I can just post this and like on the purchase side, I could post the shipment and invoicing as two separate steps if I’m just packing it and shipping and invoicing in one go, I could also do that just posting the shipment and the invoicing in one go.

So now I’ve made the posting of this item.

I have now 6 on stock.

And if I look into my customers, I could see the movement, the customer entries.

I could find the vendor entries and of course also the item entries.

I could also look into my chart of accounts, but here I’m seeing a lot of stuff because this is all my balances from this year.

But what I can do here is I could filter because I have cheated and created a new dimension for this small transaction here.

So I know that my customer and vendor, in this scenario, only had this new dimension added so thereby, I can see her in my chart of accounts all the postings coming from what I just did.

So basically I could also filter here on my net change.

So if I’m filtering on the amount being different from 0, that’s the way we can see it in Business Central, I can see all the not bolded columns here being my normal accounts.

So I have some revenue. This is the sales that I’ve just did.
I have some cost on my purchase account. Direct cost applied.

Those always equal out, and I can like this drill down into my chart of accounts both in the income statement and the balance to see what has happened.

So this is the very simple flow in Business Central.

Now, when I need to pay my vendor or receive money from my customer, I could go into a payment journal, in here, and this journal is meant for doing my payments here.

So I could just select my vendor number, the account number that I want to pay in.

So I can do my payments here for my vendors and I can pay for my customers and post it in here which is general journal and it will create general ledger entries when I’m doing this posting and this will finish the complete flow.